As of March 2003 Act LV of 2002 on Mediation (the "Act"), came into force. This area has not yet been regulated any time before in Hungary. The scope of the Act is to provide a dispute resolution procedure for parties to a conflict with the participation of a third party mediator and to assist the parties in concluding a settlement agreement in relation to the dispute. The scope of the Act is somewhat limited, certain types of conflicts are excluded from its scope.
Only listed practitioners may provide mediation services. The Ministry of Justice maintains a list of mediators licensed after an administrative procedure. Any private individual with a university degree, and five years of practice in the same area (if other general conditions are also met) may be registered as a mediator. Also, legal organisations (e.g. law firms) may be authorised to provide mediation services if mediation is registered among their activities in their deed of foundation and if they prove that they have an employee or a member who is registered as a mediator.
The Act provides that the parties to a conflict may, on the basis of their mutual agreement, invite one or more mediators in writing to the mediation procedure. The mediator is required to respond in writing within 8 days indicating whether he/she accepts the invitation. The parties are then required to sign a mediation contract with the mediator. The fees and the costs of the mediation are up to the parties. The parties are obliged to be personally present at the first hearing, otherwise each party may be represented by a lawyer or any authorized third party. At the first hearing the parties have to give a statement in which they declare in writing that they wish to proceed with the mediation procedure. In this document they must also agree on the payment conditions for the costs arising in connection with the procedure, on the conditions of the termination of the procedure and on any confidentiality provisions.
During the procedure the mediator may have joint hearings where all of the parties are present and separate hearings with each party. Where separate hearings are held, the mediator may release information provided by one of the parties to the other party, except where the party providing the information instructs the mediator otherwise. The mediator may ask for the opinion of an expert and may interview third parties having knowledge of the conflict between the parties.
The mediation procedure may terminate with the signing of a settlement agreement by the parties, and must be terminated if the procedure does not result in a settlement within 4 months from its commencement. The parties may freely initiate a court or arbitration procedure regarding the same conflict even after a settlement has been concluded, but there are restrictions on the ability of the parties to refer to information acquired in the mediation procedure in the court or arbitration procedure. If the mediation procedure has been terminated by signing of a settlement agreement and afterwards any of the parties initiates legal proceedings regarding the same conflict (except the legal proceedings for the enforcement of the settlement agreement), the party initiating the legal proceedings must bear all costs of the court procedure irrespective to the judgement to be made in such legal proceedings.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.