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USAID Contract Law Enforcement (CLE) Program in Kosovo

1

May 2014

Law on Mediation

Training Manual:

Law on Mediation

DISCLAIMER

The content of this manual is sole responsibility of Checchi and Company Consulting, Inc., and the author’s views

do not necessarily reflect the views of the United States Agency for International Development or the

Government (USAID) or the United States Government.

This publication may be reproduced, multiplied, or transmitted in electronic, mechanical, photocopy, recorded, or

any other manner, provided that attribution to USAID and the USAID Contract Law Enforcement (CLE) Program

in Kosovo is clearly indicated on any copy made and distributed.

Table of Contents

INTRODUCTION TO LAW ON MEDIATION ......................................................................... 6

Overview ................................................................................................................................... 7

Learning Objectives ................................................................................................................... 7

About the Course ..................................................................................................................... 7

Learning Methodology ............................................................................................................... 8

Participation Requirements ....................................................................................................... 8

Summary ................................................................................................................................... 8

MODULE 1: ................................................................................................................................... 9

CONFLICT AND ALTERNATIVE DISPUTE RESOLUTION ...................................................... 9

1.1 Overview ............................................................................................................................... 10

1.2 Learning Objectives ............................................................................................................... 10

1.3 Introduction .......................................................................................................................... 10

1.4 Conflict .................................................................................................................................. 10

1.5 Alternative Dispute Resolution (ADR) ................................................................................. 12

1.6 Mediation ............................................................................................................................... 13

1.7 Types of Mediation ................................................................................................................ 14

1.8 Advantages and Disadvantages of Mediation ........................................................................ 14

1.9 Regulation of Mediation in Kosovo ....................................................................................... 15

1.10 International Regulation of Mediation ................................................................................. 16

1.11 Exercise: Mediation Defined ............................................................................................... 17

1.12 Summary .............................................................................................................................. 18

MODULE 2: ................................................................................................................................. 19

OBLIGATION TO MEDIATE ..................................................................................................... 19

2.1 Overview ............................................................................................................................... 20


2.3 Introduction .......................................................................................................................... 20

2.4 Contractual Obligation to Mediate ....................................................................................... 20

2.5 Court Ordered Mediation .................................................................................................... 22

2.6 Meaning of “Obligation to Mediate” ..................................................................................... 22

2.7 Resort to Arbitral or Judicial Proceedings ............................................................................ 23

2.8 Exercise: Obligation to Mediate Discussed........................................................................... 24

2.9 Summary ................................................................................................................................ 24

MODULE 3: ................................................................................................................................. 25

MEDIATION PROCESS .............................................................................................................. 25

3.1 Overview ............................................................................................................................... 26


3.3 Introduction .......................................................................................................................... 26

3.4 Stages of Mediation ............................................................................................................... 27

3.5 Mediation Process According to Law ................................................................................... 28

3.6 Confidentiality during Mediation ........................................................................................... 31

3.7 Exercise: Mediation Process Discussed ................................................................................ 32

3.8 Summary ................................................................................................................................ 33

MODULE 4: ................................................................................................................................. 34

MEDIATED SETTLEMENT AGREEMENT.................................................................................. 34

4.1 Overview ............................................................................................................................... 35


4.3 Introduction .......................................................................................................................... 35

4.4 Law on Mediation on the Settlement Agreement ................................................................ 35

4.5 Drafting the Settlement Agreement ..................................................................................... 36

4.6 Enforceability of the Settlement Agreement......................................................................... 37

4.7 Exercise: ................................................................................................................................ 38

4.8 Summary ................................................................................................................................ 38

MODULE 5: ................................................................................................................................. 39

MEDIATOR’S ROLE AND RESPONSIBILITIES .......................................................................... 39

5.1 Overview ............................................................................................................................... 40


5.3 Introduction .......................................................................................................................... 40

5.4 Mediator as Process-Controller ........................................................................................... 40

5.5 Mediator as Facilitator of Communication ........................................................................... 41

5.6 Mediator’s Substantive Role .................................................................................................. 41

5.7 Mediator Impartiality and Independence .............................................................................. 42

5.8 Exercise: ................................................................................................................................ 44

5.9 Summary ................................................................................................................................ 45

MODULE 6: ................................................................................................................................. 46

PROFESSIONAL REGULATION ................................................................................................ 46

6.1 Overview ............................................................................................................................... 47


6.3 Introduction .......................................................................................................................... 47

6.4 Mediation Committee ........................................................................................................... 47

6.5 Qualification of Mediators ..................................................................................................... 48

6.6 Professional Liability of Mediators ........................................................................................ 49

6.7 Exercise: ................................................................................................................................ 50

6.8 Summary ................................................................................................................................ 51

INTRODUCTION TO LAW ON MEDIATION

USAID Contract Law Enforcement (CLE) Program in Kosovo 7

Overview

This presentational module explains the purpose and content of the training on the Law on

Mediation and the teaching methodology which will be used during the training for judges,

prosecutors, lawyers and jurists.

Learning Objectives

After completing this course, participants will be able to:

Explain the objectives and the content of the Mediation Law course

Understand the learning methodology and participant requirements

Principles and procedures of mediation in Kosovo

Protocols for case referrals from the courts and prosecution offices to the mediation

centres in Kosovo

About the Course

This one-day course is designed to provide a framework for understanding the main concepts of the

Mediation Law as one of the key legal instruments that regulates mediation activities in Kosovo. The

primary objective of this course is to provide an in-depth understanding of the most important

principles and rules governing mediation activities in Kosovo deriving primarily from national

legislation. Particular attention will be given to the relationship between mediation and other

alternative dispute resolution mechanisms, national and international rules on mediation, the legal

consequences of any obligation to mediate, the mediated settlement agreement and its legal

consequences, the role and responsibilities of mediators as well as the institutional and regulatory

framework governing mediation, Protocols for case referrals from the courts and prosecution offices

to the mediation centres in Kosovo

Upon completing the course, you will be able to:

Explain “conflict” and the different types of conflict

Explain “alternative dispute resolution” (ADR) and the different forms of ADR

Explain “mediation” and the different types of mediation

Critically discuss the advantages and disadvantages of mediation

Explain the elements of a contractual obligation to mediate

Explain the different forms of court ordered mediation

Elaborate the meaning of “obligation to mediate”

Discuss problems related to admissibility of litigation and arbitration when there is an

obligation to mediate

Outline the various stages and elements of the ideal and rational model of mediation

Explain and critically discuss the legal provisions governing the mediation process

Discuss the regulation of confidentiality as contained in the Mediation Law in contrast to

similar provisions set out in the UNCITRAL Model Law and Directive 2008/52/EC


Outline the provisions of the Mediation Law on the settlement agreement

Explain the elements of a settlement agreement

Critically discuss the provisions of the Mediation Law on the enforceability of the settlement

agreement

Explain the different roles a mediator plays in the mediation process

Discuss the elements of the mediator’s impartiality and independence

Explain the structure and responsibilities of the Mediation Committee

Discuss the qualifications required for mediators

Elaborate the elements of a mediator’s professional liability

Learning Methodology

The role of the instructor is to facilitate your learning. The course methodology includes instructor

presentations, and utilizes exercises, designed to apply the concepts related to mediation in practical

situations. The course materials that will be distributed includes comments, notes,

narratives/presentations, and practical examples on the main principles and rules related to

mediation law, as well as exercises to illustrate the application of these rules applicable to mediation.

Participants are required to have a copy of the Mediation Law and relevant international and

European legal instruments governing mediation law, which will be used and applied during the

training. Such materials will be distributed at the beginning of the course.

Participation Requirements

The participants in the course come with a variety of valuable professional experiences. Your

contribution to group discussions and exercises will be very helpful to other participants. Likewise,

the experiences of other participants serve as a valuable resource to you. During the course, you

will be asked to participate in several ways: group discussions, and working in teams with other

participants to analyze problems and make recommendations. Please take the opportunity to share

your knowledge and experiences, ask questions and challenge concepts.

Summary

This Introduction Module explained the purpose of the Mediation Law course as well as the learning

methodology that will be used during the training.

In this module you learned to:

Explain the purpose of the Mediation Law and protocols for case referrals

Understand the learning methodology and participant requirements

The information that you received in this introduction should ensure that the rest of the course is

meaningful to you.


MODULE 1:

CONFLICT AND ALTERNATIVE DISPUTE

RESOLUTION

USAID Contract Law Enforcement Program (CLE)

10

1.1 Overview

The present module explains the notion of conflict and the different types of conflict. Departing

from this, the module introduces the notion of Alternative Dispute Resolution and explains its

different types as well as the advantages and disadvantages of mediation. The module also provides

an overview of the regulation of mediation in Kosovo as well as at the international and European

level.

1.2 Learning Objectives

Upon the completion of this module, you will be able to:





Outline the regulation of mediation in Kosovo and as regulated by the United Nations and

the European Union

1.3 Introduction

Mediation is one of the methods available to resolve conflict, which falls under the category of

alternative dispute resolution or ADR. However, in order to fully appreciate mediation as a method

of resolving conflicts, it is necessary to define and to have a clear understanding of conflict and its

various types. While mediation is certainly an effective conflict resolution tool, it has its advantages

and disadvantages which have to be taken into consideration when selecting mediation as a method

to resolve a dispute. Finally, mediation, though grounded on the principles of free will and party

autonomy, requires regulation. Such regulation is provided for under national legislation, such as the

Kosovo Law on Mediation, but there are also international standards available which may serve

national legislators to design domestic mediation legislation.

