19 April, Bucharest. Since the beginning of the year, as many as 73 disputes pending before courts in 18 counties of Romania have been eventually resolved through negotiations, in the Alternative Banking Dispute Resolution Centre (ABDRC). Since 2021 and to date, more than 280 court proceedings have been settled off-court because the parties wanted and managed to find a solution by negotiation, via ABDRC.

By mid-April 2023, more court cases were resolved than in all of 2021. In these cases, the courts proceedings were stayed, and the consumers and banks decided to negotiate and reach a compromise, with the aid of an ABDRC conciliator. In most cases, it was the bank that was opposing a consumer in court proceedings which recommended the conciliation option, as an alternative to court, and the consumer accepted it and filled out the application on the csalb.ro website. There are also instanced where judges have made such recommendations to the parties to a dispute.

Arges Specialized Tribunal and Pitesti District Court are the first courts of the country to formally recommend, through their judges, conciliation between consumers and banks/NBFIs.

Ciprian Tita, President of Arges Specialized Tribunal: “Conciliation provides both consumers and banks with genuine benefits, and should be formally promoted across all courts because the diversity of solutions that can be obtained in this procedure is impossible to obtain in court.

The two main arguments in favour to turning to alternative resolution are the much shorter time and the costs that court proceedings entail, when the claims raised are, at least in part, unfounded, and the claimant is bound to the pay the court expenses. The alternative resolution provides greater certainty since the amicable amendment of contracts is to a greater extent under the control of the parties.

The first hearing is the best time for judges to recommend conciliation. I noticed that the most effective way is direct communication, in the hearing, to the parties and their lawyers, and postponement of the case to give them time to pursue this alternative.

Financial and banking cases are most complex and require a commensurate effort on the part of both the courts, to hear and settled them, and the parties and their defenders, to commence and pursue the proceedings. This is the reasons why ABDRC’s contribution in take some of this load off the courts is very important. Not infrequently the courts are assaulted with loads of cases that are not substantiated by a consistent legal analysis or an established court practice, but by myth that somehow spreads diffusely and without proper documentation, that the court is place when certain solutions can be obtained. The awareness that the conciliation procedure can bring can via ABDRC can shelter beneficiaries against the harsh reality of the costs of a lost lawsuit.”

Ionut-Dragos Cringus, President of Pitesti District Court: “To my mind, it’s part of our role as judges to promote alternative means of dispute resolution, particularly in the current context where the courts are increasingly overloaded, the average degree of case complexity increases every year, and the human resources policy is not very stable and balanced. The benefit of conciliation lies in the greater margin of negotiation than what it would be allowed within the boundaries of a lawsuit. The court judgement is bound by a more rigid framework, limited by legal rules.  Most of the time, the process leads to rendering judgments that, while they are lawful and thorough, are not to the satisfaction of one or another party or event to none of them. Justice is served in abidance of the law, but people do not always feel it this way. Therefore, a framework, where the parties can negotiate directly and can voice their expectations, proposals and claims, can lead to a justice that is felt as such, and can put an end to a state of conflict and dispute.

For a judge, the financial and banking cases are highly complex, which requires considerable study efforts, judicial research (often complex, multidisciplinary expertise is required), deliberation, ruling and, eventually, providing reasons for the judgment. It should not be neglected either the fact that the courts that hear the substance of case, in our case Pitesti District Court, have many young judges, who have not effectively specialized in the categories of disputes they hear. There are District Courts where panels are mixed, since you are called upon to hear combined civil and criminal cases, from non-criminal complaints to abusive clauses or insolvency of natural persons. Considering its field of work, I believe that the potential of ABDRC is huge, and those 200 cases coming from courts could easily become 2,000, let’s say.“

Alexandru Paunescu, representative of the National Bank of Romania in ABDRC: “The constant increase in the number of lawsuits closed in court in order to be resolved via ABDRC entitles us to expect this to continue also in the next period. We hope that more and more banks will realize the usefulness of this approach, not only for their reputation, but also for their finances. On the other hand, we want the judges from as many courts as possible to recommend conciliation to the parties. This year alone, ABDRC amicably resolved lawsuits coming from courts of 18 counties, most of them from Cluj, from where we received 20 cases.

Looking at how long it takes for a dispute to be settled in court, the costs it implies, or the confrontation-based position of the parties, I recommended to my colleagues from the legal departments of commercial banks, as Director of the Legal Directorate of the National Bank of Romania, to do their legal best not to end up in court with consumers. And when they are already involved in pending court proceedings, to try to resolve the disputes amicably via ABDRC.