Dr Ewelina Stobiecka

radca prawny

I’ve been supporting entrepreneurs for almost twenty years in resolving commercial disputes in and out of court. I represent my clients as an attorney and negotiator and also act as a commercial mediator...
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Settle your dispute

ADR in Poland and in GermanyThis article is co-authored by Patryk Kulig, Counsel and Mediator from the German Arbitration Institute (DIS).

With the entry into force of the latest amendment to the Polish Civil Procedure (KPC), the question arises: do the new rules of civil procedure contribute to the increased importance of alternative methods of conflict resolution? Similar solutions have been functioning for a long time in Germany, where ADR is the basic tool for resolving disputes in business.

New civil procedure and ADR

One of the key objectives of the amendment is to accelerate and streamline proceedings. In order to achieve this, the legislator introduced a number of institutional and organisational solutions concerning the procedure itself. The approach to the procedure and proceedings in disputed cases has been changed, according to which at the initial stage of the proceedings the parties should strive to reach an agreement, in which the judge and his new tasks related to the institution of the preparatory meeting are to play a very active role.

It is the legislator’s intention that the preparatory phase should, inter alia, create the conditions and tools to effectively seek alternative forms of legal dispute resolution. The preparatory proceedings introduced into the Code of Civil Procedure largely relate to the organisation and operation of arbitration courts. During the preparatory session, the proceedings will now be planned. It is assumed that the parties will actively participate in this phase, as it is at this stage that a party should present all requests and statements of fact and evidence which it would like to carry out in support of these statements. The knowledge of the parties’ demands and statements should contribute to a new perspective to the case and to any possible settlement discussions with the active participation of the judge. Also at this stage of the proceedings, the parties will create a plan for the hearing.

In the hearing plan, it is the parties, as co-hosters of the trial, who will jointly decide with the judge on the dates and order of evidence. A similar procedure is in force in the regulations of many arbitration institutions, when at the very start of the proceedings the parties together with the arbitrators make careful planning of subsequent actions.

Communication between the judge/arbitrator and the parties

The rules of civil procedure in force in the new version as of 7 November 2019 also provide for a reduction of the distance between judges and parties to proceedings through a formalised preparatory meeting. At this stage, the judge will be able to present his preliminary view to the parties and the parties could be ‘encouraged’ to make a reasonable compromise (Article 2056 § 2 of the Civil Procedure Code). This is a novelty in the civil procedure, as so far at no stage of the proceedings has the judge been able to present his or her views or the envisaged solution until the hearing is closed and the judgment is formally announced. Such a reduction of the distance between the judge and the parties to the proceedings is another point of contact between the civil procedure and alternative dispute resolution methods. Efficient, formalized communication is also a more effective procedure.

As the drafters emphasize in the justification for the changes introduced, the resolution of a dispute does not necessarily have to rely on a judge’s consideration and the ruling of the case. Before this happens, all possibile solutions to conclude the dispute should be exploited, including with the help of the judge, but at the will of the parties themselves, for example by coming to a settlement.

The activity of the judge at this stage of the proceedings will complement that of the mediators, who may also act in the subsequent stages of the proceedings. Initiating attempts to reconcile the parties will require the judges to have special conciliation skills and a certain change of perspective on the objective of settling the case.

Mediation and arbitration

Of course, the same goal – to settle the matter – can be achieved by the parties both in mediation and in arbitration. Both of these tools are often chosen methods to solve disputes in business. Often both of these methods also occur within a single case (the so-called “Med-Arb” or “Arb-Med” procedure) or within a single arbitration institution.

Practice will show whether a change in the civil procedure will increase the importance of alternative forms of conflict resolution methods in Poland. It is worth noting that methods such as mediation are also available outside the civil procedure. Mediation can also be used privately, without referring the case to court and regardless of the jurisdiction or legal regime to which the dispute is subject. It is important to bear in m mind that a settlement concluded before a mediator can be confirmed in a common court or an arbitration court, which gains the legal value of a court judgment.

Mediation in more complex cases can take from a couple to several weeks, which is an excellent result compared to many years of court proceedings. The costs of mediation are also much lower than in a traditional court trial.

As for arbitration, the parties have to make an agreement on a specific arbitration and the so-called arbitration clause is crucial for the facility to initiate this procedure. Arbitration, like mediation, gives the parties complete guarantee of confidentiality, which the parties cannot always count on in the case of a courtroom where the principle is openness of proceedings.

There are many arbitration institutions which offer their services in the framework of arbitration in specialised sectors or fields. There are also many institutions that handle disputes arising from international trade. Foreign investors are reluctant to submit their disputes to common courts. Contracts of multi-million monetary value and often huge investment projects are often submitted to international arbitration. Taking into account the fact that Germany is one of the largest and most important trade partners to Poland, economic disputes between Polish and German companies are on the agenda.

