In my first article I showed you a picture of Poland, country in which a totally new reality replaced the old system. Now let me take you on yet another short history tour of the judiciary system, and then show you how mediation works in Poland.
Judicial system
Before the transition began, Poland, as all the other communist countries in the Central and Eastern Europe, had everything to make it look like a western judicial system: laws (rules), courthouses (place) and judges, bailiffs, clerks etc (staff necessary to handle cases). The idea however, was that the state controlled everything, and the judiciary system was simply another tool of such control. In the absence of corporate rights towards the state, communist party-controlled arbitration used to handle commercial disputes, whereas criminal and civil cases were referred to formal judges working in courts – huge and intimidating buildings reflecting the idea that individuals are unimportant faced with the system.
Commercial legislation
Basically, commercial laws defined the relationship between the state agencies and set production targets. In the new economic era many new laws (such as property, evidence, banking, bankruptcy laws) had to be implemented to meet the needs of a market economy. This created the need to expand the pool of judges in order to understand and enforce these laws.
Demand for judicial services
As a result of market liberalization the volume of commercial and civil cases increased dramatically. According to the World Bank survey [1] Poland ranks top as far as the demand and the capacity to deliver judicial services is concerned. To show you how heavy the demand is, have a look at the following figures: a lawsuit in Poland takes on the average 780 days (almost 2 years!), a contractual claim enforcement takes on the average 1000 days (almost 3 years!).
How do business managers view court system?
Let’s not forget either that the greater role of judiciaries in a market economy with insufficient accountability resulted in judicial corruption beginning in the 1990’. Nowadays less than one third of business managers in Poland view court system as honest and uncorrupted. Around 30% of firms say courts are able to enforce decisions, only around 15% see courts as quick. [2]
In 2002 approximately 50% of firms operating in Poland saw the judiciary as a problem for doing business against 40% in 1999 (four dimensions of court performance were assessed: fairness and honesty, speed and affordability and ability to enforce decisions). [3]
In the meantime in Europe: mediation
While after the political shift Poland had to work quickly on new regulations and redesign the whole system to adapt it to the market economy, in other European countries a new conflict resolution method was gaining support from the lawmakers.
Important facts include the creation in 1989 of the European Forum for Victim-Offender Mediation and Restorative Justice. In 1999 the European Council adopted a recommendation on mediation in penal cases, and in 2002 a recommendation about mediation in civil cases.
Spreading the concept of mediation in Poland
Poland followed this example; foundation for mediation was laid in 1995. At that time was set up a Team for the Introduction of Mediation to Poland (transformed into the Polish Center for Mediation in 2000), whose main goal was to introduce mediation to the Polish judicial system. An experimental program was carried out in cooperation with a few courts in which victim-offenders cases were mediated.
Mediation in penal cases
Mediation was finally introduced to the penal code in 1997. [4] A penal case can be referred to mediation by:
Mediation in juvenile offenders’ cases
A family and juvenile court judge can refer any case to mediation provided that both the victim and the offender consent to mediation. [5]
Mediation in collective disputes
Collective dispute is a dispute between the employees and the employer (or the employers) regarding working conditions, wages, insurance benefits, as well as trade union rights and freedom. There can be no collective dispute regarding individual employees’ rights that can be sued for. The parties are represented by their organizations: trade unions and employers’ organizations.
The law [6] defines the steps of a collective dispute resolution, negotiations being the first step. In case the negotiations fail, mediation is the next. Mediation is compulsory. Failure to settle the dispute by mediation gives the trade unions the right to go on strike.
Mediation in civil cases
Introduced according to the law of July 28th 2005 amending the law – the Code of civil procedure and some other laws, mediation applies to all civil cases (commercial, family, labor). [7]
The abovementioned law governs the issues: legal basis of mediation, requirements regarding the mediator, impartiality and confidentiality of the mediation procedure, mediators’ remuneration, requirements regarding the contents of an application for mediation, conditions in which courts can refer a case to mediation, description of mediation procedure.
Most important provisions regarding mediation.
a. Mediation is voluntary
Mediation procedure is set in motion based on a mediation contract or court’s decision referring a case to mediation.
Mediation takes place before the institution of the proceedings, but if the parties agree to go to mediation, mediation can take place also in the course of proceedings.
b. Rule of impartiality and confidentiality of the mediation procedure.
c. Mediator’s remuneration is specified in special regulations; mediation expenses are split up by the parties.
