Mediation is appropriate when the parties need a decision and are willing to negotiate.

Example criteria

Voluntary recourse, ability to take decisions (autonomy)

• Participation of a party in mediation is not forced (by threats or in any other way) by the other party or any third party;
• Each party is able to understand and process information;
• Each party is able to take decisions and stick to them (e.g. parties have no physical or mental diseases exist that prevent them from making decision, have authority to settle, do not insist on court judgment, do not have a background of non-performance of agreements or court judgements).

Communication

• Obvious misunderstandings are present;
• Parties feel insulted, behave in aggressive way or avoid direct communication with the other party;
• Relations are very emotional;
• Many people are involved.

Relations

• Relations between parties are strained, but they have to continue (e.g. because parties live or work together, have a joint child, joint property, etc.);
• Parties are willing to continue their relationship.

Parties’ interests

• Quick resolution is needed;
• Parties are interested in preserving control over the outcome of their dispute;
• Reputation is important;
• Confidentiality is important;
• Sustainable solutions are needed and wanted;
• Relationship is important and has to be continued somehow;
• Parties want to reduce the adverse effect of dispute on the relationship, or on business or other important or urgent affairs.

Dispute background

• Disputing parties have negotiated in good will but the impasse still exists;
• A party is not making unrealistic demands or taking unrealistic positions;
• A party is making unrealistic demands or taking unrealistic positions which are based on emotional issues.

Case Specifics

• A gap in the law is present;
• Law queries are risky and difficult to be solved;
• Single or multiple claims are present;
• It is obvious to whom the right belongs, but the specific amounts due are disputed;
• It is a question to whom the right belongs.

In every case it depends on the competence of the mediator and the way of mediation choosen which kind of cases are appropriate to be mediated or not.

The question is which cases are suitable for mediation and it depends on the competence of the mediator and the type of the applied Mediation.

General rule: Where parties are not ready to search for a solution, where they do not see the necessity to search for a solution or where at least one of the parties insist to resolve their conflict by asserting the position solely. The cases listed below could be seen as unsuitable only upon certain conditions and it has to be taken into account that in many of these cases the alleged obstacle may be surmounted in the course of mediation.

Example criteria

Parties’ specifics

• Any of the parties stay in a zero sum game and stay insisting on getting „justice” or „revenge” by a court judgment;
• Threats or violence between parties are present/or suspected and parties are not able to reflect their violent approach even not with the help of a mediator.

Need for court judgment

• It is necessary to prevent any possible future misconduct through a court judgment – e.g. in cases of violence, etc. and parties are not able or willing to obey an agreement about;
• Public announcement is needed for the purposes of restoration of the reputation of one of the parties;
• Legal interpretation is needed;
• Public interest is at stake.

The EU Mediation Directive pays special attention to the relationship between mediation and judicial proceedings. First, it is declared in Article 1 that the Directive’s “objective is to promote the amicable settlement of disputes by encouraging the use of mediation and by ensuring a balanced relationship between mediation and judicial proceedings”. Further, Article 5 of the Directive provides for that “A court before which an action is brought may, when appropriate and having regard to all the circumstances of the case, invite the parties to use mediation in order to settle the dispute. The court may also invite the parties to attend an information session on the use of mediation if such sessions are held and are easily available.”

ADR program or rules of the court hearing the case

First of all, when considering mediation, it is reasonable to check whether the court where the case is pending has its own ADR Program or a court-annexed mediation scheme (where mediation is conducted by external provider). If such a mediation program exists, most often it would be beneficial for parties to use it. For this purpose, it is necessary to check:

- What are the general rules for mediation procedure, especially the obligations of mediator and parties under such a procedure (e.g. confidentiality, type of mediation, etc.);
- How to refer a case to the mediation program;
- Who are the mediators;
- Can parties choose a mediator;
- When and where mediation can be held;
- What are the fees associated with the procedure;
- What would be the effect of the settlement agreement, and will it need further approval by the court.
- How the settlement can become enforceable

Terms and deadlines for mediation within pending court procedure

When initiating mediation of a case pending before a court, it is crucial to take into account that:
- Procedural deadlines in pending litigation are usually not affected by the initiated mediation, which means that they must be observed;
- The case might be postponed or suspended by the court for a certain period (which needs to be checked in the legislation governing the court proceedings in the respective state) to allow mediation to take place; in some legal systems parties might be allowed to choose whether they would mediate between two court hearings, postpone the case or suspend it, while in other legal systems only the court would be able to decide on these issues.

