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A New Wave of Mediation in Lithuania - What Does it Mean for Lawyers

A New Wave of Mediation in Lithuania - What Does it Mean for Lawyers

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In recent years, the government and courts of Lithuania have intensified their attempts to develop mediation. There are many reasons for this – promoting social peace, decreasing court caseloads, saving time and money for the end-users, and providing them with higher satisfaction among them.

The constant pressure to introduce mediation that is coming from policy- and decision-makers has resulted in more tangible results. It is already common for state courts to offer mediation to parties and their lawyers in civil and commercial court cases. Courts generally put even more pressure on parties to attempt mediation in particularly complicated cases. In 2019, the Lithuanian legislator even empowered civil courts to require parties to attempt mediation when it is deemed appropriate. Mediation is made more attractive by a reduction in court fees as a “carrot” and possible litigation costs sanctions for failure to use it or misuse of it as a “stick.”  As a result, the number of cases involving formal attempts at mediation has already increased almost tenfold from 2015, when only about 100 were attempted. And that’s only the beginning, as more significant changes have been brought to life by the legislator at the start of 2020.

Mandatory Mediation

By following the example of Italy and some other states, Lithuania launched mandatory mediation as a prerequisite to contentious family legal actions in court at the beginning of this year. An obligation to try mediation before filing a claim extends to litigation involving divorce, maintenance of a child, determination of residence, property obligations, and other family disputes. Over the first month of 2020, more than one hundred applications to initiate mediation were received. The number of applications is expected to grow on a monthly basis, as there are around four thousand family disputes in courts each year. Extending mandatory mediation into other fields of disputes is likely to be considered as well if its performance in family matters turns out well. The Mediation law envisages possible up-scaling to other fields. 

Under the new legislation, if one party applies for mediation, either the mediator or the State Guaranteed Legal Aid Service will send the other party a notice of initiation. If the consent of the other party to the dispute is not obtained within fifteen working days, that party is deemed not to have consented to the mediation. In such cases, the party to the dispute who initiated the mandatory mediation is entitled to apply to the court for a judgment in its favor. If parties do not turn to mediation on their own initiative and at their own expense, mandatory mediation services will be paid for from the state budget and provided for up to four hours. The State Guaranteed Legal Aid Service assists in selecting and appointing mediators. There is certain degree of obstruction and worry that the mediation infrastructure is not yet well prepared. Nevertheless, resistance is far from resembling the lawyers’ strike that broke out in Italy when mandatory mediation was first introduced in that country.

What Does That Mean for the Practice of Law? 

First and foremost, Lithuanian lawyers are now aware that mediation is no longer just a theory or an extraordinary phenomenon and that they will need to integrate it into their day-to-day professional lives. Clients appreciate having more information and more efficient assistance in the course of mediation by lawyers when the added-value of such services is demonstrated. Multiple examples show that clients are ready to pay for it at legal services market fee rates. Many lawyers have already adjusted and can offer appropriate assistance in mediation. The ones who struggle with it are negatively perceived by judges, and the threat of cost sanctions is not helping conservatives. So hostility to mediation in such a context inevitably results in the reduction of professional success. In addition to being sharp and skilful lawyers in legal battles, Lithuanian lawyers have found a door to a new practice, and an increasing number are receiving mediator training and enrolling on the mediators’ list.

I believe that the rise of mediation in Lithuania has brought interesting and exciting changes. A higher level of flexibility in choosing and applying means of dispute resolution, as well as more happy clients winning disputes with mediated settlements, will bring our profession more satisfaction from both a psychological and business perspective. 

By Rimantas Simaitis, Partner, Cobalt

This Article was originally published in Issue 7.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

 

Lithuanian Knowledge Partner

COBALT is closely integrated alliance of top-tier law offices in Estonia, Latvia, Lithuania and Belarus, making us one of the largest law firms in the Baltic market. 

COBALT is a trusted partner for daily matters and complex large-scale transactions and disputes. The firm’s broad spectrum of expertise and established position as the market leader give a comprehensive basis for providing advice on special areas of business law.

We advise top international and regional businesses, financial institutions, state and local governments, and the region’s most promising start-ups. We offer leading-edge solutions in key industry sectors: Consumer Products, Trade & Distribution, Real Estate & Construction, Pharmaceuticals & Healthcare, Energy & Utilities, Communications, Media & Technologies, Financial Services, Transport & Logistics.

COBALT has been named Baltic Law Firm of the Year 6 times. We were recognized as the Most Innovative Law Firm of the Year 2019 in the Baltics at the IFLR European Awards in London. COBALT also won CEE Legal Matters Deal of the Year Award for Estonia, Latvia, and Lithuania, as well as the overall Baltic Deal of the Year, at the 2019 CEE Legal Matters Awards. We have received multiple awards from the Chambers Europe, IFLR, The Lawyer and Mergermarket and we are regularly listed amongst the top performing M&A legal advisors in the Bloomberg, Thomson Reuters and Mergermarket deal tables

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