Law and policyDefinitions
Is there any legal definition in your jurisdiction of the terms ‘ADR’, ‘conciliation’ and ‘mediation’?
Section 1, paragraph 1 of the German Mediation Code (MediationsG) defines mediation as ‘a confidential and structured procedure in which the parties, with the help of one or more mediators, voluntarily and on their own responsibility seek an amicable settlement of their conflict’.
No legal definitions of the terms ADR and conciliation exist in German statutory law. Commonly, ADR is understood as the umbrella term describing structured methods of conflict resolution aside from litigation. Conciliation is commonly used to describe a conflict resolution method, whereby the conciliator facilitates settlement by actively offering settlement options.Mediation models
What is the history of commercial mediation in your jurisdiction? And which mediation models are practised?
The settlement of disputes has a long history that can only be outlined in this publication. Because historical documents referring to mediation relate to centuries ago, it is less a question of history of mediation in Germany but more a question of history of mediation in Europe according to the given political and structural situation at the relevant time in the past.
The German Code of Civil Procedure (ZPO) and former procedural laws traditionally focus on the task of judges to achieve a settlement between the parties in court. It is statutorily ordered that a judge has to provide the possibility of settlement to the parties of a lawsuit at any time of the proceeding.
Historical documents show that Alvise Contarini (1597-1651), an Italian diplomat, was appointed as mediator to negotiate the Peace of Westphalia as finalised in Münster and Osnabrück on 15 May 1648 and 24 October 1648 respectively to end the Thirty Years’ War (1618-1648).
Mediation in its modern form started in Germany at the end of the 1970s. One first initiative regarding mediation was made in the field of legal sociology, at a conference held in 1977, and later published in the Yearbook of Legal Sociology and Legal Theory. Then in 1979, the president of the Federal Constitutional Court pointed out the limited resources of the legal system (Bender, Deutsche Richterzeitung (1979), p. 357). The president of the Federal Court of Justice also concluded that there was a need for more efficiency in the judicial system, which mediation in particular could provide (Pfeiffer, Zeitschrift für Rechtspolitik (1981), p. 121).
Until the late 1990s, the general interest in non-adversarial ADR methods was relatively modest in Germany. Mediation was quite rare and its use mostly confined to the fields of divorce and environmental disputes.
Effective from 1 January 2000, the federal legislator introduced the new section 15a of the Introductory Law to the German Rules of Civil Procedure, which authorised the German federal states to establish conciliation for possible cases with a monetary value of up to €750 and certain types of minor disputes (eg, disputes between neighbours). In addition, the federal legislator amended a provision in the Code of Civil Procedure by providing for court referrals to ADR with the consent of the parties (section 278, paragraph 6 ZPO). Further, the Ministry of Justice in Lower Saxony initiated a pilot programme to promote voluntary mediation based on this provision in several courts. In the context of this programme, judges referred cases mainly to judge-mediators who were not assigned to the particular case. The project started in January 2003 and was extremely successful. The success rate of this kind of court-annexed mediation was 79 per cent.
The German Bar Association established a committee on ADR, as well as a section for mediation with several hundred members.
The German Federal Constitutional Court determined in 2007 that obligatory conciliation does not violate the constitutional right of civil procedure and ruled that an amicable settlement of a dispute is basically prior to a decision by a court (BVerfG, 14/02/2007 - 1 BvR 1351/01).
Today, there is a significant body of German literature on mediation and the subject can frequently be found on the agenda of conferences and congresses in all business areas and branches. Meanwhile, thousands of lawyers and other professionals have been trained in mediation and offer their services as mediators.
The MediationsG is another milestone in the development of mediation in Germany.
Concerning the mediation model, practically a mix of facilitative and evaluative mediation is used, especially in commercial mediation proceedings. In general, German mediators prefer joint sessions focusing on the interests and needs of the parties. However, private sessions (caucuses) are increasingly used in all areas of mediation. The mediator is responsible for the structure and the procedure of the mediation. He or she works with the parties on three levels: process, facts and relationship. In commercial cases, German mediators are often willing - preferably in private sessions - to advise the parties, to undertake risk assessment or a ‘best alternative to a negotiated agreement’ analysis.Domestic mediation law
Are there any domestic laws specifically governing mediation and its practice?
