Partners Supports Private Sector Mediation
In Serbia, democratic change means expanding the use of mediation in the business sector to prevent and resolve conflicts that can discourage investment and growth.
It is very expensive for a corporation or business owner to enforce a business contract in Serbia using the legal system. It requires an estimated 36 different procedures over 635 days at a cost of 28.9% of the claim. Small and medium enterprises are disproportionately impacted by these high costs of litigation and long delays for court decisions. The backlog discourages investment, development and undermines the trust of Serbian citizens in the justice system and state institutions as a whole.
Mediation is an alternative dispute resolution method in which a third party facilitates a voluntary negotiation between parties to help identify the sources of the conflict, brainstorm possible solutions, and craft an agreement they both approve. The process is proven to resolve disputes more quickly than litigation, and with a greater chance of maintaining and improving working relationships. In a recent case in Serbia, an investor and a contractor needed two days of mediation to resolve a two-year long dispute that threatened to block a 14 million EUR international construction project. Mediation is still relatively new and not widely used within the Serbian business sector, although in many developed economies it is an important element of a modern system of justice.
Partners Serbia’s “Commercial Mediation Capacity Building” (CMCB) initiative educates business representatives from large, medium and small firms about mediation in order to build more demand from potential parties to mediation. After one of the outreach seminars, one of the participants said, “Mediation is very much needed in our private and business lives.” Partners Serbia ran general awareness-building seminars and in-depth trainings for corporate counsels, HR managers and other professionals who deal with disputes and legal proceedings as part of their daily work. These activities had immediate results: two of the biggest Serbian law firms have started regularly using mediation as a dispute resolution option for their clients. In addition, a mid-sized company with about 1000 employees decided to train 10 in-house mediators to address harassment-related complaints. Following their participation in this program, the Serbian Chamber of Commerce established an internal “Center for Services and Mediation”. This center will primarily provide mediation and facilitation services to its members in the area of financial restructuring of commercial debts. One corporate lawyer added: “It is crucial to raise awareness on mediation among businesses and other potential parties to disputes. As lawyers we are ourselves responsible for promotion of this useful dispute resolution method which can make businesses more successful and our lives better.”
The program is helping create a cadre of mediation professionals who are eager to use their skills. This was confirmed by a program participant who said: “If you help us to learn more about mediation we will be ready and capable of helping others in peaceful resolution of their disputes.” And so Partners-Serbia’s goal of introducing the power of mediation to the business sector in Serbia is being realized.