1.4 Conflict

Conflict could be defined as a situation in which individuals disagree or have differing needs, interests

or values resulting in tension between them. Conflict implies a fight, battle, collision, or struggle.

Given that the terms “conflict” and “dispute” are used interchangeably, the following definition of

dispute as provided by the Permanent Court of International Justice in the Mavrommatis Palestine

Concessions (Jurisdiction) case (1928) could also be taken into account:

“A dispute is a disagreement over a point of law or fact, a conflict of legal views or of interests between

two persons.”

When understood in this sense, a conflict situation is a zero-sum game, one whose outcomes are

polarized as win-lose, victory-defeat, gain-loss, and rise-downfall. In each of these situations, one party’s


gain means the other’s loss. Zero-sum thinking is a concept widely promoted by lawyers who treat

litigation as positional bargaining.

Conflict exists when there is a difference (actual or perceived) between two or more parties

and when that difference is characterized by:

Tension;

Mistrust;

Poor or failed communication;

Different information or different assessment of information;

Different perceptions of alternatives to negotiated settlements; and/or

Emotionalism.

Although some degree of conflict is inevitable in each of our lives, few of us are ever comfortable

with it. Conflict is usually perceived as negative. To varying degrees we choose to avoid conflict,

possibly because we fear its negative outcomes. This means we often ignore conflict until its

resolution becomes extremely difficult. Ironically, when conflict has the potential to endanger an

important relationship (interpersonal conflict), or when it endangers an individual’s emotional

stability (intrapersonal conflict), there is a greater tendency to avoid the conflict until a crisis arises.

During such avoidance, the involved parties often fear that their needs will not be met in the

relationship. This results in an absence of intimacy in close relationships and distrust in more formal

ones. If avoidance fails to reduce tensions in a given conflict, the conflicting parties may resort to

fighting to resolve the problems. Parties who fight often adhere to the adage that “might makes

right”, but other forms of fighting – such as psychological warfare – also occur with great regularity.

In either case, the intent of each party involved is to control the other party. Although most of us

have been socialized to accept a certain amount of fighting in our society, recent trends indicate that

some types of violent fighting such as spouse abuse and child abuse – are becoming increasingly

unacceptable. But regardless of the severity or type of fighting, this “solution” seldom ever solves the

conflict. Such a solution usually serves only to reinforce existing power disparities between parties

to the dispute. Fortunately, unless one is fairly certain of the outcome, he or she will choose in the

long run not to fight. In such cases avoidance appears as a much more palatable method for dealing

with the conflict.

The popular idea that one can “win it all” without having to give up or sacrifice anything in the

process is a precious illusion for many people. Frivolous litigation is a direct consequence of such

thinking, where the focus is on blaming, proving the other is at fault, and seeking to win at the

expense of the other. This black-and-white approach is used as a means to achieve justice even

though it is intentionally designed to avoid a fair outcome.

This devious tool of litigation is frequently used as recourse to conflict resolution; however, it is

highly ineffective in rebuilding relationships and results in a total breakdown of communication

between the disputants.

Zero-sum thinking is responsible for chipping away at social cohesion, regardless of the given

community’s size. Interfamilial conflicts where both parties are determined to “win it all” often leads


to divorce and a splintering of the family; international border conflicts between two recalcitrant

parties often means war; commercial disputes between businesses or between a business and its

customers often result in a disruption of business and loss of revenues. It is important then to

perceive “conflict” in a new way with a new context, so that peaceful resolution becomes a logical

outcome instead of impossibility.

When we understand conflict as a perceived divergence of interest, a person’s interests, goals or

aspirations are re-contextualized as his/her subjective feelings about what is desirable. The stumbling

block to a resolution is created by the positions that each party has locked itself into. Position here

means something that a party wants, or a legitimate claim that overtly surfaces on the negotiating

table. Interest is what lies behind the position. While positions remain obvious and rigid, interests are

multiple and fuzzy, and may be traded to clinch an agreement that both parties can live with. This

approach replaces the concept of win-lose with win-win.

When we understand conflict as a perceived divergence of interest, interests, objectives or aspiration of

a person are re-contextualised as his subjective pursuit around that which is desired. Obstacles to

the solution are created from the positions of parties who are in deadlock. The position in this case

means something being sought by the party, or a legitimate claim which is revealed in the negotiation

table. The interest is what stands behind this position. While positions remain to be strict, interests

are multiple and ambiguous, and could be negotiated to enable the agreement which could be

accepted by both parties. This approach replaces the win-lose concept with the win-win one.

When the settlement of a conflict or dispute is arrived at by reconciling or integrating the interests

of both parties, the focus shifts from blaming to sharing responsibility, from judgment to self-

realization, and from disregarding to accommodating the other party’s interest. This concept of

designing an opportunity for both parties to mend fences and get along by seeking mutual agreement

is highly productive and beneficial for building relationships and recreating lines of communication.

1.5 Alternative Dispute Resolution (ADR)

Very often people think that that the most common form of resolving conflicts is through formal

litigation. The state, which has a monopoly on the use of force, makes courts available, which apply

procedures determined by law to resolve disputes between persons. The state also provides the

necessary administrative apparatus and legal procedures to enforce decisions rendered by courts.

Thus, the state avoids individuals taking justice into their hands, which might result in a situation of

“might makes right”.

However, litigation is not the only means of effectively resolving disputes. The most basic form of

dispute settlement is that of negotiation. It consists basically of discussions between the interested

parties with a view to reconciling divergent opinions, or at least understanding the different positions

maintained. It does not involve any third party, at least at that stage, and so differs from the other

forms of dispute management. In addition to being an extremely active method of settlement itself,

negotiation is normally the precursor to other settlement procedures as the parties decide amongst

themselves how best to resolve their differences. It is eminently suited to the clarification, if not

always resolution, of complicated disagreements. It is by mutual discussions that the essence of the

differences will be revealed and the opposing contentions elucidated. Negotiations are the most

satisfactory means to resolve disputes since the parties are so directly engaged. Negotiations, of


course, do not always succeed, since they do depend on a certain degree of mutual goodwill,

flexibility and sensitivity.

When negotiations fail, the conflicting parties may resort to alternative dispute resolution (ADR)

instead of litigation before courts. ADR refers to all processes and techniques of resolving disputes

that fall outside of the judicial process.

ADR can be adjudicative, evaluative, or facilitative. In adjudicative ADR, a neutral third party makes

a, usually, final decision, which is binding on the parties to the dispute. In an evaluative ADR, a

neutral third party provides feedback to the parties about the facts and merits of the dispute, which

may also include some advisory opinion. In facilitative ADR, a neutral third party helps the disputing

parties to achieve a mutually satisfactory resolution by assisting in communication, understanding the

problem and the interests involved and identifying options tom overcome the problem.

The most common form of adjudicative ADR is arbitration. Arbitration is an extra-judicial form of

adjudicating a dispute whereby the parties agree to submit their dispute to arbitration instead of

pursuing litigation before regular courts. In arbitration, the parties have, in principle, the possibility of

determining the arbitrators and to set the arbitration procedure. The arbitral award has the force of

a court judgment and can be enforced as such.

As regards facilitative ADR, mediation and conciliation may be considered the methods most known

and applied.

1.6 Mediation

Mediation could be defined as follows:

“Negotiation carried out with the assistance of a third party.”

“A form of third party assistance to resolving a dispute, which involves an outside to the

dispute, who lacks the power to make decisions for the parties.”

A more comprehensive definition of mediation could be:

“Mediation is essentially a negotiation that includes a third party who is knowledgeable in effective

negotiation procedures and can help people in conflict to coordinate their activities and to be more

effective in their bargaining. Mediation is an extension of the negotiation process as it involves

extending the bargaining into a new format and using a mediator who contributes new variables and

dynamics to the interaction of the disputants.”

In view of the above definitions, it is evident that the essence of mediation is that the role of the

mediator is merely to facilitate the resolution of the dispute. The mediator has neither the power

nor the authority to impose a decision on the parties. As such, mediation is an extended form of

negotiation, i.e. a form of conflict resolution which leaves the decision-making to the disputants. In

mediation, the role of the third party can never be to make a decision on the substance of the

dispute. The third party’s position is merely that of a facilitator to the negotiation between the

conflicting parties, either to bridge the communication gap, or to provide a different perspective of


the dispute, or to bring new ideas, all in an attempt to bring the parties closer to an amicable

settlement of their dispute.

Thus, the key feature of mediation is that the dispute resolution process remains within the control

of the conflicting parties and that any solution to the conflict is also within the parties’ control.

1.7 Types of Mediation

In general terms, there are three types of mediation, i.e. (i) facilitative mediation, (ii) evaluative

mediation, and (iii) transformative mediation.

(i) Facilitative Mediation

In facilitative mediation, the mediator seeks to address the interests of the conflicting parties as a

means to overcome intractable positions, which the parties have adopted in the course of the

conflict. The difference between position and interest may be described as follows: positions are,

what the parties demand, while interests are the motivations and needs behind such demands. The

mediator attempts to engage the parties in principled negotiation based on their interests and needs

rather than focusing on their positions. In addressing the needs of the parties, the mediator will seek

to encourage the parties to develop creative options in order to come to win-win-solutions.

Mediation, as defined in the Kosovo Law on Mediation, is facilitative mediation.

