Mediation is a process in which involved parties, in the presence of a third, independent party or person, attempt to resolve their dispute through a sort of agreement. In the year 2003., the “Law on Mediation” came into effective service in Croatia. It was considered the first special law that regulated the process of mediation. Furthermore, with the introduction of Directive 2008/52/EC of the European Parliament and EU Council on certain aspects of mediation in civil and commercial matters and disputes, the law required customization and adjustment, which led to the new “Law on Mediation”, which came into effect in the year 2011. As it came out to be, neither of the two laws yielded significant success, and the concept of mediation is still not applied - to the extent it should be. Today, marking almost 20 years after the first law passed, a completely new “Law on Peaceful Dispute Resolution” has been put into effect. This paper presents the advantages of the mediation process, studies and analyzes the changes brought by the new law, as well as it highlights the efforts that the European Union provides to promote appliance of mediation in cross-border disputes and comparatively, depicts the legal regulation and structure of the mediation institute in individual member states of the European Union.