Romania
In your jurisdiction, are there any formal ADR procedures available for resolving commercial disputes other than litigating (or arbitrating) to a final hearing?
In Romania, the main ADR procedure available for resolving commercial disputes without resorting to litigation or arbitration is mediation. This is an alternative, voluntary method for amicably resolving conflicts, with the involvement of a third-party specialized as a mediator. This process adheres to principles of neutrality, impartiality, and confidentiality, and relies upon the voluntary consent of the parties involved.
Other ADR procedures are 1) negotiation, the most common and straightforward form of ADR procedure involving direct discussions between the parties (and/or their legal advisors), with the parties seeking to resolve the dispute by reaching an agreement. It is often the first step in resolving commercial disputes; and 2) conciliation, an alternative dispute resolution procedure similar to mediation, involving an external consultant (the conciliator) who must have a strong reputation and expertise in the relevant field of law where the dispute is occurring. The conciliator takes a more active role in proposing solutions to the parties. Conciliation is commonly used in labor and employment disputes, and it is not specifically related to commercial disputes.
Other more specialized mechanisms (involving other fields of law, and not specifically related to commercial disputes) are 1) customer protection: SAL Direction within The National Authority for Consumer Protection (ANPC): an alternative mechanism for the judiciary, whereby consumers are given the opportunity to resolve disputes they may have with traders when facing a problem with the purchase of a product or service; 2) banking: the Alternative Banking Dispute Resolution Center, an independent non-governmental apolitical, not-for-profit legal entity of public interest, whereby consumers are given the opportunity to resolve disputes they may have with the banks.
Does engaging in ADR have any effect on potential or existing litigation or arbitration?
Yes, engaging in mediation in Romania, suspends the deadline of the statute of limitations from running. The mediation process requires the parties to conclude a mediation agreement and as soon as that happens the statute of limitations deadline is suspended for the entire duration of the mediation procedure, irrespective of the result. If the parties decide to engage in ADR after court proceedings have commenced, the court has no legal grounds to suspend the proceedings, but according to the law, if both parties request the suspension, the court must suspend and in practice this is what happens in most cases.
Engaging in ADR procedures, such as mediation, may have certain effects on litigation or arbitration, subject to a mutually agreed solution between the parties. Hence, when a conflict or dispute is settled through mediation, and the parties involved reach an agreement, the court typically plays a role solely in formalizing the agreement by rendering an expedient decision, which is enforceable.
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?
Mediation is not compulsory, but according to the Romanian Civil Procedure Code, the courts may invite the parties to resort to mediation to amicably resolve the dispute, and if agreement is reached, part of the court taxes already paid are be reimbursed.
The right to litigate or arbitrate is not directly affected by engaging in ADR as the parties are not obligated to settle the dispute. On the contrary, the parties have the right to leave the mediation procedure at any time and opt for litigation or arbitration instead.
Previously, for processes started after August 1, 2013, the parties were obliged to attend an information session on the advantages of mediation before initiating certain legal processes and even though the obligation pertained to attending an information session on mediation and not the mediation procedure itself, the imposed sanction was notably severe, namely: the annulment of the request for a lawsuit. Later, (through Decision no. 266/2014) it was decided that the obligation to attend the information session about the advantages of mediation is a restriction of the free access to justice. As a result, as from August 10, 2014, the provisions that stipulated the obligation to participate in the information session ceased to have any legal effects.
Can the parties agree, in advance of any potential dispute, to engage in ADR?
Yes, the parties can include clauses in their contracts, specifying that they will attempt to resolve any disputes that may arise through ADR procedures, such as mediation, before resorting to litigation or arbitration. These clauses are referred to as “mediation clauses”.
When does ADR generally take place?
ADR can take place both before initiating a formal court case and after a lawsuit has been filed.
Is ADR subject to without prejudice privilege and/or confidential? If not, is there any other means to protect confidential information?
Yes. ADR in Romania is generally confidential, and the communications, discussions, and support made during mediation by the parties to the conflict, as well as by the mediator are confidential to the parties. Moreover, the information shared during mediation is not admissible as evidence in legal or arbitral proceedings, unless the parties involved in mediation explicitly agree otherwise or unless the law specifically allows for it.
Does the output from ADR create precedents?
No, ADR procedures do not create legal precedents. It should be mentioned in this context that in Romania, the legal system is primarily based on codified laws and regulations, and the court decisions are not based on precedent.
Who bears the costs of ADR?
For the initial information session, the mediator is not entitled to charge any fees. Thereafter, the parties share the costs of ADR procedures, including the mediator fees and other expenses. The parties’ obligation to pay the mediator’s fees and the expenses incurred by the mediator during the mediation process in the interest of the parties, is included in the mediation contract.
Is your jurisdiction subject to any specific rules for cross border ADR?
As an EU member state, Romania is subject to EU regulations and directives, the following being relevant: 1) the European Small Claims Procedure Regulation, having as a general objective to simplify and expedite litigation concerning small civil and commercial cross-border cases, as well as to reduce costs; 2) moreover, Romania has implemented into the national law the Mediation Directive, aimed to promote and regulate mediation as an alternative dispute resolution method for civil and commercial disputes, providing a standardized approach within the EU.
Are there any particularly unusual features of ADR in your jurisdiction that you are aware are different to other jurisdictions?
Mediators in Romania should undergo specialized training and obtain certification from accredited mediation training providers. While there is no obligation for mediators to be legally qualified, lawyers, public notaries, and legal advisers can acquire the capacity of a mediator.
As mentioned above, the judicial stamp duty is refundable if the conflict or dispute is resolved through mediation, unless the conflict resolved by mediation is related to the transfer of ownership, in which case 50% of the judicial stamp duty paid will be refunded.
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