A new law on mediation in non-criminal settings – Act No 202/2012 Coll. on mediation and the amendment of certain laws (the Mediation Act) – has already been in force for six months. In April 2013, the first “registered mediators” were listed by the Ministry of Justice, having fulfilled all statutory conditions under the Mediation Act and its implementing regulation No 277/2012 Coll. Czech courts have discovered the usefulness of mediation largely based on Act No. 89/2012 Coll., the Civil Code (most likely due to the extensive seminars and lectures held recently about the Act). The upshot is a rise in the number of first meetings with a mediator being directly ordered by the courts.*
The Mediation Act has had close links with the civil procedure rules (Act No. 99/1963 Coll.) since January 1, 2013. Since January 1, 2014, mediation has also featured in the Act on Special Judicial Proceedings (Act No. 292/2013 Coll.), featuring in its part five on family law proceedings.
The civil procedure rules (“CPR”) address both the power of courts to recommend mediation in cases where the circumstances seem to favour this approach, and their power to directly order a first meeting with a mediator. In the latter case, the court may only order a first meeting with a mediator, and not mediation itself, since one of the key principles of mediation is voluntariness. This voluntariness, together with confidentiality and the mediator’s impartiality, are the flagstones of the mediation process.
The court may recommend mediation as part of the preparations for the proceedings (s 114(2)(b) of the CPR) or at any point after they commence (s 99 of the CPR), including during appellate proceedings. It may also directly order a first meeting with a mediator. This cannot last more than three hours even if it is ordered as part of the preparations for the proceedings; any proceedings in progress may be suspended for up to 3 months to accommodate the court order (ss 100 (2) and 114(3)(d) of the CPR).
An agreement concluded in the presence of a mediator is not directly enforceable. It may be raised to the status of an enforcement order if it is endorsed by a court as a court settlement. If the proceedings have already started, this may be achieved by the process under s 99 of the CPR. The mediation agreement (or its part) may also be submitted to the court as a ‘praetorian’ (court) settlement under s 67 of the CPR; in that case, after investigating the compatibility of the agreement with Czech law, the court has 30 days from the start of the mediation proceedings in which to endorse or reject the agreement. The main advantage of a settlement is that it minimises court expenses (80% of costs are refundable under s 10(7) of Act No 549/1991 Coll., on Court Fees, and so too is the CZK 500 for the endorsement of the praetorian settlement, regardless of the content of the mediation agreement – see s 9 of the annex to Act No. 549/1991 Coll.). Alternatively, an enforcement order can be attained by notarising a mediation agreement that contains a direct enforceability clause; this method has the benefit of being less time-consuming.
Thanks to the many advantages that mediation offers, such as the ‘simplicity’ of gaining enforcement orders (as described above), confidential negotiations and the freedom to pursue and implement creative solutions reflecting the interests and capabilities of the disputing parties, mediation with a registered mediator is being used more and more frequently even in commercial settings.
Another advantage lies in the related substantive law. Since the time of Act No. 40/1964 Coll., (the “old” Civil Code) and Act No. 513/1991 (the Commercial Code), the law has addressed the issue of the suspension of limitation and prescription periods connected with mediation with a registered mediator. The Civil Code in force since January 1, 2014 extends this benefit to all agreements on extrajudicial creditor-debtor negotiations with effect for the claim concerned and the circumstances from which it arises (ss 647 and 654); therefore the suspension of limitation and prescription periods is not only tied to the start of mediation with a registered mediator. It is also now established that when the period starts running again, it will extend for at least the next 6 months (s 652). This gives the creditor enough the flexibility to pursue its claim even if extrajudicial negotiations break down.
Despite the above-described benefits of mediation, civil service bodies and local authorities have taken a rather sceptical approach to its use in proceedings to which they themselves are a party. Their representatives justify this, citing concerns that by concluding a mediation agreement, i.e. a settlement plan, they would breach the standard of care required of a proper manager. As a result, they spend years in drawn-out legal battles “just to be sure...” I have one final comment on this matter: The purpose of a settlement is not to determine the facts of a dispute, but to prevent more inconsistencies or disputes by cancelling the original obligation underlying the disputed claim and replacing it with a new duty. Mediation is an ideal tool for seeking out this kind of solution. When assessing the odds of success in a court case, it is essential to consider its specific circumstances (quality of the evidence available, realistic prospects of at least partially enforcing an obligation after years of litigation etc.), advice from leading experts and other supplementary documentation as well as the current state of relevant case law. The resolution of the dispute by way of settlement (i.e. by a related mediation agreement) may, all circumstances considered, be the best alternative available.
____________________________
* For the sake of completeness, it should be noted that as well as the courts, authorities involved in the social and legal aspects of child protection have the power to order a first meeting with a registered mediator. In this regard, the Mediation Act connects closely with Act No. 359/1999 Coll.