What is mediation and when should it be used?

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For economic purposes, entrepreneurs cooperate with each other, but sometimes their interests turn out to be contradictory. Therefore, conflicts between contractors are inevitable. In order to pursue their claims in court, the entrepreneur is afraid that the procedural proceedings will be long and its costs will be high. The issue of image and the possibility of further cooperation are also important. Meanwhile, the legislator provided for the possibility of resolving the conflict through mediation. Mediation is a dialogue-based conflict resolution, and is also much faster and cheaper.

Definition of mediation

Mediation is one of the voluntary methods of conflict resolution. Entities decide to try to mediate when their goal is not only to obtain a favorable resolution, but above all to clarify disputable issues and reach an agreement. It should be emphasized that joining mediation does not involve the obligation to reach a settlement. It also does not cancel the party's right to pursue its rights in court. Mediation takes place with the consent of both parties, and the agreement reached in its course is the result of the consensus. Currently, the claimant is required to indicate in the statement of claim whether the parties to the dispute have attempted mediation earlier.

Which cases are suitable for mediation?

Mediation may resolve disputes relating to matters in which a settlement is permissible. The subject of a settlement can only be a civil case that is admissible through a court. Moreover, the subject of the settlement may not exceed the availability limit of the parties. This means that a settlement cannot be reached on a matter which the parties cannot decide.

In particular, a settlement cannot be concluded:

  • if the case does not go to court;

  • if the case is excluded from national jurisdiction and

  • in proceedings in matters related to social insurance.

When is the mediation?

Contending parties in dispute may decide to mediate either before or during a court trial. They may also be referred for mediation by a court.

Commencement of mediation

Mediation is initiated on the basis of a previously concluded mediation agreement or at the request of one of the parties addressed to the mediator, after consent to mediation by the other party or on the basis of a court order referring the parties to mediation.

Mediation rules

The basic principles of mediation proceedings are:

  • voluntary - mediation takes place with the consent of the parties, moreover, they have the right to withdraw from mediation at any stage;

  • impartiality - the mediator should remain impartial while conducting mediation;

  • confidentiality - the mediation process is confidential. Pursuant to Art. 259 of the Code of Civil Procedure, the mediator cannot be a witness as to the facts which he learned in connection with conducting mediation, unless the parties release him from the obligation to keep mediation secret. If no settlement is reached, the parties may not, in the course of further proceedings, refer to the statements and proposals submitted to the mediator.

Mediation and the running of the limitation period

It should be emphasized that pursuant to Art. 123 § 1 point 3 of the Civil Code, the initiation of mediation interrupts the limitation period for the claim. It should be noted that each time the limitation period is interrupted, it restarts. However, if the limitation period is interrupted by an action in a court or other body appointed to hear cases or enforce claims of a given type, or before an arbitration court or by initiating mediation, the limitation period does not run anew until the proceedings are completed. This means that the limitation period should be counted from the date of the conclusion of the mediation. If it ended in a settlement, the claim stated therein shall be time-barred after ten years, even if the limitation period for such claims was shorter. If the claim thus established covers periodic benefits, the claim for future periodic benefits shall be subject to a three-year statute of limitations.

How long does mediation take?

The parties to the dispute decide for themselves how long they will conduct out-of-court mediation. Each of its participants may terminate it at any time. Usually, the duration of out-of-court mediation does not exceed one month. Practice shows that the parties manage to reach a settlement during 3–4 mediation sessions scheduled every few days. On the other hand, the duration of judicial mediation is determined by the procedure. Pursuant to Art. 18310 § 1 of the Code of Civil Procedure, when referring parties to mediation, the court sets its duration for up to three months. At the joint request of the parties or for other important reasons, the time limit for mediation may be extended if it favors an amicable settlement of the case. The duration of mediation is not included in the duration of the court proceedings.

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Approval of the settlement by the court

Pursuant to Art. 18314 § 1 of the Code of Civil Procedure, if a settlement has been concluded before a mediator, the court, at the request of a party, immediately conducts proceedings to approve the settlement concluded before the mediator. Pursuant to § 2 of the cited provision, if the settlement is enforceable by way of execution, the court approves it by giving it an enforcement clause; otherwise, the court approves the settlement by a decision in closed session.

It follows from the above that, at the outset, the court assesses the settlement submitted to it in terms of whether it contains content suitable for enforcement by way of execution. If the settlement meets this condition, its approval takes place by issuing an enforcement clause, and otherwise by issuing an approval order.

Next, the court examines the content of the settlement in terms of its compliance with the law. Based on Article. 18314 § 3 of the Code of Civil Procedure, the court refuses to grant an enforcement clause or to approve a settlement concluded before a mediator, in whole or in part, if the settlement:

  • is contrary to the law or principles of social coexistence;

  • tends to circumvent the law,

  • is incomprehensible or contradictory.

As emphasized in the case law, the catalog of reasons that make it impossible to approve a settlement concluded before a mediator is closed and cannot be interpreted extensively. The review of the admissibility of the settlement concluded before the mediator cannot be based on the merits examination of the case (decision of the Court of Appeal in Poznań of January 14, 2014, I ACz 2163/13).

Pursuant to Art. 18315 § 1 of the Code of Civil Procedure, a settlement concluded before a mediator, after its approval by a court, has the legal force of a settlement concluded before a court. A settlement concluded before a mediator that has been approved with an enforcement clause is an enforceable title. This means that on its basis, the bailiff may carry out enforcement, as in the case of a court judgment.

§ 2 of the cited provision indicates that it does not infringe the provisions on a specific form of legal action.

This means that although a settlement concluded before a mediator has the legal force of a settlement concluded before a court, there is a difference between them in terms of the application of provisions on a specific form of legal transaction. Only the settlement concluded before the court has the force equal to notarial deeds. The settlement concluded before the mediator does not have this value.

Mediation costs

Mediation costs include the mediator's fees and reimbursement of expenses related to mediation, such as the cost of renting a room or the cost of correspondence. They are borne by the parties, usually in half, unless otherwise agreed. In the case of out-of-court mediation, the amount of the mediator's remuneration and reimbursement of his expenses incurred in connection with the mediation are agreed by the parties with the mediator before mediation begins.

In mediation proceedings to which the parties have been referred on the basis of a court order, the mediator's remuneration is:

  • in non-pecuniary disputes and in disputes over property rights, in which the value of the subject of the dispute cannot be determined - PLN 150 for the first mediation session, and for each subsequent session - PLN 100 (not more than PLN 450 in total);

  • in disputes regarding property rights: 1% of the value of the subject of the dispute (not less than PLN 150 and not more than PLN 2,000 for the entire mediation procedure).

The mediator's expenses incurred in connection with the mediation are also reimbursed (including the fee for renting the room up to PLN 70 for one meeting and the costs of correspondence, in the amount not exceeding PLN 30). VAT will have to be added to the costs of mediation if the mediator is a VAT taxpayer.

Pursuant to Art. 981 § 1 of the Code of Civil Procedure, the necessary costs of the trial include the costs of mediation conducted as a result of referral by the court. § 2 of the aforementioned provides that if the civil proceedings were initiated within three months from the date of completion of the mediation, which was not concluded with a settlement, or within three months from the date of the decision to refuse to approve the settlement by the court, the necessary costs of the trial also include costs mediation in the amount not exceeding one fourth of the fee.