Latvia
In your jurisdiction, are there any formal ADR procedures available for resolving commercial disputes other than litigating (or arbitrating) to a final hearing?
Yes. In Latvia, ADR options include mediation, conciliation, dispute resolution with the help of an expert and binding advice.
Mediation is structured co-operation process on voluntary basis whereby the parties attempt to reach a mutually acceptable agreement on the settlement of their dispute with the assistance of a mediator.
Conciliation is similar to mediation but focuses on clarifying the rights of the parties and assessing the claim. For example, labor conciliation committees, where the employee settles the dispute with the employer with the help of the employees’ trade union.
Expert determination involves a process whereby the parties hire an expert who provides a solution to their dispute.
In the binding advice process, the parties hire an independent expert who, after hearing the views of the parties, provides a binding advice. However, this binding advice is not compulsory enforceable. After this process, the parties are more likely to maintain their cooperation/relationship in the future.
Does engaging in ADR have any effect on potential or existing litigation or arbitration?
The running of the time period for bringing an action (limitation period) laid down in law and regulation is suspended at the time when a proposal for mediation is expressed. The running of the time period for bringing of an action renews from the day when a proposal for mediation is rejected or mediation in accordance with Mediation Law is terminated.
Court-Annexed Mediation is mediation that takes place during the judicial process, while the essence of the case has not yet been completed, if the parties have expressed a desire to resolve their disputes through mediation after the court (or judge) recommendation. When the parties (claimant and defendant) in the case agree to use mediation, the judge decides to use mediation and sets a deadline for its use, which is not longer than six months, and also establishes the obligation of the parties to submit evidence to the court regarding the outcome of the mediation no later than seven days after the conclusion of the mediation.
Regarding negotiations, the Civil Procedure Law of the Republic of Latvia provides that the court is not obliged to accept an application to suspend proceedings, if the extrajudicial examination procedure has not been carried out.
Is ADR compulsory and if so are there any consequences if a party fails to engage in ADR? If it is not compulsory are there any plans for this to change?
ADR is not a compulsory process, with the exception of labor conciliation committees, as mentioned previously.
Mediation is voluntary. There are no consequences for parties not engaging in ADR. The Ministry of Welfare plans to make mediation mandatory in divorce proceedings. It is envisaged that the failure of an applicant to attend a consultation of a certified mediator before an orphans’ court or a claimant before a court, without fulfilling an obligation directly arising from the legal provision, would be an obstacle to initiating an administrative case before an orphans’ court or to initiating legal proceedings before a court. Therefore, it is necessary to legislate that if the orphans’ court finds that the applicant has not attended the counselling of a certified mediator, it has the right to refuse to initiate an administrative case. In order to ensure effective control over the legality and appropriateness of the Orphans’ Court’s action (refusal to initiate an administrative case), the right of persons to appeal against the refusal of the Orphans’ Court should be preserved.
Can the parties agree, in advance of any potential dispute, to engage in ADR?
Yes. The ADR process in Latvian private law is essentially an expression of the private autonomy of the parties, such as the parties may provide for the ADR process in a contract.
When does ADR generally take place?
Mediation can take place outside court proceedings (pure mediation) or through mediation recommended by the court. The regulation of court-recommended mediation in Latvia is laid down in the Mediation Law and the Civil Procedure Law. It is mediation conducted by a mediator where, in the course of the proceedings, pending the merits of the case, and on the recommendation of the court or a judge, the parties have expressed their willingness to resolve their differences through mediation.
Other possible forms of ADR can be carried out during the proceedings, except for ADR which is required by law to be carried out before the proceedings, such as conciliation commission in labor disputes.
Is ADR subject to without prejudice privilege and/or confidential? If not, is there any other means to protect confidential information?
Yes, ADR is confidential. Information obtained in or relating to ADR is confidential unless otherwise agreed by the parties.
In mediation, the mediator shall not disclose to a party information provided by the other party unless the other party agrees. Confidentiality is one of the fundamental principles of mediation, which is enshrined in the Mediation Law. If the parties so wish, an additional confidentiality agreement may be agreed and attached to the mediation agreement. This is signed only by the parties, as the mediator’s confidentiality is already provided for by the Mediation Act.
Does the output from ADR create precedents?
This does not set a precedent, as the process is confidential. Because the ADR process is private, the precedential value of dispute resolution is very limited.
Who bears the costs of ADR?
Usually, the ADR process is paid for by the parties jointly in equal shares, but other arrangements can be made.
Is your jurisdiction subject to any specific rules for cross border ADR?
Latvian cross-border ADR process comply with the relevant laws and regulations. Latvia is not a party the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention).
Are there any particularly unusual features of ADR in your jurisdiction that you are aware are different to other jurisdictions?
The mediator does not need any specific qualifications. Mediator – a natural person selected freely by the parties who has agreed to conduct the mediation. Certified mediator – a mediator who in accordance with the procedures laid down in the laws and regulations has acquired mediation and received a certificate which gives the right to be included in the list of certified mediators.
Under the State Budget Program, individuals can receive state-provided support to use the services of certified mediators free of charge to help resolve disagreements between parents that also affect the interests of children and to strengthen family stability. In order to ensure the quality of the mediations and the availability of mediators, the project is implemented in close cooperation with the Board of Certified Mediators. The mediation services will be provided by certified mediators.
To promote the use of mediation in family disputes involving children’s interests, the Government is promoting an initiative to introduce mandatory consultation on mediation. The aim is to provide parents with information, understanding of mediation options and resources for resolving family disputes. At the same time, the choice to use mediation or not remains at the discretion of the parties.
Contacts
© Eversheds Sutherland. All rights reserved. Eversheds Sutherland is a global provider of legal and other services operating through various separate and distinct legal entities. Eversheds Sutherland is the name and brand under which the members of Eversheds Sutherland Limited (Eversheds Sutherland (International) LLP and Eversheds Sutherland (US) LLP) and their respective controlled, managed and affiliated firms and the members of Eversheds Sutherland (Europe) Limited (each an "Eversheds Sutherland Entity" and together the "Eversheds Sutherland Entities") provide legal or other services to clients around the world. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements and operate in accordance with their locally registered names. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the Eversheds Sutherland Entities are in a partnership or are part of a global LLP. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client.