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Mediation Act: The final text of the law did not resolve the ambiguity of whether mediation is mandatory or not

After the public consultation on the Draft Mediation Act (ZMRS), the final text of the law was published in the Official Gazette, which came into force on June 29, 2023, and the previous Mediation Act ceased to be valid. Article 3 of the ZMRS emphasizes that the purpose of this law is to create conditions for amicable dispute resolution, to avoid unnecessary initiation of court proceedings, and to ensure a balanced relationship between the mediation process and court proceedings.

However, the final text of the law shows that the legislator attempted to find some kind of compromise between the voluntariness of mediation, its main characteristic, and the obligation of mediation, which should reduce the burden on the judiciary. The final solution will, it can already be concluded, remain this time only a cosmetic attempt by the legislator without any real effect. It is worth noting that this time the original draft of the legal text was far better than its final solution.

Limited Scope

The limitation of this law is immediately evident when comparing just two legal articles. Thus, Article 1, paragraph 1 of the ZMRS stipulates that this law regulates the peaceful resolution of disputes in civil, commercial, labor, family, administrative, and other disputes concerning rights that the parties can freely dispose of, while Article 9, paragraph 1 of the ZMRS stipulates that parties, before initiating litigation for damages, except for damages arising from employment, are obliged to attempt to resolve the dispute amicably.

Therefore, although it could be concluded from the first legal provision that the law applies to all disputes concerning rights that the parties can freely dispose of, the second legal provision significantly narrows the scope of this law, as the ‘obligation of mediation’ actually applies only to proceedings for damages from which proceedings for damages arising from employment are excluded.

No Consequences

Furthermore, the intention to introduce the obligation of mediation has been entirely relativized by this law. Namely, if a party intending to file a lawsuit does not conduct the mediation process beforehand, the court will not dismiss the lawsuit (which would be a characteristic of the concept of ‘obligation’ of mediation) but will, after receiving the response to the lawsuit, direct the parties to participate in an informational meeting on mediation within 15 days (Article 10, paragraph 1 of the ZMRS). Why would anyone delay the moment of filing a lawsuit to conduct mediation to which they are not even obliged? Moreover, another inconsistency in the legal solution is the duty of the parties directed to the informational meeting to participate in mediation, but without any consequences for acting contrary to that duty.

Namely, if one of the parties does not attend the ‘informational meeting on mediation’, they bear no consequences, and the court proceedings can continue. However, if the parties accept mediation, it must be completed within 60 days from the date of its commencement, but, pay attention now, in any case, it must not affect the holding of scheduled hearings (Article 10, paragraph 4 of the ZMRS). What does this mean? That court proceedings are conducted independently of the ongoing mediation process? Confirmation that this is the case is that the Civil Procedure Act (ZPP) does not foresee the possibility of pausing court proceedings until the mediation process is completed in accordance with the provisions of this ZMRS. The current ZPP contains separate provisions on the possibility of mediation during court proceedings that are not in accordance with the provisions of the ZMRS, and given that the ZMRS prescribes certain obligations for judges that are contrary to their obligations under the ZPP, it is clear that either a re-amendment of the ZPP or the newly adopted ZMRS can be expected.

Unpredictability of Effects

Parties can achieve peaceful resolution of disputes even during court, arbitration, or other proceedings, but it is also retained that each party can withdraw from the mediation process at any time without any explanation. Thus, the duty of mediation remains just dead letters on paper. The ZMRS also provides for the establishment of a Center for Peaceful Dispute Resolution as a public institution, which will be founded by the Republic of Croatia. One of the Center’s authorizations is to grant and revoke consent to mediation institutions and to maintain a Register of Mediators. From this, it can already be concluded that mediation can only be conducted by those legal entities registered in the Register of Mediation Institutions that organize mediation and other legal entities designated by special regulations to organize mediation.

A mediator can only be a person registered in the Register of Mediators. Has the ‘title’ of mediator then been abolished for those individuals who became mediators, for example, by obtaining certain certificates from associations that previously conducted mediation processes until those individuals were registered in the Register of Mediators? However, because the manner and conditions of registration in the register of mediation institutions and in the register of mediators will be determined by a separate regulation, which the minister is obliged to adopt within thirty days from the date of entry into force of the ZMRS, at least minimal predictability of the scope and effects of the new ZMRS is lacking. And this has already become a characteristic of most legislative proposals and solutions of the Government of the Republic of Croatia.

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