The MediationsG came into force on 26 July 2012. It is the primary source for mediation in Germany in domestic and international cases and it provides regulations for the following areas:
- section 1: definition of mediation and of the mediator;
- section 2: procedure of mediation, rights and duties of the mediator;
- section 3: neutrality and impartiality of the mediator;
- section 4: confidentiality obligations for the mediator;
- sections 5 and 6: basic and continued education for mediators, requirements for the certified mediator;
- section 7: research and financial support of mediation; and
- section 8: evaluation of the development of mediation in Germany.
The legislator of the MediationsG considered the minimum standards provided by Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain Aspects of Mediation in Civil and Commercial Matters.
Further, the ZPO and other statutes have been amended in several provisions, for example, section 253, paragraph 3 ZPO: in the event of commencement of an action, the claimant should declare in the statement of claim whether mediation has been tried beforehand, and if not, the relevant reasons for the refusal of conducting mediation in the given case. In addition, the court can recommend mediation during the court proceeding; for the time of mediation, the court can stay the proceeding (section 278a ZPO).
Also, the European Code of Conduct for Mediators (http://ec.europa.eu/civiljustice/adr/adr_ec_code_conduct_en.pdf) is relevant to Germany as a voluntary set of principles in mediation.
In addition, Regulation (EU) No. 524/2013 of the European Parliament and of the Council of 21 May 2013 on Online Dispute Resolution for Consumer Disputes and Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on Alternative Dispute Resolution for Consumer Disputes have been transferred into German law. The German Code for Settlement of Consumer Disputes (VSBG) came into force on 1 April 2016. The German Federal Ministry of Justice and Consumer Protection is currently considering revising and amending the VSBG to establish compatibility with the German system of class action.Singapore Convention
Is your state expected to sign and ratify the UN Convention on International Settlement Agreements Resulting from Mediation when it comes into force?
Provided the UN Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention) is finalised, the Federal Ministry of Justice and Consumer Protection will discuss the ratification of this Convention after the signing date. For the time being, it is not predictable whether there will be a ratification of the Singapore Convention in Germany, especially considering the fact that the German legislator refused in the past to regulate the enforcement of Mediation Settlement Agreements by separate statutory law. However, in February 2019, the German Federal Bar issued a recommendation to sign and ratify the Singapore Convention.Incentives to mediate
To what extent, and how, is mediation encouraged in your jurisdiction?
Mediation can be applied in all cases where a settlement is legally possible. Mediation cannot be applied in criminal cases, apart from cases of misdemeanour. For such cases, victim-offender mediation can be ordered by the prosecutor.
It should be noted that mediation remains voluntary even after the enactment of the MediationsG. The German courts or other official institutions cannot order mediation before or during a court proceeding; they can only recommend mediation and, if the parties agree to mediation during a court proceeding, stay the court proceeding for the duration of mediation proceeding (section 278a, paragraph 2 ZPO).
According to section 278, paragraph 5 ZPO, the parties of a court proceeding can be transferred to a conciliation judge. The conciliation judge is different from the appointed judge for the case who has no decision power but tries with the parties to resolve the dispute by means of alternative dispute resolution (ADR). The conciliation judge has discretion regarding the methods of ADR to be applied in a certain case. In practice, predominantly mediation is applied in such cases. If the settlement efforts of the conciliation judge fail, the case continues in court for a decision.
Lastly, section 69b of the German Court Fee Code enables the federal states to provide financial incentives to promote mediation. In the event of an out-of-court settlement of a dispute, for example, by mediation, the court fees before the specialised courts may be waived or reduced. To date, only the Lower Saxony State Chancellery has established such legal ordinance.Sanctions for failure to mediate
Are there any sanctions if a party to a dispute proposes mediation and the other ignores the proposal, refuses to mediate or frustrates the mediation process?
German courts cannot order mediation before or during a court proceeding; they can only recommend mediation, as already mentioned. Following this and also in cases of out-of-court mediation proposals, there are no legal sanctions if a party ignores a proposal, refuses to mediate or frustrates the mediation process.
