The Supreme Court of the Russian Federation has identified gaps in mediation regulations

An article about the application of Federal Law No. 193-FZ, of 27 July 2010, The alternative procedure of dispute settlement with the participation of a mediator (mediation procedure), for the period from 2013 to 2014, appears on the official website of the Supreme Court of the Russian Federation. This is the Supreme Court’s first analysis of experiences with resolving disputes through mediation, and it raised questions about the procedural obstacles involved in mediation procedures.

The study showed that the demand for mediation and the number of resolved disputes remains quite low. The main reasons for the low popularity of the reconciliation process are, in particular, the high cost of mediation, the overall level of conflict in society, and the lack of knowledge about mediation. However, the Supreme Court noted that, despite the lack of prevalence of this procedure, the number of instances where the parties have resorted to mediation seems to be growing.

The article cited examples courts frequently use to encourage mediation: informing the parties about the process; explaining to them the nature and advantages of conciliation procedures; and proposing that the parties employ mediation to resolve contentious issues and disagreements.

The study shows that the courts already have taken measures to increase the demand for conciliation procedures. These include brochures about mediation in courthouses and placing information about reconciliation and its results in special sections of court websites. The information describes the intent, process, and advantages of mediation. It provides agreements for carrying out the procedure, sample agreements that have resulted from the mediation process, requests for the approval of a mediation agreement as a settlement to terminate proceedings, and descriptions of the rooms, cubicles, and other areas that are equipped with computers and are available for of mediators and parties hoping to resolve a dispute.

The summary of court practice showed that, after initiating proceedings, the parties mediated disputes related to family and marriage concerns, real estate issues, inheritance, housing, consumer protection, recovery of sums due in loan agreements, other loan agreement disputes, as well as fee collection for residential, utility (hear, electricity, and the like), and labor services.

The document states that businesses are increasingly resorting to mediation, in both the preparation stage for a trial and during the trial.

In practice, there are instances when parties use conciliation procedures to abuse procedural rights and delay a trial. Such cases have occurred during collection proceedings for bank loans. While the judicial session was in progress, the claimant’s representative requested that the defendants delay the trial to facilitate a peaceful settlement of the dispute and subsequently did not appear at the mediation hearing or did not take tangible steps to use conciliation procedures. The courts also noted cases of the abuse of rights, such as numerous motions to adjourn the proceedings in order to rely on mediation, without the parties reaching a settlement.
According to the courts, the procedural obstacles to more frequent and effective use of reconciliation in civil and arbitration procedures are the short term of cases, the small size of the state fee reduction in court costs for the services of a representative, the absence of mandatory mediation, the judges’ legal inability to mandate mediation, and the unresolved issue of the procedural period for mediation.

The study mentions the existence of several gaps in the legal regulation of mediation. In particular, based on a literal interpretation of Article 106, of the Arbitrazh procedural code, and Article 88, of the Civil procedural code of the Russian Federation, payment for the services of a mediator does not apply to legal fees. However, based on the meaning the legislature has assigned to the term “litigation costs,” the list of cash amounts payable to specific persons, logically, must contain a monetary amount payable to the mediators. Therefore, the Supreme Court “invites” the help of legislators to consider the inclusion of a payment for the services of a mediator in the concept of “court costs.”

The question of the ability of the mediator to become acquainted with the case materials remains. In Article 35 of the Civil procedural code and Article 41 Arbitrazh procedural code, mediators are not named among those entitled to familiarize themselves with the case. This limitation substantially impedes the ability of a mediator to perform the duties associated with reconciling the parties.

In the study, the Supreme Court also considered the mediation agreement. It noted that, from the information the courts provided, there was a complete absence of cases connected with challenging mediation agreements, protecting rights when mediation fails to take place, and compensating for damages that result when a party does not implement the terms of mediation. Since a mediation agreement is a matter of civil law, it must be subject to and challenged as part of civil law. If it is part of a settlement, it also should be subject to dispute, just like any other settlement agreement.

According to the Supreme Court’s study, mediation is not a popular method of dispute resolution in Russia, but it still is developing. The number of cases of successful dispute resolution that employ this tool is growing constantly. However, the Supreme Court recognizes that significant issues still need to be resolved at the legislative level.