Interview with Vladimir Furman and Yuliya Petrenko for Magazine “Accountant and Law”: Mediation as a Modern Mean for Settlement of Conflicts

-         When did the definition “mediation” appear for the first time?

Before January 2011, the term “mediation” was not in use in the legislation of the Republic of Kazakhstan.  As of the date of this interview, the term “mediation” can be found only in two legislative acts.  These are the Law of the Republic of Kazakhstan “On Mediation” and the Law “On Introduction of Amendments and Changes into Certain Legislative Acts of the Republic of Kazakhstan on Mediation Issues”. Both laws were signed by the President of the Republic of Kazakhstan on 28 January 2011 and will enter into force as from 5 August 2011. Accordingly, the term “mediation” appeared in the legislation of Kazakhstan for the first time a month ago and is new to it. Mediation as a means for settlement of certain disputes, however, existed in one form or another (depending on a level of development of a society) and was employed by many nations from ancient times, when a dispute was settled by the most reputable and wise mediator (chieftain, flamen, and the like). Elements of mediation existed in the traditional Kazakh society. According to researches the Court of the Biys, as a democratic institute of justice, existed for a period from the 15th to the beginning of the 20th century. One of the main objectives of a biy elected by an aul was reconciliation of conflicting parties. L.A. Slovokhotov, researcher of the beginning of the 20th century, determined the Court of the Biys as “loved by nation”.

Unfortunately, during the Soviet period in Kazakhstan and the USSR, in general, mediation as a legal institute did not receive further development despite the fact that the mediation institute existed in many countries, and mediation as the dispute settlement institution continues to be used in countries with reputable legal institutes, such as the USA, France, Germany and many others.  It is fair to say that rules of some arbitration institutions applicable in the territory of the Republic of Kazakhstan contained provisions on mediation long before adoption of the Law on Mediation.  Possibility to resort to mediation as a dispute settlement procedure in arbitration courts is, however, limited as such procedure can apply only in relation to disputes arising out of civil contracts made between natural persons and legal entities.

In Kazakhstan, the mediation institution (especially in the context of the criminal procedure) was extensively discussed for the first time during International Conference “Alternatives to Criminal Prosecution and Protection of Human Rights in Central Asia” held in Almaty in November 2004.  Back in 2004, according to one of the participants of the above conference, mediation was viewed as a “foreign exotic phenomenon” by many of Kazakhstani participants of the conference.  It was hard to imagine that already in 2009 introduction of mediation procedures into the national criminal and civil procedure would be initiated. This initiative was advanced at the highest political level in the form of instructions given by the President of the Republic of Kazakhstan at the 5th Congress of Judges on 18 November 2009 and was stipulated in the Presidential Decree “On Measures for Improving Efficiency of the Law-Enforcement Activities and Court System in the Republic of Kazakhstan”.

-         What is mediation? What is the legal meaning of this term?

According to the Law of the Republic of Kazakhstan “On Mediation”, mediation is a dispute (conflict) settlement procedure between parties to a dispute with the assistance of a mediator (mediators) for purposes of reaching a mutually acceptable solution carried out upon voluntary consent of the parties. Objectives of mediation are (1) achievement of an option for dispute (conflict) settlement acceptable by both parties to the mediation; and (2) reduction of a conflict level between the parties. To put it simply, the main objective of mediation is to determine genuine interests and needs of parties to a dispute and settle the dispute in such a way that a solution (which can be made only by the conflicting parties with the assistance of a mediator) is satisfactory to all parties to the conflict.  This eventually excludes further application to court, and if mediation is carried out during court proceedings, termination of the proceedings.

Adoption of the Law on Mediation gives grounds to believe that courts’ workload may be reduced with the development of mediation as an alternative means for dispute settlement.

-         In which areas (economic, criminal, etc.) is application of mediation justified?

According to the Law on Mediation, the mediation procedure can apply not to all and any disputes (conflicts) but only to disputes arising out of civil, labour, family and other legal relations involving natural persons and/or legal entities as well as to cases adjudicated in criminal proceedings on misdemeanor and crimes of medium gravity, unless otherwise is provided for the laws of the Republic of Kazakhstan.

The Law also contains a norm that directly prohibits application of the mediation procedure to disputes one party to which is a state body as well as to cases on corruption crimes and other crimes against interests of the state service and state administration. In our view, application of mediation in all the areas allowed by the Law is fairly justified, and we consider that from the outset rights provided by the Law on Mediation will be exercised, and all possibilities of the mediation procedure will be most frequently employed, in disputes governed by civil, labour and family law as well as in criminal proceedings cases stipulated by the law.

