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Victoria Mindova

One of the most pressing issues in Greece along with the crisis is the slow and cumbersome judicial system in the country. The fact that a dispute may last for years prevents many local and foreign investors from developing or expanding their operations in the country. "It takes at least a year and a half to settle an international dispute which concerns civil or commercial law. This period can be significantly longer when it has to be settled in a country like Greece, which is known for its extremely busy judicial system," says Konstantinos Mihalos, chairman of Athens Chamber of Commerce and Industry.

The new practice of mediation which is new to Greece is designed to help the busy judicial system. Businessmen from the country and abroad will be able to rely, from the autumn onwards, on a lot faster judicial procedure which will allow them to find ways to settle the disputes relating to their activities in Greece. From September this year onwards, 300 mediators will be mediating in the extrajudicial settlement of disputes.

The mediation is a new institution for the country that is based on a voluntary, confidential procedure for settling disputes between companies and individuals. In it a neutral third party - a mediator - helps the disputing parties reach an agreement. The only condition for the implementation of the extrajudicial settlement is the desire of the two parties to reach an agreement without turning to the cumbersome judiciary system.

The mediation institution has been established on the basis of a proposal and project of the European Commission task force for Greece. Its head, Horst Reichenbach, was clear that the mediation would facilitate and improve the functioning of the judicial systems and at the same time would significantly reduce the time and cost of settling civil disputes.

The mediators can settle all civil and commercial disputes in the country, the only condition being the presence of the good will of the two parties to find an extrajudicial solution. The main advantages of the procedure are the significantly lower cost compared to a lawsuit and the faster settlement of the dispute.The measure is urgent, as the Greek courts are literally overwhelmed with civil and commercial claims that they cannot address for years. The court in Athens, for example, has over 190,000 cases, only half of which have been considered and decided. According to sources from the judicial system, over one million lawsuits are pending in all courts in the country which cannot be considered for years.

Due to the deepening crisis, the problems of households with debts to banks have significantly increased. The changes in the regulatory framework in 2010 have entitled households with no income and only one flat with a mortgage to benefit from the protection of the law and ask for forgiveness of the majority of the debt. If the bank and the household cannot reach alone an agreement within the law, the case is forwarded to the judicial system which is to judge whether the alleviation can be applied to the particular case.

The practice shows that a mutual agreement has been reached for only one household out of the five thousand cases which were considered by the Ombudsman of the country. "The majority of the cases related to indebted households have been forwarded to the judicial system which has scheduled the date of hearing after 2021 because it is unable to keep up with the large volume of cases," said at a press conference Nicolas Kanellopoulous, general secretary to the Ministry of Justice.

"From September onwards, we will have over 300 trained mediators who will be able to facilitate the courts as regards cases related to civil and commercial law," said Dimitra Tredafilou for GRReporter exclusively. She is a lawyer, mediator and accredited teacher in the educational centre for mediation in Greece. The people she is training are mainly lawyers and economists by occupation.

The mediators will receive 100 euro per hour; in compliance with the practice accepted in Greece, the settlement of a case takes eight hours on average. If the case requires a longer period of research, for example a week or two, the mediator cannot receive remuneration greater than 2,400 euro.

"This is done in order to avoid a deliberate extension of the settlement," says Tredafilou. The sum of remuneration is divided between the two parties which want to settle the dispute out of the court. The cost of the procedure itself is 200 euro and it is paid by either party after reaching an agreement. Tredafilou states that it is not important who will pay the 200 euro for the mediation when it comes to the fast settlement of disputes for thousands and sometimes millions of euro.

The business in Greece is positive as regards the opportunity for fast extrajudicial settlement of disputes mainly because it reduces the time for settling the disputes and, subsequently, the relevant cost. Lawyers must represent the parties who appear before the mediator, as they will help settle the dispute faster.

"Mediation opens up completely new horizons for the legal profession in Greece. It makes the legal process settle disputes faster and more flexibly and conveniently for the clients and allows the parties concerned to reach an agreement that suits them both, which is rarely possible in the case of court decisions," concludes Dimitra Tredafilou.