Only in family cases (divorce, child custody, etc) can the family court order the parties to participate in an information meeting referring to mediation (section 135 of the Act on the Procedure in Family Matters and in Matters of Non-contentious Jurisdiction).Prevalence of mediation
How common is commercial mediation compared with litigation?
Because mediation is considered as strictly confidential, no detailed statistics are available on the total number of cases. It can be held that though mediation is traditionally applied in family disputes, it is increasingly used for commercial disputes and disputes related to environmental matters as well as in the public sector. Mediation is also applied in the area of intellectual property (eg, trademark or copyright licence cases) but cannot be applied for the granting of patents. Furthermore, mediation is increasingly chosen for resolving workplace disputes (eg, between employer and employees or between employer and works council).
Is there a professional body for mediators, and is it necessary to be accredited to describe oneself as a ‘mediator’? What are the key requirements to gain accreditation? Is continuing professional development compulsory, and what requirements are laid down?
The MediationsG provides different regulations for qualification as ’mediator’. According to section 5, paragraph 1 of the MediationsG, mediators have to ensure their initial training and continued education. Mediators also have to ensure that they are sufficiently skilled in theory and in practice to guide the parties in a competent manner through the mediation proceeding. Adequate training must especially convey the following elements:
- the basics of mediation as well as of the procedure and the frame conditions;
- negotiation and communication techniques;
- conflict competence;
- legal aspects of mediation and the role of law in mediation; and
- practical exercises, role play and supervision.
No credit points system for the continued education of mediators exists at present.
In contrast, the special qualification of certified mediators exists according to sections 5 and 6 of the MediationsG. Certified mediators are subject to continuing professional development requirements, which include mandatory training, a minimum number of mediation proceedings conducted as a mediator or co-mediator that must be supervised after the initial training.
The Department of Justice enacted a legal ordinance, which stipulates that somebody must only describe oneself as a ccertified mediator, if a training programme comprising of at least 120 hours and specific training content is completed. Further, the legal ordinance sets forth that a certified mediator has to conduct at least five mediation proceedings within two years of the training, followed by supervision.
There are no regulations or limitations regarding the basic profession of mediators, nor are there regulations regarding a certain level of education (eg, a university degree).Liability
What immunities or potential liabilities does a mediator have? Is professional liability insurance available or required?
With respect to the duties of a mediator, the MediationsG provides some regulations that have already been described in earlier questions. In the event of the violation of such duties, the mediator could be liable for damages according to the rules of the German Civil Code (BGB) or, very rarely, accused for criminal behaviour according to the German Criminal Code. There are no special civil or criminal provisions, sanctions or disciplinary measures for mediators in cases of misconduct, poor performance, etc.
Most German insurance companies offer professional indemnity insurance for mediators, although it is not obligatory. Therefore, no minimum level of insurance is required for German mediators.
According to section 2, paragraph 5 of the MediationsG, the parties can end the mediation proceeding in cases of misconduct or poor performance of the mediator. In such cases, the parties could also refuse the payment of the mediator according to the general rules of the BGB and the relevant rules of contract law.Mediation agreements
Is it required, or customary, for a written mediation agreement to be entered into by the parties and the mediator? What would be the main terms?
According to the MediationsG, no formal requirements exist in respect of the agreements between mediator and the parties or between the parties themselves. The mediator and the parties are therefore completely free to agree on the content but also regarding the form of the mediation agreement. In commercial mediation, such agreements are commonly in writing and include provisions referring to the rights and duties of the mediator as well as referring to the rights and duties of the parties (trilateral contract).
