In today's alert, we will once again address the topic of the amended Public Procurement Law, which has been in force since January 1, 2021. As we noted in the two previous articles, the scale and nature of the regulatory changes are revolutionary – after 15 years of increasing stagnation in public procurement, the legislator has undertaken a comprehensive adaptation of the Public Procurement Law to the current economic realities.
In today's article, we will present another significant change in public procurement – the introduction of regulations on out-of-court dispute resolution to the Act, which are devoted to Section X.
Proceedings for the amicable settlement of a dispute will be conducted pursuant to an agreement concluded between the contracting authority and the contractor. Provisions for the amicable settlement of a dispute may be included in the public procurement contract or in a separate document. A mediation agreement or other amicable settlement of a dispute may also be concluded by a party consenting to mediation or other amicable settlement of the dispute, when the other party submits a request to the Court of Arbitration at the General Counsel to the Republic of Poland, a selected mediator, or a person conducting other amicable dispute resolution methods.
Importantly, pursuant to Article 591 of the Public Procurement Law, out-of-court dispute resolution may only be used in the event of a property dispute in which a settlement is permissible. Furthermore, concluding a settlement cannot lead to a violation of the provisions of Chapter 3 of Section VII, i.e., the provisions on contract amendments.
As a reminder, it is worth mentioning what mediation is and what other out-of-court – alternative methods of dispute resolution can be distinguished:
- Mediation is an attempt to achieve a satisfactory resolution of the dispute for all parties through confidential, voluntary negotiations conducted with the participation of a third party – a neutral, impartial and trustworthy mediator who supports the negotiations and alleviates any conflicts that may arise,
- Negotiation is a process that aims to bring both parties to a consensus that is satisfactory to them. Negotiations involve two parties negotiating terms with each other, meaning there is no third-party interference.
- Conciliation , which involves the resolution of a dispute by an independent conciliator or a special conciliation commission. After hearing the arguments of the parties to the dispute, the primary task of the conciliator or conciliation commission is to propose a resolution that would be acceptable to the parties to the dispute or would allow them to develop their own solution.
- Arbitration is a form of alternative dispute resolution, whereby a dispute is resolved by an arbitration court according to specific procedures. These procedures may be agreed upon by the parties when signing the contract or later. It is also possible to refer to the rules of the arbitration courts.
In summary, alternative dispute resolution methods are cheaper (with the possible exception of arbitration) and generally faster than traditional court proceedings. Importantly, they are also confidential. As indicated by the legislator in the draft amendment to the Public Procurement Law, the introduction of regulations regarding out-of-court dispute resolution methods arising from public procurement is justified by the need to provide parties to a dispute with instruments that will increase the chances of a voluntary and mutually satisfactory resolution of the dispute.
The new regulations could therefore make this an interesting, cheaper, and faster tool for contractors and contracting authorities to use. The introduction of out-of-court dispute resolution methods in public procurement should be considered a positive step forward, one that could subtly force changes in the culture of public procurement.
We cordially invite you to continue following our articles – next week we want to begin a series related to the implementation of housing investments, in particular we will want to analyze for you the draft of the so-called new developer act, which was adopted with amendments on March 30, 2021, by the Infrastructure Committee and referred for further legislative work.
This alert is for informational purposes only and does not constitute legal advice.
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