Commercial Mediation During Pending Litigation: Can Parties Mediate While Civil or Commercial Proceedings Are Ongoing?

Yes! Mediation can be initiated at any stage of a dispute, including while court proceedings are pending. A successful mediation can resolve the dispute and bring the litigation to an end.

Parties to ongoing court proceedings may:

• discuss and negotiate any aspect of their dispute out of court at any time, without involving the court;
• agree to mediation and initiate the process at any stage of the proceedings!

Mediation can be particularly effective in these circumstances, offering a faster and more sustainable path to resolution. Under the Austrian Code of Civil Procedure (Zivilprozessordnung, ZPO), the parties may agree to stay the pending court proceedings while pursuing mediation. In practice, we have successfully resolved numerous disputes already pending before the courts within a short time, reaching mutually acceptable settlements for all parties involved (win-win).

Most court proceedings ultimately end not with a judgment in favor of one party over the other, but with a settlement. Such settlements can often be reached just as effectively—and more swiftly—through commercial mediation conducted by an attorney mediator (legally enforceable settlement executed as a notarial deed).

Litigation may “resolve” a dispute in legal terms without achieving a lasting, sustainable solution. As the familiar saying of a judge goes, “After a judgment, at least one party is inevitably dissatisfied.” This highlights the fact that a court ruling often fails to deliver the outcome the parties had hoped for, particularly when the underlying conflict is rooted in:

• emotional factors,
• differing perceptions of the facts,
• differences of opinion or perspective

that cannot be addressed in court for procedural reasons, it is clear that a judgment is unlikely to resolve the conflict.

Commercial mediation also enables businesses to safeguard trade secrets and other sensitive internal information that might otherwise be disclosed in public court proceedings. Confidentiality is often a key consideration when deciding whether to pursue mediation rather than litigation.

For businesses, litigation can entail substantial financial uncertainty, prolonged disruption, and unpredictable demands on time and resources, all of which can negatively affect overall business performance. Commercial mediation, by contrast, offers greater predictability in terms of costs, timelines, and resource commitments, enabling CFOs to plan with greater financial certainty!

Complex civil litigation can take three to five years or longer, depending on:

• the facts and circumstances of the case;
• the volume and complexity of the evidence, as well as
• the number of appellate stages involved.

Beyond court fees, attorneys’ fees, and expert witness costs, businesses often underestimate the substantial internal costs of litigation. These include employees’ time spent preparing for repeated court hearings, participating in party and witness examinations, compiling documentation for use in court, etc. Such internal costs can substantially exceed external legal expenses, are typically not covered by insurance, and must be borne by the company regardless of the outcome—even if it prevails in court.

It is therefore worth considering whether commercial mediation could offer an effective alternative to litigation, even when court proceedings are already underway.

Over the past several years, we have successfully helped parties resolve numerous disputes already in litigation, achieving lasting outcomes through mutually acceptable, win-win solutions. In nearly every case, the cost of mediation was less than one-third of the cost of continuing with litigation.

How can parties transition to mediation while court proceedings are ongoing?

The process is straightforward. At any stage of civil proceedings, the parties can agree to pursue a mutually acceptable resolution through commercial mediation. Court proceedings can be stayed for the duration of the mediation. If the mediation is successful, the parties may agree to an indefinite stay of the proceedings, known in Austrian procedural practice as ewiges Ruhen.

The attorney mediator can:

• formalize the mediated agreement in a written settlement (which can be made directly enforceable by execution as a notarial deed) or
• alternatively also submit the settlement to the court,

whereby both options can result in an enforceable title. If the mediation does not lead to an agreement, the court proceedings can resume.

Under Section 22 of the Austrian Civil Law Mediation Act (Zivilrechts-Mediations-Gesetz), “the commencement and proper continuation of mediation conducted by a mediator registered with Austrian Federal Ministry of Justice (BMJ) suspend

• the commencement and running of limitation periods as well as
• any other time limits for asserting rights or claims that are the subject of the mediation”.