(ii) Evaluative Mediation

In evaluative mediation, the mediator conducts a mediation process using his evaluation of the likely

outcome of judicial proceedings if the dispute were to be submitted to the court in order to

persuade the parties to reach a compromise solution. The likely outcome of the (hypothetical) court

proceedings could provide a basis for a compromise solution between the parties.

(iii) Transformative Mediation

In transformative mediation, the parties are given the possibility to define the contentious issues and

to decide on the settlement terms. By doing so, the parties have a chance to recognize and

understand one another’s perspectives. An important element of transformative mediation is the

mediator’s attempt to transform the conflicting parties through moral growth and by changing the

way they relate and communicate with each other.

1.8 Advantages and Disadvantages of Mediation

The key advantage of mediation is that it addresses the root causes of conflict. There are other

advantages, since mediation:

Encourages and facilitates and exchange of information in a non-adversarial setting;

Helps to provide new information to parties which could assist in the resolution of their

differences;

Helps parties to understand each other’s views and difficulties;


Gives parties an opportunity to ensure that their concerns are understood by their

counterparts in the dispute;

Helps to promote a productive level of emotional expression;

Deals with differences in perceptions and interests between the conflicting parties;

Helps parties to realistically assess their alternatives to an amicable settlement;

Encourages flexibility and provides opportunities for creative solutions not limited by the

remedies provided for by law;

Shifts the focus of the parties’ attention from the past to the future;

Assists in the discovery of those interests that parties are reluctant to disclose to each

other which, however, may assist in the resolution of the dispute.

Mediation offers these advantages primarily because it is “assisted negotiation”. The presence of a

neutral third party who acts as a facilitator to the negotiation assists in the breaking down of barriers

to communication, adds a different perspective on the dispute, and helps parties in their

communication and negotiation process. The fact that the third party is not a judge but merely a

conduit of information allows parties to communicate with each other. However, the presence and

control of the mediation process by a neutral third party compels the parties to dispel the

perceptions of knowledge and information that they have of each other, which enables effective

communication and conflict resolution.

On the other hand, mediation will not be effective where one party is dishonest, or withholds

essential information, or otherwise acts in bad faith. Mediation will also be less effective if a party

realizes that it has better opportunities before another dispute settlement forum. In such event,

there will be no incentive for this party to engage in effective and honest mediation.

1.9 Regulation of Mediation in Kosovo

Law No. 03/L-057 on Mediation (Official Gazette of the Republic of Kosovo No. 41 of 1 November

2008) regulates the mediation procedure in general, including the establishment, organization,

functioning of the Mediation Council, as well as the rights, duties and qualifications of mediators.

The law applies to mediation procedures related to contentious procedures, property issues,

relationships based on commercial law, family law, labor law, and any other civil law, as well as

administrative law and criminal law, provided that parties have freedom to act and unless by law

mediation is excluded by vesting the exclusive responsibility form resolving the dispute in a court or

other competent authority (Article 1.2 Law on Mediation).

The Law on Mediation determines the principles of mediation (Articles 3 to 7 Law on Mediation),

the mediation procedure (Articles 8 to 16 Law on Mediation), which also covers the settlement

agreement reached by mediation and its legal and procedural implications, the Mediation Committee

(Articles 17 to 21 Law on Mediation), the qualifications of mediators (Articles22 to 24 Law on

Mediation) and the rights and liabilities of mediators and parties (Articles 25 to 27 Law on

Mediation).


There are specific laws, which also make references to mediation, e.g. the Law on Contentious

Procedure and the Provisional Criminal Procedure Code.

1.10 International Regulation of Mediation

1. UNCITRAL Model Law on International Commercial Conciliation (2002)

In 2002, the General Assembly of the United Nations Organization adopted a resolution (Resolution

57/18) approving the Model Law on International Commercial Conciliation prepared by the United

Nations Commission on International Trade Law. The General Assembly invited on that occasion all

UN member states to adopt and transform the model law into national legislation. The Model Law

was developed in the context of recognition of the increasing use of conciliation as a method for

settling commercial disputes.

The Model Law was also designed to provide uniform rules in respect of the conciliation process. In

many countries, the legal rules affecting conciliation are set out in various pieces of legislation and

take differing approaches on issues such as confidentiality and evidentiary privilege and exceptions

thereto. Uniformity on such topics helps to provide greater integrity and certainty in the conciliation

process.

The Model Law defines conciliation as a process, whether referred to by the expression conciliation,

mediation or an expression of similar import, whereby parties request a third person or persons

(“the conciliator”) to assist them in their attempt to reach an amicable settlement of their dispute

arising out of or relating to a contractual or other legal relationship. The conciliator does not have

the authority to impose upon the parties a solution to the dispute.

Although the Model Law is aimed at providing uniform rules on international mediation, i.e. when

the parties to an agreement to mediate have their place of business in different states, the rules

contained in the Model Law may well serve also for the needs of purely domestic mediation.

The Model Law contains rules on the

(i) The commencement of mediation procedures

(ii) Number and appointment of mediators

(iii) Conduct of mediation

(iv) Communication between mediator and the parties

(v) Disclosure of information

(vi) Confidentiality

(vii) Admissibility of evidence

(viii) Termination of mediation procedures

(ix) Conciliator acting as arbitrator

(x) Resort to arbitral or judicial proceedings

(xi) Enforceability of the mediated agreement

2. European Union Law


In 2008, the European Union adopted Directive 2008/52/EC on some aspects of mediation in civil

and commercial matters. The Directive explicitly recognises that:

“Mediation can ensure a cost-effective and swift extrajudicial resolution of disputes in civil and

commercial matters through processes that are tailored to the needs of the parties. Agreements

that result from mediation have better chances of being respected voluntarily and stand to preserve

friendly and sustainable relations between the parties. These benefits become even more evident in

situations that exhibit cross-border elements”.

Even though the Directive is applicable only for cross-border mediation, it encourages the member

states to apply the provisions to internal mediation processes also.

The Directive defines mediation as follows:

“Mediation entails a structured process, however it is called or referred upon only when two or

more parties in the dispute seek themselves, voluntarily, to reach an agreement on the resolution of

their disputes with the help of a mediator. This process can be initiated by the parties or can be

suggested or ordered by the court, or prescribed by law in a member state.

It includes mediation conducted by a judge that is not responsible for the judicial process related to

the dispute in question. It excludes the attempts made by the court or the judge to resolve the

dispute during the judicial procedure related to the dispute in question.”

Therefore, mediation differs in essence from agreements reached during the judicial procedures.

The Directive covers and regulates the following matters:

Ensuring the quality of mediation

Recourse to mediation

Possibility of enforcing the mediated agreements

Confidentiality of the mediation

Effects of mediation on the statute of limitation periods

Information for the wider public, courts and authorities.

1.11 Exercise: Mediation Defined

Instructions:

The following exercise is a group discussion. Please gather in groups of five (5) participants and

critically discuss:

In view of the advantages and disadvantages discussed in this module, discuss such

advanatges/disadvantages as they apply with particular focus on Kosovo.

Upon completion, each group will present to the rest of the participants their findings and the

participants will then comment and discuss.


1.12 Summary

This module provided an introduction to the notion of conflict and the different types of conflict.

The module introduced the notion of Alternative Dispute Resolution and explained in detail

mediation, its different types, the advantages and disadvantages of mediation. The module also

provided an overview of the regulation of mediation in Kosovo as well as attempts to regulate

mediation at the international and European level.





Domestic and international practices of mediation


Outline the regulation of mediation in Kosovo and as regulated by the United Nations and

the European Union.


MODULE 2:

OBLIGATION TO MEDIATE


2.1 Overview

The present module introduces the specific circumstances which create a legal obligation to mediate,

most notably contractual and court ordered obligations to mediate. The module further elaborates

the elements of an obligation to mediate and discusses shortcomings of the present mediation

legislation with regard to arbitration or litigation despite a contractual obligation to mediate.







obligation to mediate

2.3 Introduction

As a point of departure, every party to a dispute is free to decide if it wants to engage in mediation,

when to go to mediation and who will be the mediator. This is reflected in the principle of party

autonomy, which leaves all decisions as to the “if” and “how” of the mediation to the free will of the

conflicting parties. However, there are, in principle, three ways through which a person may be

required to engage in mediation, i.e. (i) by contract, (ii) by court order, or (iii) by operation of law.

Such obligation to engage in mediation does not mean that a party may be compelled to settle its

dispute by mediation, but that there is an obligation merely to attend and participate in mediation.

Since mediation mandated by law has not yet developed in Kosovo, the present module will focus on

contractual and court ordered mediation.

2.4 Contractual Obligation to Mediate

A contractual obligation to mediate in the event of a dispute may be the result of a (i) predispute

contract or (ii) a post-dispute contract. A post-dispute contract refers to agreements entered into

between parties to mediate after a dispute arises. A predispute contract to mediate may be a stand-

alone contract or a comprehensive contract, which includes a mediation clause anticipating a dispute

in the future. A pre-dispute agreement is preferrable because the parties are more likely to agree on

mediation as a dispute settlement mechanism before a dispute arises. Such contracts usually include

provisions defining

(i) under which circumstances mediation will be activated,

(ii) the procedure through which the mediator will be selected,

(iii) where mediation will be conducted,


(iv) mediation cost allocation.

