Going to court in Thailand or anywhere in the world can be a daunting process. It may seem like the only option when parties cannot reach an agreement, be it over a business contract, a payment dispute, an inheritance, or property issue. Even so, after spending considerable time and money on legal fees, you may still end with an unsatisfactory result when the courts take over the process. Of course, you can appeal a judge’s decision, but that means more time (and money) in court.
In Thailand there are existing alternative dispute resolution (ADR) options such as arbitration and mediation, but even those avenues can be costly, complicated, and challenging for all parties involved. Thai lawmakers have been working on strategies to encourage parties to pursue ADRs instead of getting caught up in a seemingly never-ending court process. To this end, they published an amendment to the Thai Civil Procedure Code (link to Thai version) in September 2020 that modifies and simplifies the current mediation process, allowing disputing parties to defer costs and more easily avoid a drawn-out litigation process.
Mediation is not arbitration
Many people think that mediation and arbitration are the same thing. They are not. Mediation, unlike arbitration, is generally a more informal process during which a mediator oversees and facilitates communications that will hopefully reach an agreed upon resolution. The mediation process itself is non-binding until and unless the parties reach and enter into a settlement agreement. Arbitration is more structured and can be likened to a private court procedure in that arbitrator(s) judge and decide a case, which is generally binding on the parties.
Mediation in Thailand can occur outside court proceedings or as part of a court-supervised process. Of course, if mediation breaks down irrespective of where it originated, the parties can choose to proceed with a lawsuit in court.
We will focus specifically on developments in court-supervised mediation in this article.
What is pre-litigation mediation in Thailand?
Previously, mediation could only occur after a party filed a formal complaint in court against another party. Also, being part of the lawsuit process and subject to the court’s trial docket, months might easily lapse before the mediation hearing is scheduled.
The new amendment allows a complainant to file a motion requesting a mediator without having to file a complaint first, thus allowing the parties to defer or skip the costs associated with drafting and/or responding to a complaint. Upon acceptance, the court will summon involved parties and appoint a mediator with the court-supervised mediation process ensuing. Typically, the mediator has 60 days to resolve the dispute and can call for information, evidence, and meetings between parties as required. If the mediation ends in a settlement, the parties will present the agreement to the court. If accepted by the court, it is final and binding.
Why is this pre-litigation mediation a good thing?
Since the settlement of this type of mediation is final and binding (appeals are only possible on the grounds of fraud or illegality), it can be enforced through the court system. Also, disputing parties avoid costly, drawn out litigation. There are no court fees for this process, and legal fees will be comparatively less compared to litigation costs.
Furthermore, even though pre-litigation mediation is a court-supervised process, it is still not part of a formal court proceeding. Negotiations during a mediation are considered “without prejudice”, meaning facts presented, statements made, positions ceded and offers proposed cannot be held against you in a later trial (if mediation fails) and remain non-binding until a settlement is agreed. If all parties enter pre-litigation mediation in good faith, any positive, beneficial relationships could be salvaged if they avoid a contentious litigation and ultimately resolve disputes together.
GPS Legal wants to help you resolve your legal disputes in Thailand
If you are in a dispute in Thailand or with a party in Thailand, GPS Legal can assist you. We understand that you most likely would want to resolve any conflict without going to court. So, we will discuss your various mediation and arbitration options available in Thailand that will best work for you. Contact us today for an initial consultation.