Why Vitorino’s mediation plan may see Monti lose more anti-trust cases

By Peter Chapman

Date: 27/05/04

THERE is good news and bad news for the hordes of company bosses and lawyers waiting in line for the European Court of First Instance (CFI) to review merger decisions, unfair anti-trust fines or a host of other rulings across the range of EU policymaking.

First, the good news.

The European Commission has put together a plan for emptying overcrowded courtrooms across Europe, in the form of a new directive.

The bad news is the blueprint won't apply to the hundreds of internal staff disputes brought by EU officials against their bosses that are the chief culprit in clogging-up the CFI - which rules on actions brought by individuals and undertakings against decisions of the Community institutions.

Last year, 26.61% of cases - 124 out of 466 - at the CFI involved staff disputes, such as complaints from officials denied promotion or unfairly dismissed or suspended, witness Marta Andreasen, the Commission's former accounting officer.

In stark contrast, the court handled 100 intellectual property cases, 25 fisheries and state aid cases apiece - and just 43 competition cases (9.27% of the total).

The draft law, currently being fine-tuned by António Vitorino, the commissioner for justice and home affairs, would allow national judges to ask parties in civil and commercial disputes to try to thrash-out their differences in confidential sessions with "mediators".

These are trained lawyers or people skilled in the fine art of brokering amicable agreements at a fraction of the cost of full-blown court hearings, away from the gaze of publicity.

Mediation is not arbitration - where panels of negotiators try to thrash-out binding deals. Agreements brokered through a mediator need to be agreed by both sides to stick.

The idea has already been tried, with success, in the US, Canada and the UK, where judges are even allowed to force the winning parties to pay costs, if they believe mediation would have been a better option.

The US plan, which applies to all federal staff disputes involving everyone from government chief to post staff, was pushed through by former president Bill Clinton as he was battling against impeachment following his antics with Monica Lewinsky.

Could mediation work at the Commission? "By all means," said Avi Schneebalg, a Brussels-based lawyer and mediator. "Employment disputes are one example of the many cases that can be solved by mediation." The Commission might even use mediation for disputes with its suppliers, he adds.

The EU executive, however, is not so sure.

Spokesman Michael Mann says: "We think mediation is a useful tool, but is not always a pragmatic solution in every case.

"Often, this is because the Commission applies its interpretation of a rule and cannot apply it in a different way for a different case."

In practice, however, Mann says the Commission already has a pre-litigation procedure without the need for lawyers.

"The main way of making a complaint is through Articles 90-91 of the staff regulations which require officials to make a complaint [internally] first.

"That gives the administration a chance to see if it is right or if it needs to be reassessed. This cuts the number of cases [going to court] by 20-25%."

The total costs of these cases per year runs to about 600,000 for both sides - around the cost of a barrister in one big criminal case in, say, the UK.

Mann says the Commission wins about 70% of its cases - with the losing official paying his or her own costs.

Nevertheless, Schneebalg says many more cases would be dropped if staff felt they had the chance to thrash-out their concerns with their bosses on neutral ground.

"It is about having the feeling of being heard and being understood directly. Not through a lawyer in a distant court."

Whether or not the Commission is right, its response is a shame for those stuck in the CFI queue. Because getting a speedy result is vital for companies desperate to resurrect a blocked deal, despite the promise of the court to "fast track" important cases.

But even with fast-track status, cases often take so long that the economy has moved on by the time a final decision is meted out.

A creaky legal system hardly gives a boost to the Lisbon Agenda, which aims to transform the EU into the world's most competitive economy by 2010.

Philip Lowe, director-general for competition, highlighted last month that the EU is looking at other ways to boost the efficiency of the court.

"There should be a rapid procedure for appeals against merger decisions, for instance. To do this, the Court of First Instance in Luxembourg needs more resources and more chambers, if not a specialized competition chamber," he insisted.

Specialist chambers are a popular option - though many prefer a more general tribunal, able to take the cases as they come, rather than tie up resources in specialist areas. But if all else fails, what about taking a leaf out of Mr Vitorino's book?

Article discusses a draft directive being prepared by DG Justice and Home Affairs which would allow national judges to ask parties in civil and commercial disputes to try and resolve their differences in confidential sessions with 'mediators'.