The Mediation Rules of the International Center for Dispute Resolution includes the following

simple model mediation clause:

“In the event of any controversy or claim arising out of or relating to this contract, or a breach thereof, the

parties hereto agree first to try and settle the dispute by mediation, administered by the International Centre

for Dispute Resolution under its Mediation Rules, before resorting to arbitration, litigation or some other

dispute resolution procedure.”

The parties should consider adding:

• “The number of mediators shall be (one or two)”;

• “The place of mediation shall be (city and/or country)”;

• “The language(s) of the mediation shall be ___.”

A contractual obligation to mediate may very often be a condition precedent for engaging in another

form of alternative dispute resolution, e.g. arbitration, or for initiating litigation procedures before

the ordinary courts.

Such mediation agreements are subject to the general rules of contract formation as set out in the

Law on Obligations. If the mediation agreement is formally and materially valid, it will be enforceable

by the courts and it creates the obligation on the part of all parties to the mediation agreement to

engage in mediation as an extra-judicial dispute settlement procedure. However, the contractual

obligation to mediate does not include the obligation to settle the dispute by mediation. If parties

engage in mediation but fail to reach a settlement, such failure is not a breach of the mediation

agreement.

There are primarily two forms of breaches of the contractual obligation to mediate. In the first

instance, a party may simply refuse to participate in mediation. The other party may then request a

court to enforce compliance with the mediation agreement. In the other instance, where the

obligation to mediate is a condition precedent for engaging in any other form of dispute resolution, a

party may simply disregard the mediation agreement and initiate another procedure, e.g. by

proceeding instantly with arbitration or by filing a lawsuit with an ordinary court. In such event, the

other party must invoke the mediation agreement as a procedural bar to such proceedings.

The mediation agreement must be clearly distinguished from the agreement reached by the

conflicting parties through mediation. While the former creates merely an obligation to mediate, the

latter is a dispute settlement agreement which eventually precludes the parties from pursuing other

dispute settlement mechanisms and which confirms the dispute to be no longer existent.


2.5 Court Ordered Mediation

When judges mandate the use of mediation, one has to clearly distinguish if the judge has just

encouraged or suggested the parties to use mediation, or if the judge has ordered the parties to

engage in mediation. In the former case, the parties are free to disregard the “suggestion” and to

continue with litigation. In the latter case, the court order is binding on the parties and they have a

legal obligation to engage in mediation, though not to reach a settlement by mediation.

For example:

The Law on Mediation, Article 9.6, sets forth that “at any stage of the court procedure until its

completion, the court may suggest the parties to follow the mediation procedure”. In addition, the Law on

Contentious Procedure, Article 411.1, provides that “the court may propose to the parties to settle their

dispute by mediation”. From the wording of these two provisions, it appears that the court may only

suggest the use of mediation but not to order the parties to mediate.

In contrast, the Provisional Criminal Procedure Code, Article 228, sets out the following:

(1) The public prosecutor may refer the criminal report on a criminal offence punishable by a fine or by

imprisonment of up to three years for mediation. Before so doing, the public prosecutor shall take account of

the type and nature of the act, the circumstances in which it was committed, the personality of the

perpetrator and his or her prior convictions for the same criminal offence or for other criminal offences, as

well as his or her degree of criminal liability.

(2) The mediation shall be conducted by an independent mediator. The mediator shall be obliged to accept a

case referred by the public prosecutor and shall be obliged to take measures to ensure the contents of the

agreement are proportionate to the seriousness and consequences of the act.

At first sight, Article 228 (2) creates an obligation only for the independent mediator. But the

wording and structure of this Article 228 implies that once the public prosecutor has referred the

criminal report for mediation that such mediation is mandatory in terms of creating an obligation to

mediate.

2.6 Meaning of “Obligation to Mediate”

In order to know if a party has complied with its legal obligation to mediate, it is necessary to define

what it means “to mediate”. The following elements are commonly implied in the term “to mediate”:

1. Attendance

One important aspect of compliance with the requirement to mediate is that the parties to the

dispute physically attend the mediation meetings. It is controversial if it would be allowed for a party

to be absent from the meetings and instead be represented by an attorney. Meaningful mediation

would require that the parties to the dispute communicate with each other with the assistance of

the mediator. Because they would have to communicate with each other and because they retain the

final authority to reach or not reach a mediated settlement, physical presence would have to be

considered a necessary element of the obligation to mediate. Representation by a third party,

including an attorney, could be considered in the event that a company or a government entity is a

principal party to the mediation. But even in these cases it will be necessary to determine the scope

of the delegated authority, i.e. whether the representative has the authority to reach a binding


agreement on behalf of the principal reaching a settlement, or whether any agreement reached by

the representative is only of preliminary nature and subject to ratification by the principal.

2. Preparation

The argument is made in legal literature that a proper preparation to mediate is an integral part of

the obligation to mediate. However, in practice, it is very difficult, if not impossible to determine the

scope of an obligation to prepare for mediation, and to assess if a party has made proper

preparations to mediate. It is perhaps in very obvious cases, where a party is evidently without any

information about the mediation, that failure to properly prepare for mediation could be considered

as a breach of the obligation to mediate.

3. Payment of Mediator’s Fees

Payment of the mediator’s fees are an essential part of the mediation process. Thus, failure to pay

the mediator’s fees is an indicator of a party’s failure to mediate, provided the agreement to mediate

requires up-front payment of such fees.

4. Good Faith/ Meaningful Participation

The obligation to mediate requires more than just the physical presence of a party during the

mediation sessions. Good faith, as a general principle of law, requires a party to engage in meaningful

participation in mediation. In general terms, meaningful participation means participation beyond

merely minimal. In mediation, this would entail making a statement of position, listening to the other

party’s statements, and providing a response to such statements. These are indicators which imply

that a party has seriously attempted to reach a settlement through mediation although it is under no

legal obligation to reach a settlement.

5. Exchange of Information

A more specific element of good faith participation in mediation is the requirement to exhange

information, however, without compromising any party’s right to protect confidential information.

Exchange of information would be sufficiently complied with if the parties exchange statements on

the legal and factual issues in dispute, the party’s position on these issues, the relief sought, and any

offers and counter-offers for attaining a settlement. In this respect, Article 11.3 of the Mediation Law

specifically requires that “the parties in procedure are obliged to present the contested matter

circumstances in the truest and correct manner”.

2.7 Resort to Arbitral or Judicial Proceedings

The Mediation Law recognizes the right of parties to a dispute to initiate mediation procedures at

any time before and during judicial and administrative proceedings (Articles 8 and 9.1 of the

Mediation Law). However, the law is silent as regards any legal effects of on obligation to mediate

that may be set forth in a contract.

For example, the UNCITRAL Model Law on Conciliation contains the following rule (Art. 13):

Where the parties have agreed to conciliate and have expressly undertaken not to initiate

during a specified period of time or until a specified event has occurred arbitral or judicial

proceedings with respect to an existing or future dispute, such an undertaking shall be given

effect by the arbitral tribunal or the court until the terms of the undertaking have been

complied with, except to the extent necessary for a party, in its opinion, to preserve its rights.


Initiation of such proceedings is not of itself to be regarded as a waiver of the agreement to

conciliate or as a termination of the conciliation proceedings.

No such provision is contained in either the Mediation Law or the Law on Contentious Procedure.

As a consequence, a party failing to respect its contractual obligation to mediate could initiate

arbitration or litigation procedures despite a commitment made to the contrary by contract. While

such party would incur contractual liability, no court or arbitral tribunal could dismiss such a claim

for reasons of inadmissibility. In order to complement the contractual obligation to mediate,

legislation should also provide for inadmissibility of claims before courts or arbitral tribunal where

there are conditions as provided for in Article 13 of the UNCITRAL Model Law.

2.8 Exercise: Obligation to Mediate Discussed

Instructions:


critically discuss the following:

1) You were asked to formulate a provision along the lines of Article 13 UNCITRAL Model Law to

be inserted in national legislation. How would you formulate such a provision and which laws would

have to be changed to give effect to such a provision.

2) Present your views on what constitutes “meaningful participation in mediation procedures”.



2.9 Summary

This module provided an introduction to the specific circumstances which create a legal obligation to

mediate, most notably contractual and court ordered obligations to mediate. The module further

elaborated the elements of an obligation to mediate and discussed shortcomings of the present

mediation legislation with regard to arbitration or litigation despite a contractual obligation to

mediate.






obligation to mediate.


MODULE 3:

MEDIATION PROCESS


3.1 Overview

The present module introduces the basic and rational model of mediation outlining the various

stages of mediation. While there are various models, which break down the mediation process in

different ways for purposes of analyzing mediation, all the models follow a rational sequence of

activities. The module also presents the fundamental rules set out in the Mediation Law, which

govern the mediation process. The module further presents the rules on confidentiality as set forth

in the Mediation Law and compares them with relevant confidentiality rules set forth in international

and European mediation standards.



Outline the various stages of the basic and rational model of mediation



similar provisions set out in the UNCITRAL Model Law and Directive 2008/52/EC.

3.3 Introduction

Mediation is a process in which conflicting parties attempt to reach a consensual settlement of issues

with the assistance of a neutral party. The mediation process systematically isolates points of

agreement and disagreement, develops options, and works toward a final agreement.

As a process, there are certain basic procedural steps or stages in mediation While authorities refer

to differing numbers of stages (five, six, and nine are all common), for the purpose of this manual, we

refer to the following six: (1) mediation opening, (2) information gathering, (3) issue identification,

framing and agenda setting, (4) issue clarification, (5) generation and assessment of options, (6)

conclusion of mediation.

