Opinion of the European Economic and Social Committee on the "Green Paper on alternative dispute resolution in civil and commercial law" (COM(2002) 196 final)
Date: 2002-12-11
Institutions: European Economic and Social Committee
Subjects: access to the courts, civil law, civil proceedings, commercial law, conflict of jurisdiction, trade dispute

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Official Journal of the European Union

8.4.2003

Opinion of the European Economic and Social Committee on the ‘Green Paper on alternative
dispute resolution in civil and commercial law’

(COM(2002) 196 final)

(2003/C 85/02)

On 19 April 2002, the Commission decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on the ‘Green Paper on alternative
dispute resolution in civil and commercial law’.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 6 November 2002. The rapporteur was
Mr Malosse.

At its 395th plenary session (meeting of 11 December 2002), the European Economic and Social
Committee adopted the following opinion by 91 votes to one with two abstentions.

0. Summary of the opinion

0.1.
On the overall approach: Community action should
take the form of a recommendation. Nevertheless, at the end
three years, the case for switching to a directive or
of
continuing with the recommendation should be considered
after evaluating the latter’s impact.

On the scope of ADR clauses: referral to the courts
0.2.
should be declared inadmissible as
the actual
implementation of the ADR procedure has not gone ahead.
However, this provision should not apply in the case of
membership contracts and, more generally, consumer con-
tracts.

long as

0.3.
On the suspension of the period of limitation for court
action: this should be allowed when the initial contract makes
no provision for an ADR clause, and also in the absence of
such a clause, but only from the moment the ADR mechanism
has been effectively implemented by the parties.

0.4.
On minimum procedural guarantees: it is necessary to
retain the principles of third-party impartiality, transparency,
effectiveness, fairness and confidentiality.

0.5.
On the outcome of the ADR procedure: the legal
nature of the agreements should be harmonised throughout
the Member States and it should be stipulated that an
agreement which is enforceable under any one State’s legis-
lation would ipso facto be enforceable throughout
the
countries of the European Union. The ‘Brussels I’ regulation
should be amended accordingly.

0.6.
On the status of those involved: initial practical training
— supplemented by mandatory continuing training — should
be provided for third parties; a European code of conduct
should be drawn up to help third parties in their work; steps
should be taken to form associations of third parties, which
should be approved at European level.

On insurance for third parties: third parties should be
0.7.
encouraged to take out civil liability insurance, either person-
ally or through the body (legal person) that has appointed
them.

1. State of play

1.1.
On 19 April 2002, the European Commission, at the
request of the Ministers of Justice of the Member States,
published a Green Paper in the context of Article 65 of the
Treaty establishing the European Community, which states
that measures in the field of judicial cooperation are to include
improving and simplifying the recognition and enforcement
of decisions in civil and commercial cases, including decisions
in extrajudicial cases. The Commission’s objective is therefore
to provide interested circles with better information on the
existing rules and regulations and also to launch a debate on
the possible need for common provisions at European level.

‘Alternative Dispute Resolution’ — ADR — is defined
1.2.
in the Green Paper as an out-of-court dispute resolution
process, excluding arbitration proper (1). It is an amicable
process which, often through the offices of a neutral and
independent third party, helps the parties to come to an
agreement and reach a solution that settles their dispute. ADRs
generally fall
into one of two categories. When they are
conducted directly by the court or entrusted by the court to a
third party, they are ‘ADRs in the context of judicial proceed-
ings’. However, when an out-of-court procedure is used by the
parties, they are ‘conventional ADRs’. ADRs have several
objectives: to re-establish dialogue between parties, maintain
economic relations, help provide good justice and restore
social harmony.

(1) Arbitration is closer in practice to a quasi-judicial procedure than
to an ADR as arbitrators’ awards replace judicial decisions.
Arbitration is already highly regulated in both the Members States
and internationally.

