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Mediation, Cheap and Alternative Mechanism for Disputes Resolution

Tbilisi Business Hub is fully oriented on businessmen and their needs. Our services enable you to maximally save money, time, which a contemporary individual lacks for, most of all.

Mediation is among our services, that, according to the world practice, is the cheapest and fastest way for disputes resolution. Therefore, we are interested in mediation process. We asked Tbilisi Business Hub lawyer Shorena Chumburidze to explain the nature of mediation mechanism.

Today, mediation is one of the widespread mechanisms for conflicts settlement worldwide, but in Georgia this mechanism is less developed. And this is a surprising fact, taking into account Georgia’s unique historical heritage  in this field, as well as the oldest forms of trials and courts, when a mediation court used to play an important role in procedural activities, on the ground of ordinary legal norms.

Mediation was the most frequently practiced mechanism in highland Georgia and it was expression of conscience, honesty, wisdom and quite high legal thought. Mission of mediation court was to prevent conflicts and revenge and resolve all disputes between parties by agreement.

Mediation court’s decision was to be satisfactory and just for both parties. Because of this factor, arguing parties used to trust disputable issues to mediation court for resolution.

As noted, today a major part of civil disputes in European countries and the USA is resolved through mediation.

Statistics clearly shows that 80% of all disputes, where mediation is involved, ends in full agreement and far less time and financial resources are spent. Based on the above-mentioned, mediation mechanism has become an important part of legal system and culture.

In General, 40-50% of civil disputes in European countries are settled through mediation, while in the USA only 5% of civil disputes are transmitted to court system.

It is worth noting that in contemporary Georgia certain progress is recorded in this respect and rich historical experience and knowledge is revitalized.   For example,  on January 1, 2010, a new law on arbitration was enacted, which, despite some shortcomings, corresponds to universally recognized international standards in this field. Moreover, amendments were made to the Civil Procedural Code on December 20, 2011. As a result,  court mediation practice was introduced in Georgia.

In general, international doctrines and practice includes mediation courts and nonjudicial forms. Our national legislation has recognized both forms: in court mediation, according to amendments to civil procedural code of Georgia, the court gives recommendation for discussions through the case mediation. A mediator is appointed by court. An appeal is submitted to the court, first of all. After submission of an appeal to the court, case that is subject to court mediation may be transmitted to a mediator for the purpose of finishing the dispute by agreement, while in nonjudicial mediation, mediation process proceeds out of the court and the parties agree to resolve dispute through mediation process. To this end, the Parties select an authorized body. In this instance, the dispute has already arisen and the parties strive for dispute resolution, not for legal settlement of the dispute.

According to amendments to the law on Notaries, such an authorized body may be a notary that will act as «a mediator between arguing parties».

I think notarial mediation is the most interesting practice in this respect – an idea has been established in national legislation through introduction of a new form of enforcing justice, based on the principle of equality of the parties.

In this situation the principle Everybody is Equal” is applicable. Notary is not obliged to make parties aware of legal foundations of the dispute, give advices or talk about available legal outcomes. In this case a goodwill of acting  Parties is considered to be a higher category, which is expressed in the choice of parties to resolve the dispute by agreement. The latter mechanism has more advantage than legal resolution of a dispute. Therefore, the Parties bear risks of undesirable legal sanctions that may be caused by available agreement act.

In general, European doctrine is based on the same idea, when it interprets mediation as a procedure based on free will of the Parties,  and shifts process completion outcomes onto responsibility of the Parties and this is expressed in choice of the Parties to resolve the dispute by agreement.

Liberalization of mediation process is also very interesting, actual freedom that is not subjected to ordinary legislate frameworks. What does a withdrawal from legal frameworks mean? The point is that the mediation process is neither a legal proceeding nor court proceedings, where decisions are made on the ground of legislation. As noted, it is mainly oriented on results – for resolution of the so-called dispute, when arguing Parties are not interested in legal grounds of the demand and entirely rely on their own opinion that provides more leverages for flexible decisions amid established norms. However, it should be also noted that a mediator is authorized to refuse issuing an agreement act if the agreement contradicts public order that rules out, despite a withdrawal from legal frameworks, availability of violation of interests of any party.

It should be also noted that an additional positive aspect of notarial meditation is that an agreement achieved by the Parties as a result of mediation is confirmed by notarial regulations, while in the event of non-fulfillment of obligations, a notary’s order of enforcement is issued upon request of a creditor. Based on this document, enforcement activities are carried out under Georgian law on Enforcement Proceedings and this procedure does not require additional trial that sometimes proceeds endlessly.,

Naturally, all information on the mediation process is confidential and the mediation process participants must not divulge this information. In some countries, violation of this obligation is punished by a fine. It is inadmissible to interrogate a mediator on similar issues.

Mission of justice and law is to resolve disputes between individuals according to regulations that are  recognized and established by the state and society in advance. The court, which is a constitutional institute for implementing justice, is not an only and  the best mechanism for legal resolution of disputes.

Alternative mechanisms for disputes resolution includes any other forms, besides court proceedings.

Over the past decades the increased costs on court and legal services make legal  various legal systems and traditions to seek cheaper and more efficient ways that would alleviate the process, on the one hand, and ensure real resolution of the existing disputes, on the other hand.

Mediation is the mechanism that can provide huge assistance to civil justice if its legal regulation and employment practice will be tailored to the existing experience and standards of the developed world. All the above-mentioned enables to think that it is more efficient that disputes be resolved by specialists of such fields as defense lawyer, auditor or body of other profession, whose knowledge is closer to the disputable subject.

Even more so, if it is possible to receive service of these people in the form of a team, where professionals of all fields participate together, it will make the mediation institute more flexible and desirable as the cheapest and best alternative mechanism for disputes resolution.