Intellectual Property Mediation Conference
The EU Mediation Directive
Alicante, 29 May 2014
Tackling the challenges to mediation, especially in IP
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Giuseppe De Palo
President, ADR Center (Rome, ITALY) Professor of Alternative Dispute Resolution Law & Practice, Hamline University School of Law (St. Paul, USA)
Obstacles to IP Mediation
• Obstacles to IP Mediation are, by and large, the same obstacles to all mediations
• Savings of time and costs are high on average,
imagine how much they would save on complex IP disputes
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DIRECTORATE GENERAL FOR INTERNAL POLICIES
LEGAL AFFAIRS
‘Rebooting’ the Mediation Directive: Assessing the Limited Impact of its Implementation and
Proposing Measures to Increase the Number of Mediations in the EU
1) Update the “Costs of Non Mediation” survey
2) Analyze the legislation implementing the Mediation Directive in a number of Member States
3) Propose legislative measure to increase the use of mediation across the EU
4) Propose non legislative measures to increase the use of mediation across the EU
The EU Parliament’s Study Goals: Resolving the “EU Mediation Paradox”
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Time and Cost Savings: Break-Even Point in the EU (source: Quantifying
the costs of not using mediation, 2011)
Time Savings
Cost Savings
-€ 4,000.00
-€ 2,000.00
€ 0.00
€ 2,000.00
€ 4,000.00
€ 6,000.00
€ 8,000.00
2% 3% 23% 25% 40% 43% 44.5% 45% 50% 75% 90%
Cos
t Sav
ings
Success Rate of Mediation
-100
0
100
200
300
400
500
5% 8% 8.5% 9% 10% 19.5% 20% 25% 30% 40% 40.5% 50% 75% 90%
Tim
e Sa
ving
s (d
ays)
Success Rate of Mediation
19% Success Rate
24% Success Rate
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High Performance Even at Low Success Rates
Savings of successful mediation are much greater than extra costs (i.e., mediation then litigation) when mediation fails
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1203 Total Responses From Across the EU
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• Questionnaire created and sent to highly selected experts to test the clarity of the format and the questions
• Questionnaire published online and sent to contacts and other highly recognized mediation organizations
• Questionnaire available online for three weeks before the responses began to be analyzed
• 816 responses were collected for the study, an additional 387 were collected after the study period had closed
• The majority of respondents identified themselves as mediators, the number of lawyers who responded was also high
Estimated Annual Number of Mediations in the EU
Over 10 000: DE, UK, IT, NL Between 5 000 and 10 000: HU, PL Between 2 000 and 5 000: BE, FR, SL Between 500 and 2 000: AT, DK, IE, RO, SK, ES Less than 500: BG, HR, CY, CZ, EE, FI, GR, LV, LT, LU, MT, PT, SE 8
Estimated Annual Number of Mediations in the EU
Over 10 000: DE, UK, IT, NL Over 200 000 Italy A bit more than 10 000 Germany United Kingdom Netherlands
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Average Time of a Dispute in Days
566
Average time of litigation in the EU
326
Average time of mediation then litigation (with 50% mediation success rate)
212
Average time of mediation then litigation (with 70% mediation success rate)
Savings 240 days
Savings 354 days
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Average Cost of a Dispute in Euro
9 179
Average Cost of Litigation in the EU
7 960
Average cost of litigation if trial is preceded by succesful mediation in 50% of the cases
6 124
Average cost of litigation if trial is preceded by succesful mediation in 70% of the cases
Savings 1 219
Savings 3 055
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1) Strong confidentiality protection 2) Judges pro-activity 3) Easy enforceability 4) Financial incentives 5) Lawyer duty to inform clients 6) Robust mediator accreditation systems
Legislative Measures That Have Not Made Mediation Happen
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The Single Most Effective Legislative Measure
Mandatory mediation in certain cases
Mandatory mediation info sessions
Financial incentives to mediate
Require counsel to inform parties of mediation
Economic sanctions
Judges power to order mediation
Mandatory mediation with opt-out
270
212
188
142
105
90
85
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The Single Most Effective Legislative Measure
Mandatory mediation in certain cases
Mandatory mediation info sessions
Financial incentives to mediate
Require counsel to inform parties of mediation
Economic sanctions
Judges power to order mediation
Mandatory mediation with opt-out
270
212
188
142
105
90
85
297
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Going Beyond Voluntary Mediation….
I will drink only if someone leads me to water!
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Fight Flight
The Two «Fs»
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Will a «Culture of Safe Driving» Alone Do it?
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1) Introduce “mitigated mandatory mediation” in Mediation Directive and other EU legal instruments on ADR (in force and being proposed), albeit on a temporary basis, as a trial. 2) Insist that the MS accept the “Balanced Relationship Target Number” theory (given the poor results of all other pro-mediation legislative measures, alone or combined, it should lead the MS to do the same as above)
Legislative Measures to Solve the «EU Mediation Paradox»
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Each MS must determine its own BRTN = minimum percentage of cases to be mediated to arrive at “balanced relationship” with that of litigated cases.
Each MS free to choose the appropriate policy tools to reach its BRTN (mandatory mediation, information sessions, financial incentives etc.)
Failure to set and reach BRTN = failure to comply with the Directive
Art. 1 of the Mediation Directive The objective … is to facilitate access to alternative dispute resolution and to promote the amicable settlement of disputes by encouraging the use of mediation and by ensuring a balanced relationship between mediation and judicial proceedings.
The «Balanced Relationship Target Number» Theory
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Recent Trends in Favor of Mandatory Elements in Mediation
• New York County Commercial Division Mandatory Mediation Pilot (“every fifth case”) - expected by the end of Spring 2014
• French Senate Report mandatory mediation trial programs – February 2014
• UK Mediation Information and Assessment Meetings (MIAMs) – April 2014
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«The Emperor Has No Clothes!»
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