Advocate General Opinion on the Consumer ADR Directive and compulsory mediation

In a case referred to the Court of Justice of the European Union (CJEU) by the Italian courts, an Advocate General opinion has been issued which considers the scope of the Consumer ADR Directive, including whether it precludes national legislation from imposing mandatory mediation as a pre-condition to litigation:  Menini and another v Banco Popolare Società Cooperativa (Case C-75/16). 

We have previously reported (here and here) on the introduction of the Consumer ADR Directive (2013/11/EU), which entered into force in July 2013.  Broadly, the Directive aims to encourage the use of ADR to resolve consumer complaints against traders in the EU, including by requiring Member States to ensure that there are ADR entities meeting specified minimum quality standards providing ADR procedures for all such disputes across all sectors.

Italy is one of a small number of jurisdictions where a substantial proportion of disputes are legally required to be mediated before being brought before the courts.  In Menini, two Italian consumers seeking to appeal a judgment objected to being forced to mediate as a pre-condition and the the Italian court requested a preliminary ruling as to whether the relevant Italian law was incompatible with either the Consumer ADR Directive (particularly the provision specifying that mediations covered by the Directive must be voluntary) or the earlier EU Mediation Directive (2008/52/EC).

The opinion prepared by Advocate General Saugmandsgaard and submitted to the CJEU concluded that:

(i)   the Consumer ADR Directive's requirement that mediation be "voluntary"  does not  preclude national legislation from requiring consumers to mediate as a pre-condition to litigation, provided the procedure allowed parties to be in control and organize the process as they wished (paras 72-74).  This was considered to be consistent with the meaning of “voluntary” in the Mediation Directive.  The Opinion concludes that that condition was satisfied in the case of the Italian legislation

(ii)  the Consumer ADR Directive does preclude national legislation which, in respect of mediations covered by that Directive:

• requires the parties to be legally represented in the mediation; or
   
• penalises the parties for withdrawing from the mediation without valid grounds (unless the concept of "valid grounds" includes the party simply being dissatisfied with the ADR procedure).

The Opinion observed that the Italian legislation did not appear compliant in these respects and may need amendment - although the Italian court should be given the opportunity to confirm whether the legislation could be interpreted so as to be in accordance with the Directive's requirements.

(iii)    although this case did not fall within the scope of the Mediation Directive as there was no cross-border element, it would be paradoxical to disallow Member States from imposing compulsory mediation under the ADR Directive where Member States were allowed to impose compulsory mediation for cross-border disputes under the EU Mediation Directive (para 77). However, interestingly, the Opinion concluded that, if a conflict did exist between the two Directives in this regard, the EU Mediation Directive should prevail (para 63).