Law on Mediation in Dispute Resolution

Procedure of mediation in resolving disputes

The Law on Mediation in Dispute Resolution (“Off. Herald of RS”, No. 55/2014) regulates the notion, principles, procedure and legal effect of mediation in resolving disputes, requirements for carrying out mediation, rights and duties of a mediator and training program for mediators.

Mediation is understood to mean any procedure, regardless of the name, whereby the parties voluntarily seek to settle their dispute through negotiation, with the assistance of one or several mediators, who assist the parties in reaching an agreement.

Mediation is applied in disputes wherein the parties may freely dispose of their claims, unless other law stipulates exclusive jurisdiction of a court or other authority, regardless of whether it is carried out before or after instituting court proceedings or other proceedings.

Mediation is possible particularly in property – legal relations the subject matter of which is fulfilment of an obligation of performance, in other property – legal relations, in family and commercial disputes, administrative matters, disputes in the field of environmental protection, in consumer disputes, as well as in all other disputes where mediation corresponds to the nature of the disputes and may help to resolve them.

The provisions of the Law on Mediation in Dispute Resolution (“Off. Herald of RS”, No. 55/2014) also apply to mediation in criminal and misdemeanor matters in respect of the property claim and damages, as well as in labor disputes, unless otherwise prescribed by a separate law.

The provisions of the Law on Mediation in Dispute Resolution (“Off. Herald of RS”, No. 55/2014) do not apply to resolution of disputes in relation to imposing and collecting the public revenues.

Matters not expressly governed by the Law on Mediation in Dispute Resolution (“Off. Herald of RS”, No. 55/2014) are resolved in accordance with the mediation principles envisaged by the present Law and mediation standards contained in the acts of the United Nations, European Union and the Council of Europe.

Proposal for Initiating Procedure

If one of the parties submits a proposal for conclusion of an agreement to undertake mediation, the other party is obliged to answer the stated proposal, within 15 days from the day the proposal has been served, in writing.

Where initiation of the mediation procedure is envisaged by a separate law as a condition for conducting a court or another proceeding, i.e. if the parties when concluding a contract have committed themselves to attempting to resolve their dispute through mediation before instituting a court or another proceeding, a party is obliged to propose in writing to the other party the conclusion of the agreement to undertake mediation.

Initiating Mediation Procedure

Mediation procedure is initiated by concluding the agreement to undertake mediation.

If the parties in the course of a court or other proceeding agree to undertake the dispute resolution through mediation with stay of the court proceeding, mediation procedure is initiated by submitting the agreement to undertake the mediation to the court or other authority before which the proceeding is conducted. In this case a stay of court proceedings occurs, which may be imposed only once on such grounds and cannot exceed 60 days.

Agreement to Undertake Mediation

The parties and the mediator enter into the agreement to undertake mediation in writing confirming the mediator selection, governing respective rights and obligations in accordance with the mediation principles, establishing mediation costs and other issues of importance for conducting mediation.

Selection of Mediator

Mediation procedure is conducted by one or several mediators, designated by the consensus of the parties.

If the parties fail to agree on the mediator, they may request that the court or other authority before which the proceeding is conducted designates the mediator.

Exclusion of Mediator

A mediator cannot be a judge acting in the case regarding the dispute, i.e. an official deciding on the request of the parties related to dispute in administrative or other procedure.

Mediator Recusal

Mediator shall be recused from mediation procedure wherein he has personal interest or if for any other reason he is unable to act impartially.

Mediator is obliged to inform the parties of any circumstances that might raise doubts as to his impartiality.

Mediator may conduct mediation procedure also in the case where the parties, after being informed of the existence of the above circumstances agree that he conducts the procedure.

Conducting the Procedure

At the beginning of mediation procedure, the mediator gets the parties acquainted with the aim of mediation, role of mediator, rules and costs of the procedure.

The parties freely negotiate on the manner of conducting mediation by referring to certain rules of procedure or in some other manner.

Mediator may conduct joint or separate talks with the parties, as well as convey suggestions and positions of one party, with their consent, to the other party.

Each party may withdraw from further participation in mediation procedure at any stage of the procedure.

Mediator may terminate mediation procedure if he estimates that further implementation of the procedure is not worthwhile.