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1.3.
The Heads of State and Government of the Fifteen have
demonstrated their enthusiasm for ADRs at a number of
European summits: in Vienna in December 1998, the European
Council, in its conclusions, endorsed the Council and Com-
mission action plan on establishing an area of
freedom,
security and justice and urged the Council to start immediately
with the implementation of priority measures to that end;
the
similarly,
European Council pointed to a new way forward in the field
of justice and home affairs by calling for the greater use of
extrajudicial procedures. The Lisbon European Council
in
March 2000 called on the Commission and the Council to
consider how to promote consumer confidence in electronic
commerce, in particular through alternative dispute resolution
systems. And lastly, in Feira in June 2000, this objective was
re-affirmed when the eEurope 2002 Action Plan was approved.

in Tampere, on 15 and 16 October 1999,

In more concrete terms, a number of sectoral measures

1.4.
on ADRs have been taken at European Union level.

These initiatives have been largest in number in the
1.5.
field of consumer law. This reflects the Commission’s concern
to offer consumers a uniform level of protection. See, for
instance, the Commission recommendations of 30 March
1998 (1) and 4 April 2001 (2).

1.6.
In parallel, the Council and the Commission, at the
time of adoption of the ‘Brussels I’ Regulation (3) on jurisdiction
and the recognition and enforcement of decisions in civil and
commercial matters, reiterated, albeit not in the regulation
itself, but in a joint declaration (4), how important it was
for work on alternative methods of dispute resolution in
commercial and civil matters to continue in the Member
States, thereby stressing the complementary role that these
alternative methods could play in relation to conventional
court proceedings, particularly in the area of electronic com-
merce.

The Directive of 8 June 2000 (5) expressly included
1.7.
provisions (Article 17) calling on Member States to encourage

out-of-court bodies to operate in the context of consumer
disputes (6).

1.8.
Lastly, in order to facilitate consumer access to the
amicable settlement of cross-border disputes, two European
networks of national bodies have been set up by the European
Commission. The ‘FIN-Net’ network was launched on 1 Febru-
ary 2001 in the financial services sector, while the ‘EEJ-Net’
network, which has existed as a pilot project since 16 October
2001, covers all fields.

1.9. Moreover, the need to take account of the human
dimension of family disputes has led the Council and the
Commission to take parallel initiatives in family law. In this
respect, the possibility of mediation as a means of solving such
disputes is clearly one of the objectives of the proposal for a
Brussels II bis Regulation (7).

1.10.
In the field of labour law, ADRs (often in the form of
mediation) are a mandatory preliminary to any court case in
many countries of the European Union, and, in some cases,
the first stage in the court proceedings. Their usefulness in
industrial disputes was stressed back in 1989 in the European
Social Charter (8);
in its Communication of 28 June 2000
entitled, Agenda for Social Policy (9), the Commission also
stressed the importance of ADRs in the context of modernising
the European social model. It subsequently instructed a high
level group on industrial relations and managing change to
issue concrete recommendations in this respect.

Although ADRs are therefore to be found in a number
1.11.
of fields, this does not mean that they are always understood
in the same way, either between or within EU Member States.
ADR is a general term for which very different, and in some
cases imprecise, terminology is used. These differences which
are certainly one of their features, could nevertheless prejudice
their proper development. It is therefore desirable to provide a
framework in which ADRs can flourish in complete safety,
and for this purpose to pinpoint certain principles in terms of
minimum procedural guarantees, third party impartiality and
fairness and confidentiality.

( 1) On the principles applicable to the bodies responsible for out-of-
court settlement of consumer disputes, OJ L 115, 17.4.1998.
( 2) On the principles for out-of-court bodies involved in the consen-
sual resolution of consumer disputes, OJ L 109, 19.4.2001.
( 3) Council Regulation (EC) No 44/2001 of 22 December 2000 on
jurisdiction and the recognition and enforcement of judgments in
civil and commercial matters, OJ L 12, 16.1.2001.

( 4) Joint Declaration of the Council and the Commission concerning
Articles 15 and 73 of the Regulation in the minutes of the meeting
the Council of 22 December 2000 which adopted this
of
Regulation.

( 5) Directive 2000/31/EC of 8 June 2000, OJ L 178, 17.7.2000.

(6) Incidentally, for any dispute concerning electronic commerce —
and not just consumer disputes — the Member States must ensure
that their legislation does not hamper the use of ADR mechanisms
by electronic means.