Information requirements

After concluding mediation it might be necessary or obligatory (depending on the requirements of the applicable law) to inform the court about the mediation outcome – whether it resulted in settlement, partial settlement or no settlement. The mediation outcome would affect the way in which the court will further proceed with court proceedings – whether and how it would continue or be dismissed.

Informing the court about the outcome of mediation is usually obligation of parties and their lawyers.

In order to protect parties’ interests after mediation it is important to take into account the requirements of the procedural law applicable - in some legal systems the court would be able to dismiss the case if parties do not go back to the court in a certain period after mediation, in others – in all cases parties would be obliged to present to the court the result of their mediation.

How pending litigation would affect parties’ choice of place for mediation

Choosing the right place for mediation might be affected by the existence of pending litigation concerning the case to be mediated. Very often, the reasonable choice of place for mediation would be the country where court proceedings take place. However, there are no obstacles to conducting mediation in another country. In such a case, it is important to choose applicable law or to take into account which law will be applicable to the mediation procedure and its consequences.
In the presence of pending litigation procedural deadlines and requirements and conditions of enforceability of the agreement should be taken into account.

Information for mediators or mediation providers is available online, and often can be found in the chambers of commerce, embassies, or associations of mediators in the respective country. Usually this type of information is available on the Internet.

Useful criteria for choosing a mediator would be:
- Reputation of mediator, possible specialization in the field of the respective dispute;
- Considerations concerning nationality (e.g. if parties would prefer a mediator of nationality different than the nationality of each of them, or co-mediators - each having the nationality of one of the parties);
- Considerations concerning place – would parties prefer mediator/s to travel to the country of habitual residence of one or both parties, or parties would travel to the place of business of the mediation provider;
- Cost-efficiency – choosing an option with less travel or other costs associated with mediation;
- Occasionally the mediation rules the mediator will follow (especially with regard to confidentiality, limitation periods, enforceability, other guarantees for parties rights);
- The mediator’s competence and qualification;
- Fees;
- Additional services provided, e.g. translation, etc.

Where mediation should be conducted

In cross-border mediation, especially where parties have habitual residence or place of business in different countries, choosing place of mediation convenient for both of them might become a challenge.

Main options concerning place

- Mediation to be held in the country of one of the parties;
- Joint mediation sessions to be held in the country of each party consecutively;
- private mediation sessions to be held with each party in his/her own country (shuttle mediation);
- Mediation to be held in a third country - e.g. the one of the mediation provider;
- On-line mediation.

In each of the above cases mediation sessions on the spot can be combined with teleconferencing and other ways for distance communication, e.g. lawyers or one of the parties may participate distantly.

What are the most often concerns when choosing a mediation venue?

Psychological issues

As one of the main principles of mediation is neutrality, ensuring neutral venue where both parties are able to express their free will and protect their interests by equally participating in the decision making process and equally influencing the outcome of mediation, is crucial. Therefore, mediation is often held on a neutral territory – e.g. in the premises of the mediation provider or in a conference room hired especially for the case. However, there are exceptional cases, where one of the parties only agrees to mediation if the other party accepts the invitation to conduct mediation on the territory of the inviting party – as a sign of good will.

Expenses

The choice of venue in mediation often depends directly on the costs associated with it. Parties and their lawyers should put some efforts in making a preliminary estimation of the costs of mediation (by doing research or discussing with one or few possible mediation providers) in order to decide whether it is better for them to travel or to have the mediators travel.

If only one of the parties travels to the mediation venue (e.g. which is in the other’s party country), then the costs associated with such a travel could be discussed and included in the total sum of expenses for mediation and distributed between parties according to their agreement on costs. In order to balance the travel costs parties could also consider having mediation sessions in each party’s country (if this is reasonable with regard to parties’ preferences).

Timeframe

In cross border mediation one of the main needs is to conduct mediation in a time-consuming manner.

