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News
An Alternative to the Settlement of Civil Disputes in Court
29.12.2009
On 18 November 2009, the Riigikogu adopted a Mediation Act governing mediation in civil matters and creating an alternative to the settlement of civil disputes in court.
The nature and purpose of mediation
According to the Mediation Act, mediation is a process in which the parties to a dispute attempt, on a voluntary basis, to reach an agreement on the settlement of their dispute with the assistance of an impartial mediator who facilitates communication between the parties. Mediation is an alternative to costly and time-consuming court proceedings.
The mediation procedure can be commenced in two ways: (i) the parties agree on the settlement of their civil dispute by mediation; or (ii) if the court is of the opinion that mediation is necessary for adjudicating the matter being heard by the court, it may compel the parties to participate in mediation.
The mediator
Under to the Mediation Act, each natural person appointed by the parties to conduct the mediation process may act as a mediator, i.e. a mediator does not have to hold a special licence or be included on a certain list. Attorneys-at-law and notaries may also act as mediators; moreover, a conciliation body established by the state or a local government may also act as a mediator according to the Act.
The task of a mediator is to facilitate communication between the parties to a dispute with the aim of helping them to resolve the dispute. Mediators must be independent and act with impartiality towards the parties. Unlike a judge or an arbitrator, a mediator is not competent to make a binding decision but the role of a mediator is to facilitate reaching a consensus. A mediator may make a proposal for resolving the dispute based on the circumstances of mediation and the course of the mediation process; however, this proposal is not binding on the parties.
The result of mediation
Once the parties have reached an agreement on settling the dispute, the mediator will put the agreement in writing at the request of the parties. The written agreement will be signed by the parties and the mediator.
The parties to the agreement may file an application with a court for additional recognition of the agreement. If the court recognises the enforceability of the agreement, the agreement is regarded as an execution document, meaning that, if necessary, the parties can have recourse to a bailiff for enforcing the agreement; the bailiff will conduct execution proceedings and take the necessary action (e.g. seizing the property of the debtor) for enforcing the agreement.
Fees payable to the mediator and the cost of mediation
The fees payable to the mediator will be determined by agreement of the mediator and the parties to the dispute. The mediator may require the advance payment of some or all of the anticipated fees. The parties shall be solidarily liable to the mediator for failure to pay the agreed fees.
The parties should agree on the division of the costs of mediation. If there is no agreement, each party will be required to pay its own costs.
The above does not, however, apply in situations where the parties were referred to mediation by a court. In such a case, the costs will be divided according to the procedure established by the Code of Civil Procedure.
The Mediation Act will enter into force on 1 January 2010.
