On 7 August 2019, China and other 45 States signed the UN Convention on International Settlement Agreements Resulting from Mediation (the Singapore Convention). It is time for us to take a close look at mediation in China.
1. History of Mediation in China
In China, the history of mediation can be divided into four stages:
(1) From 1949 to the 1980s: highly praised
After the establishment of the People's Republic of China in 1949, the government advocated "mediation as the primary" (調解為主) in dispute settlement. The mediation here mainly relies on the people's mediation committees set up in the grassroots society. During this period, China's state power penetrated into all corners of society, and state-driven mediation was generally accepted by society. Mediation, therefore, played a very important role.
(2) From the 1980s to the 1990s: the sharp weakening of mediation
After China began its reform and opening up in 1978, state power gradually withdrew from Chinese society, and its support for mediation was also greatly weakened. People no longer recognized the authority of mediation and turn to lawsuits, which led to a large number of disputes flowing into the courts.
(3) The first decade of the 21st century: the rise of court-connected mediation
In response to the pressure of dispute settlement, China launched a movement called the "Big Mediation" (大調解). [1] The mediation conducted during litigation played a major role in this movement. Court-connected mediation could take place at any stage of court proceedings, and judges were also keen to urge litigants to accept mediation.
(4) The 2010s: out-of-court mediation is highlighted
In order to cope with the litigation explosion faced by Chinese courts, and also to serve the "Belt and Road Initiative" (BRI), China is now proposing a "diversified dispute settlement" scheme, that is, mediation, arbitration, and litigation are connected and coordinated. In this scheme, out-of-court mediation is valued, namely: a collaborative system of people's mediation, administrative mediation, industry mediation, commercial mediation, and court-connected mediation. [2]
The main disadvantage of out-of-court mediation is that the settlement agreement resulting from mediation cannot be enforced by the court, given its nature of an ordinary contract in essence. In order to support mediation, the PRC Civil Procedure Law (CPL) newly amended in 2012 stipulates that the court may, based on the application of the parties, make a ruling to confirm the validity of the settlement agreement, so that it can be enforced by the court. [3]
2. Current Types of Mediation in China
There are no systematic legal rules on mediation in China, but they are scattered in the CPL, People's Mediation Law of the People's Republic of China, as well as the rules promulgated by China's Supreme People's Court (SPC) and China's Ministry of Justice. According to these rules, Chinese mediation generally includes the following:
(1) Court-connected mediation
Court-connected mediation refers to the mediation conducted during in a lawsuit.
Court-connected mediation is stipulated in the CPL. This type of mediation is conducted by a judge in civil proceedings. Mediation is not separate from the case trials, but is part of it. After the settlement agreement is reached, the court shall make a “settlement statement” (調解書). The settlement statement, just like the judgment, can be enforced by the court.
Since 2016, Chinese courts have been trying to separate mediation from case trials, and have established a “docking mechanism to connect litigation with mediation”(訴訟與調解對接機制) for this purpose. Under this mechanism, the court commissions/assigns the case to a specific mediator (including full-time mediators in the court and mediators outside the court), and the judge can no longer mediate during the trial.
(2) People's mediation
People's mediation (community mediation) is the mediation of community residents.
The People's Mediation Law enacted in 2010 is the only law in China that specifically targets mediation. People's mediation mainly refers to mediation by the people's mediation committees set up in community self-governing organizations (neighborhood committees, villager committees), which does not charge fees.[4] Therefore, this mediation is a kind of community mediation for public welfare, and does not include commercial mediation, mediation of industry association, etc.[5] Nevertheless, social organizations such as industry associations can establish a people's mediation committee with reference to the People's Mediation Law to exclusively deal with the disputes of their professions.
(3) Profession/industry mediation
Profession/industry mediation is a kind of mediation provided to a specific field of profession or to a member of a particular industry association.
After 2015, China began to encourage the development of profession/industry mediation, including two categories. The first category is the mediation of industry association, namely, the mediation institution established by industry association itself; the second category is industry-based and profession-based people's mediation, namely, the people's mediation committee established by industry association with reference to the People's Mediation Law. [6]
The difference between the two: the former is subject to the supervision of the relevant regulatory authorities of the industry. For example, the Securities Association of China mediates securities disputes and is regulated by the China Securities Regulatory Commission; the latter is regulated by the supervision department of people's mediation, namely, the Ministry of Justice and the corresponding department in each local government.
