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ADR methods allow disputes to be resolved without the intervention of a court or at least without a court decision on the merits of the case. Among the main types of ADR practised in Slovenia are arbitration, mediation and court action in a broader sense aimed at encouraging a court settlement.
The arbitration board is a private court composed of one or more persons, appointed by agreement of the parties. The parties, acting by arrangement or spontaneously, entrust the board to deliver, on the basis of an agreement or contract, a decision on the merits of the case that is recognised by law as equivalent to a final decision by an ordinary court. By concluding an arbitration agreement, the parties rule out the possibility of an ordinary court having jurisdiction.
Mediation is the settlement of a dispute with the help of a neutral third party, which cannot deliver a binding decision.
During proceedings in a civil court, the parties may at any time conclude a settlement on the subject of the dispute (court settlement). Anyone intending to bring an action may try to reach a court settlement (preventive court settlement) in the local court at the place of residence of the opposing party. The agreement on the conclusion of a court settlement constitutes an instrument permitting enforcement.
As already explained in the factsheet "ADR – Community law", the Commission has published on its website a list containing a large number of ADR bodies for resolving consumer disputes in all the Member States. You will find in this list the practical information you need to decide whether to have recourse to one of these ADR schemes: their structure, field of application, procedures, costs and other details.
You may well need to call on the services of an ADR body established in another Member State. To obtain practical information on such bodies, you may consult the web pages of the EEJNet or, for disputes relating to financial services, FIN-NET.
Arbitration is not an appropriate method for resolving all types of disputes. The Civil Procedure Act (Official Gazette of the Republic of Slovenia No 36/04 – official consolidated version; hereinafter: “ZPP”) states that, for disputes on rights which they hold freely, parties may determine by agreement that jurisdiction rests with a domestic arbitration board. In disputes where at least one of the parties is a private individual resident abroad or a legal person established abroad, the parties may agree that jurisdiction rests with a foreign arbitration board, on condition that a Slovenian court does not have sole jurisdiction in the dispute in question. For example, it is not possible to resolve by arbitration matrimonial disputes or actions for establishing or challenging paternity or maternity. Parties opt for arbitration mainly in economic disputes. The Chamber of Commerce and Industry of Slovenia has a Permanent Court of Arbitration which is responsible for resolving disputes in business relationships derived from rights freely held by the parties. The arbitration board at Zavarovalnica Triglav d.d. is a specialised body that rules on disputes in insurance and compensation cases. The Arbitration Tribunal at Ljubljana Stock Exchange is a specialised body responsible for resolving disputes relating to transactions in serial securities.
A court settlement may be used to resolve all types of civil-law disputes, with the exception of matrimonial disputes and disputes between parents and children (save in cases concerning the protection, education and maintenance of children or concerning contacts between children and parents or other persons, where the court does not allow a settlement if it finds that it is not in the child’s interest). Likewise, a court settlement cannot be concluded regarding claims which parties are not free to assert (because they run counter to mandatory regulations or moral rules).
Mediation is practised by various non-governmental bodies or courts in different types of disputes. Courts practise court-related mediation in civil, family and commercial matters, whereas non-governmental bodies mediate in disputes between neighbours, disputes between landlords and tenants, disputes at school, at work or between organisations and consumer disputes.
The ZPP contains provisions designed to encourage the conclusion of court settlements and to that end provision has also been made for a special settlement hearing to explore the possibility of concluding a court settlement. However, conclusion of such a settlement depends on the free will of the parties. Mediation and other types of ADR are also voluntary. The ZPP lays down that the court may, at the settlement hearing, suspend the civil proceedings, on a proposal agreed by the parties, so that an attempt can be made to resolve the dispute by alternative means.
Among its provisions on the procedure to be followed in labour and social disputes, the Labour and Social Courts Act (Official Gazette of the Republic of Slovenia Nos 2/2004, 10/04 – corrigendum No 61/04), which came into force on 1 January 2005, states that, where a mandatory procedure for the peaceful resolution of a dispute is prescribed by law or by collective agreement, a court action is admissible only on condition that such a procedure was initiated beforehand, but was unsuccessful. This provision does not apply in disputes concerning the existence or termination of an employment relationship.
Arbitration is voluntary and based on an agreement between the parties.
Court settlements are regulated by the ZPP, which also contains basic provisions on arbitration. Mediation is not regulated by law.
If the parties agree by contract that a specific dispute will be resolved by the competent arbitration board and a court action is brought in the same dispute between the same parties, the court will, in response to an objection by the defendant, declare itself to have no jurisdiction, annul any acts carried out in the proceedings and dismiss the action.
