ADR in Regional Level
This part is devoted to appreciate in a bit detail about the importance of ADR in regional institutes. Thus, the experience of European Union and North American Nations under NAFTA in the settlement of dispute is taken care of. Lastly, the African approach to ADR is considered though it is only in its infant stage of development. I put it in the last for we got many things that we should learn from the other two.
Access to justice is at the top of the political agenda in all Member States of the European Union. More and more disputes are being brought to court. As a result, this has brought not only longer waiting periods for disputes to be resolved but has pushed up legal costs to such levels as to often be disproportionate to the value of the dispute.
This is where ADRs come in. Alternative dispute resolution (ADR) methods are extra-judicial procedures used for resolving civil or commercial disputes. These usually involve the collaboration of disputing parties in finding a solution to their dispute with the help of a neutral third-party. As there are numerous types of ADR methods available, they can be applied and adapted to a variety of areas whether civil or commercial in nature.
The advent of the single European market has increased the movement of goods and of people across the European Union. Unfortunately, it also has increased the number of disputes involving nationals of different Member States. These cross-border disputes add another dimension of complexity to already complicated issues. In this context, ADRs are regarded as an important element in the attempt to provide fair and efficient dispute-resolution mechanisms at EU level.
In recent years, the use of ADRs has increased considerably in the European Union. They are being used to resolve disputes between citizens and administrations, within families, working relationships or yet again in commercial relations and consumer disputes.
At the European Council on Justice and Home Affairs that took place in Tampere (Finland) in October 1999, EU leaders drew attention to how much importance they place on the role of ADR in cross-border disputes. In March 2000 at the Lisbon Summit on employment and the information society, EU leaders asked the European Commission and the EU Council of Ministers to reflect upon ways of applying ADR methods to resolve conflicts in the area of e-commerce in view of promoting consumer confidence.
In the field of consumer disputes, ADR has become a special priority of the Commission. As such, it has adopted two recommendations on the subject:
- one on procedures involving a third party who proposes or imposes a solution (30 March 1998);
- another on procedures which are restricted to a single attempt to draw conflicting parties together to help them find a common solution (4 April 2001).
Furthermore, a network of national bodies (ECC-NET) was created to facilitate the task of finding extra-judicial solutions to cross-border consumer disputes. The European Commission has established to ADR related organisations: The European Extra Judicial Network (“EEJ-Net”) and the Financial Services Complaints Network (“FIN-NET”) for matters relating to financial services. The Commission’s Green Paper says: “All political and legislative endeavours, initiatives and debates to date at national, Community and international level have been aimed at preserving the quality of ADRs in terms of accessibility, effectiveness and guarantees of good justice while maintaining their flexibility.”
The Commission has launched in April 2002 a Green Paper on ADR so as to initiate a constructive debate on a certain number of legal issues, which have been raised as regards alternative dispute resolution in civil and commercial law. The questions in the Green Paper relate to the essence of the various means of alternative dispute resolution such as clauses in contracts, limitation periods, confidentiality, the validity of consent given, the effectiveness of agreements generated by the process, the training of third parties, their accreditation and the rules governing their liability.
The Green Paper talks of certain non-determinative forms of ADR helping to achieve social harmony in that “the parties do not engage in confrontation but rather a process of rapprochement”. Well that is fine in my experience but, in reality, much mediation involves parties who have a considerable enmity towards one another. They may be engaging in the process for a whole variety of reasons - but the desire for non-confrontation and the achievement of rapprochement is often not at the forefront of their minds! They may be engaged in the ADR process because they are adopting a commercial “common sense” approach to the dispute. The dispute may already be subject to litigation with large costs already incurred and perhaps is approaching a lengthy and costly trial. Parties may be there because they have been advised to give the process a chance.
They may be there to elicit information. They may be there to give the impression of being reasonable. Whatever the reason or motivation for parties attending mediations or engaging in other forms of ADR, there is no doubt that it is becoming increasingly popular.
Commission Green Papers are documents intended to stimulate debate and launch a process of consultation at European level on a particular topic (such as social policy, the single currency, and telecommunications). These consultations may then lead to the publication of a White Paper, translating the conclusions of the debate into practical proposals for Community action.
Following this consultation period and based upon the contributions of the debate's participants, the Commission has decided (see the Commission Scoreboard on Justice and Home Affairs COM(2003) 291 final) to launch two initiatives:
- Work will start in 2003 to develop a European plan for best practice in mediation in 2004 a a European code of conduct has been launched.
- In 2004 the Commission is planning to present a proposal for a directive to promote mediation.
On 2 July 2004 a conference was held in Brussels to discuss self-regulatory initiatives for mediation in general and to launch the European code of conduct. The conference was attended by some 100 participants. The morning session saw a number of presentations on national experiences of self-regulation. The afternoon session was introduced by Mr Faull, Director General for DG Justice, Freedom and Security of the European Commission, and was followed by a panel debate on the European code of conduct.
