Mediation in Bosnia and Herzegovina: A Second Application

A. Statutory Revisions

The first set of recommendations relates to statutory changes. As mentioned above, there are a few important amendments that would greatly improve the BiH Mediation Law. The law should clearly define “party” so that litigants understand the extent of the law’s application.¹⁹⁰ It is advisable that the definition of party include those individuals or entities who have been named but not served, as well as those (perhaps by consent) unnamed but with a direct stake in the dispute.

Some important confidentiality provisions also need to be improved.¹⁹¹ The confidentiality of documents, not just oral statements, needs to be protected. One way is to rewrite Article 7 and follow the simple UNCITRAL Model language, “all information relating to the conciliation proceedings shall be kept confidential . . .”¹⁹² This would also guarantee the confidentiality of mediator statements during the process, which is not currently addressed in the BiH Mediation Law. The confidentiality of settlement discussions in mediation proceedings must be further clarified.¹⁹³ While the best interpretation of the current law may be that settlement discussions or offers are indeed included within the definition of a party’s protected mediation “statements,” it is advisable to make this more explicit. The best way to do this is to adopt the UMA’s approach and to provide an expansive definition of “mediation statements.” The UMA defines confidential mediation communication as, “a statement, whether oral or in a record or verbal or nonverbal, that occurs during a mediation or is made for purposes of considering, conducting, participating in, initiating, continuing, or reconvening a mediation or retaining a mediator.”¹⁹⁴ The BiH law could use this and add to the end, “including all statements relating to settlement discussions.”

The legislature should also consider a few important changes to the procedural provisions. The law should require conflict of interest waivers to be in writing.¹⁹⁵ In addition, it should more narrowly limit the contents of the mediator’s termination submission to the court.¹⁹⁶ This could be accomplished by adding a few words to Article 19 clearly limiting the content of the submission to “the belief on the part of the mediator that any further proceedings are not useful.” The BiH Ministry of Justice or HJPC could develop a mediation termination form for use in all courts, containing standard, straightforward language that would simply require a signature and identification of parties, case numbers, and dates. When combined with a provision requiring all mediators to use the form, parties will be sufficiently protected against prejudicial submissions.¹⁹⁷

More importantly, the law must be amended to allow mediators to offer settlement options, sua sponte.¹⁹⁸ The current language unduly restricts mediators to a very limited, facilitative role, unless one of the parties requests, during a separate interview, that the mediator propose resolution options.¹⁹⁹ An amendment could be made by striking the first part of the sentence in Article 23, which states “Upon the request of a party, brought up during a separate interview, the mediator may propose options . . . “ This would eliminate the need for the mediator to wait for a party to request that she propose solutions and instead allow mediators to tailor the roles they play to the needs of the case. Ultimately, it would improve the settlement rate.

Regarding the automatic enforceability of settlement agreements, the legislature should consider adding an article providing for a court approval requirement of mediated settlements before they receive the Article 25 automatic enforceability characteristics. This would protect the system from the anomalous instances whereby it is charged with enforcing a provision that is contrary to public policy.²⁰⁰ The current rule not only allows for potentially awkward results, but it is also inefficient. Currently, a case may be dismissed based on a settlement that is only reviewed years later and found to be contrary to public policy—after one party breaches and claims this as a defense to enforcement. As a result, the parties might end up back in court disputing the enforcement issues, the original issues, and, perhaps, hold an additional claim against the mediator. Furthermore, in some cases, the current rule will not protect public policy at all. There is no guarantee that the offending agreement will ever be breached. A case might be dismissed based on settling parties agreeing to, for instance, involuntary servitude. If the agreement is never breached, the courts have lost any control over the matter.²⁰¹ This is not an effective or efficient method of protecting public policy.

