TO

The 51st National Assembly of the Republic of Bulgaria

CC:

Committee on Constitutional and Legal Affairs (Lead Committee)

OPINION

Submitted by

Bulgarian Entrepreneurial Association (BESCO),
UIC 177239971,
represented by its Executive Director, Nedyalko Dervenkov

Regarding: Draft Act Amending and Supplementing the Civil Procedure Code, Bill No. 51-502-01-19

Dear Members of Parliament,

The Bulgarian Entrepreneurial Association (BESCO) brings together more than 1,000 companies from dozens of industries. We work to improve Bulgaria's business environment through effective public policies, the promotion of innovation, and the introduction of modern mechanisms for economic development.

In this context, we would like to express our position regarding the Draft Act Amending and Supplementing the Civil Procedure Code and the Mediation Act, which introduces a mechanism for informing disputing parties about mediation as an alternative dispute resolution method—a key instrument for the sustainable resolution of civil and commercial disputes.

Mediation is a valuable mechanism for resolving commercial disputes between companies, disagreements between partners and shareholders, as well as employment disputes between employers and employees.

For businesses, mediation:

• saves time and administrative costs;
• preserves business partnerships and employment relationships;
• facilitates the swift restoration of normal business operations;
• provides flexibility, confidentiality, and allows the parties to retain control over both the process and its outcome; and
• promotes a stronger culture of legal awareness and constructive communication within the corporate environment.

We believe that:

• Settlement agreements reached through mediation are often complied with voluntarily to a much greater extent than court judgments. This is because the parties actively participate in developing the solution and therefore feel a stronger commitment to the agreed outcome.
• Unlike court proceedings, mediation is confidential. All discussions and documents exchanged during the mediation process remain confidential. This is particularly important for companies seeking to protect trade secrets, prevent the disclosure of sensitive business information, and safeguard their reputation.
• While courts are bound by the applicable legal framework and are often limited to a narrow range of remedies (such as monetary compensation), mediation enables parties to explore a broad spectrum of creative and tailored solutions. These may include future business cooperation, customized payment arrangements, amendments to existing contracts, or other forms of non-monetary compensation.
• Because mediation focuses on the parties' underlying interests and shared objectives, it creates an environment that encourages dialogue and negotiation, making it possible not only to preserve but often to restore business relationships. This significantly reduces the need to establish new commercial partnerships—an undertaking that inevitably requires additional time and expense—and contributes to the stability of the overall business ecosystem.
• Participating in mediation and reaching a mutually acceptable settlement not only resolves the immediate dispute but also improves communication and mutual understanding between the parties. As a result, future disagreements can often be managed more effectively, reducing the likelihood of new disputes arising.

We firmly believe that mediation is not merely an alternative to litigation, but a strategic choice for businesses. It offers an efficient and legally sound means of resolving disputes while contributing to the long-term sustainability and prosperity of companies.

For this reason, BESCO supports every initiative aimed at increasing businesses' awareness of and access to mediation, including the introduction of mandatory informational meetings where appropriate.

We would like to emphasize the following positions regarding the Draft Act:

• Inclusion of Commercial Disputes

We strongly welcome the inclusion of commercial disputes within the scope of the proposed legislation, which we consider to be one of its most important features from a business perspective.

We would also like to stress that introducing a minimum monetary threshold for commercial disputes would be inappropriate.

The success of both the informational meeting and the mediation process itself does not depend on the monetary value of the dispute, but rather on numerous other factors, including the nature of the relationship between the parties, their willingness to engage in dialogue, and the complexity of the specific case.

• Retaining Commercial Disputes Within the Scope of Mandatory Informational Meetings

We believe that, during the legislative process, no categories of disputes—including commercial disputes—should be removed from the scope of mandatory informational meetings.

Doing so would unnecessarily limit access to mediation precisely in those areas where it is most valuable.

Commercial disputes often result in significant financial losses and substantial time costs for businesses.

Compared with court proceedings, mediation offers a faster and more cost-effective method of dispute resolution. This directly reduces operating costs, frees financial resources that can instead be invested in growth and innovation, and enables companies to return more quickly to their normal business activities.

As noted above, mediation also allows commercial relationships to be preserved.

In today's dynamic business environment, where long-term partnerships are essential, the ability to resolve disputes without damaging commercial relationships represents a significant strategic advantage. This contributes to greater market stability and enhances the competitiveness of Bulgarian businesses.

Furthermore, the availability of a fast and effective mediation mechanism for resolving commercial disputes increases legal certainty and predictability for investors.

When companies know that an effective out-of-court dispute resolution mechanism exists, the legal risks associated with commercial disputes are reduced, encouraging both domestic and foreign investment.

This sends a strong signal that Bulgaria offers a stable, predictable, and reliable business environment.

• Expanding the Scope of Mediation to Include Additional Types of Business Disputes

From a business perspective, it is essential that the scope of mediation include categories of disputes that entrepreneurs regularly encounter and that are particularly well suited to alternative dispute resolution.

These include, among others:

• corporate disputes;
• intellectual property disputes; and
• other commercial disputes whose resolution through litigation often takes years, making court proceedings economically, administratively, and practically inefficient.