-         Who is eligible to act as a mediator? Can non-professionals act as mediators? What is the main function of a mediator? What is the primary objective of the mediator?

 

Speaking of the mediation procedure as a legal institution, it should be emphasized that participants to mediation are parties to a dispute, third parties (in case if the dispute affects or may affect their interests), and a mediator.

The Law on Mediation envisages that a mediator can carry out its activity both on a professional basis (professional mediator) and a non-professional basis. Mediators (professional and non-professional) can be persons who meet the requirements enlisted in the Law. The main function of a mediator is mediation between parties to mediation, giving recommendations on settlement of a dispute. At the same time, such activity must be carried out in strict observance of rights and interests of parties to mediation. The main objective of the mediator is such interaction between parties to mediation that eventually results in entering into a settlement agreement approved by court, if such agreement is made in the course of civil proceedings and, in certain cases, in criminal proceedings.

-         Do mediators need to have knowledge in medicine, psychology?

Irrespective of the law (civil, labour, family or other) governing a dispute, each dispute is specific not only in terms of its legal nature and grounds on which the dispute has arisen. Specificity of the dispute also depends on the sphere of activity of parties to a dispute. Therefore, speaking about knowledge and skills that, in our opinion, the mediator must have it should be noted that irrespective of whether the mediator is a professional or a non-professional mediator, he/she needs to have, as a minimum, knowledge of fundamentals of law, negotiating skills and experience as well as profound knowledge in some spheres of human activity, for instance, in psychology, medicine, pedagogy, construction or other areas.

It is obvious that if parties in the course of civil proceedings choose a mediator who does not have sufficient knowledge in civil law and aviation equipment for purposes of settlement of a dispute on quality of an aircraft, as a financial leasing subject, it is unlikely that such mediator would be able to understand peculiarities of performance of obligations by the parties and specifics of liability for failure to perform respective obligations as well as well-foundedness of claims as to quality of the aircraft, as a leasing subject, and as a result have parties to the mediation enter into such settlement agreement that will eventually be approved by court.

 

-         How are results of successful work of a mediator assessed?

The question on assessment of mediator’s activity is interesting. There is no doubt that in the sphere of mediation, as in any other sphere of human activity, there will be first-class mediators and highly professional specialists that will be successful. However, there will also be mediators simply referred to as “member of association (union) of mediators”.

Assessment of results of the mediators’ activity, not mediators themselves, is a fairly complicated issue. Results of the mediators’ activity is conditional upon many factors depending both on the mediator, such as mediator’s experience, wisdom, level of legal knowledge and knowledge in the sphere of activity in which the dispute has arisen, ability to comprehend and negotiate, as well as on many other factors, and the conflicting parties. Here, one of the substantial aspects is behaviour of parties to the mediation and compromises that the conflicting parties are ready to make for purposes of finding a mutually acceptable solution.

-         How expenseve are services of a mediator?

Mediators’ job is not easy and must be compensated properly. It would be possible to objectively speak about mediators’ job in approximately two years when there is practice on application of the Law on Mediation and accordingly practice on formation of prices for mediators’ services that undoubtedly be affected by “appetite’ of craftsmen of mediation.

-         Law on Mediation is aimed at introducing in Kazakhstan the mediation institution as an alternative means for dispute settlement. What is your expert opinion about this Law? What are the goals for which this document has been elaborated? Please make some analysis of this normative legal act.

 

Some lawyers express an opinion that settlement of disputes by means of mediation in the end of the day can substantially change the system of justice and even improve moral environment in the country. We want to hope this will be the case and mediators will be able to help parties to a dispute forget previous hard feelings, troubles and find themselves on the same side of the fence because settlement of disputes by means of mediation gives the parties an opportunity to settle the dispute themselves, at their own discretion, in their own interests and on mutually acceptable conditions, and, what is important, according to the law.

There are also hopes that in foreseeable future the Law on Mediation can offload courts allowing them to focus on genuinely complicated cases where conflicting parties have not managed to find consensus. It is common knowledge that after a judgement has been rendered by court there is always a party to a dispute that is not happy with the judgement or a party with a gall left in mind. After completion of court proceedings, people who have found themselves on different sides of the fence do not necessarily become enemies but their previous relations get ruined. This is particularly typical for family and marital relations.

It is unfortunate that this Law was not adopted earlier because despite the fact that the Code of Civil Procedure and the Civil Code of the Kazakh SSR contained (and similar codes of the Republic of Kazakhstan contain) provisions allowing parties to settle a civil dispute before filing it to court by means of novation (i.e. by substituting “old” relations by “new” ones), and, if the dispute is already adjudicated in court, to settle the dispute in court by means of a settlement agreement, the Law on Mediation significantly expands the category of civil relations that can be settled through the institute of mediation.