With the proposed approval requirement, the presiding court could raise any public policy issues immediately after settlement, thereby allowing for a better chance of agreement revision, as opposed to dealing with it in an adversarial disposition potentially years later. This proposal is not without local precedent. The BiH Revised CCPs provide for court review of “judicial settlements” and grant judges the power to strike all or part of those settlements.²⁰²

Finally, Article 25 should be amended to clarify whether a prelitigation, mediated settlement is entitled to automatic enforceability. Some well-run jurisdictions do provide for different treatment depending on whether a case has been filed.²⁰³ However, as mentioned above, this creates an incentive to sue.²⁰⁴ That could significantly raise the costs of settlement. Since BiH parties face relatively high legal fees,²⁰⁵ this is an unwarranted burden. Furthermore, the BiH court system is already struggling with inefficiency and a significant case backlog, so this incentive to sue would add to these problems. Given the foregoing, the better rule in BiH would be to allow for all mediated settlements to enjoy the automatic enforceability provisions. This was probably the intended rule anyway.²⁰⁶ Accordingly, Article 25 should be clarified with the following language: “[t]he settlement agreement referred to in Article 24 of this law, whether reached before or after the initiation of court proceedings, shall have the force of a final and enforceable document.”²⁰⁷

B. Implementation Strategies

Despite the assumptions built into many legal reform projects, new laws in and of themselves are not the solution.²⁰⁸ Therefore, another set of recommendations relates to implementation strategies. First, there will need to be extensive training for the mediators. The BiH Association of Mediators (AoM) has a strong general training program in place. However, in BiH some parties may expect subject-matter expertise from mediators. Therefore, the standard training program will have to be augmented with specialized training in areas such as drafting settlement agreements or in specific legal subjects like property disputes arising from the war or personal injury. In addition, it may be useful to recruit mediators from the ranks of certain industries like mining, insurance, or organized labor and then provide them with specialized training.

The AoM would be well-served by developing a long-term training plan that moves beyond the general standardized mediation training and incorporates the foregoing strategy. International donors may be more willing to fund specific training programs (labor-management mediation, for instance), if presented with a strategy that identifies clear, targeted benefits, like the reduction of industrial strikes.²⁰⁹ In any case, all training modules should focus, as much as possible, on interactive role-playing and skills development and avoid over-reliance on lecture, theory, and law. There are many excellent mediation training modules that have been developed by USAID implementers.

Second, sitting trial court judges will need to be trained on how to identify appropriate cases for mediation and encouraged to make the suggestion to parties. They will, in essence, be the gatekeepers. In the short term, parties are not likely to suggest mediation to each other for two reasons. First, their lawyers may be unfamiliar with mediation and second, a suggestion of mediation might be taken as a sign of weakness. Therefore, it will be incumbent on the judges to take proactive steps to refer cases to mediation.

This could be encouraged through a basic mediation course developed by the AoM or others and made part of the judges’ initial apprenticeship experience. The training could focus on the effectiveness of nonconfrontational dispute resolution techniques and how to identify appropriate cases. The course could offer judges, when possible, the opportunity to observe an actual mediation. The judges participating in the successful Slovenian mediation program might be used as trainers since they come from the same legal background. The judges could also be given an incentive by creating internal provisions that favorably count mediated settlements in the statistical tracking mechanisms.²¹⁰

Third, the attorneys will need extensive training on the advantages of mediation and how to participate. In 2004, ABA/CEELI held a number of single day awareness events for attorneys, but this is only a beginning.²¹¹ Initial follow up training modules should focus, in part, on how mediation can work in favor of attorneys’ pecuniary interests. Bar associations like the ABA are best positioned to work with the BiH bars on this. Attorneys need to be convinced that mediation is not a threat to their livelihood. If they are not convinced, they will shun mediation and prevent it from gaining further acceptance. The official attorney tariff might be amended to provide for contingency fee agreements. These agreements provide attorneys with a stronger financial incentive to settle cases.²¹² At present, such agreements are not allowed. Another way to improve acceptance is to initially recruit mediators from the ranks of the bar associations.²¹³ Once convinced, attorneys need to learn how to participate effectively in mediation (i.e. compromise) and how to advise their clients. This will require specialized training, most likely from U.S. and EU attorneys. Perhaps, international law firms could be encouraged to become involved as a long-term business development activity.

Fourth, the BiH law schools might consider developing textbooks and teaching materials on mediation. Law faculties might even consider making mediation (or ADR generally) a mandatory course for all students. The law students represent the future of the judicial system and they are more likely to embrace novel concepts like mediation than sitting judges or practicing attorneys. There are many U.S. law school mediation courses available for consideration. One idea would be to obtain international funding for the placement of an American professor at each of the six BiH law faculties. In addition to teaching a mediation/negotiation class, the professor might provide training for a local professor to take over the class in the future.

