‘privatizing’ Civil Justice through Procedural Agreements: a Comparative Law Analysis*

This study aims at examining, in a systemic and, to the extent possible, comprehensive manner, the topic of procedural agreements in United States civil procedure law and afterwards to compare the relevant experience with the results of analogous researches conducted in respect with single national procedural systems in Europe. It is widely recognized that party autonomy is paramount in arbitration and other forms of alternative dispute resolution, but it also can play, as it in fact does, a prominent role in civil procedure, through many forms of agreement whereby the parties, either directly or indirectly, convene to produce a certain effect upon the course of an ongoing or future proceeding: examples can be observed, among others, in forum selection agreements, in provisions regarding admission of facts and consent judgments or decrees, as well as in waivers to judicial recourses, appeals and/or challenges. Despite converging perceptions that party autonomy is given, one way or another, “presence” and relevance in civil procedure, opinions, however, are not unanimous as to the limits of this presence and, since years, a systematic analysis at this regard, at least in continental Europe jurisdictions, is neglected, with the result that the issue appears quite unclear and a very “magmatic” one. Whilst the study of the topic touches the very basis of any procedural system, a comparative study, here predicated for the U.S. jurisdiction, seems to be useful since it allows to understand a certain legal system in its entirety, hence to appreciate limits and foreseeable uses of such methods for streamlining civil procedure according with the common will of the litigants, consistently with the recent and increasing call, in many procedural traditions, for a more “cooperative” procedure. Summary: 1. Preliminary remarks: why the US system? Comparing civil procedure laws. Method and merits of the research. 2 Background of the project. Brief analysis of the “state of the art” in the field (European jurisdictions). 3. Consensual adjudicatory procedure in the U.S. system. 3.1 General background. 3.2 The “arbitration analogy”. 3.3 Unequal bargaining power. 3.4 Types of procedural agreements. (3.4.1 3.4.18). 4. Some inklings and “first” impressions. 1. Preliminary remarks : why the US system? Comparing civil procedure laws. Method and “merits” of the research. Recent years have showed, in multiple legal systems, an increased tendency to “privatize” civil proceedings1 and the present study seeks to examine this tendency, framing it in the different experiences of every single jurisdiction. * This article is a preliminary draft of a broader ongoing study, completed for presentation at the Global Fellows Forum, held at the New York University, School of Law, on October 22, 2013. Comments are warmly welcomed by the author, who can be reached at [email protected]. Please do not quote without prior permission. ** Global Research Fellow, New York University, School of Law. 1 One may ask why the word “privatize” appears in the title under quotation marks: one provocative answer to this question, as will be pointed out infra, can be found in Sassani, Il codice italiano di procedura civile e il mito della riforma perenne, in Studi in Onore di Juan Montero Aroca, Valencia, 2012 2 Whilst the topic had been made subject of analysis only in rather dated contributions, a renewed attention is drawn on the issue and this tendency has to be seen in a rather precise historical context, in which the dogma of civil procedure being an exclusive prerogative of the States’ jurisdictions – as an expression of their sovereignty – is progressively deflecting2: formal procedural guarantees are being abdicated and a principle of cooperation between the parties and the judge is strikingly invoked. Needless to say, party autonomy is not given the same space and importance in civil procedure as it is in civil law, being the former, essentially and traditionally, a domain of public law and an expression of the public authority. It remains mere rhetorical the question of whether the parties, who basically enjoy the maximum freedom to choose which substantive law applies to their dispute, should not have the same control over the procedure, at least where relevant to the same substantive law. If we look at the recent past, we find that Salvatore Satta, a prominent Italian scholar of the last century, observed that “from the alienability of the substantive right to the free disposability of civil procedure there is no consequential passage, but a jump” 3. Standing on the same point of view, Tito Carnacini had previously explained that the “free disposability” of civil procedure law did not exist at all, and the extent to which a certain system leaves space for the parties to contract procedural rules could be just faced with as an issue of “procedural technique”4. Leaving from such authoritative premises, we now wish to add that the space dedicated to party autonomy (and, reciprocally, to the State’s intervention) in a certain legal system is undoubtedly changeable in time and space5, as it is proved in civil and in Rivista di Diritto Processuale, 2012, § 5, where the author emphasizes that the expression is a “nonsense”. 2 Ex multis, Picardi, La giurisdizione all’alba del terzo millennio, Milano, 2007, passim and in particular 13 and ff. 3 Satta, Commentario al codice di procedura civile, 1966, vol. I, 451. 4 Carnacini, Tutela giurisdizionale e tecnica del processo, in Studi in onore di Enrico Redenti, Milano 1951, II, 695 and ff. 5 Irrespective of what just pointed out in the text, clear similarities can be observed with the issue of the extension, in civil law, of the so-called default rules (i.e. those rules “that are government-created rights and duties that are privatizable, rules that govern unless the parties contract out of them”: Ayres, Gertner, Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules, in Yale Law Journal 1989, 87 and ff.) and, reciprocally, of the so-called mandatory rules (which are “those government-created rights and duties that cannot be avoided by contract, those that are not privatizable”: Ayres, Gertner, Filing Gaps, cit., 88, footnote 8). 