Such steps presuppose a rational process, which in practice, however, will be handled flexibly

depending on the specific circumstances of the mediation process. Unlike court proceedings, in

mediation there are no formal and strict rules and the Mediation Law specifically provides that the

parties are free to determine the mediation procedure (Article 10.1 of the Mediation Law).

Nevertheless, the Mediation Law sets forth rules governing certain elements of the mediation

procedure, which will be assessed in the present module.


3.4 Stages of Mediation

1. Mediation Opening

The mediation process begins when a party to a dispute decides to ask a neutral third party (the

mediator) to assist in resolving an impasse. If only one party initiates the process, the remaining

party or parties may or may not choose to participate. It is usually an agreement between the

conflicting parties, which provides the legal basis and obligation to mediate. In some cases, mediation

may be prescribed by operation of law.

In the opening stage, the parties and the mediator introduce each other. It is usually the mediator’s

role to make an opening statement and to explain at this early stage the mediator’s role and to

outline the mediation process. This may be described as a warm-up stage for the mediator to

establish a relationship with the parties and to make the parties more comfortable with the

mediation process. During this stage, the mediator lays down the mediation rules and establish the

parties’ willingness and authority to settle in a mediated process.

2. Information Gathering

At this second stage, the parties present their side of the conflict to the mediator and each other.

This allows the mediator to collect the factual and emotional facts surrounding the dispute. At the

end of this, the mediator usually summarizes the situation to each party to have them correct any

inaccuracies.

The mediator may also request further information from the parties by asking more specific

questions about their needs, interests, concerns and priorities. These questions may be asked in the

joint session, but mediators may also choose to do this in private sessions in case there is sensitive

or confidential information involved which one party is not willing to discuss in front of the other.

This stage also allows the parties to hear each other and establish a first channel of communication.

By hearing each other’s positions, this may cause a shift in their respective perspectives and thus

enable reaching an agreement. Moreover, this stage is very important to parties as it gives them their

day in court.

3. Issue identification, framing and agenda setting

With the information gathered in the second stage, the mediator can now together with the parties

identify the issues in the dispute before them. The mediator must frame these issues neutrally and

have them endorsed by the parties. This can then become the agenda for discussion and it gives the

mediator a map with which to direct the mediation.

It is also at this stage where the mediator may put a larger frame around the issues by focusing on

the common interest of the parties. This would allow the parties to work towards a common goal

which can include all their interests.

While the third stage is usually also conducted in a joint session, the mediator may also decide to

invite the parties to separate sessions, which is often referred to as caucussing (and is provided for

in Article 11.1 of the Mediation Law). A separate session may help the mediator to gather additional

information that a party is reluntant to disclose in a joint session. A mediator might also use

separate sessions at other stages of the mediation procedure.


4. Issue clarification

Unlike stage 2, where the information gathered is about the problem between the parties and their

needs, interests and concerns, this stage is more forward looking. The mediator assists the parties in

exploring their thoughts and feelings about the issues that were identified in stage 3. This serves

three functions:

1. It allows the parties to feel heard. This is important for addressing the emotional basis of the

conflict.

2. It allows the mediator to further clarify and refine the underlying needs, interests and concerns

of the parties.

3. It allows the mediator to identify some preliminary options to explore with the parties.

5. Generation and assessment of options

At this stage, the mediator, either in a joint or a private session, generates options that address the

issues and result in mutually satisfying outcomes for the parties. At this point, assessment of the

options is not the goal. Developing a list of options is the only goal at this stage. During this stage the

mediator may assist the parties to move from entrenched positions and facilitate their search for a

viable option. Once an option is selected, the details of the agreement would have to be worked

out. But at this stage, the mediator’s role must be minimal, to the extent possible. It is important for

the parties themselves to own the final outcome, which is a significant factor in ensuring that the

agreement will be lasting.

6. Conclusion of Mediation

In the final stage, the mediator’s role is to undertake a reality test of the agreement which has been

agreed upon by the parties. This ensures that the parties have thought through what they are

agreeing to and also serves to address any loose ends or loopholes which may have been overlooked

by the parties. Once such reality check has proven successful, the mediation process ends.

However, very often, the parties reach only partial agreements. It is then for the mediator to

provide further assistance to enable the parties to reach agreement also on the remaining issues.

The mediation stages described above would then be applied accordingly.

3.5 Mediation Process According to Law

The Mediation Law provides that a party to mediation procedures may be any natural or legal

person, i.e. limited liability company, joint stock company, non-governmental organization or the

state, including independent state agencies if they have their own legal personality (Art. 9.2).

1. Beginning of Mediation

Although Article 9 purports to cover the Initiation of Mediation Procedure, there are several

analogous provisions in Article 10 that, as noted below, appear to be inconsistent.The Mediation

Law allows parties to conduct mediation before or after the beginning of court or administrative

procedures (Art. 8). According to Art. 9.1, the mediation procedure begins at the moment when the

parties agree to begin with it. As such, it implies that one party cannot impose on the other the

beginning of the mediation process. Art. 9.3 reinforces this by providing that a party’s silence to the


other party’s request to begin mediation must be interpreted as a refusal to mediate, provided the

party was silent for 15 days following receipt of the request for mediation.

Art. 10.3 stipulates that mediation starts once the parties have signed an agreement commencing the

procedure of mediation. Art. 10.4 sets out the details of such agreement. Art. 10.3 is confusing with

regard to a pre-dispute agreement to mediate providing for medation in the event that a dispute will

arise in future between the parties to the contract. Such mediation agreement (whether included in

a mediation clause in the main contract or a separate mediation contract) is normally sufficient legal

basis for initiating mediation. Art. 10.3, however, seems to require parties to have an additional

mediation agreement concluded, which contains the elements defined in Art. 10.4. This requirement

would make sense in the case of a post-dispute mediation agreements concluded once a dispute has

arisen. Art. 10.3 is also not consistent with Art. 9.1, which does not require a formal agreement to

begin mediation. Art. 9.1 is in line with Art. 4 of the UNCITRAL Model Law, which implies that Art.

9.1 should be considered as the proper rule for determining if and when mediation starts. On the

other hand, Art. 10.3 and 10.4 would have to be interpreted as requirements for a contractual

obligation to mediate, even though it is not clear if that would apply to pre-dispute mediation

contracts or only to post-dispute ad-hoc contracts.

Art. 9.4 requires the mediator, before the mediation starts, to inform the parties about the

principles, rules and expenses of the mediation procedure as well as the elegal effects of any

agreement reached by mediation. This requirement is repeated in Art. 10.9.

Art. 9.5 provides that when the matter is before the court or the prosecution and if they (i.e. the

court or the prosecution) consider that a dispute can be resolved by mediation, they suggest to the

parties to undergo a mediation procedure. According to Art. 9.6, such “suggestion” may be made at

any stage of proceedings before the court or the prosecution. Since the court or the prosecution

only suggest, it is in the discretion of the parties to determine if they want to make use of such

suggestion and proceed with mediation. Since the Provisional Criminal Procedure Code, Article 228,

has to be interpreted as a form of mandatory mediation, there may be a conflict between the

Criminal Procedure Code and Article 9.6 of the Mediation Law, unless the Criminal Procedure Code

is interpreted as a “special law” which takes precedence over the Mediation Law.

If the dispute is pending before the court and the parties agree to proceed with mediation, they are

obliged to inform the court of such decision and they have to provide the court with a copy of the

mediation agreement (Art. 10.6).

The Mediation Law does not require the mediation agreement to determine the mediator or even

to define the procedure for appointing the mediator. The Mediation Law does not contain rules on

the appointment of mediator(s) apart from the requirement that the mediation procedure should be

conducted by only one mediator, unless the parties agree otherwise (Art. 10.2). While Art. 10.2 is in

accordance with Art. 4 UNCITRAL Model Law, the Mediation Law does not incorporate the

remaining, though important provisions of the Model Law, which are as follows:

“The parties shall endeavor to reach agreement on a conciliator or conciliators, unless a different

procedure for their appointment has been agreed upon.

Parties may seek the assistance of an institution or person in connection with the appointment of

conciliators. In particular:


(a) A party may request such an institution or person to recommend suitable persons to act as

conciliator; or

(b) The parties may agree that the appointment of one or more conciliators be made directly by such

an institution or person.

In recommending or appointing individuals to act as conciliator, the institution or person shall have

regard to such considerations as are likely to secure the appointment of an independent and impartial

conciliator and, where appropriate, shall take into account the advisability of appointing a conciliator of

a nationality other than the nationalities of the parties.”

Another key problem is that the Mediation Law is silent as to the effect of beginning with mediation

with respect to time limits related to judicial and arbitral proceedings. For example, EU Directive

2008/52/EC requires member states to

“ensure that parties who choose mediation in an attempt to settle a dispute are not subsequently

prevented from initiating judicial proceedings or arbitration in relation to that dispute by the expiry of

limitation or prescription periods during the mediation process”.

A similar provision could be transposed into Kosovo legislation to ensure that parties willing to

engage in mediation do not suffer adverse procedural effects.

2. Mediation Process

Art. 10.1 provides that the parties are free to decide the development of the mediation procedure.

It means that the parties can determine the course of the mediation unless there are mandatory

provisions of the law to be respected.

