Mediation – is it worth it?

1. Purpose of mediation
2. Mode of mediation
3. Costs of mediation
4. Summarising

From January 1, 2016, the Act of September 10, 2015 amending certain acts in connection with the support of amicable dispute resolution, became effective in the Polish legal order. Clients of JMK Kancelaria Adwokacka often ask about the purpose of preceding court proceedings with mediation. Do the provisions on mediation really encourage the parties to the dispute to use it before the case is subject to the court’s assessment?

1. Purpose of mediation

The purpose of the regulation is to promote amicable dispute resolution. The Ministry of Justice encourages choosing this path by issuing various types of promotional materials. The direct indication is in art. 10 of the Polish Civil Procedure Code.

From the point of view of relieving the courts, mediation should be a good alternative to resolving disputes. Due to the fact that now the courts have the obligation under the law to urge the parties to a dispute to mediate at every stage of the proceedings, this method is becoming more and more common.

Mediation is conducted by an impartial mediator. A permanent mediator may be a natural person who: enjoys full public rights, has full legal capacity, has knowledge and skills in the field of mediation, is over 26 years old, knows the Polish language, has not been legally convicted of an intentional crime or intentional tax crime and was entered on the list of permanent mediators kept by the president of the regional court. The judge cannot be a mediator.

2.  Mode of mediation

Mediation can be initiated on the initiative of the Court, which issues a decision to refer the parties to mediation, or on the initiative of the parties themselves. In this case, the obligation to mediate may arise from the provisions of the contract obliging to precede the judicial mediation, or arise through the actual accession of the parties to the dispute to mediation.

It doesn’t matter who takes the initiative to initiate mediation, in all cases all parties involved in it must agree. Since it is voluntary, the will to resolve the dispute through mediation must exist throughout its duration, until the settlement is concluded.

In accordance with art. 183 (8) of the Code of Civil Procedure, mediation is not conducted if a party within a week of the day of announcement or delivery of its order referring the parties to mediation did not agree to mediation. However, in the event of mediation carried out on the basis of a court order, if no party objects within a week of the announcement or delivery of the order by the court, the consent is given. There are doubts in the doctrine if the construction of “silent agreement” can be used. The justification of the proposal of the Civil Law Codification Commission at the Minister of Justice (point IV, p. 10) shows that the wording “agree” should be understood as mediation based on a referral by the court when “the parties do not object” within a week of the day when the order is announced or served. Lack of consent causes the case to “go back” to court, but the mediator will still be entitled to remuneration. When referring parties to mediation, the court is obliged to immediately provide the mediator with contact details of the parties and their representatives. A report is drawn up on the mediation process and a possible settlement is attached to it.

This settlement is considered to be an enforcement order, which means that it is not required to be approved by the court in order to initiate enforcement proceedings. In the course of enforcement proceedings, however, it will be verified by the court in terms of compliance with the law and principles of social coexistence, as well as if there is no attempt to circumvent the law. The court also examines whether the settlement is understandable and does not contain contradictions in its content.

By “mediation meeting” is meant a simultaneous meeting of the mediator with all parties at a specific time and place. Holding meetings understood in this way is not obligatory, mediation can be conducted, e.g. by means of separate meetings of the mediator with each of the parties or by using means of direct remote communication.

Mediations also take place at the headquarters of JMK Kancelaria Adwokacka. The mediator sets the place and date of the meeting. A party may be represented by a proxy in mediation proceedings. Advocate Justyna Michalak-Królicka often represents her Clients as mediation parties.

Participation in mediation does not require a power of attorney. At any time, a party may withdraw from mediation, the mediators themselves are not competent to resolve the dispute. In principle, mediation can be carried out in any case, however the Code of Civil Procedure contains detailed regulations indicating the possibility of resolving the dispute by means of mediation, e.g. in art. 445 (2) of the Code of Civil Procedure regarding divorce and separation or in art. 570 (2) of the Code of Civil Procedure regarding parental responsibility.

3. Costs of mediation

According to art. 98 (1) of the Code of Civil Procedure, the necessary process costs include the costs of mediation conducted as a result of a referral by a court. According to art. 183 (5) of the Code of Civil Procedure, the costs of mediator’s fees and reimbursement of expenses are borne by the parties. Mediation costs are not covered by the exemption from court costs.

Persons exempt from court costs must cover the costs of mediation themselves, even in the event of a referral for mediation, unless the mediator has agreed to conduct mediation without remuneration. If mediation takes place on the basis of a court referral, the costs are determined on the basis of the Regulation of the Minister of Justice of 20 June 2016 on the amount of remuneration and reimbursable expenses of the mediator in civil proceedings. The mediator receives remuneration after issuing the invoice, the court recovers these costs from the parties only after the case has been completed.

The mediator’s remuneration is independent of the result of the mediation because the mediator provides a kind of service to the parties. Pursuant to the Regulation, the mediator’s remuneration in matters of property rights is 1% WPS (the value of the subject of dispute), but not less than PLN 150 and not more than PLN 2,000 for the entire mediation procedure. In matters of property rights, in which the value of the subject of the dispute cannot be determined, and in cases of non-property rights, the mediator’s remuneration for conducting mediation proceedings is PLN 150 for the first meeting, and PLN 100 for each subsequent meeting, not exceeding PLN 450 in total. The expenses incurred, i.e. the costs of travels, notices, used office supplies, room rental for parties’ meetings must be added. If the mediation ends in a settlement, the costs are mutually offset (Art. 104 (1) of the Code of Civil Procedure), failure to settle will result in the losing party being charged with the costs in general.

In the case of court mediation, concluding a settlement before a mediator in the course of proceedings in the case results in the ex officio reimbursement of the entire fee (if the settlement was concluded before the start of the trial in the first instance) or three-quarters of the fee (when the settlement was concluded after the beginning of the hearing) paid from the letter instituting the proceedings at first instance and charges from the payment order (Art. 79 (1) (1) and Art. 77 (1) of the Act of 28 July 2005 on court costs in civil matters).

4. Summarising

Mediation seems to be a good way to quickly resolve a dispute without involving the court. As for costs, it is particularly beneficial in cases where the value of the subject matter of the dispute is not significant and the complexity of the case allows the dispute to be resolved with the help of an impartial person, not necessarily from the legal environment.

On the other hand, when it comes to substantively complex cases, with complicated legal and factual status, settlement by mediation is unlikely, primarily due to the parties’ determination to reach the court’s decision and longer time necessary to conduct mediation.

A separate problem is the “freshness” of the institution and the relative lack of real experience of those who can act as mediators. Certainly, however, this institution will become more popular over time, especially in family and civil matters.