Solving these disputes on the traditional court route, even taking into account the amended provisions of civil procedure, may be protracted. This is not only related to organisational issues such as international service, but also to issues of a legal nature when, for example, the Polish court has to apply German substantive law or vice versa.

Private arbitration institutions which offer alternative legal dispute resolution proceedings may be a solution to such dilemmas.

Commercial arbitration and common courts in Germany

The amicable nature of commercial dispute resolution is deeply rooted in the German procedural culture – both in common courts and in arbitral tribunals established to resolve individual disputes.

The Polish legislature seems to directly draw on German solutions, in particular on the mandatory pre-trial negotiation procedure (Güteverhandlung), when the court, often in the presence of not only attorneys-in-fact but also of the parties themselves, discuss the dispute with them, taking into account all circumstances of the case known to the court and the parties at the time, actively ask questions and share a non-binding preliminary factual and legal assessment. On the basis of Article 278 of the German Civil Law Code, the court may further refer the parties to the so-called conciliation judge (Güterichter), who has no judicial capacity and whose role is limited to mediating between the parties, in a role comparable to that of a mediator and negotiator between the parties. He may also offer the parties an attempt to settle the dispute out of court, based on amicable methods such as mediation.

Arbitration and the general courts in Germany have one thing in common – a high percentage of commercial disputes are resolved amicably. As for arbitration, the most common amicable form of dispute resolution is for the parties to participate (and often, at least indirectly, also through an arbitral tribunal) in determining the content of a so-called arbitration award with agreed content; in the case of a court, the conclusion of “classic” court settlements.

The current Article 278 of the German Code of Civil Procedure, which refers directly to Article 279 of the Prussian General Code of Civil Procedure of 1794, obliges the court to take measures for the sake of procedural economy, thereby increasing the time and cost efficiency of the proceedings by considering at each stage of the proceedings, an amicable settlement of the dispute or individual litigation issues.

Statistics on all resolved civil and commercial disputes in 2018 in ordinary courts indicate, depending on the forum concerned, the conclusion of court settlements in between 16% and 40% of proceedings:

– Amtsgericht (equivalent of a district court) – 923,179 of all proceedings, of which 134,510 were concluded in the form of a court settlement, which accounts for 22% of all proceedings;

– Landgericht (equivalent of a district court) as a court of first instance: 303,993 of all proceedings; 80,544 court settlements; which accounts for 39% of all proceedings, in the second instance: 43 030 of the total number of proceedings; 5 471 court settlements; which accounts for 30% of the total number of proceedings;

– Oberlandesgericht (equivalent of a court of appeal) 49 164 of all proceedings; 7 841 court settlements; 16% of all proceedings.

In Germany, the trend is to conclude arbitration awards in the form of arbitral awards with agreed content. This means that the parties to the proceedings themselves agree on the content of the settlement and request in the arbitral tribunal that the content of the settlement becomes an arbitral award (with agreed content). The second possibility to conclude a settlement, which is characteristic of German arbitration, is the conclusion of a settlement as a result of the parties’ prior acquaintance with the preliminary assessment of the legal and factual situation, which may be shared by the arbitral tribunal with the consent of all parties. This form often involves the parties making a statement of no res judicata if the parties do not reach a settlement on the basis of the tribunal’s preliminary assessment.

In practice, the arbitral tribunal supports the settlement of the dispute in the arbitration proceedings, also in the subsequent stages of the proceedings by indicating the possibilities for conciliation, and the common court tries to point out settlement issues from the very beginning of the hearing in the framework of the mandatory negotiation procedure (Güteverhandlung).

The specificity of arbitration and one of the key reasons for its choice instead of the common court system by its very nature encourages users of arbitration – business entities and representatives of the broadly understood business – to be efficient in terms of time and cost, and thus to seek agreement and, as a result of the amicable settlement of the dispute, to further cooperation.

Another important practical aspect, which is an established part of the German tradition of dispute settlement, is the possibility to reduce court costs and the higher rates of attorneys at law in the case of settlement in proceedings in common courts, and often the reduction of administrative costs and arbitrators’ fees in the case of institutional arbitration.

Each commercial dispute is different and requires special instruments in order to achieve the most qualitative, time and cost effective resolution. Settlement is not always the best solution, just as arbitration is not always the best way to resolve a dispute. Awareness of the wide range of instruments for the choice of commercial dispute resolution is crucial, and in the case of complex disputes, both in fact and in law, particularly in cross-border disputes, amicable settlement methods based on settlement can often be a way of resolving the dispute quickly and engaging in further business cooperation.

