Admittedly, flexibility, a commendable virtue, has to be weighed against certainty, and more so in an international context. If settlement agreements are treated as contracts with scope for challenge, thus bringing with them unpredictability, the very benefits that mediation offers, such as low cost and speed, would be lost.

Before concluding, a few words on the other variants. Variant A63 simply provided that a signed settlement agreement is binding and enforceable. It does not state how such agreements may become enforceable and leaves it to the state to specify the provisions for enforceability, thus introducing an element of unpredictability. It is this variant that has been adopted in the final text, namely in Art 14. Variant C is similar to the solution suggested earlier – that is, appointing an arbitral tribunal post-mediation so that the settlement can be recorded in the form of an arbitral award. The objections raised earlier apply equally here.

Mediation online

As with arbitration, the provision of online mediation has been the subject of discussion since the late 1990s.64 A number of private organisations65 offer online dispute resolution,66 which includes mediation besides negotiation and arbitration. In a legal context, mediation is perhaps more conducive to the electronic medium than arbitration, since issues such as juridical seat are not relevant. This does not mean that online mediation is free of legal obstacles. Questions about the recognition of an electronic contract, such as an electronic settlement agreement, may arise. However, given the legislative changes taking place internationally to accommodate electronic contracts, as a result of instruments such as the UNCITRAL Model Law on Electronic Commerce, it should not be a major obstacle.67

In the absence of statistics on the web sites, the success of cyber mediation can be assessed only on the basis of empirical research. On the down side, lack of face to face contact in real space and the associated non-verbal communication techniques that play an important role in mediation may prove a major handicap. Current technology in the form of video conferencing (where available) does not seem to be sufficiently sophisticated for the effective use of non-verbal communication.

Despite these apparent shortcomings, it seems that legislators are taking online mediation seriously, albeit for consumer disputes in the context of e-commerce.68 The European Union (EU) E-Commerce Directive on Electronic Commerce,69 for instance, makes provision for dispute settlement using electronic means. Recitals 51 and 52 state:

Each Member State should be required, where necessary, to amend any legislation which is liable to hamper the use of schemes for the out-of-court settlement of disputes through electronic channels; the result of this amendment must be to make the functioning of such schemes genuinely and effectively possible in law and in practice, even across borders.

63It reads: ‘If the parties reach agreement on a settlement of the dispute and the parties and the conciliator or the panel of conciliators have signed the settlement agreement, that agreement is binding and enforceable [the enacting state inserts provisions specifying provisions for the enforceability of such agreements].’

64See, for example, Cona, ‘Application of online systems in alternative dispute resolution’ (1997) 45 Buffalo LR 975; Donahey, ‘Current developments in online dispute resolution’ (1999) Journal of International Arbitration 115.

65For a complete list, see Schultz, Kaufmann-Kohler et al, Online Dispute Resolution:The State of the Art and the Issues, 2001, University of Geneva, available at www.online-adr.org.

66See http://onlineresolution.com.

67See Chapters 3 and 4.

68See Recommendations of the OECD Council Concerning Guidelines for Consumer Protection in the Context of Electronic Commerce, December 1999, available at www.oecd.org.

69Directive 2000/31/EC of 8 June 2000 on Certain Legal Aspects of Information Society Services in Particular Electronic Commerce [2000] OJ L178/1. See Cortés Online Dispute Resolution in the European Union, 2011, Routledge.

622 | MEDIATION (CONCILIATION): AN ALTERNATIVE FORM OF DISPUTE RESOLUTION

The effective exercise of the freedoms of the internal market make it necessary to guarantee victims effective access to means of settling disputes . . . Member States should examine the need to provide access to judicial procedures by appropriate electronic means.

Art 17(1) provides: ‘Member States shall ensure that . . . their legislation does not hamper the use of out-of-court schemes, available under national law, for dispute settlement, including appropriate electronic means.’

The EU Directive on mediation in civil and commercial matters

With harmonisation in mind, the Directorate-General for Justice and Home Affairs initiated a preliminary draft proposal for a directive on certain aspects of mediation in civil and commercial matters.70 After subsequent amendments, Directive 2008/52/EC on certain aspects of mediation in civil and commercial matters (Directive) was adopted.71 Its purpose is to promote the use of mediation in cross-border disputes, while providing a predictable framework for the key aspects of mediation and ensuring the quality of mediation. Member states are required to comply with the Directive by 21 May 2011.72 According to Art 1(2), the Directive will apply to cross-border disputes in civil and commercial matters but will not apply to revenue, customs or administrative matters or to the liability of the states for acts or omissions in the exercise of State authority. The cross border element is established by looking at the domicile or habitual residence of the parties. According to Art 2(1), a cross-border dispute is one where at least one of the parties is domiciled or habitually resident in a member state other than that of any other parties at the time when the mediation is agreed, or where mediation is ordered by the court, or an obligation to use mediation arises under national law or an invitation to use mediation to settle the dispute is made by a court.

