Thursday, 15 June 2017

Mediation may be mandatory but should be free to withdraw from and of lawyers - CJEU in Menini and Rampanelli (C-75/16)

Yesterday the CJEU issued also the first judgment on the new ADR Directive in the case of Menini and Rampanelli (C-75/16). We have previously commented on the AG Saugmandsgaard Øe's opinion (First case on new ADR Directive...) and the CJEU agreed with the AG's assessment that the new ADR Directive does not preclude Italy to prescribe mandatory mediation procedure, as long as parties retain the right to access the judicial system. The "voluntary nature of the mediation lies, therefore, not in the freedom of the parties to choose whether or not to use that process but in the fact that 'the parties are themselves in charge of the process and may organise it as they wish and terminate it at any time'" (par. 50). The right to access the judicial system would be guaranteed if e.g. the outcome of the ADR procedure is not binding on the parties and if the limitation periods do not expire during such a procedure (par. 56). However, as currently the Italian mediation procedure requires consumers to use legal services (which is contrary to Art. 8(b) of ADR Directive, see par. 64) and does not allow them to withdraw from the mediation process unless they demonstrate the existence of a valid reason for such a withdrawal, these features of the mediation procedure are in breach of the ADR Directive. The latter function makes ADR procedure binding to an extent (see par. 57 and 67 on the necessity of free withdrawal from the ADR procedure at any stage).

The CJEU in providing this answer left a lot of questions posed by the national court unanswered. It left it to the national court to determine whether "an application to have an order for payment set aside and an application for a stay of provision enforcement associated with that measure constitute a complaint by a consumer, of an independent nature in relation to the order for payment proceedings instituted by a trader working in credit..." (par. 42). The ADR Directive applies only if the ADR procedure has been initiated by the consumer.

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