In an attempt to lighten the heavy burden on the Greek judicial system, articles 178 to 206 of Law 4512/2018 on Arrangements for the Implementation of the Structural Reforms of the Economic Adjustment Programs and Other Provisions provide guidelines for new mediation procedures in civil and commercial matters. This alternative extrajudicial dispute resolution method seeks to provide an attractive and expeditious solution in the form of an executed agreement that is immediately enforceable.
The Law was published on January 17, 2018 and the part concerning voluntary mediation came into force immediately; however, the provisions of Article 182 on compulsory mediation - which are considered to be the most controversial provisions of the Law - were suspended until September 16, 2019.
Article 182 applies to the following seven categories of private disputes: a) landlord-condominium cases; b) road traffic accident cases unless the harmful event resulted in death or personal injury; c) professional fees/remuneration; d) certain family law matters; e) medical liability related to malpractice; f) industrial property rights (trademarks, patents, designs); and g) stock exchange transactions. Failure to submit evidence of a mediation attempt signed by the party and the lawyer when filing a claim with the court will bring an automatic dismissal.
Prior to filing any legal action, lawyers are obliged to inform their clients, in writing, about the mediation requirement and initiate the process by appointing a person from a list of accredited mediators who may not be lawyers, and thus be without the experience or training in the special law provisions necessary to provide an appropriate level of protection to the claimant.
The mediator has to notify the party of the date of mediation by registered letter, electronic message, or any other legal means that, with the exception of a bailiff, may not always secure the validity of the mediation procedures in terms of proof of receipt or in accordance with traditional service requirements in cross-border disputes.
Following such notice, the first mediation session has to take place within 15 days and have been completed within 30 days as of its initiation. The mediation proceedings cannot last for more than 24 (working) hours, unless the parties agree otherwise. Summons to compulsory mediation proceedings suspends applicable limitation periods.
During the mediation session both parties shall attend in person along with their lawyers, except for small claims below EUR 5,000 and consumer protection cases. Parties of unknown residence are excluded from this obligation. Where physical presence is not feasible, the use of digital technology through electronic platforms is allowed.
This provision has raised many issues, particularly due to the disproportion of the legal costs of the compulsory mediation, which can directly affect the right of access to the Court of Justice, a point stressed in CJEU case law. In addition, the obligation of personal attendance could create difficulties for the legal representatives of legal entities or in cases where physical appearance is not possible. Online mediation could be part of a solution, but it can only work when all the parties have access to digital tools.
A party who has been summoned in the proceedings may opt not to attend; however, it is in the discretion of the court to impose a fine against such party ranging from EUR 120 to EUR 300 depending on the reasons for non-attendance. In addition, the court could also impose a penalty on the non-appearing party of up to 0.2% of the claim depending on the extent of the defeat.
Moreover, the fact that the minimum remuneration of the mediator is owed even when a party has refused to follow the mediation process from the very beginning exacerbates the disproportionate nature of compulsory mediation.
Although the supporters of compulsory mediation claim that it is not mandatory to resolve the dispute through mediation – only to be informed and get acquainted with the procedure – this provision caused many reactions, leading to decision No. 34/2018 of the Administrative Grand Chamber of the Supreme Court, which held that the provisions for compulsory mediation contradict the provisions of Article 20 (1) of the Greek Constitution, Article 6 (1), 13 of the ECHR, and Article 47 of the Charter of Fundamental Rights of the EU, since serious extra costs are incurred and the weaker party is indirectly obliged to accept a mediation agreement, thereby being deprived of the “natural judge” privilege set out in the Greek Constitution and the ECHR.
In light of the above, remedial action on the compulsory mediation terms is widely expected in order to ensure compatibility with national legislation and the EU’s legal order in terms of minimum costs.
By Sophia Ampoulidou, Partner, Drakopoulos
This Article was originally published in Issue 5.11 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.