Taking Counsel: Peaceful Settlement of a Civil Dispute 's Is It Possible?

  • 2008-09-03
  • By Lijana Garsvaite [Jurevicius Balciunas & Bartkus]
For a long time, the most popular way 's almost the only way 's to settle a legal dispute in Lithuania was to apply to court, but  arbitration has recently gained in popularity. Whether in court or arbitration, the dispute is settled when the judge or arbitrator passes a judgement obligatory for the parties in dispute. A further alternative to these methods is mutual agreement, applying mutual concessions and adoption of a resolution acceptable to all parties in dispute. One method for reaching mutual agreement is through mediation.

On July 15, the Seimas of the Republic of Lithuania passed the Law on Mediation in Civil Cases (hereinafter, the Law). The Law came into force on July 31 (except for Article 10). The Law regulates mediation in civil disputes. In accordance with the Law, this Law shall be applicable to both judicial and extrajudicial mediation. The Law does not provide for a detailed regulation of the mediation procedures, so parties to the dispute are free to agree on a lot of issues.

 According to the authors of the project, the Law provides only for the issues that can have significant effect on the mediation quality, efficiency and popularity. Such regulation of the mediation procedure was chosen in order not to undermine the efficiency of mediation procedures and to promote mediation development in Lithuania, as so far mediation has not yet been a common way to settle legal disputes in the country.
However, the Law did not establish a new way to settle disputes. any other legitimate way, Even though the Law on Mediation in Civil Cases sets forth clear regulation of the mediation procedure in one legal act for the first time, the Law does not provide for anything new that could not be used by the parties in dispute previously.

The Law did not establish mediation as an obligatory dispute settlement procedure to be used before applying to court. The Law sets forth that when parties in dispute agree to settle a dispute by mediation, they must attempt to resolve the dispute this way before applying to court or arbitration. Also, despite this obligation, even if the parties do not fulfill it, the court has no right to refuse to accept a civil claim: the Code of Civil Procedure contains a finite list of grounds on which the court refuses to accept a civil claim, and the failure to fulfil the above obligation is not among them.

The Law sets forth that if the parties manage to settle the dispute peacefully, a peace agreement shall be drawn between the parties that has legal force with regard to the parties. By a mutual request of the parties, the peace agreement may be presented to a court for approval. A peace agreement has the force of final judgement (res judicata); if necessary, it may be executed by force.
If the parties in dispute fail to come to a mutual agreement, mediation can be terminated without a peace agreement, i.e., any party to a dispute may withdraw from a mediation procedure without giving a reason. There is no restriction on repeated attempts.

The Law also provides for a confidentiality obligation: with several exceptions provided for by the Law, the parties in dispute and mediators must keep all the mediation and related information confidential. Also, the mediator may not disclose any confidential information that was given to him or her by one party to the other party in the dispute. 

The most significant provision is suspension of abridged prescription. When mediation starts, abridged prescription is suspended, and when the mediation ends without a peace agreement, the abridged prescription continues and the remaining time of prescription is prolonged in accordance with the provisions of the Civil Code. As a result of the above provisions of the Law, the parties to the dispute do not have to worry that the claim prescription will end during the mediation procedure and the possibility to resolve the dispute in court will be lost.

In conclusion, it should be stated that the newly adopted Law on Mediation in Civil Disputes established almost nothing new that could not be applied between the parties to a dispute before. Therefore, it will hardly make mediation a more popular dispute settlement method in Lithuania than it was before. On the other hand, the Law is the first to officially acknowledge mediation as a way of dispute settlement, and this way of dispute settlement is regulated in one legal act. Thus, the Law may be a good start in the creation of favorable legal conditions for the application and development of mediation.

Lijana Garsvaite is an associate advocate at Jurevicius Balciunas & Bartkus, a member of Baltic Legal Solutions, a pan-Baltic integrated legal network of law firms including Teder Glikman & Partnerid in Estonia and Kronbergs Cukste in Latvia, dedicated to providing a quality "one-stop shop" approach to clients' needs in the Baltics.