If parties decide that they will both travel to the venue of the mediation provider, mediation sessions would usually be arranged in an intensive way, so that mediation can be concluded for 2-3 days or within the timeframe needed by parties. If the mediation venue is in the country of one of the parties, it must be chosen in a way that saves time for travel for the other party and mediators as much as possible. If only one meeting is planned, it is good to hold it close to the airport. If the stay will be longer, a hotel which is close to the mediation venue should be chosen.

Most time is saved when mediators conduct shuttle mediation by travelling to each party’s country. However, joint sessions are often a key part of mediation and it is useful to have at least one joint session with both parties present.

Using teleconferencing, e-mails and other forms of distance communication is the most time saving approach. Therefore, when time saving is a priority for parties, it is worth considering such forms of communication. E-mails have also proven to be a useful tool for clarification and focusing on the important issues during mediation sessions.

Pending court or arbitration procedures

When mediation is held in a country different than the country of the pending court or arbitration proceedings, it must be ensured that the settlement agreement will be concluded in such a form and with such content so that it can be approved by the court and made enforceable if parties need it to be enforceable.

Applicable law

When considering the place of mediation, it must be taken into account that it might influence the conditions of mediation and the settlement agreement and its legal consequences. E.g. if mediation is held in the country of the mediation provider, in the absence of a choice-of a law provision in the agreement to mediate, mediation will most likely be conducted in accordance with the law of the country of the mediation provider according to Rome I Regulation.

Unusual venues

Coffee shop, bar, conference rooms at the airport.

In order to meet the higher requirements for saving time and costs in cross-border mediation, more flexible forms and venues of mediation might be used.

The most important rule is multilingual mediation is the parties to have the opportunity to express themselves freely and fully to understand others. This means that they should either speak a common language (fluently enough) or use the translation. The mediator is useful to understand the languages of all countries, but this is not the definition of a successful mediation.

To ensure that all parties will participate equally in discussions in mediation in many cases it is advisable to use translation – e.g. if one party is not fluent in the language used in mediation. If using transfer mediator it is important to ensure that each participant in mediation can freely express their thoughts and participants who speak, be heard and understood by other participants.

Parties and mediators

In order to successfully deal with the distance issue cross-border mediation could be held in a variety of forms suitable to parties’ needs.

• Although joint sessions are very useful, shuttle mediation where mediator/s meet separately with each party in its own country, is an admissible option. Parties may convene for a final joint session for discussing and concluding a settlement agreement.
• It is also possible to hold a mediation session with one of the parties personally present and the other – participating via tele- or videoconferencing.

It is important to point out that parties’ presence in mediation is crucial as they know best their interests. Namely the interests are one of the most important subjects of discussion in mediation and serve as a basis for a settlement. This is especially valid in disputes between individuals, e.g. family disputes. In commercial disputes the role of the CEO or another legal representative of the company is also important. However, in many cases company lawyers could contribute to the settlement as much as any other ‘internal’ representative of the company.

In cross-border mediation it is possible to combine different forms of participation - live via a remote communication or Online Mediation.

Lawyers and other advisors

Lawyers are very important participants in cross-border mediation where cross-border mediation involves more complex legal issues that have to be taken into account.

At least the consequences of the settlement agreement, the law governing it, and the opportunities for its enforceability need the advice of a lawyer.

Lawyers may attend the mediation sessions personally or via teleconferencing, or consult parties on the phone during the sessions or in breaks. They can also advice parties in the time between sessions. It is also possible to hold mediation with lawyers only, especially in case where legal entities are parties to mediation.

Neutral experts

Use of neutral experts is an open option in mediation, if parties need expert opinion on technical, accounting, financial, or other issues requiring special qualification.

Translators

Translators’ help in mediation in cross-border cases is very important. The general rule is that everybody in mediation must be able to freely express his opinion in the language in which he/she feels most comfortable. It is always preferable to have translators, unless all parties explicitly declare that they fluently speak one language.

Agreement to mediate is a contract for the provision of services. The mediator undertakes to use her/his best efforts to facilitate the communication between the disputing parties and to help them reach their own agreement resolving their conflict. The parties are obliged to pay for the services rendered (unless the fees are paid by third parties (the State or NGO’s).

