New legislation to make mediation mandatory in all insurance disputes in Italy will be of interest to any (re)insurers operating in the jurisdiction.

On 4 March 2010, the Italian legislature passed a law (Legislative Decree no. 28/2010, the "Decree") which requires the mandatory mediation of certain disputes, including insurance disputes, before a case can be brought to court.

The Decree will become effective on 6 March 2011 and is expected to reduce the number of disputes brought before the courts, reduce the time necessary to obtain settlement of these disputes and generally make the Italian judicial system more efficient.

The basic features of the new mandatory mediation rule are as follows:

  • the mediation must not last longer than four months from the date that the request to mediate is submitted;
  • the mediation will be regulated by a mediator who is chosen by the parties to the dispute;
  • mediation is a condition precedent to any subsequent hearing of the dispute before a court of law;
  • the parties participating in the mediation will benefit from a new tax break in the form of a deduction from the money paid as commission to the mediator (up to a maximum of €500 in the event that the mediation is successful and up to a maximum of €250 in the event that the mediation is unsuccessful); and,
  • any agreement reached by the parties as a consequence of the mediation will have the same validity as a contract and will therefore be enforceable before a court.