Common provisions for trilateral contracts between the mediator and the parties are, inter alia:
- a preamble with a short description of the dispute;
- assignment of the mediator and the mediator’s duty to conduct the mediation in person;
- a description of the main characteristics of the mediation proceeding: decision-making power remains with the parties, the mediator does not act as a decisionmaker, amicable solution as the goal of the mediation proceeding, etc;
- assurance of the mediator’s neutrality and impartiality, also according to section 1, paragraph 2, section 2, paragraph 3 and section 3 of the MediationsG;
- a confidentiality agreement, especially linked to parties and referring to section 4 of the MediationsG;
- assurance of the voluntary nature of the parties’ participation; also according to section 2, paragraph 2 of the MediationsG;
- the right of the mediator and the parties to terminate the mediation proceeding with immediate effect, also considering section 2, paragraph 5 of the MediationsG;
- the right of the mediator to call for caucus and correspondent approval by the parties according to section 2, paragraph 3 of the MediationsG;
- provisions referring to the time, place and structure of the mediation proceeding;
- if court or arbitration proceedings are already commenced: agreement on the stay of such proceedings for the duration of the mediation;
- an agreement on the prolongation of legal or contractual deadlines or limitation periods, if legally allowed;
- a fee for the mediator and costs of the mediation proceeding; and
- joint and several liability of the parties for costs and expenses related to the mediation proceeding.
How are mediators appointed?
Section 2, paragraph 1 of the MediationsG stipulates literally: ‘The parties choose the mediator.’ This is also the general way to appoint a mediator in Germany. Courts can only propose mediation and are very hesitant to propose mediators because no official lists of mediators exist.
If the parties agree to an administered mediation, the corresponding mediation organisation (eg, DIS, EUCON) can appoint mediators according to their rules and regulations (see, for example, section 4 of the DIS Mediation Rules (the English version can be found at: www.dis-arb.de/en/16/rules/dis-mediation-rules-id31) and section 3 of the EUCON Rules of Procedure).Conflicts of interest
Must mediators disclose possible conflicts of interest? What would be considered a conflict of interest? What are the consequences of failure to disclose a conflict?
The mediator has to undertake a conflict check and must inform the parties about a possible conflict as follows:
- section 3.1 of the MediationsG: the mediator has to reveal all circumstances that could influence his or her neutrality and impartiality;
- section 3.2 of the MediationsG: if a person has already advised a party, he or she cannot act as a mediator in the same matter. Such a case cannot be subject to approval by the parties; and
- section 3.3 of the MediationsG: the mediator has to inform the parties if one of his or her colleagues has advised a party in the same matter. In such a case and after such information, the parties can agree on the service of the mediator according to section 3.4 of the MediationsG.
As mentioned above, in the event of the violation of such duties the mediator could be liable for damages according to the rules of the BGB.Fees
Are mediators’ fees regulated, or are they negotiable? What is the usual range of fees?
The mediator’s fees are not regulated by law and are therefore free for negotiation. Only in cases of administered mediation do some mediation organisations determine a fee scale. In commercial cases, the mediator’s fees range from €150 to €500 per hour plus VAT, depending on the expertise of the mediator and on the volume of the case in dispute. In family cases, the hourly fees are lower. In workplace disputes, daily rates are also common. Often, a flat fee is agreed for the preparation and the follow-up work.
The parties usually split the mediator’s fees and agree on joint and several liabilities.
The administration fees of mediation organisations are as follows.German Institution of Arbitration (DIS)
- Procedural fee amounts to €250;
- fee for nomination of a mediator by the DIS amounts to €250; and
- fee for a mediator amounts to €300 per hour, unless agreed otherwise.
All fees are subject to VAT.EUCON
Value of the dispute
Hourly rate for the mediator
up to €100,000
up to €1 million
up to €10 million
more than €10 million
There is no legal aid or other financial support by the state for mediation proceedings if parties cannot afford to pay the mediator. However, German courts are willing to include the costs for mediation proceedings in the general assessment of costs if the mediation has been conducted as a court-annexed mediation.
ProcedureCounsel 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.
Must a settlement agreement be in writing to be enforceable? Are there other formalities?
The settlement agreement at the end of a mediation proceeding essentially has the character of a contract that is binding between the parties. If the contract shall not be binding, it must be stated explicitly. All statutory regulations of German contract law apply for the mediation settlement agreement. Therefore, it depends on the content of the settlement agreement whether it has to be in writing or even must be notarised (eg, transfer of land ownership or transfer of shares must be notarised for validity and enforceability according to German contract law).