The main functions of the agreement to mediate are: to formalize parties’ consent to participate in mediation and to provide parties with the key information needed for their participation in the mediation procedure.

The legal regulation of the agreement to mediate varies in the different countries and very often it is unregulated contract.

Nevertheless, there is a high extent of international standardization of the contents of this contract.

• The roles of mediator(s) and parties and the purpose of the procedure.
• Parties to the process and their consent to participate in mediation under the terms of the applicable rules (usually the rules of the mediation provider or standards submitted) and the applicable law.
• General principles of Mediation: neutrality and impartiality of the mediator, the parties obligation to pay the agreed fees for Mediation, etc.
• Mediation Procedure

- General principles: voluntary participation of parties (and right to withdrawal from the process), equality, confidentiality;
- Stages: joint sessions and caucuses, time frame, breaks, termination of mediation, including upon expiry of a term specified by parties;
- Mediator’s obligations: neutrality and impartiality, functions;
- Responsibility;
- Parties’ responsibilities: good faith participation, mutual respect, complying with the negotiated time schedule, rules and mediator’s guidance.

• Use of legal advice
• Mediation fees
• Date and signature of parties and mediator/s

Lawyers usually do not sign the agreement to mediate unless they participate as party representatives and the party is not present at mediation. However, whether lawyers would sign the agreement to mediate is an issue regulated by the rules applicable to mediation (e.g. those of the mediation provider). It is to be recommended as it is required in some systems that lawyers are required to sign a declaration of confidentiality in order to ensure that confidentiality of the procedure will be observed by all of the participants.

In cross-border cases it is very important to determine the law applicable to the agreement to mediate (lex contractus), as it will regulate the rights and obligations of parties and mediator in the procedure and will provide regulation to issues not explicitly stipulated in the agreement to mediate. (e.g. mediator’s professional liability, suspension of limitation periods during mediation, exceptions from confidentiality, etc.).

The instrument of international private law that helps determine the applicable law in contractual relations is Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations, also known as Rome I Regulation (hereinafter referred to as RIR).

Determining the applicable law in cross border mediation is based on the Rome I Regulation.

• Mediation between business entities

- If the agreement to mediate does not contain a choice-of-law clause, the applicable law would be the law of the country where the service provider has its habitual residence (Article 4.1 RIR), i.e. the Mediator or the Mediation Organization. When it is clear from all the circumstances of the case that the contract is manifestly more closely connected with another country, the law of that other country shall apply. (Article 4.3 RIR).

• Mediation between individuals having the same habitual residence

- If the agreement to mediate meets the requirements for a consumer contract under the RIR, the law of the habitual residence of the consumers (Article 6.1 RIR) will be applied
- If the agreement to mediate cannot be considered a consumer contract, the general rule of Article 4.1 b RIR will apply, i.e. the applicable law will be the law of the country where the service provider has its habitual residence, i.e. the Mediator or the Mediation Organization.

• Mediation between individuals having different habitual residence

Two spouses who are from Greece and Germany and who lived together in Greece separated 2 years ago. Currently the wife, who is a German national, lives in Germany and the husband, who is a Greek national – in Greece. They refer their case to a mediation team of a Greek and German mediator.

Consumer contract

As said above, if the agreement to mediate is a consumer contract, the habitual residence of the parties would determine the applicable law.

Having in mind the complications associated with cases where consumers do not have a joint habitual residence, it would be recommendable for such parties to make a choice of law between the laws of the countries where they have their habitual residence.

Non-consumer contract

If the agreement to mediate cannot be treated as a consumer contract, the applicable law will be the law of the country where the provider of the services (i.e. the mediator) has his/her habitual residence (Article 4.1 b) RIR. If the two mediators have habitual residence in different countries, the applicable law would be the law of the country with which the contract is most closely connected (Article 4.4 RIR).
If the whole mediation is held in a single country (for instance, Germany) the law of this country will apply.

However, if mediation is conducted using video or teleconferencing, or communication via Internet, or in case of indirect (‘shuttle’) mediation with spouses in their respective states, it would be very difficult to determine the ‘most closely connected’ law. Therefore, in such cases it is strongly recommendable to include a choice-of-law clause in the agreement to mediate.