(7) COM(2001) 505 final, OJ C, November 2001. This proposal for
a regulation supplements Regulation (EC) No 1347/2000 of
29 May 2000, OJ L 160, 30.6.2000, p. 19 — called ‘Brussels II’
— on jurisdiction and the recognition and enforcement of
judgments in matrimonial matters and in matters of parental
responsibility.

(8) Article 13.
(9) COM(2000) 379, 28.6.2000.

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For this purpose action has been taken in the context
1.12.
of the Grotius programme (1),
involving several mediation
centres from Member States (2). The MARC 2000 programme
on European cooperation for the development of amicable
methods of settling enterprises’ civil and commercial disputes
has also been implemented and has led to the formulation of
a list of recommendations intended to promote a minimum
level of harmonisation for ADRs in Europe.

1.13.
Accordingly, the Green Paper under consideration
contains twenty-one questions concerning the establishment
of basic principles common to the Member States. The
methods and content of these principles need to be examined.

2. The main principles to be promoted

2.1.

Previous ESC positions

2.1.1.
A pioneer in this respect, the ESC was quick to
indicate its interest in ADRs as a complementary way of
resolving disputes which calls on the responsibility of econ-
omic and social players from organised civil society (so-called
‘functional subsidiarity’). Mention can be made in particular of
the opinion on the Proposal for a Council Regulation (EC) on
jurisdiction and the recognition and enforcement of judgments
in civil and commercial matters (3), the opinion on the Initiative
of the Federal Republic of Germany with a view to adopting a
Council Regulation on cooperation between the courts of the
Member States in the taking of evidence in civil and commercial
matters (4), the opinion on the Proposal for a Council Decision
establishing a European Judicial Network in civil and commer-
cial matters (4), and the opinion on the Proposal
for a
European Parliament and Council Regulation concerning sales
promotions in the Internal Market (5).

2.2. Needs

On the one hand, dispute settlement is increasingly
2.2.1.
faced with lengthening procedures and costs that are in some
cases disproportionate to the issue at stake. Over and above
these classic problems, one of the features of cross-border
disputes is that they often involve complex issues relating to
conflicts of law or jurisdiction. It is therefore chiefly to remedy
the problems of access to justice that ADRs have been
developed as they can play a fully complementary role to court
proceedings. In other words, promoting these methods of

( 1) This programme helps through the provision of grants to
facilitate judicial and extrajudicial cooperation by fostering mutual
knowledge of legal and judicial systems.

( 2) The Brussels Business Mediation Centre (BBMC, Belgium), the
Centre for Effective Dispute Resolution (CEDR, United Kingdom),
the Netherlands Mediation Institute (NMI, Netherlands), Unionca-
mere (Italy) and the Centre de médiation et d’arbitrage de Paris
(CMAP), leader of the MARC 2000 programme.

( 3) OJ C 117, 26.4.2000.
( 4) OJ C 139, 11.5.2001.
( 5) OJ C 221, 17.9.2002.

out-of-court settlement seems to offer a solution to the
proliferation of cross-border disputes resulting from increasing
trade, in particular electronic commerce, and citizens’ greater
mobility.

On the other hand, it should be borne in mind that
2.2.2.
ADRs have been developed first and foremost as a priority for
consumers and also for the world of work and industrial
disputes. They are, however, just as useful in settling disagree-
ments between enterprises: for instance trading partners are
keen, even before a dispute develops, to find neutral ground
where it is possible to examine and discuss their respective
interests in the presence of a third party. Appropriate solutions,
which it would very often not have been possible to adopt
otherwise, may well enable them to continue their commercial
relations.

At all events, ADRs must not be a way of evading
2.2.3.
national judicial systems, as the EESC has pointed out every
time that it has spoken on this issue. ADRs must continue to
be an option, agreed by each of the parties. This concern has
to underpin all the replies given to the Green Paper’s questions.
ADRs have the advantage, however, of proposing an alternative
procedure to the parties. The latter still retain their fundamental
right to seek redress through the courts, even though we know
that this generally functions in an unsatisfactory way (delays,
bulky dossiers, slow procedures). Lastly, promoting ADRs also
reflects the desire to support a model of civil society based on
the principle of conciliation, in which civil society players and
organisations occupy an important place.