Such a settlement agreement is not enforceable in the same way as a judgment or an arbitral award. In fact, the enforceability of the settlement agreement requires further efforts and can be achieved in a number of ways:
- approval by a notary public, section 794, paragraph 1 No. 5 ZPO;
- a court-approved settlement agreement if the mediation was conducted in parallel to a court proceeding, section 794, paragraph 1 No. 1 ZPO;
- transfer of the settlement agreement into an arbitral award with agreed terms, section 794, paragraph 1 No. 4a ZPO; or
- transfer of the settlement agreement into an agreement by the lawyers of the parties and recorded by the responsible district court, section 796a, paragraph 1 ZPO.
In what circumstances can the mediation settlement agreement be challenged in court? Can the mediator be called to give evidence regarding the mediation or the alleged settlement?
Revision, withdrawal or challenge of the final settlement agreement follows the general rules of German contract law. If the steps have been taken to establish enforceability, the rules of the ZPO also apply.
As outlined above, the mediator is exempted from the obligation to give evidence in court proceedings or in arbitration by law. The parties can release the mediator from the duty of confidentiality for civil cases according to section 385, paragraph 2 ZPO, which would lead to the possibility of the mediator giving evidence in court or arbitration proceedings.Enforceability of settlements
Are there rules regarding enforcement of mediation settlement agreements? And on what basis is the mediation settlement agreement enforceable?
See question 20.
Stays in favour of mediationDuty to stay proceedings
Must courts stay their proceedings in favour of mediation?
The court can stay the proceeding (section 278a ZPO). It should be noted that certain procedural time limits are not affected by staying the proceeding.
MiscellaneousOther distinctive features
Are there any distinctive features of commercial mediation in your jurisdiction not covered above?
The DIS has recently adopted the revised DIS Arbitration Rules 2018, which encourage amicable settlements and increases awareness of ADR methods. This can, potentially, lead to an increase of mediation proceedings administered by the DIS. In addition, several German and global companies also located in Germany founded the Round Table on Mediation and Conflict Management of the German Economy (RTMKM) as a non-profit organisation (see https://www.rtmkm.de/en/). The RTMKM recently developed and published on its website DiReCT - Dispute Resolution Comparison Tool in order to ease and support for commercial disputes the decision for the best possible method for conflict resolution.
Med-arb or Arb-med or other combinations of ADR proceedings are less used in Germany. Section 1053 of the ZPO provides for settlement in arbitration and also for an award on agreed terms. However, section 41, No. 8 ZPO disqualifies a judge from the exercise of judicial office by law in all matters in which he or she assisted in mediation proceedings or in any other alternative conflict resolution procedures. This rule also applies for the grounds to disqualify an arbitrator who acted as a mediator prior to arbitration.
There are several initiatives to provide settlement talks by telephone, especially promoted by German legal protection insurance companies. Some mediation providers specialise in conducting mediation by telephone, email or web meetings.
There are already several conciliation committees for consumer disputes established in Germany, for example, the conciliation committee for public passenger traffic, the conciliation committee for energy and the ombudsman for bank and insurance companies who is responsible for disputes between banks and consumers. This trend increased after the transfer of the European online dispute resolution legislation.
Update and trendsOpportunities and challenges
What are the key opportunities, challenges and developments which you anticipate relating to mediation in your jurisdiction?Opportunities and challenges 25 What are the key opportunities, challenges and developments which you anticipate relating to mediation in your jurisdiction?
As one trend, mediation is increasingly the focus of German courts (eg regarding liability of mediators (see Federal Supreme Court, 21/09/2017 - IX ZR 34/17 for the liability of lawyers acting as a mediator)) or regarding the right of an employer to instruct employees for participation in mediation proceedings (see Higher Labour Court Nuremberg, 27/08/2013 - 5 TaBV 22/12).
In the academic field, there has been criticism that mediation is already regulated by law without sufficient scientific substantiation. Although in the past, mediation was promoted by its positive effect for an amicable dispute resolution. The downsides of mediation are now also in discussion.
As a general trend, it must be admitted that mediation has lost some of its charisma and influence in the commercial field and in political discussion.