Mediation clause

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[edit] Contents of the Mediation Clause

A mediation clause may foresee:

  • The organization of the mediation;
  • The modalities of recourse to a mediator;
  • The professional guarantees that the mediator must present (independence, neutrality, impartiality and confidentiality);
  • The repartition modalities for the mediation fees;
  • A suspension of prescription time-limits;
  • The recourse to mediation before any further recourse to a tribunal in case of status change of either party or because of any other difficulties which might lead one of the parties to resort to a judicial proceeding or not to respect the established contract following the mediation.

A company can foresee in its contracts with private individuals or partners to bear all the mediation costs. In no case the mediation clause would attempt to exclude the recourse to justice.

[edit] Examples

  • 1) In case of a dispute, the parties agree that at the request of one of them, they will appeal to a professional mediator. They will equally share the mediator fees. They commit themselves to undergo a separate personal interview and then at least one common meeting with the mediator in order to seek, with his regulating assistance, the best possible solution suited to resolve their conflict.
  • 2) The parties agree that if a dispute arises about the subject or any provisions of the involved contract, they would urgently recourse to a professional mediator for his ethical guarantees of independence, neutrality, impartiality and confidentiality. Before any recourse to mediation, in case one of the parties would feel compelled to initiate a legal proceeding, the mediator lets the judge decide the necessity (or not) to begin a mediation process according to the real character of urgency for a court decision; so no party, even possibly implicated, can be harmed. Thus, by the parties' will and the judge's decision, mediation would be suspensive of all prescription time-limits.
  • 3) The contracting parties, aware that in case of dispute they might be struggling to correctly and deeply communicate together and aware that they might be unable to negotiate peacefully, commit themselves to recourse to a professional mediator in order to help them along the conflict resolution. About the court referral, if one of the parties gives to the mediator the power to initiate and lead a meeting, the other party must attend it in the month following the request. For the meeting, the mediator shall send a simple letter and a letter with acknowledgement receipt. If the parties do not find an agreement, or if one of them believes that it would be more interesting to resort to a legal proceeding, the arbitration clause shall be deemed honoured.

[edit] Consultation of Mrs Laura Combaz, Lawyer in Chambery (France, March 2007)

“You have asked me about the legality and contractual value of a mediation clause inserted within a contract between professional and private individual.

A mediation clause implies the obligation for the involved parties to resort to a third party mediator when a dispute has arisen as a prior measure before further recourse to any jurisdiction.

The first approach (section 1134 of the French Civil Code) suggests that such a clause, if it is mutually and freely consented, is absolutely legal under the condition that no provision of public order is contravened. In France, arbitration clauses are not valid for private individuals.

The arbitration clause, unlike the mediation clause, raises the arbitrator as a judge and renders the pronounced judgment official and imperative.

On the other hand, the mediation enables the parties to maintain their full freedom and autonomy of will. Indeed, until the end of the process, the parties are always free to reject the reached solution.

In other words, if the arbitrator has a judicial function, the mediator is situated outside the framework of judicial system and his intervention has no other purpose than to enable the parties to establish a voluntary solution, therefore contractual.

Thus, provided that the clause is voluntary and mutually consented, the prior and obligatory recourse to mediation seems perfectly legal.

However, the mode of designation of the mediator should be foreseen and specified, so no suspicion of collusion with the professional third party might be claimed. In that context, the designation of an organization attached to a "charter" of quality and ethics seems desirable.

The last difficulty lies in the prescription time-limits, especially in some specific areas (like construction law). Recourse to the mediator does not provide the power to interrupt a prescription, so the non-specialist must be informed on it and be able to interrupt the prescription through procedural means in order to preserve his right of further action.

Finally, it seems possible and even appropriate to add an obligation for the professional to endorse the reached solution found with the mediator if it is accepted by the consumer, in order to make the mediation clause appear as much more serious in the eyes of the private individuals who subscribe it.

However and one more time: this obligation can not be imposed on the consumer.

The last question of law raised by such a mediation clause comes from the sanction following the disrespect of the clause.

The principle of the contractual commitment enables to point out the inadmissibility to initiate a court referral as long as the mediation clause, freely consented, has not been implemented.

In France, the obligation to implement a mediation process as a prior condition before any litigation, in accordance with contractual clauses, is a result obligation.

The failure to respect this prior condition would enable the judge to quash the court referral that the party has requested to a jurisdiction (sections 122 and 124 of the New Code of Civil Procedure - France).

In contrast, the conduct, progression and outcome of the involved mediation are only subject to an obligation of means.”

[edit] A court Order for the Mediation Clause

Some doubts could persist since the mediators inform that it is possible to include a mediation clause in the contracts, a clause that involves a free agreement aiming to anticipate the risks of any contract.

It is reasonable to consider the inclusion in a contract of a mediation clause that aims to extend the contractual freedom by "framing" conflictual impulses through alternative conflict resolutions. We should ensure that mediation will be suspensive of prescription time-limits which can be very constraining.

But be careful, the mediators are not allowed to provide legal advices. It would be an illegal practice of the lawyer occupation. Therefore, even though the mediators are allowed to incite companies or any other individuals who are writing a contract to insert a mediation clause, and even to envision the recourse to their services of independent mediators, they must refer the parties to a legal professional for all legal aspects, especially about the precautions for possible legal proceedings in progress or to initiate as a protective measure.

[edit] Another Decision

Two companies sign a contract that specifies:

  • The designation of the president of a Labour Union as a mediator in case of a dispute;
  • The recourse to a judicial proceeding to the Commercial Court of Paris in case of a failed or refused mediation.

Subsequently, one of the companies initiates a legal proceeding aiming the contract resolution. The request has been rejected, since the company had to first implement the mediation process foreseen in the contract (April 8, 2009).

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