Italy
In your jurisdiction, are there any formal ADR procedures available for resolving commercial disputes other than litigating (or arbitrating) to a final hearing?
Under Italian law the main types of formal ADR procedures available for resolving commercial disputes are mediation, negotiation with attorney, preliminary technical expertise for settlement purposes and non-ritual arbitration.
Mediation (regulated by Legislative Decree No. 28/2010 (“Decree on Mediation”) is a procedure carried out before an impartial third person that is a member of a duly registered mediation body, who assists the parties in seeking an amicable settlement of a dispute, including setting forth a settlement proposal.
Negotiation with attorneys (regulated by Decree Law No. 132/2014, converted into Law No. 162/2014 (“Decree on Negotiation”), is an agreement whereby the parties, with the assistance of qualified attorneys, agree to cooperate in good faith to amicably resolve a dispute. When the dispute is resolved, a settlement agreement is executed; otherwise, a statement on disagreement is certified by the appointed attorneys.
Preliminary technical expertise for settlement purposes (regulated by article 696-bis of the Italian Code of Civil Procedure (“ICCP”)), is a procedure whereby one party applies to the court having jurisdiction, for the appointment of an expert for the purpose of ascertaining claims arising out of the non-performance of contractual obligations or out of tort. The court appointed expert, before filing the report, tries, where possible, to conciliate the parties. If a settlement is achieved, the minutes of the settlement are immediately enforceable.
Non-ritual arbitration (regulated by article 808-ter ICCP), whereby the parties agree that a dispute is resolved by one or more arbitrators, through a final statement that has the same effects as a contract among the parties.
In addition to the above, the parties may avail themselves of other non-formalized instruments (for example contractual expertise) or of the conciliation procedures provided for in public service charters issued by the operators of certain public services (the latter, however, essentially concern disputes with consumers and not commercial disputes).
Does engaging in ADR have any effect on potential or existing litigation or arbitration?
Both mediation and negotiation with attorneys are condition precedents for commencing certain legal proceedings, and in such cases starting the relevant ADR procedure is mandatory before commencing litigation or arbitration. The statute of limitation is stayed, from the moment of the legal knowledge of the request for mediation by the addressees and from the moment of the request to execute a negotiation with attorneys. In the event that the dispute is resolved through either mediation or negotiation with attorneys or preliminary technical expertise, the relevant agreement is immediately enforceable even by way of attachment, foreclosure, registration of mortgage, etc.
Is ADR compulsory and if so are there any consequences if a party fails to engage in ADR? If it is not compulsory are there any plans for this to change?
Mediation is compulsory and is a condition precedent for commencing legal proceedings in matters such as, inter alia, lease agreements, leasing of companies, insurance, banking and financial contracts, franchising and sub-supply agreements, joint ventures (see full list under article 5 of the Decree on Mediation).
Negotiation with attorneys is compulsory and is a condition precedent for commencing legal proceedings on disputes concerning damages caused by motor vehicles, payment of sums howsoever arising and not exceeding €50,000.00, provided that the matter does not fall within the cases of compulsory mediation (see article 3 of Decree on Negotiation).
If a party fails to attend the first meeting of the mediation proceedings without a justified reason: (1) the court may infer evidence in the subsequent court proceedings; (2) when mediation is compulsory, the court orders such party to pay a determined amount in favor of the State budget; (3) if such party loses the court case, the court may order it to pay a higher amount of fees in favor of the winning party.
Failure to reply to the invitation to negotiation with attorneys within thirty days of its receipt or its refusal may be grounds for the court assessment for the purposes of charging court costs, for the award of damages for reckless litigation (article 96 ICCP) and for the provisional enforcement of the order of payment (article 642 ICCP).
We are not aware of any programs of the Italian Parliament/Government to further extend the cases in which ADR procedures are mandatory.
Can the parties agree, in advance of any potential dispute, to engage in ADR?
The parties are free to agree in advance that they will or may try one or more ADR methods to resolve any dispute that may arise. It is becoming more frequent that commercial contracts include ADR clauses.
When does ADR generally take place?
As a rule, ADR takes place before litigation or arbitration has commenced. However, there are specific cases where ADR may take place during court proceedings:
- whenever mediation or negotiation with attorneys is a condition precedent, if in the course of court proceedings the court finds that the ADR procedure has not been carried out or, if initiated, has not been concluded, it shall schedule the next court hearing after the expiry of the time limit prescribed by law for the completion of the ADR procedure; and
- mediation: during court proceedings (even before the court of appeal) the judge, having regard inter alia to the nature of the dispute, may order the parties to commence a mediation procedure
For the sake of completeness the following should be mentioned:
- judicial conciliation: the investigating judge, at the joint request of the parties or by his own motion, may set a hearing for the appearance of the parties in order to cause the parties to achieve conciliation (article 185 ICCP); and
- conciliatory proposal: in court proceedings, at the first hearing or until the investigation is completed, the judge may submit to the parties, where possible having regard to the nature of the case, the value of the dispute and the existence of issues that can be easily and promptly resolved, a proposal for settlement or conciliation. Such proposal may not constitute grounds for objection or abstention of the judge (article 185-bis ICCP)
Is ADR subject to without prejudice privilege and/or confidential? If not, is there any other means to protect confidential information?
Mediation and negotiation with attorneys are generally confidential. The statements made or information acquired in the course of such ADR procedures may not be used in court/arbitration proceedings having the same subject matter, commenced, resumed or continued after the failure of the ADR procedures. Statements made by third parties in the negotiation with attorneys may, within certain limits, be disclosed in the subsequent court proceedings.
Does the output from ADR create precedents?
ADR, whether or not it ends with a settlement agreement, does not create a precedent.
Who bears the costs of ADR?
In principle, the costs of ADR are borne by the parties in equal shares.
Is your jurisdiction subject to any specific rules for cross border ADR?
Pursuant to article 12.1-bis of the Decree on Mediation, in cross-border disputes referred to in Article 2 of EU Directive 2008/52/EC of May 21, 2008, the agreement that resolved the dispute shall become enforceable in Italy through the homologation by the president of the court in whose district the agreement is to be enforced.
Italy has not signed the has not signed the United Nations Convention on International Settlement Agreements Resulting from Mediation 2020 (Singapore Convention).
Are there any particularly unusual features of ADR in your jurisdiction that you are aware are different to other jurisdictions?
Under Italian law (see decree No. 180/2010), the mediation body and the mediators must be registered on a register kept by the Ministry of Justice and to this extent must satisfy certain specific requirements. The mediators must have: (1) a qualification of no less than a three-year university degree, alternatively must be the registered with a professional bar or association; (2) the possession of specific training and development at least every two years as well as the attendance, in the above two years period, in at least twenty cases of mediation; (3) the possession of specific requirements of honorability; and (4) the possession of appropriate documentation attesting the language skills required for those mediators seeking to register in the section of the list of mediators experienced in international issues of mediation bodies.
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