The Directive does not apply to the different types of ADR (e.g., Med-arb) that are to be found. It is restricted to mediation and Art 3(a) defines mediation as follows:

Mediation means a structured process, however named or referred to, whereby two or more parties to a dispute attempt by themselves, on a voluntary basis, to reach an agreement or settlement of their dispute with the assistance of a mediator. This process may be initiated by the parties or suggested or ordered by a court or prescribed by the law of a Member State.

This definition does not prescribe any specific type of mediation and, hence, will, presumably, depend on what the parties choose.

Confidentiality, as stated earlier, is regarded as a central core of mediation and this aspect is addressed in Art 7. Article 7 expects confidentiality to be respected and requires member states to ensure that mediators and those involved in the administration of the mediation process are not compelled to give evidence in civil and commercial judicial proceedings and arbitration regarding information that arises out of or in connection with a mediation process. However, this is subject to the following exceptions:

70Available at http://europa.eu.int. See also Green Paper on Alternative Dispute Resolution in Civil and Commercial Law (COM (2002) 196 available at http://europa.eu.int).

71OJ L 136/3 24.5.2008. Implemented by the UK - Cross-Border mediation (EU Directive) Regulations 2011, S.I. 2011 No 1133. Came into force 20 May 2011.

72In the case of Art 10, dealing with information on competent courts and authorities to receive requests for the enforceability of agreements resulting from mediation, the date of compliance is 21 November 2010.

•where the parties agree otherwise (Art 7(1));

•overriding public policy of the Member State, such as protection of the best interests of children or to prevent physical or psychological harm of a person (Art 7(1)(a)) or

•where disclosure is necessary to implement or enforce the agreement (Art 7(1)(b)).

The enforceability of the mediation settlement is addressed in Art 6, and this provision requires member states to ensure that a written settlement be enforceable by a court. However, this is subject to a number of exceptions, (1) where the content of the agreement is contrary to the law of the member state where the request is made or (2) where the law of the member state does not provide for its enforceability.

Since ensuring the quality of mediation is one of the of objectives of the Directive, Art 4 expects states to encourage the adoption of and adherence to voluntary codes of conduct73 and other quality control mechanisms. Initial and further training is another aspect addressed by the article.

The EU initiative has seen some controversy. A number of organisations, such as the Swedish Chamber of Commerce, Council of the Bars and Law Societies of the European Union (CCBE) and the Scottish Parliament, Justice 1 Committee, were consulted on the draft proposal. The Swedish Chamber of Commerce saw no specific European need for a European directive on the issue of mediation since the need is addressed by the Conciliation Law.The CCBE, conversely, supported the EU initiative and made a number of suggestions for the improvement of the proposal.74 The Scottish Parliament Justice 1 Committee’s response to the Draft Proposal was lukewarm, and it was felt that regulation may stifle the growth of mediation in Scotland, which was still very much in its infancy compared to England or Europe.75

Although it is understandable that regulation is seen as a growth inhibitor76 and may, in some circumstances, actually result in stifling growth, it is debatable whether it would in the context of mediation. For mediation to be conducted successfully, it needs to be carried out within a framework. The EU Directive provides just such a framework.

As for the view that the Conciliation Law is sufficient for the purposes of harmonisation, it must be said that the Conciliation Law is not exhaustive and does not impact on the level of certainty in respect of enforceability of settlement agreements. At the very least, the Directive has the opportunity to rectify this drawback in a suitable manner that makes mediation an attractive alternative.

There has been another major development in respect of disputes emanating from the ICC. This is the Dispute Board Rules77 which came into force on 1 September 2004. Dispute Boards are designed to deal with disputes as they arise and are set up at the outset of a contract and remain in place throughout the duration of the contract.

These are ideal for midor long-term contracts. The Dispute Board Rules cover a number of matters from definitions of the different types of dispute boards (Arts 4–6), appointment of members (Art 7) and their obligations (Arts 8–10) to operation and powers of the dispute board (Arts 14–15).

73For an example of a code of conduct, visit www.cedr.com.

74See Preliminary CCBE Comments on the Preliminary Draft Proposal for a Directive on Certain Aspects of Mediation in Civil and Commercial Matters, available at www.ccbe.org.

75See JI/52/04/22/6 (2 June 2004) Justice 1 Committee ‘European Justice and Home Affairs Scrutiny’.

76See Chapter 3, on the regulation/self-regulation debate in relation to electronic commerce.

77Available at www.iccwbo.org.

Part VI

Corruption

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