What is mediation?
Mediation is an internationally widely used ADR method, where the parties of a dispute attempt, on a voluntary basis and with the assistance of a trained neutral third party (the mediator), to negotiate and reach a mutually acceptable and viable solution. In Greece, mediation is regulated by Law 4640/2019 (it was first introduced in 2010) and constitutes an alternative means in which parties can access justice, outside of court.
Why choose mediation?
Mediation is one of the most effective methods to resolve disputes in the financial service and commercial sectors, like loan/debt restructuring, disputes arising from the provision of investment and insurance services etc.
There are many advantages to mediation, especially in disputes arising in the financial services sector:
Α. Time-efficiency and cost effectiveness
Mediation saves both times and costs, since is a much quicker and a less expensive process than court processes. Depending on the issues involved in the dispute, a mediation process might last only a few days, while disputing parties can avoid significant court fees. Especially in banking and finance-related disputes, time and cost are two main elements that parties want to minimize, in order to avoid uncertainty, which usually adversely affects their business operations.
Β. A voluntary process of reaching viable agreements
Parties enter the mediation process on a voluntary basis and in good faith, aiming to find a solution to their problem through their own decisions (unlike a court or arbitration process, where a judge or an arbitrator respectively, decides for the parties and imposes a binding decision). Especially in banking and finance-related disputes, the voluntary nature of mediation implies that parties involved sincerely want to negotiate and to reach a mutually beneficial solution. Most importantly, the mediation agreement is usually a well-structured agreement that takes into consideration realistic and reasonable parameters and assumption.
C. Confidentiality, impartiality and effectiveness
Mediation creates a neutral and impartial environment that provides privacy, safety, builds trust and encourages disputing parties to negotiate, on equal terms, a mutually acceptable agreement. The mediator (who has no interest on the outcome of the dispute) acts as a catalyst between disputing parties facilitating their communication and actively assisting them to reach an agreement. Furthermore, the mediator ensures confidentiality of all information disclosed and he/she will never disclose confidential information to anyone, without permission. Accredited mediators have received special training and are registered in the official list of the Greek Ministry of Justice. Especially in banking and finance-related disputes, the mediator has expertise, deep knowledge and significant relevant experience.
D. Enforceability
The final written Mediation Settlement Agreement, if parties reach an agreement, is fully executed (enforceable title) and can be used for the registration or cancellation of mortgages. The enforceability of the final Mediation Settlement Agreement implies that if a party fails to comply with the terms the mediated agreement, then the other party has the right to immediately initiate enforcement proceedings.
On the other hand, if the parties fail to reach agreement, they can pursue their dispute through a court.
Ε. Viable business and intrapersonal relationships
Mediation, especially in banking and finance-related disputes, helps parties to improve their commercial bonds and to strengthen their business relationships. Even if these relationships have been damaged, mediation can create the conditions in with trust and confidence can gradually start to rebuild. Instead, going through the courts is usually more stressful, causing considerable damage in business and interpersonal relationships.
Mandatory Initial Mediation Session
According to Law 4640/2019 (articles 6 & 7), for certain categories of disputes, parties are obligated to attend an introductory mediation session with their respective lawyers (compulsory mediation):
- Cases under the Single-Member Court of First Instance (of value more than €30,000)
- Cases under the Multiple Member Court of First Instance
During the mandatory initial mediation session, the mediator informs the parties about the mediation procedure and the possibility to resolve their dispute outside of court.
If both parties agree to resolve their dispute through mediation, they can sign a Mediation Submission Agreement.
If the parties don’t choose to go through mediation, then the mediator signs the minutes of the session indicating the failure to continue through mediation. If a party chooses to go through the court (initiating an action), then the minutes shall be submitted to the court along with the briefs, otherwise their case is rejected as inadmissible.
Our Center provides all necessary administrative and support services to facilitate the mandatory initial mediation session.