Fifth, special care should be taken with regard to commercial disputes. While the World Bank believes that commercial disputes have the greatest mediation potential,²¹⁴ there remains a problem with settlement authority. In the BiH pilot commercial mediation sessions, company representatives were often mid-level managers who did not have ultimate settlement authority²¹⁵ and were reluctant to compromise, perhaps out of fear that upper level management would disapprove of any concessions. Future training efforts should sensitize companies to this issue and promote the in-house decentralization of settlement authority. In addition, the legal community should be careful not to promote mediation as a solution only for commercial disputes or business people.²¹⁶ Mediation has great potential in many different kinds of disputes. The Slovenia mediation program²¹⁷ reports a higher settlement rate with domestic relations cases than with commercial cases²¹⁸ and at least one-half of the mediated cases in the World Bank’s pilot program were non-commercial disputes.²¹⁹

Sixth, ethnic divisions will have to be considered. As mentioned above, mediation may be effective in addressing ethnic issues.²²⁰ Because of their recent war experience, many BiH citizens may have difficulty accepting a member of a different ethnic group as truly neutral and objective. Judges and attorneys will have to take this into consideration when contemplating mediation. One way to address this is to have the AoM provide parties with the opportunity to conduct a brief interview of potential mediators so that they can ask personal questions and assuage their concerns about bias or prejudice. In cases of cross-ethnic disputes, the AoM might suggest a mediator that is a member of the third major ethnic group. This might require the AoM to recruit mediators from all three ethnic groups to be available in each region. Mediation may also have nonlitigation applications in ethnic relations issues and these opportunities should be explored.

Seventh, potential litigants will need to be informed of mediation through a general public awareness campaign. If people understand that mediation is an option, they are more likely to request it from their attorneys and courts. However, any campaign needs to carefully craft the message for this culture. Public promotions should emphasize cost and time savings. Promotions should avoid emphasizing the degree of personal involvement in the mediation process, because BiH citizens feel more comfortable with the idea that disputes are best resolved by the fiat of an institutional decision maker, not through personal negotiation.²²¹

Finally, mediation has to be given sufficient time to develop.²²² It took decades to develop in the United States and proponents cannot expect a quick adoption in BiH. With the new CCPs and the various international projects underway, the entire BiH judicial landscape is already changing at near revolutionary speed. Judges and lawyers need time to learn about the changes, digest them, and acquire the necessary skills. Only then will they be in a position to fully and confidently embrace mediation. A culture of individual-centered responsibility may begin to develop, and mediation will both benefit and assist in this transformation.

Accordingly, local and international assistance providers need to develop long-term strategies. They should commit to at least five years’ financing for the training and public education initiatives. A collaborative approach involving the World Bank, the United States, and the European Union would be most effective, since it would expose local professionals to many different kinds of mediation approaches. This time period would provide the opportunity to expand the initial World Bank pilot project to other cities in a measured fashion. Specific provisions should also be made for international assistance in statutory reform. The revisions should not be left to those with limited mediation knowledge and experience, and should utilize international experts well-versed in ADR.

Mediation should also be better integrated into other long-term assistance efforts and not be seen as merely a stand alone project. Human rights programs that focus on legal NGOs or improving access to justice should include funding for mediation training. Programs that seek to improve minority or gender equality could also explore mediation as a means of achieving such goals in a more expedited and creative fashion. Minority return programs could focus on mediation as a way of resolving property and other disputes outside of the formal court system. Target industries, like insurance, banking, utilities, or mining, might consider obtaining private loans or grants to focus on establishing permanent mediation boards for labor/management and other disputes.

CONCLUSION

Ten years after the end of the war and the mediated settlement that lead to the creation of BiH, mediation may have a second application. The complex BiH court system suffers from serious problems and does not meet the needs of BiH society. Mediation, while not a panacea, may eventually contribute to judicial efficiency, reduce exposure to corruption, improve access to justice, and could, given the right circumstances, help develop an ethic of compromise-based dispute resolution and ultimately, help strengthen democracy through improved civic engagement.