Framework under the EU Mediation Directive

According to the EU Mediation Directive judge’s role in mediation is seen in the following directions:

- Article 3 (a). Definition. Mediation may be ‘suggested or ordered by a court’.
Mediation may be ‘conducted by a judge who is not responsible for any judicial proceedings concerning the dispute in question. It excludes attempts made by the court or the judge seised to settle a dispute in the course of judicial proceedings concerning the dispute in question;

- Article 5. Recourse to mediation. A court before which an action is brought may, when appropriate and having regard to all the circumstances of the case, invite the parties to use mediation in order to settle the dispute. The court may also invite the parties to attend an information session on the use of mediation if such sessions are held and are easily available.
- Recital 13. It should be possible under national law for the courts to set time-limits for a mediation process.
- Article 6 (2). Enforceability. The content of the agreement may be made enforceable by a court (or other competent authority) in a judgment or decision or in an authentic instrument in accordance with the law of the Member State where the request is made.

Specific functions of judges in referral

Having in mind this general framework of judge’s role and the practical functions that judges exercise in legal systems where mediation is applied in court-annexed schemes, the most common tasks of judges performed in support of mediation are:

• to decide on suitability of mediation for each particular case – when reviewing the case or later in the court room where parties’ and lawyers’ attitude may also be taken into account;
• to mention the option for mediation – judges may refer to a specific court-connected mediation program if such exists at their court, or to mediation in general. Usually judges do so in their initial written communication to parties as provided in procedural legislation of their country, as well as in the court room – in the first court hearing or in any subsequent hearing;
• to inform parties about the advantages of mediation – it has been proven in practice that by mentioning the advantages of mediation judges are better able to motivate parties to use mediation. Parties tend to follow judge’s encouragement to use mediation, especially when they see that the judge believes in mediation and recommends it as an opportunity for positive outcome for both parties;
• to discuss with the lawyers the opportunities offered by mediation – talking to lawyers and encouraging them to use mediation is very important as they are usually the people who will decide whether to use mediation – in most cases parties would follow their advice;
• to schedule an informative session about mediation – with a mediator or a court clerk – this would be possible where special court rules governing referral or the applicable law provide such opportunity;
• to schedule a date for mediation obliging parties to try at least one mediation session – only when such an option is allowed by the applicable legislation or by court rules.
• to reflect the results of mediation in a court judgement or ruling – in compliance with the respective procedural law. When parties reach a settlement agreement judges would approve it provided that the legal requirements for such an approval are met. If parties have reached an agreement on additional issues which are not within the scope of the pending court proceedings, in most legal systems judges would not be able to approve such an agreement. If parties do not reach a settlement agreement or reach a partial agreement the judge will continue the court proceedings dealing with the unresolved issues. If parties do not need court’s approval for the execution of the agreement or do not present the agreement to the court, the court proceedings would be dismissed.

Judge’s assistance for settlement agreement

Judges may assist parties in reaching a settlement agreement within mediation proceedings only in countries where the law provides for such an authority for them.

The EU Mediation Directive sets forth that a judge may conduct mediation in case he/she is not responsible for any judicial proceedings concerning the dispute in question. Therefore it is expected that the number of countries where judges will be allowed to conduct mediations will increase in the near future.

Mediation lawyer is acting as a consultant who helps his client to negotiate a solution that best suits his/her interests.

It can help in various forms:

• to advise the client before or between mediation sessions;
• to participate in mediation with him;
• to act instead of clients in Mediation (in rare cases, mainly in commercial disputes).

Unlike litigation, where the role of the lawyer is of a defender who is entirely responsible for the outcome of the process, here the responsibility for this decision is shared. The decision is actually taken by the client; the lawyer is the professional who advises him on how best to protect the interests which the client stands for in Mediation. The role of the lawyer can be as a leader - he holds talks with or without his client or as an escort – an adviser who takes part if necessary.

