Pre-action settlement of disputes in 2026: the demand, mediation, deadlines

Since 28 August 2025 the Commercial Code has no force, and with it went Article 222 and its compulsory pre-action demand. A demand is now compulsory only where the contract or a specific statute requires it. Mediation suspends the running of limitation, and a settlement reached before the hearing on the merits begins returns 50 % of the court fee.

Law No. 4196-IX ended the Commercial Code of Ukraine on 28 August 2025, and that is the biggest change in pre-action practice in a decade. The provision on the demand procedure, which in-house lawyers had worked to for decades, no longer exists, so the line “in accordance with applicable law we hereby send this demand” now rests on nothing in a great many letters.

That does not mean pre-action settlement has gone. It has moved where it belongs: into the contract, into specific statutes and into the procedural codes. Whether the parties wrote a demand procedure into the dispute resolution clause now decides directly whether a court will accept a claim without prior correspondence.

What changed after the Commercial Code was repealed

Until 28 August 2025 Article 222 of the Commercial Code set both the form of a demand and the time for answering it. Once the code fell, what remained were the Civil Code’s general rules on obligations and freedom of contract. There is one practical consequence: the “Dispute resolution” section in new contracts must be written out in detail, stating when a demand is sent, how, how long the other side has to reply and what silence means.

If the contract has no such clause, no law obliges you to send a demand before suing. Exceptions come from specific provisions: Article 925 of the Civil Code, for instance, requires a demand to be made to a carrier before suing on a contract of carriage. Tax matters have their own rules, where an administrative challenge to a tax assessment notice is a separate procedure with its own deadlines.

The demand: when it really is compulsory

A demand remains the cheapest instrument even when it is not compulsory. It fixes the moment from which the debtor is in default, grounds the charge of three per cent per annum plus inflation losses under Article 625 of the Civil Code, and in court shows the claimant’s good faith when costs are allocated.

Its content must be specific: who is demanding, from whom, under which contract, exactly what sum and for what, with the calculation and the date for payment. A vague “please settle the outstanding balance” produces no legal consequence at all. Send it by registered post with a list of contents or through the electronic document system named in the contract, since a message in a chat app is harder to prove. We handle such documents within pre-action settlement of commercial disputes.

Mediation: what it offers beyond talking

The Law “On Mediation” No. 1875-IX has been in force since 2021 and rests on four principles: voluntary participation, confidentiality, the mediator’s neutrality and independence, and the parties’ self-determination as to what they agree. The mediator takes no decisions and weighs no evidence; their task is to bring the parties to an outcome both are willing to perform.

The main procedural advantage is that Article 263 of the Civil Code lists the parties’ mediation agreement among the grounds that suspend the running of limitation. Negotiations therefore no longer eat into the time for going to court, and a party that genuinely tried to settle does not lose the right to sue. That matters especially now that limitation, suspended on 2 April 2020, resumed running on 4 September 2025 under Law No. 4434-IX, and the three years are ticking again as normal.

An agreement reached in mediation is an ordinary contract and is performed voluntarily. If one side breaks it, court still follows, but the claim is then about the agreement rather than the original dispute, which usually makes it easier to prove.

Judge-assisted settlement

This is a procedural tool that works once proceedings are already open. The Civil Procedure Code devotes Articles 201–205 to it: settlement takes place with the parties’ consent before the hearing on the merits begins, in joint and closed sessions, and the whole process may not exceed thirty days and cannot be extended. The Commercial Procedure Code and the Administrative Procedure Code have equivalent provisions.

The judge who conducts the settlement may not then hear the case on the merits, and that is what allows the parties to speak frankly. If they agree, the dispute ends in a settlement, a withdrawal of the claim or an admission. If not, the case goes to another judge and is heard in the ordinary way, and what was said in the sessions cannot be used as evidence.

What it costs and what it saves

The court fee on an individual’s non-monetary claim is 1,331.20 UAH, and a company’s 3,328 UAH; on a monetary claim it is one per cent of the value for an individual, within 1,331.20 to 16,640 UAH, and one and a half per cent for a company. Article 142 of the Civil Procedure Code returns half the fee to the claimant where, before the hearing on the merits begins, a settlement is made, the claim is withdrawn or the respondent admits it. On a large claim that is real money.

Time is saved too: a civil case with an appeal runs from six months to a year and a half, while an exchange of demands takes weeks and judge-assisted settlement is capped at thirty days. At Svarog pre-action settlement costs from 5,000 UAH, a written opinion on the prospects from 5,000 UAH and drafting a contract with a sound dispute resolution clause from 5,000 UAH, whereas handling a civil case end to end starts at 25,000 UAH and a commercial one at 30,000 UAH. The full list of rates is on the page of legal service prices.

