MEETING OF THE APPEAL COURTS OF EUROPEAN CAPITALS
October 29 and 30, 2009
Great Hall of the Appeal Court of Rome
REPORT
Mr. Filippo Paone
President of the Third Civil Division
of the Appeal Court of Rome
In-Court Settlements as a Deflationary Tool
Experimentation of an implementation protocol
Introduction
The Third Civil Division of the Appeal Court of Rome is taking some experimental initiatives which are not innovative in their approach in that they try to revive the use of in-court settlements. Despite being modified over time, this type of settlement is increasingly falling into disuse, while on the contrary it could greatly contribute to deal with the huge backlog of the courts in general and the courts of appeal in particular.
The Personnel and the backlog of the Court
As to the backlog of the third division, which is doomed to increase, let me quote the letter of September 14, 2009, in response to the request for information by the President of the Court in view of his report on the judicial year.
This letter states that
“… the statements provided by the Statistics Office show that for the Court of Appeal as a whole the expected duration (that is the time needed to clear up outstanding proceedings if no other cases are lodged with the Court) amounts to 5.58; the expected duration for the third division is slightly longer and amounts to 5.85. This means that it would take 5 years and a half to clear up all the outstanding proceedings if no other cases were lodged.
The delay in handling cases is actually more than 5 years for the third division which is making great efforts to give priority to the handling of cases listed before 2005”.
This letter also states that
“…59 proceedings listed up to 2002 are therefore pending before the division, plus 379 proceedings of 2003 (set for 2009 and 2010) and 1032 of 2004 (set for 2009 and 2010).
This statement also shows the number of proceedings assigned to each panel of judges whereby 323 old proceedings are pending before the panel sitting on Tuesday, 348 proceedings before the panel sitting on Wednesday and about 800 before the panel sitting on Friday (which holds a preliminary hearing every Thursday). The latter backlog is due to the fact that all the proceedings regulated by the so-called old procedure - which are by definition the oldest ones - have been assigned to the panel sitting on Friday”.
All this is taking place within a division that is always short of the permanent staff, which in itself would be insufficient. Let me quote again from said letter:
“… the division has long been under-resourced. Whilst a previous standard provided that said section should be made up of 12 or 13 judges grouped into three panels, each panel being composed of a presiding judge and three associate judges, there have long been fewer than nine judges working at the division following retirements, transfers and extended leaves, so that recourse has frequently been made to seconded district judges and substitutions to make up the three panels”.
The reasons for this backlog are well known and it is worth mentioning what the President of the Appeal Court repeatedly pointed out during various seminars and in his speech at the inauguration of the current judicial year – namely that the 1998 single judge reform, by amalgamating district courts (preture) into courts (tribunali), exponentially increased first instance judgments and, as a consequence, the number of appeals, without any enlargement of second instance courts being undertaken for more than a decade.
To this one should add the possibility to appeal against decisions without any filtering and the lack of whatever constraints against frivolous appeals which are sometimes manifestly unsubstantiated. It a very sensitive subject which is to be addressed with great wisdom and a balanced approach, since the widest possible access to justice is to be reconciled with the need to reduce the truly excessive costs of justice.
It is a particularly serious situation since the delay of the Appeal Court in handling outstanding cases can be expected to exceed six years in a few months, with a resulting increase in the claims for just compensation lodged pursuant to Law no. 89 of March 24, 2001 because of the failure to comply with the reasonable time-limit set for duration of the trial.
The Appeal Court has tried to encourage settlements in the attempt to significantly reduce pending cases.
A brief survey of the regulatory framework could give legal scholars coming from other countries some information in order to better understand the difficulties and outlook of the initiative.
The regulatory framework governing settlements
The provisions governing this matter are non-systematic and contained in various norms of the Code of procedure and special laws.
A distinction should be drawn between the so called in-court settlement that is attempted when an action has already been brought and the various forms of out-of-court settlement introduced or recommended by several special laws addressing certain matters.
The attempt to settle a dispute during the proceedings is governed by different norms of our codes of procedure:
· Section 185 of the code of civil procedure with respect to settlement within a first instance trial;
· Section 350 of the code of civil procedure with respect to settlement in the appeal phase;
· Section 420 of the code of civil procedure for settlement within labour disputes;
· Section 708 of the code of civil procedure for settlement within separation proceedings.
Different forms of preventive settlement are also provided for to clearly avoid that an action be commenced. Without any intention to be exhaustive, the following can be mentioned:
· Section 322 of the code of civil procedure, providing for an out-of-court judicial settlement before the justice of peace;
· Section 410 of the code of civil procedure, providing for the mandatory attempt to settle labour disputes;
· Section 46 of Act no. 203/1982, providing for the attempt to settle agrarian disputes;
· Section 10 of Law no. 192 of 1998, providing for the mandatory attempt to settle before the Chambers of Commerce, but without any sanctions being imposed, in disputes between the contractor and sub-contractor, in cases of sub-contracting of production activities;
· Section 194 bis of Law no. 633 of 1941, providing for the mandatory attempt to settle copyright disputes;
· Sections 38-40 of legislative decree no. 5 of 2003, providing for the discretionary attempt to settle corporate disputes;
· Law no. 129 of May 6, 2004 in the matter of franchising;
· Legislative decree no. 190 of August 19, 2005 in the matter of remote financial services;
· Section 141 of legislative decree no. 205 of August 19 (Consumer Code);
· Section 768 octies of the code of civil procedure introduced by Law of February 14, 2006 in the matter of family agreements;
· Significant innovations are also outlined by Law no. 69 of June 18, 2009 which not only amended civil procedure rules but also enabled the government to legislate on settlement via Section 60.
