Counsel and witnesses

Are the parties typically represented by lawyers in commercial mediation? Are fact- and expert witnesses commonly used?

Given that the parties seek an amicable settlement of their conflict on their own responsibility, it is considered as essential that the parties appear in person, even in commercial mediation. Notwithstanding this, participation of the lawyers handling the case in an advisory role is common. Generally, fact and expert witnesses are not used, because it would not correspond with the aforementioned aim of the mediation proceeding.

Procedural rules

Are there rules governing the mediation procedure? If not, what is the typical procedure before and during the hearing?

According to section 1 paragraph 1 of the MediationsG, the mediation proceeding must be structured. No further legal requirements are included in the MediationsG or in the ZPO. Nevertheless, mediation proceedings follow a logical structure:

  • opening statement;
  • fact-finding and topics relevant for solutions;
  • moving from the parties’ positions to a discussion of their interests;
  • collecting ideas for solutions and evaluating these ideas; and
  • drawing up a final settlement agreement.

Whether parties must prepare for mediation depends on the needs of the mediator and on the case in dispute (complex or straightforward). There is no explicit legal requirement for the parties to prepare for the mediation proceeding.

Tolling effect on limitation periods

Does commencement of mediation interrupt the limitation period for a court or arbitration claim?

According to section 203 of the BGB, the limitation period is suspended for the duration of the mediation proceeding. As soon as the mediation proceeding is terminated, a grace period of three months starts. After the three-months grace period the limitation period continues.

Enforceability of mediation clauses

Is a dispute resolution clause providing for mediation enforceable? What is the legal basis for enforceability?

Mediation clauses are increasingly included in commercial contracts, mainly in the form of multi-tiered clauses. If a mediation clause is included in a contract, the attempt to find a settlement in mediation has been considered as mandatory in few court cases. For example, the Federal Supreme Court decided in 1977 (BGH, 04/07/1977 - II ZR 55/76) ,in 1983 (BGH 23/11/1983 - VIII ZR 197/82) and 1998 (18/11/1998 - VIII ZR 344-97) that the attempt to settle a case is inadmissible if conciliation is agreed in the articles of association of a company or in a contract. In a decision of 2008 (BGH, 29/10/2008 - XII ZR 165/06), the Federal Supreme Court considered a conciliation clause as a precondition to litigation. On the other hand, the Federal Labour Court rendered a decision in 1999 (BAG, 18/05/1999 - 9 AZR 682/98) regarding an agreement to call an ecclesiastic conciliation committee that - in the judges’ view - does not exclude the recourse to litigation. Finally, the District Court of Heilbronn (LG Heilbronn, 10/09/2010 - 4 O 259/09) referred in 2010 to a mediation clause and concluded that the clause cannot be interpreted as a preliminary waiver of action in state courts because mediation can be terminated by the parties at any time. However, the decision of the District Court ofHeilbronn was discussed in the legal literature and considered as fundamentally wrong.

Confidentiality of proceedings

Are mediation proceedings strictly private and confidential?

According to section 4 of the MediationsG, the mediation proceeding is confidential by law for the mediator. The MediationsG does not cover the confidentiality obligation of the parties as well as of experts or other external persons who are included in the mediation proceeding. Such confidentiality must be agreed by separate contracts or explicit confidentiality declarations.

Exceptions to the mediator’s confidentiality obligations are also governed by section 4 of the MediationsG. The disclosure of the content of the mediation proceeding is allowed if:

  • it is necessary for the implementation or enforcement of the settlement agreement;
  • it is necessary for overriding considerations of public policy, in particular when required to ensure the protection of the best interests of children or to prevent harm to the physical or psychological integrity of a person; or
  • the disclosure refers to facts that are obvious or that are not sufficiently important to necessitate their remaining confidential.

According to section 4, paragraph 1 of the MediationsG in connection with section 383, paragraph 1 No. 6 of the ZPO, all mediators are exempted from the obligation to give evidence in court proceedings or in arbitration. This is applicable for civil cases, however, not for criminal cases. The parties can release the mediator from the duty of confidentiality for civil cases according to section 385, paragraph 2 ZPO, which could lead to the mediator giving evidence in court or arbitration proceedings.

The disclosure of confidential information by the parties or other persons involved in the mediation proceeding depends on the provisions of the confidentiality agreement or on professional regulations, for example, existing for lawyers or tax advisers.

Success rate

What is the likelihood of a commercial mediation being successful?

No detailed statistics regarding mediation proceedings are available due to the confidential nature of these proceedings. The increased use of commercial mediation indicates a certain success of commercial mediation, though.