The professionally performed role of the lawyer executed in Mediation provides not only a good solution for the party, but is also crucial for a successful mediation. In particular, in the course of mediation lawyer assists as:

• Informs and advises the client of his rights, strong sides and weaknesses of his case;
• Helps the client to build a realistic assessment of the case and possible solutions, based on facts, law, accepted standards or practices;
• Advises him to assess the options for agreement;
• Upon completion of the mediation the lawyer prepares or assists the preparation of the achieved agreement and ensures its legality;
• After mediation, in a pending case, the lawyer shall submit the agreement for approval by the court;
• When necessary, the lawyer can assist the enforcement of this Agreement;

In cross-border mediation it is essential the lawyer to ensure compliance with applicable requirements of legality and enforceability of the agreement.

Consultation with a lawyer before signing the agreement is seen as an important guarantee for safeguarding the rights and interests of the parties. Therefore it is common practice to recommend to the parties either in the rules of Mediation of many Mediation organizations or by the mediators during the procedure.

• Scope of Mediators’ obligations

Mediator’s duties and responsibilities during mediation do not have uniform international regulation, as mediation is a flexible procedure applied in forms which vary not only from country to country but from mediator to mediator.

The EU Mediation Directive also does not provide any hints as to the role of mediator. It defines the term ‘mediator’ in the widest possible manner. According to Article 3 (b) of the Directive ‘Mediator’ means ‘any third person who is asked to conduct a mediation in an effective, impartial and competent way, regardless of the denomination or profession of that third person in the Member State concerned and of the way in which the third person has been appointed or requested to conduct the mediation’.

The main instrument providing framework of the responsibilities of a mediator in the mediation proceedings is voluntary, but widely acknowledged and used - the "European Code of Conduct for Mediators".http://ec.europa.eu/civiljustice/adr/adr_ec_code_conduct_en.pdf

In countries having legislation governing mediation, mediator’s obligations are usually regulated – at least in general, and rarely in details. Mediators often have subscribed the rules of mediation providers which most often contain regulation of the specific duties of a mediator in the mediation proceedings.

In cross-border cases the first thing to determine prior to mediation is namely the common understanding of mediation and the conditions for mediation. On the grounds of the above, it will be decided what rules will be applied to mediation proceedings in order to know what duties and functions are assigned to mediators. They can usually be slightly altered upon agreement between parties and mediators in the agreement to mediate.

Opening

One of the key objectives of the opening in cross-border mediation would be to adjust the way of mediation and occasionally to set clear rules about mediation where necessary so that all participants in mediation have the same expectations from the process. This is especially important as people from different background might have different experience with mediation and therefore different expectations.

Unless determined during the administrative preparation of the procedure, the following issues should be discussed between mediator/s, parties and their lawyers.

• Treatment of parties – aims, roles and functions
• Rules governing mediation – applicable law, content of the agreement to mediate, legitimating of mediator/s, parties, lawyers;
• Structure of mediation – view on phases, applicability of joint sessions, caucuses, shuttle mediation, partial and untypical meetings (with one or two lawyers only, with third parties influencing mediation);
• Timeframe – schedule for mediation sessions (e.g. whether parties prefer intensive mediation sessions in few consecutive days in order to save time, or need more time in between mediation sessions), deadlines (e.g. in case of forthcoming court session);
• Dealing with distance – type of distant communication suitable for parties (if any) – tele or videoconference, VOIP, emails; combination with sessions in person.

At the end of the opening mediator/s and parties are supposed to have a signed agreement to mediate (if such is not concluded during the preparatory stage of mediation) containing the most important part of their arrangements, and oral or written arrangement on the four main issues above.

Sessions

• First joint session (variations, e.g. no joint meeting) – in addition to clarifying the disputable and undisputable issues an important objective of the first joint session in cross-border mediation would be to establish the real influence of international and intercultural issues.
• Caucuses – use of caucuses might be used in cross-border mediations as well. For this purpose, it is useful to arrange caucuses, including applying flexible forms such as online caucuses or phone caucuses. E-mail correspondence between mediator and each party between mediation sessions cannot play the role of a caucus, but it might be a great way to clarify, sort, prioritize issues in a safe and private manner. E-mail correspondence between all participants in mediation is also possible, but it might become very risky, as people tend to interpret other party’s words in e-mails in a negative connotation, which often increases misunderstandings and might even aggravate conflict.
• It’s a question of mediation culture on the one hand and the needs of the parties on the other hand whether a caucus or a joint session will be preferred. Caucus allows parties to easier open their strategic thoughts and expectations. Joint session easier let them learn the adversary’s point of view.
• Subsequent joint sessions and caucuses – in cross-border mediation time constraints and distance issue would impact the form and the duration of such sessions.

