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The Spanish Government has recently published a draft bill of the Law to Boost Mediation.

The future regulation would modify various laws and is aimed at initially subjecting certain conflicts to the mediation system as a form of resolving conflicts outside of judicial process and at the same time lightning the workload and the overloading of the courts.

This formula consists of obliging the parties to undergo mediation proceedings, as opposed to the current voluntary nature of such. The draft bill of the Law has called it “mitigated enforceability”, which constitutes an euphemism to disguise its imperative nature, since mediation shall be a necessary prerequisite for accessing judicial procedures.

The planned reform would modify Law 5/2012 on mediation in civil and commercial matters. The deadline for the duration of the suspensory effect of the mediation shall be extended to 30 calendar days. The areas in the commercial sphere where parties shall be obliged to attempt mediation proceedings before commencing a declaratory judicial process are:

(a) Distribution contracts

(b) Agency contracts

(c) Franchise contracts

(d) Contracts for the supply of goods and services

Nevertheless, the regulation has a main condition: “provided that they have been the object of individual negotiation”.

The inaccuracy of this reference is surprising, as it impossible to know what is to be understood by “individual negotiation”. However, we are confident that if this legal provision is finally approved, clarification shall be provided.

Regarding the interpretation of “attempt at mediation”, the draft bill tells us that this means having carried out an informative session and an explorative session with a mediator (both may take place in the same event), within the six months prior to filing a lawsuit. This session must be attended in person by the concerned parties, and where legal entities are affected, the legal representative thereof or person with decision-making powers of attorney.

The mediators should be registered with the Registry of Mediation and Mediation Institutions under the authority of the Ministry of Justice or the Registries of the Autonomous Region, if this falls within the latter’s competence.

In the event of unjustified non-attendance of the informative session by any of the parties, it shall be understood that they are withdrawing from the requested mediation.

The project, albeit well-intentioned, errs  on the side of a surprising candidness. In the first place, it is clear that the legislator lacks experience and practical commercial perspective. It is not possible to compare lesser commercial conflicts which arise between individuals to those arising between multinational companies, medium-sized or large companies. Likewise, it is obvious that when parties resort to judicial proceedings (that is to say they decide that a third party should settle their differences) it is because they have already exhausted amicable channels, and that what said parties have not been able to solve motu proprio, is not going to be solved by third parties either, particularly if it is not a qualified mediator. Therefore, at the very least, this regulation must establish a quantitative threshold for obliging the parties to have to attend mediation as a prior step before filing a judicial claim.

On the other hand, the draft bill provides for intra-judicial mediation, that is to say, mediation within the judicial proceedings in any civil or commercial matters, when prior to the proceedings it has not been attempted, and the court understands that the issues may be resolved through mediation. Mediation  shall not interrupt the process, unless requested by the claimant and defendant. The court shall designate a mediator in accordance with the regulated procedure in mediation legislation for civil and commercial matters.

In our opinion, the system for resolving conflicts as an alternative to the judicial process, is and should continue to be an alternative subject to the will of the parties, especially in the commercial environment. Enforceability is the opposite of mediation. The right to legal proceedings is impaired by the imposition of a prior procedure in which the parties are obliged to state their claims to a third party whose qualifications and understanding regarding a matter under debate may be questionable and in whom they most probably would not place their trust if the mediation was voluntary. On the other hand, it is obvious that in most conflicts with a certain substance, whether it be quantitative or qualitative, the mediator is not going to be able to offer better solutions than those that the parties may have already tried beforehand. Additionally, it is not reasonable to expect that the mediator is better qualified than a judge or magistrate to evaluate a case and to issue judgment, particularly in complicated cases.

Common sense and pragmatism, which normally govern the agents operating in business, determine whether it is appropriate for a judicial process or the intervention of a mediator to provide solutions to conflicts arising between them.

Obligatory mediation shall mean in many cases the dilation in the process of obtaining a fair trial, which is long and tedious in itself as things stand. This dilation may cause serious damage which may be difficult to repair later on and -whether they like it or not- it shall imply the publicity of the conflict and the claims of the parties prior to the commencement of the judicial process. The measure proposed by the Government may have a certain justification in cases of conflicts between private parties and provided that the value thereof is not substantial. However, generalising obligatory mediation for commercial matters is not going to generate benefit in the management of the administration of the justice system, but instead more costs and complexity. Finally, we must ask whether it is reasonable to predict that the measure will provide a decrease in judicial cases or more guarantees for the actionable. Not only do we feel that this is not the case, but that it is a coercive measure that will end up being understood by the market as another obstacle, a further dilation and ultimately, a restriction upon the exercise of the primary right to effective judicial protection.

For further information, please contact:

Eduardo Vilá

25th January 2019

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