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HH&P: NEW MEDIATION ACT

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The new Mediation Act came into force on 1 September, 2012. Until now, mediation regulation has been absent in Czech law. However, this does not mean that mediation did not occur or was illegal; instead, there was merely no regulation governing mediation, which has raised a number of issues as to the duties of mediators, mediation effects, confidentiality of the mediation process and other related matters. This gap is to be filled by the approved bill from the date of its effect.

What is mediation?

Mediation is a modern, alternative method of resolving disputes that is becoming more and more popular both in the Czech Republic and western countries. It is often used as the main way of reaching settlement in a variety of domains such as commercial or family matters. In simple terms, mediation is a process in which an independent and neutral third party – the mediator – assists the opposing parties in reaching a resolution of a dispute or complaint. The Act defines mediation as ‘the process in resolving conflicts with the involvement of one or more mediators supporting the communication between the parties engaged in the conflict [...] so as to assist them in reaching an amicable resolution of their conflict by entering into a mediation agreement.’

Benefits of mediation

The main benefits of mediation include, in particular, the fact that, unlike judicial proceedings or arbitration, the result of the conflict rests in the hands of the parties and the final agreement is an expression of their joint will and liability. Therefore, situations that are very often encountered in courtrooms or arbitration rooms in which one of the parties (and often both) leaves unsatisfied do not arise. Mediation is usually much faster and less formal than litigation or arbitration. The independent mediator, as a kind of intermediary, facilitates the calming of troubled waters and establishing a dialogue where the parties are often unable to have a rational discussion, be it regarding a commercial or family dispute. Foreign experience shows that agreement between the parties can be reached in up to 75% cases.

Ideal mediation

In an ideal mediation, parties enter into an agreement to mediate with the mediator under which one or several dealings are held between the parties to the mediation and the mediator. The dealings result in a settlement in the form of mediation agreement. This is how the beginning and the (ideal) ending of mediation is defined by the new Act.

Registered mediators

The Act does not regulate the performance and effects of any mediation; instead, it only provides an institutional framework for mediation conducted by registered mediators. These are persons recorded in the list of mediators with the Ministry of Justice who have passed the mediator examination and complied with the standard requirements of no criminal record and university education. To conduct mediation in family matters, in addition to the general mediation examination, the person must also pass a special examination in family mediation. The mediation examinations are administered by the Ministry of Justice and by the Czech Bar Association for attorneys-at-law who wish to become mediators. The requirements to pass the examination, the purpose of which is to assess expert knowledge in the area of mediation and related fields, including related laws, is to ensure adequate quality of services provided by registered mediators. This will also be facilitated by surveillance by the Ministry of Justice or the Czech Bar Association and strict penalties imposed for a breach of obligations by a mediator.

In addition to the guarantee of the quality of the mediation process by a mediator, one of the advantages of mediation provided by registered mediators will also be the fact that the commencement of such mediation will result in suspension of the time of prescription, which is something that unregulated mediation does not and cannot have. The same applies to the simplified rules for delivery between the mediation entities, including the statutory constructive notice, which may not be used or agreed upon effectively by the entities in unregulated mediation.

Other standardised matters include a detailed and strict regulation of the confidentiality obligation and other duties of a mediator during the course of mediation. Last, but not least, mediation provided by registered mediators is expected to remove a burden from the courts that are conferred, by granting the power to order participants in the process to meet with a registered mediator for a range of up to 3 hours. The Act also governs some other issues relating to the position of a mediator from another EU Member State and the effects of mediation conducted in other EU member states, thus implementing the relevant EU Mediation Directive (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).

We are convinced that the adopted law could help raise awareness in the business public, and elsewhere, of the possibility of using mediation as an efficient method of resolution that is fast, cheap and flexible. The new legal framework is expected to provide sufficient guarantees that mediation will be transparent and conducted by adequately competent mediators and that it will feature clearly defined results.

  • Dušan Sedláček, Partner
  • Petr Bříza, Senior Associate

 Source: Havel, Holásek & Partners; Legal News: September 2012

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