Closing

When mediation ends without agreement it is recommendable that the mediator summarizes the issues on which parties have similar views or on which they have achieved progress during mediation, as well as to encourage parties to meet again after a short period of time. It is appropriate to schedule a follow-up meeting or a phone call which would enable the mediator to support parties in their efforts to continue the settlement process if they intend to do so.

When parties reach an agreement, whether partial or on all disputable issues, the following issues must be discussed between them, their lawyers and mediator/s:
- drafting the agreement – how, by whom, when;
- form – oral, written, notarized; are there any special form requirements under the applicable law;
- enforcement - where, applicable law;

Agreements should be written in short, precise and unambiguous manner. Mediators can assist parties in preparing their agreement by facilitating the process of its formulation without interfering in any way in the content. In practice, this occurs when the mediator technically records the agreement using what is expressed by the parties.

Since in most cases of cross-border mediation the lawyers either participate or they are available to consult during the procedure, they can assist or carry out the preparation of this Agreement. In cases in which they draw up the agreement it is important not to change the statements of the parties and not to add any questions or issues that the parties have not discussed. In addition, it is advisable the so drawn up agreement to be coordinated between the lawyers fof both sides.

Even when lawyers participate in mediation or consult private parties between meetings, they need to prepare the agreement.

In all cases it is important before signing the agreement to allow the parties to consult with their lawyers as the responsibility for the legality and validity of the agreement as for the protection of interests of each party goes to the parties themselves and their lawyers.

In what form and what content should be the agreement

The settlement agreement is a contract by which parties settle a dispute between them. It might be regulated or unregulated contract in different legislative systems. In cross-border cases it is very important to determine which law will be applicable to the settlement agreement, in order to comply with possible requirements as to its form, requisites and its enforcement. The applicable law will be determined again on the grounds of RIR, mentioned above in section ‘Applicable law’. In any case, it is preferable that parties include a choice-of law clause in their settlement agreement.
Most legal systems provide high extent of freedom for parties to decide on the form and the contents of their settlement agreement. As mentioned before, the agreement may be oral, written, or bearing parties’ notarized signatures. Certain legislations may contain requirements as to the obligatory requisites of the settlement agreement.
It is recommendable that settlement agreement contains very specific covenants as to the parties’ obligations and the acts they will perform after mediation. The specific modalities of performance, such as place, time and deadlines, conditions and manner should be specified in order to increase the chances for correct and timely performance.

The effect and legal consequences of the settlement agreement will be regulated by the law applicable to the settlement agreement. In most legislations of the continental law system the settlement agreement would have the legal force of a contract which is binding for parties thereto, may not be opposed to third parties, and may not be contradictory to law and moral.

According to The Mediation Directive Member States should ensure the opportunity for ‘parties, or one of them with the explicit consent of the others, to request that the content of a written agreement resulting from mediation be made enforceable. The content of such an agreement shall be made enforceable unless, in the case in question, either the content of that agreement is contrary to the law of the Member State where the request is made.
In the enforceability of the agreement the requirements and procedures of the law of the State in which the request was made will be applied.

What are the conditions for recognition of Understanding, which is enforceable in one Member State to another Member State

The content of an agreement resulting from mediation which has been made enforceable in a Member State should be recognised and declared enforceable in the other Member States in accordance with applicable Community or national law. This could, for example, be on the basis of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters or Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility. (Recital 20 of the EU Mediation Directive).

Regulation (EC) No 2201/2003 specifically provides that, in order to be enforceable in another Member State, agreements between the parties have to be enforceable in the Member State in which they were concluded. Consequently, if the content of an agreement resulting from mediation in a family law matter is not enforceable in the Member State where the agreement was concluded and where the request for enforceability is made, this Directive should not encourage the parties to circumvent the law of that Member State by having their agreement made enforceable in another Member State. (Recital 21 of the EU Mediation Directive).