The concept of a European code of conduct as a voluntary instrument to improve quality and trust in mediation was supported. It was generally considered that the code should remain an informal document at this stage and that it should not be adopted formally by any of the institutions of the European Union. It will be the responsibility of those individual mediators and organizations that wish to subscribe to the code to also take ownership of the code, including defining implementation mechanisms.
It was agreed that as a next step the code will be made available on the internet together with general information on the code and a first list of mediation organizations who have declared that they subscribe to the code.
As further follow-up the Commission services will consider organising ad hoc meetings with representatives of organisations subscribing to the code to review implementation and content as necessary.
Further large-scale meetings may also be organised on a yearly basis, open for all interested parties, to discuss specific issues of ADR in order to maintain dialogue and encourage exchange of experiences. The next meeting of that type could be held in 2005.
As to access to justice – this is a fundamental right as provided for by Article 6 of the European Convention on Human Rights and Fundamental Freedoms and the right to valid remedies has been decided as being a general principle of community law (Case 222/84 Johnston  ECR 1651) and this is entrenched in Article 47 of the Charter of Fundamental Rights of the European Union.
Unfortunately with litigation and arbitration, access to justice is sometimes restricted due to the inability of a party to pay the costs involved and by reason of the restrictions of legal aid (not available at all in arbitration and frequently not granted or not adequate in civil litigation in the UK). So it has long been said with a certain irony that “Justice like the Ritz Hotel is open to all!” Perhaps ADR is an effective means of addressing that sorry state of affairs.
It is evident that the European Union is taking positive initiatives to facilitate access to justice through ADR. These initiatives are highlighted in the Green Paper on alternative dispute resolution in civil and commercial law presented by the Commission of the European Communities on 19th February 2002. That paper states that ADR is an “integral part of the policies aimed at improving access to justice”.
In some Countries there is State funding for forms of ADR – for instance in France the justice conciliators are not paid by the parties and in Ireland the family mediation service’s operating costs are funded by the Government. In Sweden the office for damage attributable to road traffic has its operating costs covered by motor insurance companies and in the UK the costs of mediation may properly be claimed against the Legal Services Commission on the part of a legally aid party.
In seeking to harmonise legislation in Member States the Council of the EU in a draft directive (COM (2001) 13 final) has said “Legal aid shall be granted in cases where disputes are settled via extra-judicial procedures, if the law makes provision for such procedures or if the parties are ordered by the court to have recourse to them.” (Art 16).
ADR and its increasing deployment is a political priority within the European Union, particularly in relation to the resolution of disputes involving electronic commerce (note for instance the March 2000 Lisbon European Council).
Different member states not surprisingly approach ADR differently. Finland makes conciliation a pre-requisite to court action. In Germany judges are asked to support an amicable resolution through court proceedings. In France Article 21 of the Civil Code states that it is the duty of judges to reconcile the parties. In England the Civil Procedure Rules expressly encourage the use of ADR. Various member states have been testing different ADR procedures.
It suggests that it may be sensible to promote legislation extending the limitation periods to account for the period of mediation. The downside is that sometimes ADR fails to achieve a resolution and occasionally (though it is felt rarely) they fail because one party has not been acting in good faith in the process and may simply have been “buying time”. That represents a not insignificant risk and it might be considered that the automatic extension of limitation periods would be unfair in such circumstances. Furthermore the existence of time pressure is sometimes a positive benefit in ensuring that the ADR process reacts flexibly and speedily to the situation at hand and the very existence of time may occasionally be a real disincentive to settlement being achieved.
Confidentiality is a key to the success of ADR procedures whereas the trend with litigation is for openness (including public hearings). In a commercial context confidentiality as such has its benefits and its downsides. . It allows parties to settle matters outside the glare of publicity which may have adverse consequences on their reputations, goodwill, and even share prices. In fact mediation may take advantage of the leverage of publicity in litigation in the sense that parties will know that if the ADR processes fails, it may mean that everything in the dispute will come out into the open – that itself may be an incentive for the parties to make sure that the ADR process succeeds. On the other hand the existence of confidentiality sometimes encourages parties to take realistic positions, which they perhaps would be less willing to expose in a public area.
The bottom line is that ADR is succeeding in the UK and deserves to succeed across Europe but the word needs to be spread. Plainly there is a very favourable climate for ADR and mediation in particular within the European Union. Member States are taking their own initiatives. The commercial community once it has a sufficient experience of the ADR processes will naturally warm to them and at least see ADR as a sensible option for use before an costly “battle” takes place in litigation or arbitration (or at suitable times during the course of litigation or arbitration but before judgment is delivered). In England there is even a mediation scheme in respect of cases going to the Court of Appeal which have already been determined in the High Court or County Court. A body such as “Euro Expert” is especially well placed to promote the judicious and sensible use of ADR in its members’ home territories and also in cross-border disputes - and I for one encourage such an approach by Euro Expert and the members of its constituent member organizations.