In the contemporary legal landscape, a dispute does not necessarily equate to a courtroom, a judge’s gavel, and proceedings protracted over several years. For the business sector and individuals alike, time and reputation are often more valuable assets than merely "proving one's truth." Consequently, Alternative Dispute Resolution (ADR) mechanisms are gaining increasing significance in the developed world.

In Georgia, the primary instrument in this regard is Mediation. The Law of Georgia on Mediation, adopted in 2019, alongside European standards, has elevated this institution to an entirely new level.

The following article serves as a comprehensive guide to help you understand: what mediation is, when to utilize it, the legal enforceability of the resulting agreement, and how to transform a conflict into cooperation.

 

1. What is Mediation? (Legal and Practical Definition)

 

In layman's terms, mediation is a negotiation facilitated by an intermediary. However, from a legal perspective, it is a strictly regulated, structured process.

According to Georgian legislation, mediation is a dispute resolution mechanism wherein one or more neutral, qualified persons (Mediators) assist conflicting parties in reaching a mutually beneficial agreement through dialogue.

 

The Role of the Mediator: How do they differ from a Judge?

 

This is the most fundamental distinction clients must understand:

• The Judge: Listens to the parties, assesses evidence, and renders a binding decision independently (which is often detrimental to one party).

• The Mediator: Does not examine evidence to adjudicate facts, does not determine who is right or wrong, and does not make a decision on the outcome. The mediator manages the process, asks the right questions, and facilitates the parties in finding a solution themselves.

Key Principle: In mediation, the decision-maker is you, not a third party.

 

2. The Four Cornerstones of Mediation: Core Principles

 

For mediation to be effective, it relies on four fundamental principles that render it unique:

 

2.1. Voluntariness

 

With the exception of rare cases provided by law (Mandatory Court-Annexed Mediation), participation in the process is voluntary. Any party may terminate the mediation at any stage, without any sanction, if they deem the process no longer serves their interests. 

 

2.2. Confidentiality (Strict Protection)

 

This is the "Golden Rule" of mediation. Everything stated within the mediation room—offers, admissions, emotional statements—remains strictly confidential.

• Legal Guarantee: The law prohibits summoning a mediator as a witness in court regarding information that became known to them during mediation. This affords parties the freedom to be candid.

 

2.3. Independence and Impartiality

 

A mediator cannot be a relative or friend of any party, nor possess any financial interest in the outcome of the dispute. If a conflict of interest exists, the mediator is obliged to disclose it and recuse themselves from the case. 

 

2.4. Good Faith

 

Parties are obliged to engage in the process in good faith, with a genuine desire to cooperate, rather than merely for the purpose of delaying time.

 

3. Mediation vs. Litigation: A Detailed Comparison

 

For businesses and citizens, a "Cost-Benefit Analysis" is crucial when making a decision. Let us review the details:

 

Time

 

• Litigation: Examining a case in the Court of First Instance takes an average of 6 months to 2 years. If appealed to Higher Courts, the process may last 3-5 years.
• Mediation: Private mediation may conclude in as little as 1 day. Court-annexed mediation is limited by law to 45 days (extendable by another 45 days upon mutual consent).

 

Costs

• Litigation: State Duty (3% of the dispute value), Attorney fees (increasing with duration), Expert fees.
• Mediation: Fees are fixed or hourly, typically totaling 40-60% less than litigation costs. Parties often split the mediator's fee.

 

Relationships

• Litigation: Litigation is inherently adversarial, one wins, the other loses. This often destroys partnerships.
• Mediation: Mediation focuses on a "Win-Win" outcome, allowing for the preservation or dignified conclusion of relationships.

 

4. Types of Mediation: Court-Annexed and Private Mediation

 

Mediation in Georgia operates in two main forms. It is important to distinguish between them:

 

A) Court-Annexed Mediation

 

This occurs when a lawsuit has already been filed. The Civil Procedure Code empowers (and in certain cases mandates) the judge to refer the case to a mediator.

• Mandatory Categories: Family disputes (excluding domestic violence), inheritance disputes, labor disputes, and small claims.

• Procedure: If the case is referred to mediation, the judicial proceedings are stayed.

 

B) Private Mediation

 

This is a fully voluntary process occurring outside the court system. Parties select a mediator themselves or apply to a mediation center.

• Usage: Frequently used in large commercial disputes where confidentiality is critical. Many companies include a "Mediation Clause" in contracts, obligating parties to attempt mediation before litigation.

 

5. The Mediation Process Step-by-Step

 

What happens behind closed doors? The process is flexible but generally includes the following stages:

1. Preparation Stage: Selection of the mediator, conflict of interest check, and signing the Agreement to Mediate.

2. Opening Statement: The mediator opens the session, explains the rules to the parties, and establishes a safe environment.

3. Parties' Presentation: Each party narrates their perspective of the problem without interruption.

4. Agenda Setting: The mediator identifies the specific issues upon which the parties must agree.

5. Individual Sessions (Caucus): A critical stage. The mediator meets with parties separately. Here, "Reality Testing" occurs. The mediator asks: "What happens if you fail to agree today? Is it worth spending 3 years in court?"

6. Negotiation: Parties adjust their positions and move closer to a consensus.

7. Drafting the Agreement: A written settlement agreement is drawn up, which carries legal force.

 

6. Enforcement Mechanism: Is the Agreement Binding?

 

Many view mediation skeptically: "What happens if we sign, but the other party fails to perform?"

The Law on Mediation provides a clear guarantee: A mediation settlement agreement is an enforceable act.

If one party breaches the agreement reached through mediation, the other party has the right to apply to the court. The court, without an oral hearing (via summary proceedings), recognizes the agreement and issues a Writ of Execution. Subsequently, the case is transferred to the National Bureau of Enforcement, and compulsory enforcement begins (seizure of accounts, property auctions, etc.), exactly as in the case of a court judgment.

 

7. In Which Disputes is Mediation Most Effective? (Case Studies)

 

Business Disputes (B2B)

• Scenario: A dispute arose between two companies regarding a breach of construction deadlines.

• Result: Litigation would have halted construction, causing losses for both. Through mediation, they restructured the payment schedule and deadlines; construction continued, and the partnership was saved.

Family Disputes

• Scenario: Divorce and determination of visitation rights/custody.

• Result: The mediator helped the parents realize that a peaceful environment was in the child's best interest. A schedule suitable for both was created, sparing the child the traumatic experience of court proceedings.

Labor Disputes

• Scenario: Employee termination and claim for compensation.

• Result: The company avoided negative PR and court costs, while the employee received fair compensation and a reference for future employment.

 

8. How Can Our Law Firm Assist You?

 

Although mediation is less formal, it still requires legal expertise. The text of the agreement must be drafted to ensure it is not difficult to enforce in the future.

Our services include:

1. Case Assessment: We advise on whether mediation is a viable option for your dispute.

2. Mediator Selection: We assist in identifying a qualified mediator from the database of the Mediators Association of Georgia.

3. Representation: We protect your interests during the mediation process and help develop a negotiation strategy.

4. Drafting the Settlement: We prepare a legally sound document that fully mitigates your risks.

 

Conclusion

 

Mediation is no longer a concept of the distant future; it is the choice of modern, pragmatic individuals today. It offers you the opportunity to take the reins of your problem into your own hands, rather than delegating your fate to others.

If you are looking for a way to resolve a dispute quickly, confidentially, and with minimal expenditure, mediation is the optimal solution.