On 1 September 2012 the new Mediation Act (Act No. 202/2012 Coll., “the Act”) became effective. The Act serves as a legal basis for the amicable settlement of private disputes within mediation proceedings.

During such proceedings, an unbiased mediator will encourage the disunited parties to compromise and reach a mutually agreed solution to their dispute. The mediator will persuade the parties to actively participate in settlement negotiations and will regulate their communication. While mediation itself is not unknown in the Czech market, the Act aims to establish a clear legal framework and thus significantly increase the amount of cases settled through mediation proceedings.

Under the Act, any person who passes specific mediation exams (requiring also the knowledge of the basics of law) will be registered and entered onto the list of mediators maintained by the Ministry of Justice. Only registered persons can act as mediators. Although many of the mediators are also admitted as attorneys-at-law, it must be highlighted that a mediator may not act as legal counsel in the same matter. In order to initiate mediation proceedings, litigating parties must agree upon a suitable mediator and other terms and conditions regarding an agreement as to the execution of the mediation. Such an agreement is a new form of contractual relationship defined by the Act. Such an agreement must state the names of the conflicting parties, the mediator, the dispute itself, the remuneration to be received by the mediator and the agreed duration of the mediation if not agreed that it should run indefinitely.

If the parties can resolve their dispute, the mediator will help them conclude a mediation agreement which shall be binding on the parties. Although mediation is usually voluntary, courts will now have the power to order litigating parties to resolve their dispute through the mediation process. This appears to be especially useful in family disputes. A material advantage of the new regulation is that in the course of mediation, the limitation period will be interrupted and thus a claim cannot become statute-barred.

Despite the introduction of the Act, “private mediators” who are not registered with the Ministry of Justice can continue to perform their activities outside the scope of this Act. A disadvantage of this is that beyond a certain guarantee of quality, the participants will lose the advantages stemming from the new regulated form of mediation created by the Act.

It could be argued that a mediation agreement concluded in the course of mediation proceedings is not directly enforceable without further court proceedings. Thus, the main factor determining the success of mediation is in fact the parties themselves. The negotiations will not be successful if the parties´ are reluctant to cooperate or subsequently refuse to adhere to the mediation agreement. Notwithstanding this, it is widely believed that mediation may represent a suitable alternative to standard court proceedings.