3 procedure, for instance, by the evolution that during years interested the concept of arbitrability6. In addition, it is worth noting that a “political” component inevitably inspires every State’s approach to the subject at issue7: in the U.S., as explained by Oscar Chase, Ronald Reagan’s presidential election in 1980 symbolized the triumph of the private sector on the public one, with the power and the inference of the State in private affairs being significantly reduced (in various areas, leaving from industrial relations to environmental law)8. We may then conclude that whether a procedural agreement has to be enforced or not, or given somehow relevance in civil procedure, seems to be a matter to be solved, as it has been suggested, by investigating “from the very basis of law and constitutional principles and the rule of law” of every single legal system9: possible solutions to be outlined on the issue being all “expression of the unity of law”10; and there is no doubt that such values change all the times. One may then ask why a comparative study, and why it is worth investigating the American system. The answer to the former question, at this initial stage, may be but a declaration of intent, perhaps superstitiously supported by preceding experiences that have already proven that comparing civil procedure laws, on the one hand, helps the development of single domestic traditions and, on the other hand, serves to identify, often unexpected, match points11. 6 See, in this respect, ex multis, Brekoulakis, On Arbitrability: Persisting Misconceptions and New Areas of Concern, in Mistelis, Brekoulakis (eds), Arbitrability: International and Comparative Perspective, London, 2009, 18 and ff. 7 This study will not investigate the political reasons for such tendency, being even too clear that political choices in procedure are everywhere (Resnik, Managerial Judges, Jeremy Bentham and the Privatization of Adjudication, in Walker, Chase (eds), Common Law Civil Law and the Future of Categories, Toronto, 2010, 205 and ff. and in part. 223 as well as, more in general, Pekelis, Legal techniques and political ideologies, in Michigan Law Review, 41, 1942/1943, 665 and ff.). Neither the study will address potential practical and economic benefits and disadvantages of the practice of contracting for procedure, although some references to studies performed in this respect will sometimes be quoted. 8 Chase, I metodi alternativi di soluzione delle controversie e la cultura del processo: il caso degli Stati Uniti d’America, in Varano (ed), L’altra giustizia. I metodi alternativi di soluzione delle controversie nel diritto comparato, Milano, 2007, 151-152. 9 Belohlavek, Arbitration, Ordre Public and Criminal Law, Kiev, 2009, 177. 10 Belohlavek, lc. ult. cit., quoting Müller-Dietz, Zur Befreiung des Strafrechts vom zivilistischen Denken am Beispiel der Schadenswiedergutmachung, in Günther (ed), Gedächtnisschrift für Schultz, Köln, 1987, 253 and ff. (in part. footnote 394). 11 See, representatively, Chase, Hershkoff (eds), Civil Litigation in a Comparative Context, St. Paul, 2007, passim. 4 The latter question, instead, requires a simple and didactic answer. Traditionally, under the adversary system that typifies U.S. civil procedure, “the litigation process is partyinitiated, party-controlled, and party-driven” and this configuration is said to reflect the “American values of individuality, autonomy, competition and disdain for government”12. Thus, a strong presumption of openness to the practice at stake, by the legal system taken in consideration, supports the research. From a methodological standpoint, the study will be first of all performed through a comprehensive analysis of both the language used in codes, rules and legislation, and the doctrinal positions, as well of the relevant case-law, seeking to investigate the relationship between substantive and procedural law (and the relevance of the parties’ common will in the latter) in the United States jurisdiction13. The notion of procedural agreements to be accepted, in principle, should be a “nontechnical” notion, intending to cover procedural agreements in a broad sense, including both arbitration and prorogation agreements (characterized by the ability to induce effects approved by procedural law) and agreements in a “narrow sense”, among which are included all those procedural agreements that are entered into only in the course of a particular proceeding14. An overview of different types of procedural agreements used in the American jurisdiction should follow, distinguishing the “typical” agreements (expressly provided by the law) from the “atypical” agreements (permitted absent a specific congressional authorization), in order to reach a preliminary conclusion upon their general admissibility15. After that, we will try to define the limits for the use of such agreements by private parties and, symmetrically, the borders of extension of the judge’s control in this respect16. Only once exhausted the above aspects, we will try to suggest a more appropriate notion of the idiomatic expression “procedural agreements” and then to identify their relevant regime, i.e., most of all, the law applicable to them17. 12 Subrin, Woo, Litigating in America, New York, 2006, 22-23. 13 Infra, § 3.1. 14 Infra, passim and in part. § 3.1. 15 Infra, § 3.4. 16 I.e., the limits to “freedom of procedural contract” granted to the parties, with particular attention (but not limited to) to whether and to what degree a court is obliged to accept such agreements and/or whether and to what degree it may refuse to enforce them. See infra, § 4. 17 Infra, §§ 3.3 and 4. 5 Finally, we will try to verify if the results of the research are to change in cases in which certain “peculiar” substantive rights are involved in the proceedings. At this regard, we will consider the distinction between unalienable rights and the rights that can be freely waived by private parties, as well as the situations in which private actors relate themselves with the public powers18. In general terms, throughout the investigation, we will keep into account that party autonomy is undoubtedly paramount in arbitration and that civil procedure law, with all due caveat and differences, can learn a lot from the experience of the former19. Eventually, it is worth pointing out, always from a methodological standpoint, that analyzing a single national system will not require us to address and define the difference between “substance” and “procedure”20, at least unless the need to consider conflict of laws issues emerges. 2 Background of the project. Brief analysis of the “state of the art” in the field (European