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The Cartabia reform and the evolution of ADR systems

21 Apr 2023 - Civil Law - Min Read 5 min
The Cartabia reform and the evolution of ADR systems

The evolution of ADR or Alternative Dispute Resolution systems is part of the stated goals of the so-called “Cartabia Reform” (Law No. 206 of November 26, 2021), which came into effect, in part, on February 28, 2023 but which expects to complete the implementation of the remaining regulations in the upcoming months.

The Cartabia Reform has already revolutionized the Italian judicial system, introducing important innovations, and in the matter of ADR, it has made a massive overhaul of the discipline of what can be defined as the legal means of dispute resolution, alternative to recourse to the courts.

More specifically, the Reform contains the “Delegation to the Government for the efficiency of the civil process and for the revision of the discipline of alternative dispute resolution tools and urgent measures for the rationalization of proceedings in the field of personal and family rights as well as in the field of forced execution.

Furthermore, there are additional tax incentives for mediation, assisted negotiation and arbitration and the extension of legal aid that will be available from June 30, 2023.

If the conciliation attempt is not completed, the reform provides that evidence gathered in ADR procedures can be used in civil proceedings.

Summary of News

  1. Tax incentives to support ADRs.
  2. Extension of the area of mandatory mediation attempt to disputes involving relationships of duration (contracts whose contractual performance develops over time).
  3. Implementation of the principles of the enabling act on court-mandated (or endoprocessual) mediation.
  4. Renewal of the regulations on the training of mediators, bodies and their managers.
  5. Possibility, within the assisted negotiation procedure, of conducting an out-of-court investigation.
  6. Extension of assisted negotiation to labor cases
  7. Possibility of negotiation custody and maintenance of minor children born out of wedlock.
  8. Introduction of corporate arbitration in the Code of civil procedure.

Which ADR are affected by the Cartabia Reform?

The Alternative Dispute Resolution, or ADR, are alternative dispute resolution tools to the ordinary judicial process, very common in Anglo-Saxon countries.

They enable the parties to reach a mutually satisfactory agreement, avoiding recourse to the Tribunal, and are therefore alternatives to the resolution of the conflict.

The ADR affected by the Cartabia Reform are:

  • Mediation (family and civil)
  • Assisted Trading
  • the Corporate Arbitration

The Mediation

Mediation can help the parties to reach a customized agreement that meets their specific needs, while a court decision is often binding and limited to the options available under the law.

It is used in Italy to resolve a wide range of civil and commercial disputes, including family disputes, labor disputes, contractual and intellectual property disputes, disputes between consumers and suppliers of goods and services.

The mediation process begins with the agreement between the parties who choose a mediator, a neutral and independent professional who facilitates dialogue and helps to find a solution to the dispute.

The Ombudsman does not have the power to take decisions that are binding on the parties, but he can help them reach an agreement that is satisfactory to all.

In Italy, mediation becomes mandatory in some cases, such as labor disputes, disputes between corporations and their members, and disputes between consumers and suppliers.

It will not be possible to bring a case before a court if mediation has not been followed.

Assisted Negotiation

With the Cartabia Reform, assisted negotiation also made its debut in the labor law field, a solution designed to reduce the number of litigations and judgments in the labor field.

Assisted negotiation can be used when the parties involved have difficulty communicating or when the issue is particularly complex.

It involves the parties’ lawyers to facilitate communication between the parties in dispute and to help them reach an agreement. The negotiation can be activated by the signing between the parties of a commitment to cooperate in good faith and loyalty to amicably resolve a dispute and reach an agreement through the assistance of lawyers or labor counselors.

In addition to the subject matter of the dispute, the procedure must also provide a time limit for its completion (not less than one month and not exceeding three months), which can be extended for an additional thirty days by agreement between the parties. If the procedure is successful, the parties sign an agreement that has a definitive value, becoming an enforceable title in case of non-compliance by the obligated party.

In the case of labor negotiations, the agreement reached through the assistance of respective lawyers must be forwarded by either party within the next ten days to a labor contract certification commission.

Corporate Arbitration

Arbitration is a form of ADR in which the parties involved in the dispute rely on an arbitrator or arbitration panel, which issues a decision binding on the parties.

Arbitration can be conventional or mandatory and can be used to resolve a wide range of disputes.

The Cartabia Reform introduces the discipline of corporate arbitration within the Code of Civil Procedure, allocating four new articles into it (838 bis, 838 ter, 838 quater, and 838 quinquies).

To be reviewed was exclusively the so-called regular arbitration, that is, arbitration that concludes with a measure, the award, which has the same effect as a judgment.

New provisions are made on the role and powers of arbitrators, which will have to declare their independence, impartiality and will be able to resort to precautionary measures, which was absurd until now. The time limit for appealing an award is reduced.

The articles of incorporation of companies, except those resorting to venture capital, may stipulate that the settlement of disputes arising between shareholders and/or between shareholders and the company and that concern disposable rights, is entrusted to arbitrators.

The arbitration clause must be specific and indicate the number and manner of appointment of the arbitrators; it must also provide, under penalty of nullity, that the power of appointment shall be vested in an external entity, whose decision, if he fails to do so, shall be sought from the President of the Court where the company has its registered office.

The application to initiate arbitration proceedings, whether made by the company or against the company, must be filed with the commercial register and may be accessed by shareholders.

Third parties and other shareholders may take part in the proceedings until the first hearing of the case.

If issues concerning the validity of the resolutions of the shareholders’ meeting are brought to arbitration, the shareholders may suspend their effectiveness by order.

The award concluding the proceedings, as noted above, is binding on the company.

We have already seen how the Cartabia Reform has disrupted separation and divorce and the stages of the civil process; in time we will be able to assess its concrete effects.

As far as the changes in ADR are concerned, our lawyers look favorably on the promotion of a form of preventive and consensual justice, alternative to litigation, knowing that thanks to ADRs a “win-win” situation can be achieved, where everyone wins. If you have any questions regarding the subject matter, please do not hesitate to contact us.

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Calogero Boccadutri

Calogero Boccadutri is the Managing Partner of Boccadutri International Law Firm. He has trial experience in Forex, Personal Injury and Administrative litigation.

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