The Law on Mediation describes certain elements of the mediation process in more detail:

a. Once the mediation agreement has been concluded between the parties, the mediator must

schedule the time and location of the mediation (Art. 10.5);

b. At the beginning of mediation, the mediator must notify the parties of the goal of mediation,

the procedure to be followed and the role of the mediator and of the parties (Art. 10.9;

c. The mediator may conduct separate meetings with the parties if he considers that this would

be in the interests of the procedure. It means, e contrario, that, in principle, the mediator would

have to conduct joint sessions with the parties (Art. 11).

In addition to the mediator, the parties and their representatives, other (third) parties may also

attend the mediation procedure, provided all parties (excluding the mediator) have consented to

such a presence (Art. 10.7). Third parties may include experts or witnesses who testify on certain

facts required for the elucidation of the facts of the dispute.

The mediation procedure must be concluded within 90 days from its beginning (Art. 13), which

reflects the principle of urgency as stated in Art. 7. A clear definition of the moment when mediation

begins is therefore critical.


3. Termination of Mediation Procedure

According to Art. 14.1, the mediation procedure ends on the following grounds:

a) with the agreement between parties is reached;

b) with the withdrawal of any of the parties at any time during the procedure conduction,

c) declaring that there is no interest on continuing the mediation procedure;

d) with the confirmation of the mediator, after consultations with the parties, when it is

deemed that the continuation of the procedure is not reasonable;

e) the legal deadline for attaining the agreement has expired.

The mediator is also authorized to terminate the mediation procedure if he/she considers that

he/she is no longer impartial (Art. 14.3).

If the dispute is pending before the court, it is the mediator’s responsibility to inform the court in

writing that mediation procedures were terminated (Art. 14.2).

3.6 Confidentiality during Mediation

Art. 6.1 provides that the mediation procedure is of a confidential nature. The confidentiality covers

three aspects of mediation:

the testimonies of the parties made during the mediation;

the mediation process;

the mediated agreement.

However, the Mediation Law is not clear as to the scope and meaning of confidentiality, including

any eventual procedural consequences.

For comparison, Art. 10.1 of the UNCITRAL Model Law provides the following explanation of the

consequences of the confidentiality of the mediation procedure:

“A party to the conciliation proceedings, the conciliator and any third person, including those involved in

the administration of the conciliation proceedings, shall not in arbitral, judicial or similar proceedings

rely on, introduce as evidence or give testimony or evidence regarding any of the following:

(a) An invitation by a party to engage in conciliation proceedings or the fact that a party was willing to

participate in conciliation proceedings;

(b) Views expressed or suggestions made by a party in the conciliation in respect of a possible

settlement of the dispute;

(c) Statements or admissions made by a party in the course of the conciliation proceedings;


(d) Proposals made by the conciliator;

(e) The fact that a party had indicated its willingness to accept a proposal for settlement made by the

conciliator;

(f) A document prepared solely for purposes of the conciliation proceedings”.

In addition, the UNCITRAL Model Law, contrary to the Mediation Law, includes a clear rule on

inadmissibility of evidence acquired in violation of the confidentiality of the mediation procedure:

“The disclosure of the information (…) shall not be ordered by an arbitral tribunal, court or other

competent governmental authority and, if such information is offered as evidence (…), that evidence

shall be treated as inadmissible. Nevertheless, such information may be disclosed or admitted in

evidence to the extent required under the law or for the purposes of implementation or enforcement

of a settlement agreement”.

A similar rule is contained in EU Directive 2008/52/EC, which requires the following:

“Given that mediation is intended to take place in a manner which respects confidentiality, Member

States shall ensure that, unless the parties agree otherwise, neither mediators nor those involved in the

administration of the mediation process shall be compelled to give evidence in civil and commercial

judicial proceedings or arbitration regarding information arising out of or in connection with a

mediation process, except:

(a) where this is necessary for overriding considerations of public policy of the Member State

concerned, in particular when required to ensure the protection of the best interests of children or to

prevent harm to the physical or psychological integrity of a person; or

(b) where disclosure of the content of the agreement resulting from mediation is necessary in

order to implement or enforce that agreement”.

3.7 Exercise: Mediation Process Discussed

Instructions:


critically discuss the following:

What would be the legal consequences of a breach of the confidentiality requirement during the

mediation process?




3.8 Summary

This module provided an introduction to the basic model of mediation outlining the various stages of

mediation. In light of this ideal model of mediation, the module also presented the fundamental rules

set out in the Mediation Law, which govern the mediation process. The module also presented the

rules on confidentiality as set forth in the Mediation Law and compared them with relevant

confidentiality rules set forth in international and European mediation standards.


Outline the various stages and elements of the rational model of mediation



similar provisions set out in the UNCITRAL Model Law and Directive 2008/52/EC.


MODULE 4:

MEDIATED SETTLEMENT AGREEMENT


4.1 Overview

The present module provides an introduction to the essential elements of the Mediation Law

governing the settlement agreement reached through mediation. It further discusses details of the

settlement agreement and illustrates problems pertaining to the enforceability of the settlement

agreement.






agreement.

4.3 Introduction

The ideal outcome of a successful mediation process is an agreement entered into between the

conflicting parties, through which the dispute between them is settled. However, the parties and the

mediator have to pay careful attention to details pertaining to the drafting of such agreement

because such agreement is meant to resolve a dispute and not to become the source of future

disputes. Once there is such a settlement agreement, it is important to know the legal effects of it

for any ongoing or future judicial or arbitral proceedings.

4.4 Law on Mediation on the Settlement Agreement

The settlement agreement, i.e. the agreement reached by the parties through mediation and through

which they settle their dispute, is governed by Article 12 of the Mediation Law. The structure and

content of Article 12 Mediation Law may be explained as follows:

1. The Mediation Law provides that reaching a settlement agreement through mediation

depends exclusively on the will of the parties. This reflects the principle of party autonomy

guaranteeing that nobody may be forced into a settlement agreement. It also implies that the

settlement agreement is subject to the same rules and principles concerning the formation of

contracts and that non-compliance with such rules and principles as set out in the Law on

Obligations renders the settlement agreement invalid or voidable.

2. According to the Mediation Law, the settlement agreement is final and is enforceable (Art.

12.4). However, if the matter subject of mediation is before the courts, the settlement agreement

will have the power of an executive document provided it is approved by the court (Art. 12.5).

Further to that, the Mediation Law defines that a settlement agreement has the power of a court

agreement if the settlement agreement is approved by the court, the public prosecutor or any other

competent body (Art. 14.4).


3. The Mediation Law contains specific obligations for the mediator with respect to the

settlement agreement. It requires the mediator to assist the parties and be committed in reaching

the settlement agreement (Art. 12.2). It also requires the mediator to formulate a written

settlement agreement, which must be signed by the parties and the mediator. As such, there is a

mandatory requirement for the settlement agreement to be in writing.

4.5 Drafting the Settlement Agreement

1. General Considerations

Given that by operation of law, the mediator is obligated to formulate the settlement agreement, the

mediator has to take due care to ensure that the settlement agreement signed by the parties and the

mediator does not become a source of additional or future disputes. From the perspective of the

drafting process, it is the mediator’s duty to be sure that the participants do not leave the mediation

without a complete understanding of the details of the settlement agreement. The drafting of the

settlement agreement should also occur while all representatives are still at session so that the

parties, their representatives and eventually experts have a chance of providing their input to the

wording and structure of the settlement agreement.

The mediator must also ensure that the settlement agreement contains sufficient detail and

precision. A few examples may illustrate the problem:

Example 1:

In a debt matter, A agrees to pay B 10,000 EUR in 20 monthly installments of each 500 EUR without

interest. The settlement agreement would necessarily have to include details on dates, time, place

and manner (e.g. bank transfer, cash payment, check) of payment. The question is if the mediator

would have to include provisions on late or missed payment, penalties in such event, termination

clauses, and dispute settlement provisions.

Example 2:

In employment disputes, the parties may agree on a resignation of one party instead of a termination

of contract. In addition, the parties may also agree that the resigning party receives a letter of

recommendation from the previous employer. The settlement agreement would be insufficient if it

would only include an obligation to issue such letter of recommendation. In this case, it might be

necessary to determine the content of such letter, which would have to be agreed upon by the

parties.

2. Partial Settlement Agreement

Very often, the parties will not be able to reach a settlement agreement on all contentious issues.

However, a settlement agreement could be concluded with regard to certains aspects of the dispute,

which the parties are willing to settle. In such event, a partial agreement may involve an agreement

on a few of the substantive issues.

3. Conditional Settlement Agreement

The situation may arise during mediation that a draft settlement agreement will require the

ratification by the principal, e.g. in situations where a corporation or government entity are party to


the mediation. Everything drafted by the mediator will therefore be subject to the ratification of the

principal and have no legal effect withough such ratification. Settlement agreements could also be

conditional upon the occurrence of a fact or event with the consequence that such settlement

agreement will not be effective without such occurrence.

4.6 Enforceability of the Settlement Agreement

As already stated, the settlement agreement is final and enforceable (Art. 12.4). Enforcement is

regulated by the Law on Execution Procedures (Law No. 03/L-008). Article 24 of this law defines

executive titles as including, among others, the following:

1. Court agreements

2. Administrative agreements

3. All other documents determined by law as being an executive title.

There is no specific reference to mediated settlement agreements. However, given that the

Mediation Law qualifies a mediated settlement agreement as being final and enforceable, such

agreements should be considered as falling under “all other documents determined by law as being

an executive title”.