In the event of a case being referred to mediation by a court, mediator’s remuneration is governed by the Disposition of the Minister of Justice of November 30th 2005 on mediator’s remuneration and mediator’s refundable expenses in civil proceedings. [8]
Mediation can also be used as an out-of-court dispute resolution method. In such a case it is the mediator who defines, with the parties to the dispute, the cost of mediation.
d. If a civil case is referred by the court, the mediator draws up a mediation report in which he / she describes the outcome of the mediation (this piece of information is limited to whether there was a settlement or these was no settlement), and sends the settlement in case of a positive outcome.
If the parties go to mediation on their own initiative and settle before the mediator, the settlement should be approved by the court. Settlement reached before a mediator has the legal force of a settlement reached before the judge. The court approves an enforceable settlement by putting an enforcement clause.
Mediation in family cases [9]
The judge should encourage the parties to settle at any stage of the proceedings, provided that a settlement is permitted in a specific case. Should the case permit a settlement, the parties can settle before a mediator. If the parties settle under article 184 of the Code of civil procedure, they can apply to the court for approval. In the course of proceedings the parties can settle before the judge. Such a settlement has the legal force of a court decision with enforceable title.
Mediation in divorce cases
Under the amendment to the Code of civil procedure of 2005 conciliatory sessions were replaced with voluntary mediation. [10]
The amended law provides that a couple who have applied for divorce or separation can be referred to a mediator by the court or can apply for mediation on their own initiative.
In what can mediation be helpful?
Mediation in commercial and business cases
Mediation procedure is carried out as provided for in the Mediation Centers’ regulations. Business mediation is voluntary; it is an efficient alternative for lengthy court proceedings. Settlement reached before a mediator can be submitted to the court for approval. As in all civil cases, the parties can also apply for the enforcement clause.
How do Polish businessmen view mediation?
Basically, the term itself is known pretty well, but mediation gets usually associated with penal cases, which is not surpirsing if you take into account the sequence of introducing this concept to the Polish law, or is mistaken for arbitration.
At this stage there is little awareness amongst Polish businessmen as regards early conflict management through mediaton, hence a lot depends on the contractual settlements on this subject with the business partner. Nevertheless, considering their views on the Polish court system, it should not take long before business managers seize this new opportunity.
Educating your business partner
As shown at the beginning of this article, business managers in Poland do realize that going to court is expensive in terms of time, money and relationship with their clients. It happens, however, that in case of a dispute they have problems persuading the other side to use mediation. A solution to this might be a mediation clause in the contract instead of the usual introduction to the dispute resolution clause, which usually says merely that both parties will spare no efforts trying to solve disputes amicably before going to court.
Foreign investors and potential customers might want to use their negotiation strength to educate their Polish partners about the benefits of mediation before signing the contract.
End Notes
1 Transforming Judicial Systems in Europe and Central Asia, January 2006, World Bank
2 Idem
3 Judicial Systems in Transition Economies: Assessing the Past, Looking to the Future, 2005, the International Bank for Reconstruction and Development/ The World Bank
4 Legal basis: Articles 53, 54, 60 and 66 of the Code of Penal Proceedings (Journal of Laws No 88, item 553 as amended ); Articles 320, 339, 489, 492, 493 and 619 of the Code of Penal Proceedings (Journal of Laws No 89, item 555 as amended).
5 Legal basis: Disposition of the Minister of Justice of May 18th 2001 on mediation in juvenile cases (Journal of Laws No 56, item 591).
6 Legal basis: Art. 184 of the Code of civil procedure , Article 244 and the following of the law of June 26th 1974 –Labor Code (Journal of Laws of 1998 No 21, item 94 as amended ), and Articles from 10 to 14 of the Law of May 23rd 1991 on collective dispute resolution (Journal of Laws of June 26th 1991 No 55, item 236 as amended )
7 Legal basis: Articles 1831 – 18315 of the Law of November 17th 1964 –Code of civil procedure (Journal of Laws No 43, item 296 as amended).
8 Journal of Laws No 239, item 2018
9 Legal basis: Articles 10 and 184 of the Code of civil procedure.
10 Articles 436 and 4452 of the Code of civil procedure
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