2.2.4.
The question of the pertinence of action at European
level with regard to ADRs rests on the principles of pro-
portionality and subsidiarity. It is necessary, on the one hand,
not to set models in stone and to leave it to the local, regional
or national level to develop the most appropriate methods. On
the other hand, it has to be borne in mind that potential
disputes are increasingly cross-border in nature in a Europe
which is increasingly part and parcel of the daily life of
economic players (single market, single currency) and citizens
(travel, work mobility, family ties, etc.). It is therefore necessary
to promote, in a measured way, an appropriate framework for
the development of ADRs at European level. With this in
mind, the Committee tends to favour a flexible approach,
advocating a resolution in order to provide a reliable reference
framework, measures to promote and exchange good prac-
tice (6) and lastly encouragement for the creation of networks
of European ADR operators. The adoption of a European code
of conduct seems in this respect to be an illustrative of the
potential role of the European Union in offering support by
disseminating good practice.

(6) A number of Member States have taken sectoral

initiatives to
promote ADR by establishing consultative authorities for ADR
(France), financing ADR structures (Scandinavian countries), set-
ting up vocational training programmes (Portugal) or publicising
information about ADR.

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3. The Green Paper’s questions: initial points for dis-

cussion

3.1. On the European Union institutions’ overall approach to

ADRs (questions 1-2-3-4)

3.1.1.
In general, as regards the ADR procedure itself,
recourse to a regulation or a directive might well run the
risk of
impeding the development of ADRs, whereas a
recommendation would seem better geared towards retaining
the flexibility of ADRs: it would make it possible to sketch out
a legal framework while advocating compliance with common
principles with regard to the conduct and training of the
impartial ‘third party’ (1). Nonetheless, given the lessons drawn
from an appraisal of this recommendation over a period of
three years, the case for a directive that provides minimum
procedural guarantees should be studied. As regards the
particular point of the interference between the ADR procedure
and court proceedings (lack of jurisdiction of the courts in the
case of ADR clauses, suspension of periods of limitation (2),
the introduction of binding measures to cover these aspects
will probably need to be envisaged when the ‘Brussels I’
regulation is being revised.

3.1.2.
A further question asks whether the scope of ADRs
should be extended to all fields. If such an option were to be
adopted, it would be necessary, however, to specify that each
State could exclude what it considers to be issues of public
order over which national courts therefore have jurisdiction.
Making ADRs generally applicable would nevertheless make it
easier to pinpoint common rules of conduct and general
principles.

3.1.3.
The principles applied to traditional methods of
dispute resolution should also be applied to online dispute
resolution- which is to be encouraged, especially in consumer
law. These principles should be adapted to the technical
specifications relating, for example, to the security of data
exchanged on the Internet.

3.1.4.
ADR practices in family law, which have already
proved their worth in a number of countries, must be
developed as an absolute necessity. It would be helpful if the
proposal for a ‘Brussels II bis’ regulation, which is more
favourable to such practices, were to be enacted. There is also
a need to set up a network of the family mediation bodies in
Europe which are recognised by the competent national
authorities, Ministries of Justice or national courts responsible
for family matters.

3.2. On the value and scope of ADR clauses included in contracts

(questions 5-7-8)

The parties to a contract may make provision, when signing
the contract, for recourse to ADRs; the question is whether
their scope needs to be made uniform in all countries.

( 1) The term used in the Green Paper to denote the third party —
conciliator, mediator, etc. — involved in an ADR procedure.

( 2) See points 3.2 and 3.3.

