Alternative dispute resolution (hereinafter: ADR) refers to any process in which the parties to a dispute attempt to reach an agreement without using conventional litigation procedures, with the help of a neutral third party. The main types of ADR processes are mediation and arbitration, but other ADR techniques also exist, such as conciliation, expert appointments, or early neutral evaluation of the dispute.
Arbitration
Arbitration is the form of out-of-court dispute resolution that is most similar to judicial dispute resolution. By concluding an arbitration agreement, the disputing parties agree to submit the dispute to one or more arbitrators and exclude the jurisdiction of the court. An arbitrator is a neutral third party who, based on the evidence and arguments presented, issues a final and legally binding decision.
1. Advantages of Arbitration
Compared to judicial procedures, arbitration offers several advantages. The process is not public, meaning that business secrets or sensitive data do not become public. Arbitration is often faster than court proceedings, which can drag on for years. The parties themselves select the arbitrators, which means they can appoint experts with specific knowledge and experience and establish the rules of the procedure. While the costs of arbitration may vary, it is often cheaper than prolonged court procedures.
2. Disadvantages of Arbitration
Despite its many advantages, arbitration also has some drawbacks. One of them is the limited possibility of appealing an arbitral award, which may affect the parties' rights in the event of an unfair decision. Arbitrators do not have the same coercive powers as judges, meaning they cannot directly force witnesses to cooperate or impose compulsory measures. Additionally, arbitration does not create judicial precedents, which can make predicting future decisions more difficult.
3. Institutional and Ad Hoc Arbitration
Parties can choose ad hoc arbitration, which is established based on an agreement between the parties and arbitrators for a specific dispute, with the parties themselves designing the rules of procedure, or opt for institutional arbitration, which takes place under the auspices of an arbitration institution and provides administrative support (e.g., ECDR). Institutional arbitration offers greater legal security, while ad hoc arbitration offers more flexibility.
Mediation
Mediation is a process in which a neutral third party, the mediator, helps the parties voluntarily reach a resolution of the dispute. Mediation can take place as part of a court-based program or entirely independently. Unlike arbitration, the mediator does not make a decision on the dispute but only helps the parties find a mutually agreeable solution. Mediation is used as an alternative dispute resolution method in various legal fields, such as civil, commercial, family disputes, and labor-law procedures.
1. Advantages of Mediation
One of the key advantages of mediation is the assistance of a neutral third party who ensures impartiality and encourages the parties to seek a joint solution. Mediation is quick, cost-effective, and ensures confidentiality, as all data related to mediation is confidential unless the parties or the law provide otherwise.
Furthermore, mediation allows flexibility, as it is not as strictly bound by procedural rules as judicial procedures. In mediation, the parties may mutually agree to have the dispute resolution agreement drawn up as an enforceable notarial deed, settlement before the court, or an arbitral award based on a settlement. The process can be concluded in just one or two meetings, meaning faster resolution of the dispute and lower costs.
2. Mediation in Courts
Mediation is available at 64 courts across Slovenia, including District, Regional, and Higher Courts. It is conducted in various types of procedures, such as civil, commercial, family, and labor-law disputes.
3. Who Are the Mediators?
Mediators involved in court programs are professionals such as lawyers, judges, psychologists, and social workers. All mediations in courts are conducted by qualified mediators who are listed in the registry of mediators at the courts. Mediator training is regulated by the Alternative Dispute Resolution Act (ZARSS).
4. Impact of Mediation on Judicial Procedures
Mediation has a positive impact on the burden on courts, as it allows for faster dispute resolution and reduces the number of court cases. If mediation does not lead to a resolution, the procedure continues in the regular judicial process, ensuring that the entire process is not significantly delayed, as mediation lasts no longer than three months.
5. Mediator Training
Mediators participating in court programs must undergo appropriate training, which includes at least 40 pedagogical hours and a final exam. Training programs are available through the Center for Education in the Judiciary, Ministry of Justice.
Early Neutral Evaluation of the Dispute
Early neutral evaluation (ENE) is a process in which an independent expert analyzes the factual and legal aspects of a dispute and assesses the parties' chances of success in a possible judicial, arbitration, or other procedure. The goal of this process is to help the parties better understand the strengths and weaknesses of their claims, enabling them to negotiate more effectively, pursue mediation, or seek settlement solutions. The evaluation may also include predictions about the potential monetary amount the parties might receive and the likelihood of success in a litigation process. The process is voluntary and confidential, and the parties can select qualified neutral evaluators, such as retired judges or experts from various fields.
The ENE process is particularly suitable for disputes involving complex legal or technical issues, where an expert evaluation could help focus the dispute on key issues. It is also useful when parties cannot continue negotiations due to a lack of information or unrealistic expectations. The dispute evaluation may begin at the request of one or more parties, and the court may suspend the litigation process during the ENE process. After the evaluation is concluded, the parties can proceed to mediation, arbitration, or a combination of both for the final resolution of the dispute.
Conclusion
Alternative dispute resolution offers many advantages over traditional court procedures. The choice between arbitration, mediation, and early neutral evaluation depends on the specific circumstances of each case. Arbitration is suitable for disputes requiring a legally binding decision, mediation is ideal for seeking settlement solutions, and early neutral evaluation is useful for assessing the legal strength of a case. Parties opting for alternative dispute resolution must carefully weigh the advantages and disadvantages of each method and choose the one that best suits the goals they wish to achieve.
