Can I Afford Not to Mediate? Mandatory Online Mediation for European Consumers: Legal Constraints and Policy Issues

The aim of this paper is to examine from an EU perspective the current legal context on mediation in order to evaluate if the present rules and practices allow the use of consumer online mediation. Furthermore, this paper evaluates to which extent parties should be encouraged or even compelled in using online mediation for the resolution of their disputes. If mediation is to have a real impact in the society, its education and promotion need to be pursued as a matter of public policy. Presently, mediation is being regulated at regional level, and also promoted by the national courts. The Directive on Mediation in Civil and Commercial Matters [2008/52/EC] assures the direct recognition and enforcement of cross-border settlements. However, the law and policy on mandatory mediation is not clear. It seems that in the EU business to consumers mandatory mediation is banned by the Unfair Terms Directive [93/13/EC] and the Recommendation [2001/310/EC], which oppose procedures that deny access to justice, currently understood as access to a legal procedure. Yet, mediation may be the only choice for those unable to afford the risks and costs of litigation. This paper is divided into five parts. Part I introduces this paper. Part II analyses the transition from traditional mediation to online mediation. It starts by defining online mediation and the appropriate cases for this dispute resolution method. It also considers the main challenge in the use of online mediation: how to convince disputants in participating in mediation. Lastly, it reviews two online dispute resolution service providers: SmartSettle and SquareTrade. Part III contemplates the interaction between the courts and the mediation procedure. To that end, the purpose of regulating mediation within the EU is first discussed. Subsequently, this part focuses on the enforceability of mediation clauses under the existing regulation. Part IV considers the rule of costs in England, which encourages parties to engage in mediation by imposing the legal costs on to the parties who unreasonably refuse to engage in mediation. This paper finally discusses a number of court rulings dealing with mediation aspects, with particular attention to the criticisms attracted by Halsey v Milton [2004] EWCA Civ. 576. Finally, Part V concludes by summarising the findings of this paper.