Terminating Procedure

Mediation procedure is terminated by:

  1. Conclusion of an agreement on dispute resolution through mediation
  2. Mediator’s decision to terminate the procedure, since further implementation of the procedure is not worthwhile
  3. One party’s statement of withdrawal from further implementation of the procedure, except in the case of participation of several parties in mediation procedure, which after the withdrawal of one of the parties decide to continue the mediation procedure
  4. Upon expiry of 60 days from the date of conclusion of the agreement to undertake mediation, unless otherwise agreed by the parties.

If mediation procedure is conducted based on the instructions of a court or other authority, the mediator is obliged to submit a notification about the manner of termination of the mediation procedure to the court or other authority.

If the initiated mediation procedure, envisaged by a separate law as a condition for conducting court or other proceedings, is terminated with mediator’s decision to terminate the procedure or with one party’s statement of withdrawal from further implementation of the procedure, the mediator is obliged to inform the competent authority or organization of the mediation procedure outcome.

Effect of Mediation on Limitation Periods and Preclusive Time Limits

With initiating mediation procedure begins the stay of the limitations period of the claim in relation to the request regarding which mediation procedure is conducted, which cannot last more than 60 days. Upon expiry of the time limit of 60 days, the limitation period continues to run.

If a statute establishes a specific time limit for filing an action, such period does not run while mediation procedure is in progress, but no longer than 60 days.

Agreement on Dispute Resolution through Mediation

The contents of the agreement on dispute resolution through mediation are set by the parties to mediation procedure.

The agreement is drafted in writing and signed by the mediator, the parties to the mediation procedure and proxies attending the mediation.

The mediator participates in preparation and drafting of the agreement, if the parties to the procedure so agree.

If the parties to the mediation procedure fail to reach the agreement due to disagreement on legal matters, they may achieve written agreement on factual matters. Factual matters covered by the agreement of the parties to the procedure shall be considered indisputable in court or other proceedings.

Agreement on Dispute Resolution through Mediation as Writ of Execution

The agreement on dispute resolution through mediation may have the power of a writ of execution if the following requirements are fulfilled:

  1. That it contains a statement of the debtor whereby he agrees that the creditor under the agreement on dispute resolution through mediation, after the claim becomes due, may initiate a compulsory enforcement procedure
  2. That the signatures of the parties and the mediator are certified by a court or notary public.

Compulsory enforcement of the agreement on dispute resolution through mediation shall not be allowed if conclusion of such agreement is not allowed, if the agreement is contrary to public order, if the agreement is not eligible for enforcement or the subject of enforcement is impossible.

Mutatis Mutandis Application of the Law on Contracts and Torts

The provisions of the Law on Contracts and Torts governing extrajudicial settlement apply mutatis mutandis to the conclusion, effect and termination of the agreement concluded in the mediation procedure.

Mediation Costs

In the mediation procedure, each party bears its own costs, and common costs shall be borne in equal shares, unless agreed otherwise.

Common mediation costs include a reward for work of the mediator and reimbursement of costs that the mediator has incurred in relation to mediation procedure.

The amount of the reward for work and the amount of costs to be reimbursed are determined according to the Pricelist on Rewards and Reimbursements in Mediation Procedure adopted by the minister competent for justice affairs, unless otherwise agreed by the parties.

The parties are exempted from paying mediation costs under the conditions stipulated by a separate law.

Mediators may carry out mediation without reward.

Relationship between mediation and court or other proceedings

Instituting Mediation Procedure and Court Proceeding

The parties may institute mediation procedure prior to or after the instituted court proceeding.

The parties may also institute mediation procedure in the course of appellate procedure or in the course of enforcement proceeding.

The parties which, in the case of dispute, have committed themselves contractually to attempting to resolve their dispute through mediation before instituting court or other legal protection proceedings, may withdraw from mediation procedure at any point.

Obligation to Pay a Fee in the Case when Agreement is reached to Resolve Dispute through Mediation

If an agreement to resolve a dispute through mediation is reached after instituted court or other proceedings until conclusion of the first hearing in a trial, the parties may be exempted from payment of court, i.e. administrative fees, in accordance with the law governing court, i.e. administrative fees.

Provision of Technical Requirements for Implementation of Mediation

If mediation procedure is instituted in the course of a court proceeding, the court shall enable implementation of mediation in the court building, outside working hours, in accordance with the Rules of the Court.

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