With State Gazette issue No. 11 of 02.02.2023, amendments were adopted to the Mediation Act and the Civil Procedure Code, introducing the institute of mandatory mediation for certain types of disputes. The changes aim to reduce the workload of the courts and to ensure out-of-court and expedited resolution of the arisen dispute by mutual consent, as well as to save a portion of the costs for the parties.
The amendments come into force on July 1, 2024.
I. How will the mediation procedure be organised?
A judicial mediation centre will be established at each district court, with territorial units at the regional courts. These centres will organise the conduct of mediation procedures.
The structure and organisation of the activities of the judicial mediation centres will be determined by the Supreme Judicial Council, which places the procedure within the realm of the judiciary, as mediation, when conducted, will practically serve as a “first instance” for certain disputes. “First instance” remains in quotation marks because the parties will still have the opportunity to pursue standard three-instance court proceedings if they consider that mediation is not a suitable tool for resolving their dispute.
It is important to note that the parties are provided only with the obligation to participate in a first meeting lasting from one to three hours. After this meeting is held, the parties to the dispute can decide whether they wish to continue the mediation procedure or wish to continue the court proceedings.
Given the mandatory nature of the institute, the mediation procedure is exempt from a state fee for the above-described first meeting lasting from one to three hours.
In case the procedure ends with the parties reaching an agreement, it can be in written form or in the form of a court settlement under the procedure of Art. 234 of the Civil Procedure Code, with the court ruling within 7 days of the submission of the application.
The mediation procedure can have a maximum duration of 2 months from the start, with this period potentially extending up to 6 months by agreement of the parties. A mediator can be a person with a legal education who meets the legal requirements to practice the activity.
II. In which cases is mandatory mediation provided?
The changes provide for the following two hypotheses of mandatory mediation:
1. Cases in which the court is obliged to require the parties to participate in a first meeting in a mediation procedure, namely:
a) distribution of the use of jointly owned property under Art. 32, par. 2 of the Ownership Act; b) monetary claims arising from joint ownership under Art. 30, par. 3 and Art. 31, par. 2 of the Ownership Act; c) partition under Art. 34 of the Ownership Act – in the procedure for the performance of the partition (second phase); d) performance of obligations of owners, users, or occupants of independent units in a building under condominium ownership regime under Art. 6 of the Condominium Management Act, for reimbursement of expenses incurred by an individual owner for the repair of common parts of the building under Art. 48, par. 7 of the Condominium Management Act, as well as for the revocation of an unlawful decision of the general meeting or an unlawful act of the management board (manager) of the condominium under Art. 40, par. 1 and Art. 43, par. 1 of the Condominium Management Act; e) payment of the value of a company share upon termination of participation in a limited liability company under Art. 125, par. 3 of the Commercial Act; f) liability of a manager or a controller of a limited liability company for damages caused to the company under Art. 142, par. 3 and Art. 145 of the Commercial Act.
2. Cases in which the court may, at its discretion, require the parties to participate in a mediation procedure, namely:
a) divorce under Art. 49 of the Family Code; b) resolution of disputes regarding the exercise of parental rights, the child’s residence, personal relations with the child, and their maintenance under Art. 127, par. 2 of the Family Code; c) amendment of the measures related to the exercise of parental rights, the child’s residence, personal relations with the child, and their maintenance under Art. 51, par. 4 and Art. 59, par. 9 of the Family Code; d) resolution of disagreements regarding the exercise of parental rights and obligations under Art. 123, par. 2 of the Family Code; e) determination of measures for personal relations with the grandparents under Art. 128 of the Family Code; f) maintenance (alimony); g) monetary or non-monetary claim arising from a contract, unilateral transaction, tort, unjust enrichment, or negotiorum gestio (management of another’s affairs without authorisation) with a claim value of up to BGN 25,000; h) existence, termination, annulment, or dissolution of a contract or a unilateral transaction or for the conclusion of a final contract with a claim value of up to BGN 25,000; i) ownership and other real rights over property or for violated possession; j) remunerations or compensations arising from employment relationships, as well as for declaring a dismissal unlawful and its revocation, and for reinstatement to the previous work; k) protection of membership rights in a commercial company under Art. 71 of the Commercial Act or for the revocation of a decision of the general meeting of the company under Art. 74 of the Commercial Act, as well as claims under Art. 58, par. 1 of the Cooperatives Act and Art. 25, par. 4 of the Non-Profit Legal Entities Act; l) protection of intellectual property rights under the Copyright and Related Rights Act, the Patents and Utility Models Registration Act, the Marks and Geographical Indications Act, the Industrial Design Act, the Integrated Circuits Topography Act, and the Protection of New Plant Varieties and Animal Breeds Act.
3. The legislator has also provided for exceptions – cases in which, although the prerequisites for mandatory mediation exist, the court does not require the parties to participate in it, namely:
a) the mediation procedure is excluded for the respective type of dispute by law; b) the first communication in the case has not been served on the defendant personally or through another person in the cases provided by law, unless they are found later in the course of the proceedings; c) the defendant admits the claim; d) a party to the case is the state or a state institution; e) a party to the case is a consumer, with the exception of claims for receivables arising from a bank loan agreement or related legal relationships, as well as from a property insurance contract; f) convincing evidence has been presented in the case of violence committed against a party to the case by the opposing party, of a risk to the child’s life or health, or of their best interest.
III. Special rules for mandatory mediation.
The parties may be required to participate in a mediation procedure at any time from the expiration of the deadline for submitting a statement of defence to the closing of the judicial inquiry. The parties may be required to participate in a mediation procedure only once in the proceedings, and if the first-instance court has failed to instruct the parties to participate in one, the appellate instance requires them to do so, provided the prerequisites for this exist.
Author: Ivan Fregulya
