The EU Mediation Directive was implemented into German law in 2012 by the Act on the promotion of mediation and other methods of alternative dispute resolution (Gesetz zur Förderung der Mediation und anderer Verfahren der außergerichtlichen Konfliktbeilegung, the “Promotion Act”). The Promotion Act introduced a mediation code (Mediationsgesetz, the “Mediation Act”) and amended several procedural codes, including the Civil Procedural Code (Zivilprozessordnung, “ZPO”).

The Mediation Act comprises nine provisions:

• Section 1 defines the terms “mediation” and “mediator”.
• Section 2 contains general procedural provisions and outlines the mediator’s duties.
• Section 3 regulates the mediator’s disclosure obligations and restrictions.
• Section 4 deals with confidentiality.
• Section 5 covers training and certification of mediators.
• Sections 6 to 9 deal with other aspects, such as the power of the Minister of Justice to enact further regulations regarding the training of mediators, an evaluation of the Mediation Act itself and further interim regulations.

The provisions do not distinguish between domestic and cross-border mediations. Hence, the following features apply to both domestic and cross-border mediations.

Mediation may be initiated by the parties or at the court’s suggestion. Section 2 para. 1 of the Mediation Act provides that the mediator is chosen by the parties and is appointed either by the parties themselves or by a mediation institution at the parties’ request, such as the German Institution for Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit e.V., “DIS”), or a Chamber of Commerce (Handelskammer). Direct appointment by the parties is most common.

Generally, the parties do not need to be legally represented during a mediation. However, lawyers usually attend mediations on commercial disputes to assist their clients with the presentation of their case.

The mediation process itself is intended to be flexible. Section 2 of the Mediation Act, on procedure and the duties of the mediator, contains no specific guidelines for the mediation process. Nevertheless, most mediations go through a five-step procedure:

(i) A mediation agreement is concluded which sets out the procedural outline for the mediation and deals with issues such as confidentiality, timing, payment, etc.

(ii) The parties present a brief history of the dispute from their point of view and the issues which, in their opinion, need to be resolved.

(iii) The mediator starts to explore each party’s “real interests”. In contrast to mediations in other countries, the mediator does not usually shuttle between the parties. In fact, it is common for all participants (mediator and parties) to be present during all negotiations. However, private sessions are permitted with the express consent of both parties.

(iv) The mediator explores and negotiates possible solutions to the issues in dispute with the parties in order to find a mutual agreement.

(v) Finally, the mediation is concluded by a written settlement which documents the parties’ decision to settle the dispute and the agreed terms of the settlement.

The length and costs of a mediation vary depending on the complexity of the process and the person appointed as mediator. The costs are typically shared between the parties.

There are no audited figures, but it is understood that the settlement rate after mediation is approximately 80%.

While courts cannot generally compel parties to mediate a commercial dispute, they may, where litigation is pending, encourage the parties to attempt mediation. If the parties agree to mediation, the civil proceedings will be suspended for the duration of the mediation pursuant to Section 278a ZPO.

In addition to mediating, the judge hearing a case may assist the parties to attempt to reach an amicable settlement at a conciliation hearing (Güteverhandlung) before commencing the trial’s main oral hearing. Further, the Promotion Act introduced a new procedure allowing the court to transfer the proceedings to a conciliation judge (Güterichter). The conciliation judge is a judge who has not been appointed to hear the pending litigation. He/she is allowed to apply all methods to resolve the dispute, including mediation, pursuant to Section 278 para. 5 ZPO. The main difference to a mediator is that the conciliation judge is allowed to make a legal analysis of the case and to propose a solution to the parties. If a settlement agreement is reached before a conciliation judge, it can be recorded in writing by the court (Prozessvergleich), resulting in a deed of execution that can be enforced without resorting to further court proceedings. If no agreement is reached, the ordinary court proceedings continue.

In accordance with Article 7 of the EU Mediation Directive, Section 4 of the Mediation Act states that mediators and persons who are involved in the mediation proceedings (other than the parties) are required to keep confidential all the information received in connection with it. The duty of confidentiality corresponds with a procedural right to refuse to testify in civil litigation and arbitration in relation to information which is subject to the confidentiality obligation. Submissions made during the course of settlement negotiations will not usually be admissible as evidence in later court proceedings. However, exceptions are made if (i) it is necessary to disclose the confidential information for the enforcement of the final mediation agreement, (ii) the confidential information is required for reasons of public policy (ordre public), or (iii) the facts which will be released are obvious and do not require confidentiality given their importance.

Section 4 of the Mediation Act does not apply to the parties and their legal representatives. However, mediation agreements will usually include confidentiality clauses which will prevent the parties from disclosing information obtained during the mediation in civil proceedings. Such a clause has to be drafted carefully. If the mediation agreement refers to the rules of a mediation institution, such as the DIS, a confidentiality clause is usually automatically incorporated.

The rejection of an invitation to commence any ADR proceeding is not followed by any cost sanctions, unless the parties had previously agreed otherwise.

Section 5 para. 1 of the Mediation Act introduces quality standards that a mediator shall be required to fulfil. Mediators are personally obliged to undertake regular education and training. As yet, no regulating body exists to supervise compliance with this requirement. In practice, however, most mediators have some form of accreditation following training by appropriate associations. Furthermore, there are a number of mediation organisations in Germany.

However, Section 5 para. 2 of the Mediation Act introduced the so-called “certified mediator” status. A mediator is only permitted to call him-/herself a certified mediator if he/she has completed initial training as a mediator in fulfilment of the requirements of Section 6 of the Mediation Act and the so-called Certified Mediator Training Act (Verordnung über die Aus- und Fortbildung von zertifizierten Mediatoren, “CMTA”), which came into force on 1 September 2017.

Section 2 of the CMTA sets out the two requirements a mediator must fulfil in order to qualify as a certified mediator: (i) the mediator needs to have successfully participated in mediation training of at least 120 hours, involving theoretical education as well as practical training, and (ii) during the training or within one year after the successful completion of such training, the mediator must have participated in a reflective session (“supervision”), following a mediation which the mediator conducted as a sole or co-mediator. The status of a “certified mediator” is also available to persons who have (i) successfully completed mediation training of at least 90 hours abroad and (ii) participated in at least four mediations as a sole or co-mediator (Section 6 CMTA).

A certified mediator has to demonstrate he/she has undertaken regular training in order to remain certified. Pursuant to Section 3 CMTA, he/she has to undertake at least 40 hours of training within a four-year period. Section 4 CMTA further requires that the certified mediator participates in at least four individual supervisions within two years after his/her training, each following a mediation which he/she conducted as a sole or co-mediator.