However, the situation is confused by the provisions included in the Mediation Law that if the matter

subject to mediation is before the courts, the settlement agreement will have the power of an

executive document provided it is approved by the court (Art. 12.5). Further to that, the Mediation

Law defines that a settlement agreement has the power of a court agreement if the settlement

agreement is approved by the court, the public prosecutor or any other competent body (Art. 14.4).

The criteria for approving the settlement agreement are set out in Article 14.5 of the Mediation

Law, which includes:

Compliance of the settlement agreement with law;

The settlement agreement must reflect the will of the parties;

The settlement agreement must not interfere with the parties’ rights and interests; and

Any compensation stipulated in the settlement agreement must not be in clear

disproportion to the damages caused.

In view of the above, harmonization may be required with respect to EU law. Directive 2008/52/EC

requires the following with respect to the enforceability of mediated settlement agreements:

“Member States shall ensure that it is possible for the parties, or for one of them with the explicit

consent of the others, to request that the content of a written agreement resulting from mediation be

made enforceable. The content of such an agreement shall be made enforceable unless, in the case in

question, either the content of that agreement is contrary to the law of the Member State where the

request is made or the law of that Member State does not provide for its enforceability”.


4.7 Exercise:

Instructions:


complete the following assignment:

1) During a mediation process, A agrees to pay B 10,000 EUR in 20 monthly installments of each

500 EUR without interest. You as the mediator are required to formulate the settlement agreement.

Prepare a draft.

2) A and B are parties to a mediation. They provide in a settlement agreement that A will pay

damages to B in the amount of 10.000 EUR and an additional interest at 25% of such amount from

the day A caused the damage to B. Would you, as a judge, approve such settlement agreement?



4.8 Summary

This module provided an introduction to the essential elements of the Mediation Law governing the

settlement agreement reached through mediation. It further discusses details of the settlement

agreement and illustrates problems pertaining to the enforceability of the settlement agreement.





agreement.


MODULE 5:

MEDIATOR’S ROLE AND RESPONSIBILITIES


5.1 Overview

The present module introduces the various roles and responsibilities of a mediator during the

mediation process . The module also introduces the key elements of a mediator’s impartiality

and independence.





5.3 Introduction

As already emphasized in previous modules, the primary function of a mediator is to facilitate

the process of mediation and to thus assist the parties in reaching a settlement of their conflict.

It is not the mediator’s responsibility to adjudicate or in any other manner impose a solution to

the conflict. However, in the context of facilitating conflict resolution, the mediator performs

additional roles, which may be classified as procedural, communicative and substantial.

5.4 Mediator as Process-Controller

A mediator’s role as process-controller begins from the time that a dispute is referred for

mediation. At this stage, the mediator needs to arrange for the first session between the parties

by acting as an intermediary, arranging for appropriate times and neutral venues for mediation.

In the event of institutional mediation (mediation provided through a mediation center or other

organization) , these tasks would be accomplished by the administrative staff of the respective

mediation center. Details, e.g. taking care of appropriate seating arrangements, are also handled

by the mediator to ensure that the mediation process is smooth and not obstructed by

peripheral issues. At the same time, the mediator has to facilitate the creation of an atmosphere

conducive to amicable mediation, which requires paying due attention to a proper environment

for mediation.

During the mediation, the mediator plays an important role in chairing the mediation and

managing the mediation process. The mediator has constantly to maintain a careful balance

between being a mere observer and acting as the driver of the mediation process. The mediator

has to keep the discussion moving forward and ensure that the discussion is orderly and

meaningful by guiding the parties through the mediation process. The mediator, when necessary,

has to take action to diffuse tensions, to provide opportunities for brainstorming, or further


information gathering. The mediator has also to decide whether to use joint sessions or

separate caucuses where this may be necessary to explore options for a settlement or gather

sensitive information.

One of the mediator’s main responsibilities as process-controller is that of setting the tone and

agenda for the mediation. This involves establishing the nature of the conflict, identifying the

matters in issue and framing the issues in a manner that will promote a resolution of the dispute.

It is critical for the mediator to also set the rules which will be followed by the parties during

the discussions.

5.5 Mediator as Facilitator of Communication

One of the mediator’s crucial roles is to establish and maintain communication between the

parties. Because a dispute very often leads to break-up of communication, the mediator is

responsible for opening the channels of communication by developing a relationship of trust

between the parties and getting them to talk to each other and to the mediator. In this context,

it is the mediator’s role to diffuse tensions and strong emotions which may be generated by the

dispute.

The mediator may perform this function in different ways. The mediator may act as a

“translator” between the parties if the parties communicate at cross purposes or for any other

reasons do not understand each other (e.g. due to cultural differences). The mediator may also

increase the level of information available to the parties required for a meaningful discussion by

asking specific questions which then generate more information.

5.6 Mediator’s Substantive Role

The mediator is responsible for helping the parties draft a substantially valid and lasting

agreement that resolves the dispute if the parties are able to come to terms. In this respect, it is

the mediator’s role to identify the issues, needs and priorities of the parties and to assist the

parties in identifying options which would satisfy these needs and lead to a resolution of the

dispute.

It may also occur that although an agreement would satisfy both party’s needs and interests, one

party is unwilling to accept the agreement because of a lack of understanding of its content and

implications or because it insists in its position. In such an event, the mediator’s role would be

to explain the possible agreement, to set out the viability of any position maintained by a party

contrary to such agreement, and the eventual consequences of a failure to reach a mediated

settlement.

Last but not least, the mediator would also have to assist the parties in wording and structuring

a settlement agreement and follow-up until the signing of such agreement.


5.7 Mediator Impartiality and Independence

Article 5 of the Law on Mediation requires the mediator to be fully impartial and independent

during the mediation procedure. Although, at first sight, impartiality and independence sound

similar and interchangeable, they have important nuances. Impartiality refers to the specific

conduct of the mediator with regard to the participants. This means that the mediator will not

act with favoritism or bias toward either party. Independence is used to describe the nature of

the relationship between the mediator and the parties, especially the mediator’s freedom from

prejudice in conducting the process. Neutrality demands that the mediator withdraw if he/she is

unable to remain neutral throughout the process. As the Mediators’ Code of Conduct sets

forth, “if a mediator becomes aware of his/her lack of impartiality, the mediator shall

immediately inform the parties that the mediator is not able to continue with the mediation and

the mediator shall withdraw from such case”.

Certain mediation situations can be difficult and present significant neutrality problems. One

critical issue involves an imbalance of power between the parties. It is possible that one party

may attempt to use the process to take advantage of the other party by increasing costs,

attempting to gather information, or using newly acquired information to achieve an

advantagous settlement agreement. Difficulties may also arise when a party is more educated,

knowledgeable or articulate than the other. Such advantages may affect the mediator’s

impartiality and independence. The mediator’s proper role in such situations is a matter of

debate. The following presents some of the critical aspects of impartiality and independence:

The Mediators’ Code of Conduct (Article 4) specifically requires that a mediator should

neither give nor accept a gift, favor, loan or other item of value that may raise a question as to

the mediator’s actual or perceived impartiality. Further, a mediator must not allow the pressure

or influence from any third party (individual persons, government institutions or officials,

organizations or associations of mediators, providers of mediation services, or any other

organizations or agencies) to compromise the independence or impartiality of the mediator.

Neutrality requires that a mediator maintains a neutral process and provides the parties

an equal opportunity to participate in the process. Neutral behavior may require that the

mediator allows the parties adequate time to speak and express themselves during the process.

Although setting specific time limits may be technically difficult, mediators generally provide each

party with sufficient opportunity not only to be heard, but also to ask questions, while

maintaining a fair and neutral process.

Time spent in private session with a party is another area which impacts the mediator’s

impartiality. While mediator’s do not meet with each party for identical periods of time, they

attempt to balance the time spent with each side in order to avoid perceptions of favoritism or

partiality towards a party.

An additional aspect of neutrality includes allowing each party to obtain the information

necessary for informed decision-making during the mediation process. As such, permitting

parties to be accompanied by counsel or other representatives is often considered an element

of a neutral process.


It is imperative that mediators are not biased or prejudiced about the substance or

content of the dispute, as there is a potential danger that this might affect potential resolutions

of the dispute. It is certainly not possible to be completely neutral about such issues. However,

it is important that opinions, experiences and preferences do not impede the mediator’s ability

to conduct the mediation in an impartial manner. Mediators are therefore expected to refrain

from offering judgments or opinions concerning possible solutions to the dispute.

It may occur, that during the mediation process illegal or immoral matters may be raised

and discussed. With regard to immoral matters, it is in the discretion of the mediator to

continue or to terminate the mediation process. If an illegal issue arises during the process, legal

literature suggests that the mediator should immediately terminate the mediation process. It

should not be the mediator’s role to facilitate the conclusion of illegal settlement agreements.

The personal or professional relationships a mediator has with the parties, the existence

of a past relationship or the promise of a future relationship may have a serious impact on the

mediator’s impartiallity and independence. The intensity, frequency and duration of such

relationship are factors which may impact a party’s perception of the mediator’s ability to

remain impartial and independent. The longer such a relationship has lasted or the closer in time

to the present mediation, the more difficult the problem becomes. A special relationship

problem may ocur with “repeat players”, i.e. persons or companies who use the mediator’s

services on a regular basis (e.g. an insurance company). Intense and repeated previous relations

or the prospects of future business could jeopardize the mediator’s impartiality. Prior to the

beginning of a mediation procedure, the mediator must determine if impartiality is an issue, given

the relationships that exist. If so, then the mediator should disclose the particular relationship to

the parties. Once the relationship is exposed and only if all parties agree, then the mediation

process can proceed.