With respect to in-court settlement, it is significant that the provision most amended is exactly section 185 of the code of civil procedure which refers to the attempted settlement in first instance proceedings.
In the 1940 text it was provided that: “If so allowed by the nature of the dispute, at the first hearing the judge in charge [giudice istruttore] shall try to reconcile the parties and, if necessary, shall summon them to appear before the court”. This approach was based on the rules on procedural impediments and on the principle of concentration provided for by Section 183 - that is, since the scope of the case was clearly set from the first hearing, an attempt at conciliation was to be made ever since the parties first came before the judge.
This approach, which provided for an attempt to settle the dispute during the first hearing, was still in force in 1950 when the rules on procedural impediments were repealed and the parties were allowed to modify their respective claims; accordingly, in-court settlements increasingly fell into disuse, given that the terms of the dispute were not yet clear at that stage.
A considerable modification occurred in 1990 when Section 183 was amended by reintroducing the call made upon the parties to clearly establish their cause of action from the start. Section 185, as amended, provided for that: “At the first hearing for the preparation of the case, the judge in charge [giudice istruttore] shall freely examine the parties appearing in person and, if so allowed by the nature of the dispute, shall try to reconcile them”. Rules on procedural impediments enabled the parties and the judge to become apprised of the main terms of the dispute and to attempt a veritable settlement, such an attempt being actually enhanced by the obligation to examine both parties.
An adjustment, without any significant consequence on in-court settlements, occurred in 1995 when the first hearing was divided into first appearance hearing and hearing for the preparation of the case.
A further modification occurred in 2005 when the free examination of the parties was no longer mandatory and the general attempt to settle the dispute was abolished, such an attempt being made upon joint request of the parties or upon carefully-considered request of the judge. As a matter of fact, the current wording of Section 185 is the following: “The judge in charge [giudice istruttore], upon joint request of the parties, shall set a hearing for their appearance in order to freely examine and reconcile them. The judge has also the authority to set the hearing for the personal appearance of the parties pursuant to Section 117”. The attempt to settle the dispute broadens the authority of the judge, provided for by Section 117, who can summon the parties to appear in any phase of the proceedings in order to freely examine them on the facts at issue.
In the appeal stage, on the contrary, the attempt to settle the dispute is still mandatory.
Section 350 of the code of civil procedure - which regulates the initial hearing – provides for that the appeal judge (who always sits in panel in the Appeal Court) after verifying that the audi alteram partem principle has been respected, “… shall attempt to settle the dispute and, if necessary, shall summon the parties to appear before the Court…”.
Current practices in handling cases
Efforts made by the law-maker failed to encourage recourse to in-court settlements for a series of reasons which are difficult to define.
The 1940 approach based on first-hearing procedural impediments was firmly opposed by the Bar which wanted more leeway in its defence strategy throughout the trial in order to be enabled to produce evidence and define the claims by adjusting them to the existing requirements. Overwhelmed by an enormous number of cases, judges were not able to perform the central role assigned to them: in the confusion of hearings and lacking means (who can forget the courtrooms where four judges at the same time used to hold their hearings, each sitting in one corner of the room with dozens of cases to handle), judges neglected in their turn the examination of the parties and the attempt to settle the dispute so that in-court settlements practically fell into disuse.
The situation worsened in 1950 when the requests of the Bar for more leeway in the party-driven strategies were granted. From then on, free examinations of parties and attempts to settle the dispute became unusual in judicial practices so that they were practically abandoned.
Scepticism for in-court settlements was such that its mandatory character was definitively overruled by the 2005 reform which actually lends itself to different interpretations relating to the limits and powers of intervention of the judge and, in particular, to whether the request of the parties is to be made only at the first hearing.
The fact is that in-court settlements, whether mandatory or upon request of the parties or left to the careful evaluation of the judge, have been completely abandoned, have fallen into disuse and are not applied any more. Settlement records are very rare and the only reference to conciliation possibly sought by the parties without judicial intervention can be found in the well-know Section 309 of the code of civil procedure, i.e. when the case is stricken off the roll for non-appearance of the parties.
It is even more significant that settlement attempts, in the appeal phase, although mandatory, have fallen into disuse. To make things worse, according to a widespread interpretation of Sections 352 and 356 of the code of civil procedure, any case is to be ruled by the judge, including cases concerning voidness of the summonses to appear before the Court of first instance and the admissibility of evidence.
Initiatives of the Third Division
For slightly more than one year a panel of the Third Division has been taking initiatives to define a set of protocols for handling cases in such a way as to conduct the hearing more efficiently, in the attempt to find deflationary instruments that can contribute even very slightly to reducing the backlog.
This approach, which originates in the panel and the Third Division, has been extended to the Observatory for Civil Justice, a volunteer participation body made up of lawyers and judges which has been producing noteworthy results as for first-instance proceedings.