What is mediation, where is it used and why is it useful? Find out more in the article below.
Mediation is one of the alternative dispute resolution procedures
Alternative dispute resolution is a non-judicial procedure in which one or more neutral third parties participate in the resolution of a dispute through mediation, arbitration, early neutral evaluation or other similar procedures, as defined by the Law on Alternative Dispute Resolution.
What is mediation
Mediation is a process in which the parties, with the assistance of a neutral third party (mediator), voluntarily attempt to reach an amicable settlement of a dispute arising out of or relating to a contractual or other legal relationship, as defined in Article 3 of the Act on Mediation in Civil and Commercial Matters (ZMCGZ).
Mediator
The mediator must act independently and impartially and strive to treat the parties equally, taking into account all the circumstances of the case. The mediator has no interest in the dispute and does not render judgments. The mediator may, throughout the mediation, make suggestions for the resolution of the dispute. The solution proposed by the mediator shall not be binding on the parties.
When mediation makes sense
Mediation makes sense in all cases where:
– a party wants an efficient and expeditious procedure or solution;
– a party wants to reduce the costs of the dispute resolution, avoiding high court fees;
– a party wants to influence both the process of finding a solution and the final content (agreement);
– a party wants to avoid trial, discretion is important (mediation is completely confidential);
– the court’s decision is unpredictable and/or the outcome of the case is uncertain;
– the issues in dispute are mainly questions of fact and not so much questions of law;
– the length of the proceedings has caused the parties to lose confidence and hope of a satisfactory solution;
– there is a long-standing or important personal or business relationship which it would be reasonable to preserve;
– the attorneys consider that the case is complex and burdensome, where the outcome of the trial is unpredictable and the expected outcome is not realistic, and the trial will be very lengthy and complex, which would make an agreement the most appropriate solution.
Voluntary mediation
The parties’ participation in the mediation process is voluntary. This means that both parties have to give their consent for the mediation, otherwise the mediation will not take place. Either party may withdraw its consent to participate in the mediation process at any time without any negative consequences for the resolution of the dispute.
Once consent to mediation has been given, this does not necessarily mean that an agreement must be reached. While this is of course the aim of mediation, in order to avoid a lengthy court procedure, the parties decide on the conclusion of the agreement and on its content as they wish.
Confidentiality of mediation
All information arising out of or in connection with mediation shall be confidential unless otherwise agreed by the parties, or if disclosure is required by law or disclosure is necessary for the performance or enforcement of the agreement to settle the dispute.
Parties, mediators and third parties who have participated in the mediation may not rely on or produce as evidence or testify in arbitration, court or other similar proceedings to the party’s invitation to mediate or to the fact that the party was willing to participate in the mediation; opinions and suggestions as to possible solutions to the dispute expressed by the parties during the mediation; statements or admissions of fact made by the parties during the mediation; suggestions made by the mediator; the fact that a party has shown a willingness to accept the mediator’s proposal for an amicable settlement of the dispute; documents prepared solely for the purposes of the mediation as provided for in Article 12(1)(b) and (c) of Regulation (EC) No 1/2003. Article 12 of the Mediation Act.
Effect of mediation on limitation periods
Article 17 of the ZMCGZ expressly provides that the limitation period for the claim which is the subject of the mediation shall not run during the mediation. If the mediation ends without a settlement agreement, the limitation period shall continue to run from the moment when the proceedings end without a settlement agreement. The time elapsed before the commencement of the mediation shall be counted towards the limitation period laid down by law. If a special provision lays down a time limit for bringing an action, that time limit shall not expire in respect of the claim which is the subject of the mediation earlier than 15 days after the end of the mediation.
Conclusion of the mediation
The mediation shall be terminated when an agreement has been reached between the parties, or when one of the parties or the mediator withdraws his or her consent to the mediation, or by a declaration by the mediator or the parties that further efforts at mediation are unnecessary because the mediation has not been successful.
If there is a willingness to reach an agreement or to make mutual concessions, mediation certainly makes sense, as it avoids lengthy and arduous court proceedings and may possibly resolve issues that are not even subject in court proceedings.
Written by attorney and mediator Katarina Emeršič Polić, mag. prav.