Industry associations establish mediation institutions by themselves, and in theory, their mediation fees are not subject to the "free" rules of the People's Mediation Law. However, for the time being, most mediation institutions of the industry associations still adopt the free mode,[7] which means that their mediation is of certain public welfare but not commercial.
(4) Lawyer mediation
Lawyer mediation refers to mediation conducted by mediation institutions of lawyer profession.
Since 2017, China has tried to encourage lawyer mediation, and set up lawyers' mediation studios in courts, public legal service centers, law firms, and lawyers' mediation centers in bar associations.[8]
It should be noted that in terms of the fees charged for lawyer mediation, China's Ministry of Justice requires to adopt a "low price" model. For example, in some places, the fee for lawyer mediation must not exceed 50% of the court costs in similar circumstances,[9] even though China's court costs are already very low. In this sense, lawyer mediation is also of public welfare.
(5) Commercial mediation
Commercial mediation refers to mediation conducted by a specialized commercial mediation institution. Commercial mediation adopts a market-based charging model without providing free mediation.
In China, commercial mediation may be more professional than other mediation, but there are few commercial mediation institutions in China. These mediation institutions mainly include: China Council for the Promotion of International Trade/China Chamber of International Commerce Mediation Center (established in 1987) and the mediation centers of its chapters, Beijing Arbitration Commission Mediation Center (established in 2011), Shanghai Commercial Mediation Center (established in 2011), Guangdong, Hong Kong & Macau Commercial Mediation Alliance (established in 2013).
(6) Administrative mediation
Administrative mediation refers to mediation conducted by an administrative organ.
Although Chinese official documents often mention people's mediation, court-connected mediation, and administrative mediation in the same breath. But the concept of administrative mediation is the vaguest and least seen. The main scene of administrative mediation is that the police mediate in public security cases and traffic accidents.
3. Our Commentaries
Although developed people's mediation has been established before China's reform and opening up, it exists in a highly rigorous social structure. The mediation in the market economy came very late in China. It can be said that it was not until the 2010s that China began to establish real mediation. In this sense, Chinese mediation is still in its infancy.
Moreover, most types of mediation in China is targeted at public service, which is either free or low-price. This has greatly weakened the enthusiasm of professional institutions and personnel to participate in mediation. Therefore, the development of mediation is likely to be subject to certain restrictions.
At present, there are only a few institutions in China engaged in commercial mediation, and most of these institutions are very young, and it will take some time for development to have a large scale.
In summary, Chinese mediation is still very young and has not enough international competitiveness. Therefore, China may well be unwilling to ratify the Singapore Mediation Convention prematurely to prevent China from responding to the impact of international mediation institutions.
However, with the advancement of China's BRI, China cannot ignore the role of mediation. In fact, in 2018, China has issued the "Opinions on the Establishment of 'the Belt and Road Initiative' Dispute Settlement Mechanism and Institutions" (關于建立"一帶一路" 爭端解決機制和機構的意見), which also mentions mediation. We speculate that, in the future, mediation will be one of the most important dispute resolutions in China.
References:
[1] 關于人民法院民事調解工作若干問題的規定》(2004年),《關于進一步發揮訴訟調解在構建社會主義和諧社會中積極作用的若干意見》(2007年),《關于建立健全訴訟與非訴訟相銜接的矛盾糾紛解決機制的若干意見》(2009年),《關于人民調解協議司法確認程序的若干規定》(2011年)等。
[2] 中共中央辦公廳、國務院辦公廳《關于完善矛盾糾紛多元化解機制的意見》（中辦發〔2015〕60號）,《最高人民法院關于人民法院進一步深化多元化糾紛解決機制改革的意見》（法發〔2016〕14號）
[3] 《民事訴訟法》第一百九十四條、第一百九十五條
[4] 《人民調解法》第四條、第八條
[5] 范愉.《中華人民共和國人民調解法》評析[J].法學家,2011(02):1-12+176.
[6] 《司法部關于加強行業性、專業性人民調解委員會建設的意見》（司發通[2011]93號）
[7] 如《最高人民法院 中國證券監督管理委員會 關于全面推進證券期貨糾紛多元化解機制建設的意見》,《中國證券業協會證券糾紛調解工作管理辦法》
[8] 《最高人民法院 司法部關于開展律師調解試點工作的意見 司發通〔2017〕105號》,《最高人民法院 司法部關于擴大律師調解試點工作的通知 司發通〔2018〕143號》
[9]《山東律師調解試點來了！調解收費標準不超過訴訟費50％》, http://www.acla.org.cn/article/page/detailById/22576
Contributors: Guodong Du 杜國棟 , Meng Yu 余萌