3.2.1.
In the first place, analysis shows that a mediation or
conciliation clause of this type entails an obligation to produce
a result, but solely as regards the actual implementation of the
procedure. Such a clause should therefore oblige the parties to
try to find a negotiated solution, pursuant, moreover, to the
general rules governing any contract: parties that fail so to do
might then be deemed contractually liable and could run the
risk of being ordered to pay damages. On the other hand, once
the mediation or conciliation procedure has been launched,
the only obligation incumbent on the parties would be to try
to reach an agreement in good faith: in no case could it be
mandatory to reach a negotiated settlement of the dispute.
Therefore, each of the parties should remain free to end the
negotiation process and could be deemed liable only if there
were evidence of bad faith.

3.2.2.
Secondly, it results from the above that the existence
of such a clause could merely lead to the referral to the
courts being declared inadmissible as long as the actual
implementation of the ADR procedure has not gone ahead. At
all events this solution should not be acceptable for member-
ship contracts, consumer contracts and employment contracts.
The particular features of some matters show that ADRs
clauses could be dangerous when one of the parties is in a
position of weakness.

3.3. On the suspension of court proceedings in the case of recourse

to an ADR mechanism (questions 9-10)

3.3.1.
If such a rule were to be adopted by the Member
States, there would need to be a differentiation between two
cases: contracts comprising an ADR clause at the time of
conclusion or contracts with no such clause.

In the first case, each party could invoke the ADR
3.3.1.1.
clause before the court, which would be enough to bring about
the suspension of the court proceedings. The mediator should
ensure that the mediation process does not go on unduly long
without producing a result so that the suspension is as short
as possible.

3.3.1.2.
The answer is somewhat more problematic when
there is no such clause as there are two conflicting arguments.
On the one hand, the automatic suspension of the period of
limitation could be used as a delaying tactic by one of the
parties (3). On the other hand, as the concern is to promote
ADRs, would it be logical to penalise parties who decide to
have recourse to them in good faith? It is for this reason that
it could be decided, as a ‘safeguard’, to use the ‘actual’ (4)
implementation of an ADR as the criterion, the effect of which
would be to suspend the period of limitation.

(3) In the case of an ADR clause, however, there is less of a risk as
the parties have, from the initial contract, demonstrated a genuine
desire to have recourse to mediation.

(4) It is the task of the courts to determine if this is the case. For this
for instance, consider the determining

purpose,
criterion to be the parties’ first meeting with the third party.

they could,

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On this basis, and in both these cases, if the parties fail to
reach an agreement settling their dispute,
the period of
limitation would resume from the day in which the mediator
announces that his role has come to an end.

the parties. In any case, the principle of fairness (3) means that
the third party must ensure that a balance is kept between the
parties throughout the procedure.

3.4. On minimum procedural guarantees (questions 11-12-13-

15-16)

3.4.1.
After analysis, the principles set out in the two
Commission recommendations (1) of 1998 and 2001, with
regard to consumer law could provide a sound starting point.

3.4.2. More generally, for civil and commercial matters, the
minimum guarantees connected with the ADR procedure —
which should be included in a recommendation (see 3.1.1) —
would be as follows:

— the principle of

the third party
the impartiality of
(conciliator, mediator, etc.) with respect to the parties:
the ‘third party’ must have no conflict of interest with the
parties and must inform them of his impartiality and
independence prior to the commencement of the ADR
procedure;

— the principle of transparency; the parties must have access
to the necessary information at all stages of the ADR
procedure (general arrangements — languages, timetable
— proceedings, cost, value of and agreement reached).

— the principle of effectiveness, through ease of access (2)

and affordable cost for the parties;

— the principle of fairness, reflected in particular by the
‘equal’ treatment of each of the parties by the third party,
in particular as regards information on the conduct of the
procedure, the right of withdrawal at any time in order
to instigate court proceedings or other out-of-court
means of obtaining redress; ensuring balanced speaking
time for the parties at separate interviews with the third
party, etc.

— the principle of confidentiality; arguments exchanged
by the parties in an ADR procedure, and any other
information, should be kept confidential — unless the
parties have expressly stated otherwise. This same prin-
ciple of confidentiality should apply to the outcome of
the ADR procedure.