Including these categories of disputes within the scope of mediation would represent an important step toward modernizing Bulgaria's legal framework and adapting it to the realities of today's business environment.

It would provide entrepreneurs with an efficient, timely, and confidential mechanism for resolving complex and sensitive disputes, thereby directly contributing to the sustainability, innovation, and growth of the Bulgarian economy.

• The Court Should Retain the Power to Order an Informational Mediation Meeting

We believe it is important that courts retain the authority to require parties to attend an informational meeting on mediation even where the parties present a certificate issued by an out-of-court mediation centre confirming that a mediation procedure was conducted prior to the commencement of court proceedings.

Otherwise, there is a significant risk that mediation could be carried out only formally, without any genuine attempt to resolve the dispute.

The principal concern is that parties may participate in mediation solely to obtain the required certificate rather than to engage in a meaningful settlement process.

If the court is deprived of the discretion to assess whether an informational meeting remains appropriate, several undesirable consequences may arise:

1. Parties may participate in mediation solely for the purpose of obtaining a certificate, without any genuine intention of resolving the dispute. This would undermine the very purpose of mediation as an effective alternative dispute resolution mechanism.
2. Rather than engaging in mediation in good faith, parties may perceive it merely as another procedural hurdle that must be overcome before litigation, without fully appreciating its potential benefits.

For these reasons, preserving the court's authority to require participation in an informational mediation meeting, regardless of previously issued certificates, is essential for ensuring the authenticity, effectiveness, and credibility of the mediation process.

Such a mechanism serves as an important safeguard against abuse and helps ensure that mediation fulfils its intended role as an effective alternative means of dispute resolution.

• Court-Annexed Mediators Should Not Be Limited to Legal Professionals

We do not believe that mediators serving in court mediation centres should be limited exclusively to lawyers.

Such a restriction would be inconsistent with good commercial practice and with the realities of modern business, where disputes frequently involve economic, financial, operational, technical, or human resources issues rather than purely legal questions.

The diversity of mediators' professional backgrounds should be regarded as a significant strength.

Business disputes are rarely purely legal in nature.

For example:

• a dispute between shareholders may formally concern profit distribution, while its true cause may lie in poor communication or fundamentally different visions for the company's future;
• a product quality dispute may require technical or engineering expertise rather than purely legal analysis.

A mediator with professional experience outside the legal profession—such as an economist, engineer, HR specialist, financial expert, or entrepreneur—may be better equipped to understand these non-legal dimensions of the dispute.

Such expertise enables mediators to identify and address the underlying causes of conflict that often fall outside the scope of legal issues alone.

Likewise, where the mediator has practical experience within the parties' industry, trust is often established much more quickly.

The parties are more likely to feel that the mediator understands their commercial environment and business challenges, which is crucial for open and productive communication.

Different professions use different terminology and approaches to problem-solving.

A mediator who is not a lawyer may often be better able to explain complex legal or technical concepts in language that is accessible to all participants, thereby facilitating mutual understanding and more effective dialogue.

Knowledge of industry-specific terminology and commercial realities also enables the mediator to ask more relevant questions and guide discussions more effectively.

Indeed, BESCO itself has, on numerous informal occasions, successfully acted as a mediator between its member companies in resolving commercial and other disputes, demonstrating the value that mediators with practical business experience can bring to the process.

• Appointment of Mediators by the Court Mediation Centre Coordinator

We support maintaining the authority of the court mediation centre coordinator to appoint a mediator in cases where the parties have not jointly agreed on one or more mediators.

The coordinator is best positioned to make an appropriate appointment because they are familiar with the mediators on the court's roster, including their qualifications, areas of specialization, professional experience, and particular strengths.

The coordinator is aware not only of each mediator's legal expertise, but also of their background in economics, engineering, finance, human resources, and other relevant fields, as well as their experience in handling specific categories of disputes.

This knowledge enables the coordinator to make an informed and appropriate selection tailored to the particular characteristics of the dispute.

For example, where a commercial dispute requires financial expertise, the coordinator may appoint a mediator with an economics background and relevant practical experience, thereby significantly increasing the likelihood of a successful mediation.

• Replacing the Fine for Failure to Attend an Informational Meeting

We believe that the proposed fine for failing to attend a mandatory informational meeting could instead be replaced by an obligation to reimburse only the costs corresponding to the mediator's remuneration for up to one hour, in accordance with the tariff established by the Supreme Judicial Council.

We believe this approach would:

• constitute a more proportionate and equitable measure;
• reduce negative perceptions of participation in the mediation process; and
• preserve the institutional authority of both the court and the mediator.

Conclusion

In conclusion, BESCO expresses its full support for the broader introduction of mediation into Bulgaria's legal system—initially through court proceedings—as has already been successfully implemented for many years in numerous European countries.

We support this reform provided that the fundamental principles of voluntariness, effectiveness, and professionalismremain fully respected, as they are not compromised by the proposed legislation.

We appreciate the opportunity to present our views and encourage lawmakers to carefully consider the perspective of the business community when finalizing the proposed legislative amendments.

We also express our willingness to participate in further discussions, working groups, and parliamentary committee hearings on this subject.

Respectfully,

Nedyalko Dervenkov
Executive Director

BESCO – Bulgarian Entrepreneurial Association