For mediation to have such an impact, it will need the right legal framework, the right training regime, and most importantly, enough time. The new Mediation Laws and Civil Procedure Codes are excellent first steps, but they need important revisions. They also need to be supported by creative, long-term implementation strategies that promote mediation at all levels of the judiciary and support public engagement with this process.

190. See discussion supra Part V.C.1. back
191. Id. at Part V.C.2. back
192. UNCITRAL Model Law on International Commercial Conciliation, U.N. GAOR, 57th Sess., Supp. No. 17, U.N. Doc. A/57/17, Annex I, art. 9 (2002), available at http://www.uncitral.org/pdf/engli sh/texts/arbitration/ml-conc/ml-conc-e.pdf. back
193. See discussion supra Part V.C.2. back
194. UMA, supra note 140, § 2(2). back
195. This change could be achieved by simply inserting “in writing” into the text of Article 29. See discussion supra Part V.C.2 back
196. Id. back
197. An alternative would be to adapt the more complicated UMA provisions that limit the contents of mediator disclosures to an authority. See UMA, supra note 140, § 7. back
198. See discussion supra Part V.C.3. back
199. BiH Mediation Law, supra note 136, art. 23. back 200. Article 21 of the Entities’ Law on Enforcement recognizes the CCP proscriptions against party dispositions contrary to public policy. Law on Enforcement, supra note 183, art. 21. back
201. The courts would regain some control if law enforcement subsequently became involved. back
202. Revised CCPs, supra note 124, art. 89. back
203. See, e.g., UNCITRAL Model Guide, supra note 138, ¶ 90 (referencing divergent Australian enforcement rules for mediated settlements in connection with a pending case and those settlements without a pending case). back
204. See discussion supra Part V.C.3. back
205. See supra note 75. back
206. See supra note 183 and accompanying text. back
207. Pre-litigated, mediated settlements would not have the immediate court supervision proposed above for settlements made during litigation. The legislature might consider making provision for these settlements to be submitted immediately to a court for review prior to automatic enforceability. This would provide the same benefits as for those settlements made during litigation. However, it would carry the additional administrative burden of court involvement when there was none before. It would also raise settlement costs for the parties. back
208. Channell, supra note 110, at 8. back
209. The South African mediation training programs might be a useful model for a BiH labor-management program. See ADR Guide, supra note 71, app. B, South Africa Case Study. back
210. Unfortunately, BiH judges have an informal quota of cases to resolve each month. See ABA/CEELI JRI, supra note 27, at 31. If mediated settlements are counted in the same way as a full judicial disposition, judges will find it to their benefit to suggest mediation so as to more easily reach their quota. back
211. Program report of the ABA/CEELI Rule of Law Program in Bosnia and Herzegovina, http://www.abanet.org/ceeli/countries/bosnia/program.html (last visited Mar. 3, 2006). back
212. Eric Helland & Alexandar Tararrok, Contingency Fees, Settlement Delay, and Low-Quality Litigation: Empirical Evidence from Two Datasets, 19 J.L. ECON. & ORG. 517 (2003). back
213. Attorneys have the flexibility in their schedules to handle mediations from time to time. There will not be enough initial demand for a practitioner to make a living mediating full time. Of course, mediators need not be attorneys. back
214. World Bank Evaluation Report, supra note 186, § 10.1. back
215. See id. § 4.2. In many BiH companies, the President or division head makes all of the important decisions, including legal ones. back
216. In many post-communist countries, ADR programs focus on commercial disputes, not the entire legal system. Alkon, supra note 68, at 329. The BiH World Bank pilot project in Banja Luka is part of a larger commercial law assistance program, although in its pilot phase, it is accepting non-commercial cases. World Bank Evaluation Report, supra note 186, § 3.9. back
217. See discussion supra Part III. back
218. Domestic relations cases had a 61.4% success rate and commercial cases had a thirtynine percent success rate. Slovenia ADR Program, supra note 113, at 5. back
219. World Bank Evaluation Report, § 3.9. back
220. See discussion supra Part IV. back
221. See supra note 98 and accompanying text for a discussion on why initially BiH citizens may be uncomfortable with taking greater responsibility for and control of their legal problems. back
222. See ADR Guide, supra note 71, at 18.back