A court settlement is concluded before the court. Mediation is voluntary and has no impact on court proceedings.
As regards arbitration, it should be borne in mind that the purpose of concluding an arbitration agreement is to rule out the jurisdiction of the ordinary courts. Arbitration proceedings are generally confidential, unless the parties agree otherwise. Matters relating to confidentiality are regulated by the procedural rules adopted by the courts and organisations practising mediation. For example, the rules governing court-related mediation at Ljubljana District Court state that everything submitted to the court in writing or orally is deemed confidential. Where the mediation attempt is unsuccessful, all written papers are returned to the parties and no statements or documents received during that procedure may be taken into account by the court in subsequent civil proceedings. Where a court settlement is concluded during civil proceedings, the rules on confidentiality are the same as those that apply to the civil proceedings.
In the arbitration procedure only a person with full legal capacity can carry out procedural acts independently. A party that is not capable of taking part in a civil action must be represented by a legal representative. A party may authorise someone to represent them. Parties are very often represented by lawyers in arbitration proceedings.
The rules of the mediation procedure are laid down by the courts and organisations that practise mediation. In principle, legal advice in a mediation procedure is not compulsory, but a party may be represented by an authorised person.
Where a court settlement is concluded before the court, the rules regarding representation are the same as for civil proceedings. The ZPP states that parties may conduct their case in person or through an authorised representative. However, in proceedings involving extraordinary legal remedies, a party may carry out procedural acts only through a representative who is a lawyer. In proceedings before a local court the representative may be anyone with full legal capacity, but in proceedings before the district, higher and supreme courts, the representative can only be a lawyer or another person who has passed the state law examination.
On the question of procedures conducted at a distance, the ZPP, which regulates court settlements, states that applications received by means of communication technologies and applications received in accordance with the conditions laid down by law for the use of information technology are deemed to have been signed by the person named as signatory in the application. The ZPP also provides that a court settlement is concluded where the parties’ agreement on the settlement is recorded in the minutes and those minutes are signed by the parties.
More detailed rules on ADR procedures are laid down by the bodies practising ADR.
Arbitration proceedings are not free of charge. In principle, the costs are paid by the party that is unsuccessful in the proceedings. The amount depends on the amount at stake in the dispute, the form of the arbitration board and whether the dispute is a domestic or international one. Arbitration differs from court proceedings in that no taxes are levied.
The ZPP lays down that, if a civil action ends with a court settlement, each party covers its own costs, unless otherwise provided in the settlement.
Payment of the cost of mediation is regulated by the organisations practising mediation. Court-related mediation is in principle free of charge for the parties (except for the costs of any representative employed by the party).
Under the Free Legal Aid Act (Official Gazette of the Republic of Slovenia No 96/2004 – official consolidated version), free legal aid may be granted for legal advice, legal representation and for other legal services laid down by law, for all forms of judicial protection before all general courts and specialised courts in Slovenia, before the Constitutional Court of the Republic of Slovenia and before all bodies, institutions or persons in the Republic of Slovenia which have jurisdiction for out-of-court settlement of disputes (“court proceedings”), and as an exemption from payment of the costs of court proceedings. Free legal aid is also granted for proceedings before international courts or arbitration boards if the right to free legal aid is not regulated by the rules of the international court or arbitration board or if an individual is not entitled to free legal aid under the relevant rules.
Mediation has no influence on the possibility for instituting or continuing court proceedings or on the course of the limitation period.
By agreeing to arbitration, the parties rule out the possibility of resolving the dispute through the courts.
If the parties do not conclude a court settlement, the court continues proceedings and delivers a decision.
An arbitration decision has the force of a final decision vis-à-vis the parties (but not third parties), unless it is agreed in the contract that it can be challenged before a higher arbitration body. An arbitration decision may be declared null and void on application by a party. The grounds for challenging an arbitration decision are laid down in the ZPP and may relate only to the validity of the arbitration agreement, its content (the dispute is not covered by the arbitration agreement, the arbitration board exceeds the powers of its authority), the composition of the arbitration board, grave procedural infringements, and infringements of public order.
The agreement on conclusion of a court settlement constitutes an instrument permitting enforcement. If the agreement is not enforced spontaneously, a party may submit a proposal for enforcement based on the agreement.
An agreement concluded with the help of mediation is not binding and enforcement is only voluntary. If, at the settlement hearing in the context of civil proceedings, the parties decide to try to resolve a dispute by ARD, they may, after reaching agreement before the court, conclude a court settlement and thus obtain an instrument permitting enforcement.Top
Last update: 05-12-2007