A mediator must avoid situations resulting in a conflict of interest. If there is a prospect

that the mediator will provide e.g. legal, accounting or consulting services to a party in the

mediation process, or if the mediator has, in the past, provided such services to a party, then a

conflict of interest may be the case.

A mediator must be careful not to oppose or obstruct any solution reached between

the parties solely on the grounds that the mediator considers such solution unfair to a party.

There may be situations where there is a substantial imbalance between the parties because one

party has more power, resources and information than the other. A mediator could then easily

attempt to “assist” the weaker party. However, if the parties are satisfied with the solution, it is

not permissable for the mediator to second-guess such decision. This does not prevent the

mediator from conducting a reality-check of the solution, e.g. by asking the parties about the

potential consequences of a solution and by thus raising awareness and information among the

parties of unintended or unexepected implications. It is also not uncommon for mediators to

provide information, including legal information. However, while providing information may be

permitted, providing advice to a party would conflict with the mediator’s impartiality. Drawing a

distinction between informing and advising is therefore essential. Information is considered

factual and general and can be provided by other sources. Advice refers to the specific

application of information to the facts or situation at hand.


In the event that the mediator’s impartiality and independence is in question, Article 14.3 of the

Law on Mediation provides that the mediator may terminate the mediation procedure. This

implies that it is in the discretion of the mediator to continue or to terminate the mediation

process. The Law on Mediation does not provide for the parties to have a right to terminate

mediation due to lack of impartiality of the mediator. However, Article 14.1 (b) of the Law on

Mediation could be used by any party to terminate the mediation process at any time due to

lack of interest in the continuation of the mediation process because of the mediator’s lack of

impartiality.

Pursuant to Article 14.5 of the Law on Mediation, it would also be possible for a court or the

public prosecutor to invalidate a settlement agreement if it determines that such agreement has

been concluded in violation of the law, which, within the ambit of the Law on Mediation,

includes the mediator’s duty to remain impartial and independent throughout the entire

mediation process.

It is a matter of debate if a settlement agreement can be challenged by a party or a court

because of a mediator’s subsequent behavior that may result or be perceived as resulting in lack

of impartiality. This controversial question could be relevant only to the extent that the

settlement agreement has not been enforced yet.

5.8 Exercise:

Instructions:


critically discuss:

1) During a mediation process, the parties intend to agree to settle their dispute by a party

paying compensation to the other from the the proceeds of the sale of illegal narcotics. How

would you, as a mediator, respond to such a situation?

2) One of the parties to a mediation process, where you are the mediator, invites you for

dinner at a luxus restaurant? Would you accept such invitation?




5.9 Summary

This module provided an introduction to the various roles and responsibilities of a mediator

during the mediation process. The module also introduced the key elements of a mediator’s

impartiality and independence.





MODULE 6:

PROFESSIONAL REGULATION


6.1 Overview

The present module introduces to the regulatory framework related to mediation including the

qualification requirements for mediators and mediators’professional liability.






6.3 Introduction

As mediation develops into a profession, there is the requirement that mediation be regulated

by rules, procedures, standards and qualifications as a means to ensure quality-control over

those who provide mediation services. A profession usually includes (i) specialized knowledge

and skill acquired by formal training, (ii) independent membership in professional organization,

and (iii) charging fees for services. Since mediation meets these criteria, it is required that

mediation is subject to regulatory procedures and oversight, which ensure that all mediators

possess similar educational backgrounds in mediation. However, there are also advocates of

arguments against regulation of mediation because of the very subjective side of mediation. It is

argued that mediation is more art than science or profession and that therefore any form of

regulation would be subjective, partial and evetually inadequate. However, the general trend

moves in the direction of regulation of mediation as a profession, a path which has also been

taken by the Mediation Law.

6.4 Mediation Committee

The Mediation Law requires the establishment of a Mediation Committee by the Ministry of

Justice (Art. 17.1).

The responsibilities of the Mediation Committee include:

Defining the development policies regarding mediation

Issuing a code of professional ethics for mediators


Issue decisions and recommendations for the purpose of regulating mediation

Establishing and maintaining a register of mediators.

Issuing professional opinions on mediation

Organizing training in mediation

Providing public information on mediation.

The Mediation Committee thus has regulatory powers as it has the authority to make policies

and also decisions governing the development of mediation.

The Mediation Committee consists of 5 members, including the chairman, who must be a civil

servant appointed by the Ministry of Justice. The other 4 members must represent the following

institutions:

Kosovo Judicial Committee

Kosovo Prosecutorial Committee

Kosovo Chamber of Advocates

Ministry of Labor and Social Welfare.

The provisions of the Mediation Law on the Mediation Committee are silent as to the legal

nature of the Mediation Committee, though it can be assumed that it is a body operating under

the auspices of the Ministry of Justice. It may also not that any policies and decisions issued by

the Mediation Committee are acts adopted by the Ministry of Justice. The wording of the

Mediation Law suggests that each institution represented in the Mediation Committee selects its

own representative in accordance with the criteria set out in Art. 20 Mediation Law. Each

instititution must therefore ensure that the persons appointed to the Mediation Committee

indeed possess the qualifications required by law..

6.5 Qualification of Mediators

The Mediation Law requires a person to meet certain criteria in order to be eligible as

mediator. The criteria include:

Possession of a university degree;

Successful passing of mediation training course;

To have mediated under the supervision of a mediator in at least 6 mediation sessions;

To not be convicted for a criminal act punishable with 6 months of imprisonment or

more;


To possess high moral qualities;

To be registered in the mediator register.

Registration in the register of mediators is possible only upon the successful completion of

mediation training documented by the issuance of a certificate by the Mediation Committee. The

Mediation Committee is responsible for organizing the mediation training in cooperation with

the Ministry of Justice. Once a person has fullfilled all these requirements, the Ministry of Justice

would issue such person a license (licensed mediator). Such licenses may be suspended or

revoked by the Ministry of Justice upon the recommendation of the Mediation Committee.

However, while the Mediation Law does not provide any rules or procedures that the Mediation

Committee and the Ministry of Justice would have to apply in the event of a suspension or

revocation of a mediation license, such rules are to be established by the Mediation Committee

which is currently drafting and revising a disciplinary regulation for mediators.

The Mediation Committee is responsible for maintaining a public register of certified mediators,

which contains all personal data of each registered mediator. Such list is distributed on a regular

basis to courts, the public prosecution and other competent authorities. However, if the courts

and other public authorities receive only lists of certified mediators, it is not clear why a

mediator should also be licensed by the Ministry of Justice. It could be that the Mediation Law

contains a clerical error that instead of a register of certified mediators it should be a register of

licensed mediators. Otherwise, there would be no value added by the licensing procedure.

6.6 Professional Liability of Mediators

As professionals practice, there is also the possibility that a party may sue the mediator for

professional negligence. Professional negligence requires a breach of professional standards,

which, in the case of Kosovo, have been established by virtue of the Mediators’ Code of

Conduct.

However, general negligence under tort or contractual liability as defined in the Law on

Obligations may be considered as a legal basis for a mediator’s professional liability. Breach of

contract, fraud, false representation, libel, slender, breach of fiduciary duty and tortious

interference with a business relationship may constitute such negligence. It is also conceivable

that the mediator becomes liable for breach of statutory obligations under the Mediation Law,

e.g. confidentiality or impartiality.

The Mediation Law offers a very interesting solution. Art. 25 sets forth that the rights and

liabilities of the mediator and of the parties have to be determined before the beginning of the

mediation procedure. This is very difficult in practice as it requires the parties to anticipate all

possible liabilities in advance. It is also not clear if and to what extent such agreement on rights

and liabilities would derogate from the provisions of the Law on Obligations concerning

contractual or tortious liability. Perhaps a more feasible solution would have been to allow the


parties to exclude certain forms of liability instead of requiring them to define the liabilities in

advance.

Art. 27 of the Mediation Law further provides that a mediator will be criminally liable if he/she

discloses official secrets or misuses the official duty while exercising the functions of a mediator.

This provision implies that a mediator, duly certified, licensed and registered in accordance with

the Mediation Law, is a public official (misues of official duty) and that information obtained

during the mediation process are official information (official secrets). This stands in severe

contradiction to the understanding of mediation as a regulated profession. There would be

other, more appropriate provisions, which would be applicable to mediators as regulated

professionals, e.g. the practice of mediation without license or the disclosure of business secrets,

but the Mediation Law does not make reference to them. Art. 27 thus causes confusion as to

the status of mediators, i.e. whether they are regulated professionals or public officials

conducting a public office.

6.7 Exercise:

Instructions:


critically discuss:

1) Person A engages as a mediator although he is not in possession of a license as required by

the Law on Mediation. What would be the legal consequences for such engagement according to

Kosovo civil and criminal law?

2) During a mediation process, the mediator imposes on the parties a solution and forces them

to sign the settlement agreement.

Is such settlement agreement enforceable?

Would the mediator be liable for such behavior?




6.8 Summary

This module provided an introduction to the regulatory framework related to mediation

including the qualification requirements for mediators and mediators’professional liability.





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