🇬🇷 When a Mediator Proposes Settlement: The Questions Raised by Greece’s ADR Reform
by Pierfrancesco C. Fasano
Greece’s proposed Code of Alternative Dispute Resolution would give a mediator’s settlement proposal a defined place in the procedure. It would also allow the parties’ response to that proposal to affect the costs of later proceedings. What safeguards does such a model require?
A new role for the mediator’s proposal
Greece’s proposed Code of Alternative Dispute Resolution, currently under public consultation, provides that a mediator may formulate a settlement proposal when the parties state that they cannot reach an agreement. If both parties request a proposal, the mediator would be required to make one. Neither party would be obliged to accept it.
The proposal seeks to give parties another means of overcoming an impasse. That objective is readily understood. A mediator may see possibilities that have become difficult for the parties to identify while they remain focused on their respective positions.
The legal significance of the Greek draft, however, lies in the formal status it would give to the proposal. It would be made in writing, communicated to the parties and, if rejected, potentially relevant to the allocation of costs in subsequent proceedings. These features invite closer examination of party autonomy, confidentiality and the different responsibilities of mediators and lawyers.
Helping parties decide, without deciding for them
Under Directive 2008/52/EC, mediation is a process in which the parties attempt themselves to reach an agreement with the assistance of a mediator. The Directive calls for mediation to be conducted impartially and competently. It does not require every mediator to use an exclusively facilitative approach or prohibit discussion of possible settlement terms.
There is nevertheless a material difference between helping parties generate options and presenting them with a written proposal bearing the mediator’s authority. The latter may become a useful basis for negotiation. It may also be understood as an assessment of what the parties ought to accept, even where the mediator intends no such assessment.
That distinction matters because neutrality concerns the mediator’s relationship with the parties and the conduct of the process. It does not mean that any particular settlement term is legally correct or equally advantageous to both sides. Parties must remain able to examine a proposal against their own interests, risks and alternatives.
What the draft would require
Draft Article 81 provides that the mediator’s proposal should be clear, written and based on the information emerging during the mediation and the parties’ needs. It expressly states that the proposal does not constitute a legal assessment of the parties’ positions. Nor may it refer to statements, admissions or information obtained during the process unless the parties expressly agree in writing.
Before making a proposal, the mediator would have to inform the parties of the legal consequences of accepting or rejecting it. Acceptance or rejection would be communicated in writing, generally within five days unless a longer period is agreed. Silence at the end of that period would count as rejection.
These requirements address several practical risks. They also raise an important question of implementation. A mediator may frame a proposal around the parties’ needs without assessing the merits of their legal positions. Yet, if that proposal is later compared with a court judgment, the parties may reasonably ask how its purpose and status differ from an evaluation of the likely judicial outcome. A clear explanation at the time of the proposal will be essential.
Distinct responsibilities for mediator and lawyer
The mediator is responsible for conducting an impartial process and helping the parties communicate, explore options and negotiate. A lawyer advising a party has a different task: to consider the evidence, legal position, prospects of litigation and consequences of settlement in the interests of that client.
The distinction remains relevant when the mediator is also qualified as a lawyer. Professional qualification does not turn the mediator into either party’s legal adviser. Nor does the mediator’s impartiality make their view of a proposed settlement more authoritative than advice given by a lawyer who knows a party’s case in depth.
Under draft Article 78, parties would generally participate in mediation with legal representatives, although personal attendance would be permitted in consumer and small claims disputes. In every setting, a party should understand when the mediator is explaining the process, when a settlement option is being proposed, and when independent advice on its legal consequences may be needed.
Clearly defined roles strengthen mediation. They allow the mediator to remain impartial, the lawyer to advise the client and the parties to make their own informed decision.
The proposed costs consequences
The question becomes more consequential when a rejected proposal can follow the parties into later proceedings. Under draft Article 81, the mediator would attach a rejected proposal to the record of unsuccessful mediation and briefly state the reasons for its rejection. If a subsequent judgment substantially coincides with the proposal, the court could, with specific reasons, order the rejecting party to pay judicial costs of up to twice the amount otherwise awarded.
Draft Article 89 would permit further consequences concerning judicial and extrajudicial costs where a final decision substantially coincides with a rejected proposal. These provisions are part of a draft Code: they do not describe costs orders already made under it. The proposed powers are discretionary, although the possibility of an adverse order could influence how parties respond during mediation.
European law allows Member States to provide incentives or sanctions connected with mediation, provided that access to the judicial system remains available. That leaves a question of proportion and design: will the proposed costs rules encourage serious consideration of settlement while preserving a genuine choice to reject terms that a party considers unsuitable?
Confidentiality at the boundary with litigation
Draft Article 78 describes mediation as confidential and generally restricts the use of material arising from it in later proceedings. Article 81 would nevertheless allow a rejected mediator’s proposal, accompanied by brief reasons for rejection, to be considered for the purpose of costs.
That boundary needs careful definition. Parties often explore settlement because they can speak freely, test possibilities and disclose concerns without turning every exchange into material for litigation. A rule that brings a proposal and the reasons for rejecting it before a court should make clear which information may be disclosed, for what purpose and at what stage. It should also preserve the confidentiality of separate discussions with the mediator.
Conclusions
A mediator’s settlement proposal can be a constructive intervention. Its effectiveness depends on the parties understanding its purpose, its limits and the consequences of their response. The proposal must remain a means of assisting their decision, rather than acquiring the force of a decision made for them.
The Greek consultation offers an opportunity to establish those safeguards with precision. The proposed Code should leave mediators able to assist parties at an impasse, lawyers able to give independent advice, and courts able to address costs without undermining confidence in confidential negotiations. Above all, the parties must retain meaningful control over whether an agreement serves their interests.
Legal references and sources
Greek Ministry of Justice, proposed Code, Article 81 — Mediator’s settlement proposal.
Greek Law 4640/2019, Article 2, definitions concerning mediation and legal representation.
Directive 2008/52/EC on certain aspects of mediation in civil and commercial matters, particularly Articles 3–5.
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