Thinking of agreeing to mediation but worried that your claim might become time-barred?
Mediation is a process that is both informal and structured in nature. It is an attempt by the disputing parties, with the help of a neutral mediator, to reach an amicable agreement on how to resolve their dispute. It is imperative that this process is confidential and that the mediator cannot decide anything about your dispute afterwards. The mediation process is quicker and cheaper than court proceedings. However, it is more creative and tailored to the parties’ interests. Mediation is available in civil, commercial, labour, family and other property law disputes concerning claims that are freely at the parties’ disposal. It may also be employed in other disputes, provided the law does not exclude it. Above all, it must be possible during and before the dispute – i.e. even before court proceedings are brought. Mediation in court is used during litigation. Before litigation, the parties can engage a mediator from the Slovenian Bar Association or elsewhere.
If you agree to mediation but have not yet started court proceedings, you should not worry that your claim will be time-barred. If you have initiated court proceedings, neither the substantive nor the procedural deadlines are running. However, the procedural and substantive deadlines must not run even if you have not initiated court proceedings, but all parties have consented to mediation.
The Mediation in Civil and Commercial Matters Act governs mediation. Article 17 of the law states that the statute of limitation does not run during the mediation for claims being heard in mediation. Where the mediation ends without a settlement agreement, the statute of limitation period continues to run from the moment the proceedings end without a settlement agreement. The time elapsed before the commencement of the mediation shall count towards the statute of limitation period provided for by law. If a special provision lays down a time limit for bringing an action, that time limit shall not expire in respect of the claim which is being heard in mediation earlier than 15 days after the end of the mediation.
To illustrate this in a real-life example. Your company has a claim against another company and the claim will be time-barred in two weeks. You are reluctant to take legal action but would agree to mediation, and so would your debtor. If both parties agree to mediation (for example, under the auspices of the Slovenian Bar Association), then the statute of limitation period is suspended and does not expire until 15 days after the mediation concludes. The same applies, for example, if your neighbour is disturbing your property and blocking your access. You can bring an action for nuisance within 30 days of becoming aware of the nuisance and the perpetrator. However, if you consent to mediation, this time limit is suspended.
In disputes arising out of parent-child relationships and employment disputes arising out of the termination of an employment contract, the parties do not bear the costs of mediation. In all other disputes, the court will pay the mediation costs for the first three hours, except in commercial disputes where the parties bear the mediation costs. Out-of-court mediation costs (for example, under the auspices of the Slovenian Bar Association) are payable by the parties.
Mediation may end in a court or an out-of-court settlement. Alternatively, a party can withdraw its consent if a settlement is not possible.
Author: Dean Premec, Attorney-at-Law
