Mediation in business transactions

The effectiveness of the institution of mediation is determined primarily by the parties and their representatives (whose selection is also the responsibility of specific people). Mediation will help to resolve conflicts amicably if the parties themselves create such an opportunity, by adopting a mature, honest, non-confrontational attitude and choosing a language that is free of domination and violence (long live NVC and its techniques!).

The essence of mediation is to create a safe harbour for the conflicting parties to resolve their dispute amicably and discreetly.

One of the guarantees of this institution is the secrecy of mediation. The provision of Article 183(4) § 1 of the Civil Procedure Code establishes the principle of confidentiality of mediation, which consists of two elements. Firstly, mediation proceedings are not public, i.e. they take place to the exclusion of third parties, unless they have been expressly authorised by the parties to participate in the mediation. Secondly, both the mediator as well as the parties and other participants in the mediation are obliged to keep confidential all information of which they acquire knowledge in connection with the mediation. This is to ensure a relaxed mediation atmosphere in which the parties can conduct settlement discussions without fear of sensitive information being made public or strategic use of settlement proposals in court. However, the parties may exempt the mediator, as well as the other participants in the mediation, from the obligation of confidentiality.

Similarly, the confidentiality of mediation, as a solution to protect the parties, was commented on by the WSD in its ruling of 27 February 2016. (WSD 58/15), according to which: “the shape of mediation secrecy given to it by the cited provision of the Civil Procedure Code unambiguously indicates that this secrecy protects not so much or not only the confidentiality of information or positions communicated in the course of mediation itself but, in the first instance, the institution of mediation itself as an institution that allows relevant information or positions to be presented in the context of a dispute without the risk of “transferring” them to court proceedings and making use of them in litigation, in particular use that is unfavourable to the other party to the dispute. Reading the secrecy of mediation in this way, it must be stated that in order to determine whether there has been a breach of the secrecy of mediation, it is indifferent whether a certain position, proposal was made, articulated at an earlier stage of the dispute. What is relevant is only whether they were part of the mediation proceedings, whether they were made, raised in the mediation proceedings and whether there was an unauthorised disclosure of this fact.”

The statutory restrictions on mediation secrecy impose a duty of care on the parties in situations where disclosure of, for example, the provisions of a mediation settlement agreement will be required by law. One such situation is the obligation to publicise material provisions of a mediated settlement agreement in a current report on disclosure of inside information within the meaning of Article 7 MAR. The aforementioned necessity will arise in particular when the party to the mediation settlement is a public company for which the conclusion of the relevant agreement leads to inside information. With regard to the aforementioned circumstance, the parties should (preferably already in the settlement agreement) allow an exception to mediation secrecy and contractually legalise the public disclosure of certain provisions of the settlement agreement or its entire content.