3.5. On the outcome of the ADR procedure (questions 17 and 18)

Including a period of reflection before or after the
3.5.1.
signing of an ADR agreement, to allow time for further
thought,
is not desirable. In practice, this runs the risk of
perverting the ADR procedure and the action in good faith of

3.5.2.
The legal force of the agreements should be harmon-
ised throughout the Member States. Such agreements are
‘transactions’, whatever name is given to them in the different
countries, but the term ‘transaction’ does not, have the same
meaning everywhere.

To the extent that this question goes beyond the actual scope
of ADRs, a harmonisation strategy of this type should be
examined in a binding and more far-reaching European text
concerning contract law (4).

3.5.3.
It should be stipulated here and now than an
agreement which is enforceable under any one State’s legis-
lation, would ipso facto be enforceable throughout
the
the European Union. When the ‘Brussels I’
countries of
regulation is revised, it should therefore also be amended on
this point.

3.6. On the status of those involved (questions 14-19-20)

It
is necessary to call on third parties with recognised
qualifications and negotiating skills. Recommendations to this
effect could in particular cover the following points:

3.6.1.
It is necessary to provide adequate training which is
sufficiently comprehensive to enable third parties to provide a
useful and efficient service. This training should be sup-
plemented by mandatory continuing training.

It would undoubtedly be useful to provide these third parties
with on-the-job training so that they can learn about the
various techniques and about the conduct and the outcome of
ADR procedures from actual cases.

3.6.2.
A European code of conduct should be drawn up to
help third parties in their work. This code — which would be
attached to the recommendation — would set out principles
such as independence, neutrality, impartiality, confidentiality
and the qualification of third parties.

3.6.3.
Other paths could be envisaged, such as the forma-
tion of associations of third parties, which could be approved
at European level and would operate with financial support
from the European Commission.

( 1) As mentioned above.
( 2) Electronic methods in particular are to be encouraged.

(3) See 3.4.2.
(4) Maybe eventually as a result of the Commission’s current work

on contract law.

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3.7. On insurance for ‘third parties’ (question 21)

Special rules on the liability of third parties seem inadvisable
as matters stand. In practice, it is common civil liability law
that is applicable. There is therefore a strong case for third

parties taking out civil liability insurance, either personally, or
through the body (legal person) that has appointed them.

This last point, which is essential, should be included in the
European code of conduct.

Brussels, 11 November 2002.

The President

of the European Economic and Social Committee

Roger BRIESCH

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the
European Parliament and of the Council amending Council Directive 68/151/EEC as regards
disclosure requirements in respect of certain types of companies’

(COM(2002) 279 final — 2002/0122 (COD))

(2003/C 85/03)

On 16 September 2002, the Council decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 27 November 2002. The rapporteur was
Mrs Sánchez Miguel.

At its 395th plenary session of 11 and 12 December 2002 (meeting of 11 December), the European
Economic and Social Committee adopted the following opinion by 91 votes to one, with two abstentions.

1.

Introduction

1.1.
Directive 68/151/EEC was the first Community direc-
tive dealing with commercial companies. Its main aim was
to create, through legal disclosure requirements, a climate
favourable to the protection of the interests of members and
third parties in companies whose principal
feature is the
limited liability of members — i.e. companies limited by share
capital.

1.2.
Legal disclosure requirements derive from the obli-
gation on commercial companies to be entered on the register
of companies maintained by each country for that purpose.
The aim of such registers is to protect the interests of members
of commercial companies, and of third parties which have
contractual relations with them, by publishing information in
three areas, namely the instrument of constitution, liabilities
arising from the incorporation of the company and the effects
of a declaration of nullity of the instrument of constitution.

1.3.
In the past, businesspeople were required to disclose
information when registering with their
this type of legal
respective guilds or associations. Commercial companies must
now comply with this obligation in order to acquire legal
personality. The requirements with which registered compani-
es must comply include the minimum information to be
contained in the instrument of constitution and information
on persons or bodies empowered to bind the company legally
or financially.

1.4.
The directive came into force many years ago, and
legal and economic changes in the intervening years mean that
it must now be amended. The obligation to register has been
extended to new types of company (Article 1), and new
technologies have emerged for filing and publishing infor-
mation (Article 3) making it more widely available and
accessible, even beyond States’ national borders.