-         In your opinion, does the Law on Mediation need to be amended or changed?

Speaking about stability, i.e. inalterability of the Law, it should be noted that even the US Constitution that serves as example of stability to a certain extent, has been amended. What can one say about the Law that has been adopted for the first time in the history of the state, even if we calculate in the Soviet period? This Law has the same fate as the other laws adopted after Kazakhstan has gained independence. It goes without saying that the Law on Mediation will be refined and subject to subsequent amendments and changes.

In our personal view we would like to draw a parallel between a doctor and a mediator. If a person has problems of medical nature such person approaches not any doctor but a particular specialist, for instance, an ophthalmologist.  When there are problems in legal relations that can be settled through mediation, there are not any guarantees that a chosen professional mediator specializes in settlement of disputes in exactly those areas in which the mediator’s knowledge is helpful for settlement of a particular dispute, even taking into account the provision of the Law on Mediation allowing parties to the mediation to set additional requirements for the mediator.

We understand that not everybody will agree with our view, yet we gather that a mediator can not be omni-purpose. A mediator can certainly have rich experience, authority and wisdom, be a good negotiator, however, for settlement of disputes, the mediator should know the law governing a disputed relationship and have knowledge in the sphere of activity in which the dispute has arisen. Accordingly, we would like to see in the Law a provision on specialization of mediators.

Pursuant to Article 9 of the Law the following persons are not eligible to be mediators:

-         Persons authorized to perform state functions or equivalent;

-         Persons recognized by court as legally incompetent or partially legally competent pursuant to the procedure established by the law;

-         criminally prosecuted persons; and

-         Persons having conviction that has not expired or not been expunged pursuant to the law.

We consider that the above list of persons who are not eligible to be mediators will be expanded. You would agree that a spouse of an akim of any level or a spouse of a judge who adjudicates a case parties to which are resorting to mediation are unlikely to be eligible to act as mediators.

The next important issue from the legal regulation perspective is a problem of enforcement of a settlement agreement made between the parties as a result of settlement of a dispute. The Law on Mediation contains a general provision according to which a settlement agreement shall be enforced by parties to mediation voluntarily within a term provided for by such agreement.  Irrespective of whether a settlement agreement has been made before adjudication of a civil case in court or in the course of civil proceedings, the agreement constitutes a transaction aimed at establishment, change or termination of civil rights and obligations of the parties to it. In case of failure to perform or improper performance of the settlement agreement the party to mediation in breach of the agreement shall be liable pursuant to the procedure set forth by the laws of Kazakhstan.

Accordingly, in case of failure to perform or improper performance of a settlement agreement in absence of the Law on Mediation provisions regulating enforcement of settlement agreements made in the course of mediation, parties to mediation may (and will most likely) face problems of enforcement of such agreements. In other words, a new dispute may arise that in our view would not facilitate achievement of one of the objectives of the Law, which is reduction of the courts’ workload.

From our perspective, in order to ensure enforcement of settlement agreements it is expedient to include in the Law a provision on possibility to notarize settlement agreements upon mutual agreement of parties to it.  In this case notarized settlement agreements has effect of an enforcement document and can be mandatorily enforced without resorting to courts pursuant to the procedure provided for by the laws on enforcement.

First of all, such provision would conform to the contractual nature of the mediation procedure, including its ultimate result. Second, legislation of the Republic of Kazakhstan provides for notary certification of settlement agreements on alimony and agreements on division of common property of spouses. To carry out the above mechanism on enforcement of settlement agreements, it is necessary to introduce relevant amendments into the Law of the Republic of Kazakhstan “On Enforcement and Status of Enforcement Officers”.

-         Does the Law on Mediation allow to control corruption in Kazakhstan?

We gather that the Law on Mediation would certainly not and cannot allow creation of conditions for control over corruption in the country. All this Law can do in relation to corruption is to create one more condition for its minimization.

-         So far as known, understanding of the essence of mediator’s activity and advantages of mediation compare to other means of dispute settlement is yet to be formed? From your perspective, how an information campaign explaining the term “mediation” should be carried out in the country?

 

In our view, an information campaign explaining the meaning, essence and consequences of mediation should be aimed at all citizens, as potential parties to mediation, as well as at persons who may act as mediators on a non-professional ground (i.e. potential non-professional mediators) pursuant to requirements provided for by the Law on Mediation. The best information campaign and a means for explaining “what is mediation” would be a TV program, similar to a Russian TV program “Officer of Justice” that would demonstrate some stages of a successfully completed mediation procedure.

Авторы: Фурман В. и Петренко Ю.

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