Mediator in Bosnia and Herzegovina

In Bosnia and Herzegovina, mediation is regulated at state level by the Law on Mediation Procedure (in Bosnian) (Zakon o postupku medijacije, Official Gazette of BiH, No. 37/04), which applies in both entities and in the Brčko District. Mediation affairs, including training, the examination, the register of mediators and the tariff, have been entrusted to the Association of Mediators in Bosnia and Herzegovina, with its seat in Sarajevo. The first mediators in BiH began working in 2007, and attorney Azur Prnjavorac completed the training and was entered in the register of mediators in 2010. That twofold role, of an attorney who conducts litigation on a daily basis and of a mediator who knows how a dispute is brought to an end without a judgment, allows a realistic assessment of which dispute is worth litigating before a court and which is better resolved by settlement.

What mediation is and how it differs from litigation and arbitration

Under Article 2 of the Law on Mediation Procedure, mediation is a procedure in which a neutral third person, the mediator, assists the parties in their endeavour to reach a mutually acceptable resolution of the dispute, whereby the mediator may not impose a solution on the parties. That is the key difference from litigation and arbitration: a judge and an arbitrator decide instead of the parties, whereas the mediator conducts the discussion, separates positions from actual interests, identifies common ground and helps the parties to shape the arrangement themselves. At the request of a party made in a separate session, the mediator may propose options for a resolution, but not the resolution itself (Article 23), and may not give promises or guarantee a result (Article 22).

Mediation is suitable for the majority of civil and commercial disputes: disputes arising from contracts and the collection of claims, disputes between co-owners and heirs, disputes concerning compensation of damage, disputes between companies and their partners, neighbour and property disputes, as well as disputes with a foreign element in which litigation in BiH would be lengthy and costly. It is not suitable where an urgent court measure is required, where one party plainly does not want a resolution, or where the subject matter of the dispute is a right of which the parties may not freely dispose.

Principles of mediation under the Law on Mediation Procedure of BiH

In Articles 6 to 9 the Law lays down four principles. Voluntariness means that the parties institute the procedure and participate in reaching the agreement voluntarily, and that each party may terminate the procedure at any time (Article 19). Confidentiality means that statements made by the parties in mediation may not be used as evidence in any other proceedings without the consent of the parties, and that the mediator keeps information obtained in separate sessions secret (Article 7); third persons attending the procedure must undertake in writing to observe confidentiality (Article 16). Equality of the parties means that both sides have equal rights in the procedure (Article 8). Neutrality means that the mediator mediates without any prejudice as regards the parties and the subject matter of the dispute (Article 9), and may not act where he has a personal, family or business relationship with a party (Article 28), unless the parties, having been informed of those circumstances, expressly consent thereto (Article 29).

How the mediation procedure runs, step by step

The parties may agree to resolve the dispute by mediation before the institution of court proceedings or after it, up until the closing of the main hearing (Article 4, paragraph 1). If mediation has not been attempted before the statement of claim, the judge may propose mediation to the parties at the preparatory hearing (Article 4, paragraph 2 of the Law on Mediation Procedure and Article 86 of the Law on Civil Procedure of the FBiH), and the parties may make the same proposal by mutual agreement up until the closing of the main hearing. The parties choose the mediator jointly from the list of the Association; if they cannot agree, the mediator is appointed by the Association (Article 5).

The procedure is instituted by a written mediation agreement (contract) signed by the parties and the mediator (Article 10). The agreement must contain particulars of the parties and their attorneys-in-fact, a description of the dispute, a statement accepting the principles of mediation, the place where it is to be held, provisions on costs and the mediator's fee (Article 11). If litigation is pending, the parties submit a copy of the agreement to the court, and the court adjourns the hearing for a period of no more than 30 days (Articles 13 and 14). Natural persons must attend in person, and may be accompanied by attorneys-in-fact whose acts, including the signing of the settlement agreement, have the same effect as the acts of the party itself (Article 15). The parties submit all relevant documentation to the mediator in good time (Article 17). At the beginning of the session the mediator informs the parties of the purpose and course of the procedure (Article 18), then conducts joint and, where necessary, separate discussions with each party (Article 21), and is obliged to conduct the procedure without delay (Article 20). In practice most mediations are concluded in one to three sessions, over the course of a few days or weeks, whereas litigation before a court in BiH as a rule lasts for years.

The settlement agreement: the force of an enforceable document

Where the parties, with the mediator's assistance, find a resolution, a written settlement agreement is drawn up and signed immediately (Article 24). That agreement has the force of an enforceable document (Article 25), which is the most important practical advantage of mediation: if one party fails to perform the obligation assumed, the other party need not conduct fresh litigation, but files with the competent court a motion for enforcement on the basis of the agreement. Where litigation is pending, the parties are obliged to inform the court of the outcome and to submit the agreement immediately, and at the latest by the adjourned hearing (Article 26). If no agreement is reached, each party may terminate the procedure, and the mediator records this in a separate instrument which he submits to the court (Article 19); the litigation then continues, without any detriment to the parties' procedural position, because nothing said in mediation may be used as evidence.

The costs of mediation compared with litigation

The mediator's fee and the reimbursement of his expenses, in the amount prescribed by an act of the Association, as well as the other costs of the procedure, are borne by the parties in equal shares, unless otherwise provided in the mediation agreement (Article 30). In litigation the party that loses the dispute bears the court fees on the statement of claim and on the judgment, the costs of expert examination, its own attorney's costs and the costs of the opposing party under the attorney tariff, and proceedings through two or three instances last for years. Mediation as a rule costs a fraction of those amounts and is concluded within weeks, while the parties retain control over the outcome and may agree solutions that a court could not award, for example payment by instalments, set-off, the continuation of business cooperation, or a division of property in a manner which both sides consider fair.

Mediator and attorney in the same office: how we help

The office offers two distinct roles which are never mixed in the same case. As a mediator, attorney Azur Prnjavorac conducts the mediation procedure between parties who have chosen him jointly, neutrally and without representing either of them. As an attorney, he represents his client in mediation conducted by another mediator: he prepares the documentation and the negotiating position, attends the sessions as attorney-in-fact, verifies whether the proposed agreement is enforceable and legally sustainable, formulates the settlement agreement so that it may be enforced directly, and where necessary informs the court of the outcome. Attorney Azur Prnjavorac is also an authorised conciliator between spouses prior to divorce under Articles 45 to 50 of the Family Law of the FBiH, which is a separate procedure of pre-divorce conciliation (posredovanje) under the Family Law of the FBiH, distinct from mediation under the Law on Mediation Procedure.

If you wish to check whether your dispute is suitable for mediation, send a short description of the dispute and the documentation by email. We respond with an assessment of whether mediation is expedient, what the possible outcomes are and what costs are to be expected as compared with court proceedings. Related pages: civil litigation in BiH, disputes, litigation and arbitration and commercial disputes.

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