What to do, in order

1. Reread the contract and find the dispute resolution clause. It is that clause, not the law, which now decides whether a demand is compulsory and how long the other side has to reply.
2. Calculate limitation. The three years under Article 257 have been running normally since 4 September 2025, so check the deadline first and plan the negotiations afterwards.
3. Draft the demand with the calculation, the contract clauses cited and a clear date for payment. Send it by registered post with a list of contents and keep the receipt.
4. If the relationship is worth keeping, propose mediation and sign the mediation agreement: from that moment limitation is suspended.
5. Once a claim has been filed, apply for judge-assisted settlement before the hearing on the merits begins. The window is thirty days.
6. Put the agreement into a settlement and submit it for approval before the merits hearing starts, so that half the court fee comes back.

Typical mistakes

• Citing a repealed provision. Demands citing Article 222 of the Commercial Code after 28 August 2025 read as a template nobody updated, and immediately weaken the negotiating position.
• Negotiating instead of watching the clock. Oral arrangements do not suspend limitation. What suspends it is a written mediation agreement, not a promise that “we will sort it out”.
• A demand with no calculation. A demand without a sum, a period and a contract clause creates no default and grounds no claim under Article 625.
• Missing the moment for a settlement. Half the fee comes back only on a settlement made before the hearing on the merits begins. After that there is no refund.
• Confusing the tax deadlines. After an administrative challenge to an assessment notice only one month remains for the claim; without it, six. The Supreme Court’s Grand Chamber set that out in July 2025 in case No. 500/2276/24.

When you do not need a lawyer

If the sum is modest, the contract simple and the counterparty admits the debt and only asks for time, the demand and a payment schedule can realistically be drafted alone: what matters is the written form, the calculation and an authorised signature. An ordinary complaint to a seller about faulty goods within the warranty needs no lawyer either. Legal help pays for itself where the contract contains an arbitration clause or a foreign element, where the dispute concerns property or corporate rights, where limitation is close to expiring, and where the other side has already sued and a quick choice has to be made between a counterclaim and a settlement. Such matters we handle within pre-action settlement of civil disputes.

Questions and answers

Is a demand compulsory before suing

Since the Commercial Code fell on 28 August 2025 there is no general duty. A demand is compulsory where the contract or a specific provision requires it, such as Article 925 of the Civil Code for carriers. Otherwise a claim will be accepted without any prior correspondence.

How long is there to answer a demand

The contract sets the period. Where it does not, a reasonable time for considering the demand applies, and in practice demands specify between seven and thirty calendar days. It has to be stated in the text itself.

Does mediation suspend limitation

Yes. Article 263 of the Civil Code lists the parties’ mediation agreement among the grounds suspending the running of limitation. That is why arrangements should be put in writing rather than left as talks.

What does mediation cost

The law sets no tariff: the mediator’s fee is agreed in the contract and is usually shared equally. Compare it with the cost of litigation, which includes the court fee, expert reports and legal help across several levels of court.

What is judge-assisted settlement

It is a closed negotiation chaired by a judge after proceedings open, under Articles 201–205 of the Civil Procedure Code. It lasts no more than thirty days, and the judge who conducts it does not go on to hear the case on the merits.

Is the court fee refunded if the parties settle

Half the sum paid is returned where a settlement is made, the claim withdrawn or the respondent admits it before the hearing on the merits begins. After that there is no refund.

Can a counterparty be forced into mediation

No; voluntariness is a founding principle of the Law “On Mediation”. A contract may require the parties to attempt negotiations before going to court, but taking part and reaching agreement remain matters of free choice.

How does pre-action settlement work in tax disputes

There the route is administrative: the complaint goes to the higher-level tax authority, and only then may the matter go to court. The period for the claim after that process ends shortens to one month, whereas without it six months apply.

Does a settlement have the force of an enforcement document

A settlement approved by the court is enforced through the enforcement service on the basis of the court’s ruling. An agreement made out of court through mediation has no such force, and a breach has to be pursued by a separate claim.

Sources

• Civil Code of Ukraine, Arts. 257, 263, 625, 925 — zakon.rada.gov.ua/laws/show/435-15
• Civil Procedure Code of Ukraine, Arts. 142, 201–205, 207 — zakon.rada.gov.ua/laws/show/1618-15
• Law of Ukraine “On Mediation” No. 1875-IX — zakon.rada.gov.ua/laws/show/1875-20
• Law of Ukraine No. 4196-IX ending the Commercial Code — zakon.rada.gov.ua/laws/show/4196-20
• Law of Ukraine “On Court Fees” — zakon.rada.gov.ua/laws/show/3674-17
• Unified State Register of Court Decisions — reyestr.court.gov.ua

Pre-action settlement of disputes with Svarog

We start by checking the contract and the limitation period, because those two things decide whether negotiating is worth anything at all. Then we prepare the demand with its calculation, run the correspondence, support the mediation and apply for judge-assisted settlement where the case is already in court. When agreement proves impossible, the same material becomes the foundation of the claim, so no time is wasted. Employment conflicts are covered by pre-action settlement of employment disputes, and tax matters by pre-trial settlement of tax disputes.

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