If you want us to help you solve a dispute in business, please contact us under:

tel.: +48 669 73 79 79e-mail: e.stobiecka@taylorwessing.com

Is it possible to settle "Swiss franc borrowers" cases

More than two months ago, on 3 October, the Court of Justice of the European Union issued a ruling on mortgage CHF borrowers in response to questions referred for a preliminary ruling by the District Court in Warsaw, before which one of the cases against the bank is pending. This ruling represents a very important legal stage in the way franc borrowers assert their rights in court in relation to credit agreements containing prohibited contractual clauses.

Recently there have been many comments, both from banking experts estimating potential risks for the banking sector and lawyers representing borrowers. However, all agree that more lawsuits are expected in these cases.

Will Polish courts be flooded by a wave of Swiss franc borrowers lawsuits? Listening to the public discussion in recent weeks in Poland, this seems to be a very likely scenario. However, are other solutions possible? Could the solution to the problem of franc mortgage agreements containing abusive clauses be mass settlements between borrowers and banks?

Let us look at such a scenario.

First of all, it is worth noting that the average duration of the court litigation in these cases is well over two years in the first instance. If either party would like to appeal against the judgment of the first instance, the next several months should be added to this time. Not without significance, however, is the fact that on 7 November this year the amended provisions of civil procedure came into force, which reformulate the Polish civil procedure. It is likely that the courts will need some time to find themselves in the new procedural reality, which foresees several important novelties, which will be extremely important. These novelties are intended to contribute, among others, to faster processing of cases.

Paradoxically, however, it may transpire that in order for the regulations to achieve their goal, the training of judges related to mediation skills, i.e. such moderation of discussions between the parties to a dispute at its initial stage (here, during the so-called preparatory meeting) that the parties reach – assumed by the authors of the amendments – an agreement. This is related to the introduction of a completely redesigned procedural element, the aforementioned preparatory meeting, which is to precede court proceedings and which, in the intention of the amendment, is to aim, among others, at an amicable resolution of the dispute. It seems that this institution may also be a good tool in franc borrower cases, because at this initial stage the judge will be able, after familiarizing himself with the parties’ positions, to estimate the expected duration of the trial and – as the authors of the amendment wish – indicate the potential direction of the decision. This is the moment when the judge will be able to persuade the parties to conclude an agreement.

In a situation where the parties need more time to negotiate, the judge – as it is the case so far – may refer the parties to mediation. It seems that resolving individual franc borrowers cases by way of a settlement is a very good solution for both parties to a dispute. On the one hand, the consumer suing the bank has the opportunity to settle the dispute more quickly and possibly free himself from credit agreement with foreign exchange risk and prohibited clauses. On the other hand, the bank will be able to very actively mitigate the risk associated with a contract containing prohibited clauses and an ongoing lawsuit.

Importantly, the parties in such settlement negotiations may decide to annex the contract by replacing the invalid contractual clauses with possible valid clauses or to shape the legal relationship between them in such a manner that, in the event of cancellation of the credit agreement, they may conclude a new agreement which would serve the purpose of refinancing the credit.

The confidentiality of mediation or settlement negotiations also seems to be a great advantage for a bank which values its reputation and customer relationships.

There are several mediation centres in Poland which have very good practice in resolving business disputes, including disputes between financial institutions and consumers. It is enough to mention the Mediation Centre at the Polish Financial Supervision Authority or the International Mediation Centre established by bilateral chambers of commerce operating in Poland. It seems that both these institutions may be an excellent platform for the amicable settlement of disputes between banks and consumers.

If you want us to help you solve a dispute in business, please contact us under:

tel.: +48 669 73 79 79e-mail: e.stobiecka@taylorwessing.com

Evidence agreementAs part of the amendment to the Code of Civil Procedure, a new tool has been introduced to the Polish legal system, which may be helpful for entrepreneurs. It is the so-called evidence agreement which entrepreneurs may conclude at the stage of establishing their contact relationships with business partners, and which may be helpful in the possible settlement of disputes between them.

 

Entrepreneur as a “co-host” of the trial

The changes proposed in this amendment are to contribute to improving and accelerating court proceedings, including commercial proceedings, i.e. entrepreneurs’ cases which go to court. The new formula of civil trial places firm emphasis on greater involvement of the parties in conducting the trial, which is to be facilitated, among others, by its new stage, the so-called preparatory meeting, at which the parties together with the judge will plan the entire proceedings. The scope of the parties’ autonomy in the trial has also been significantly extended by adding another procedural agreement, i.e. the evidence agreement. It is the party, i.e. the entrepreneur, who can now influence the course of the proceedings to a much greater extent and be its “co-host”.

Up until now, the parties could (in an agreement which shapes a given business relationship) arrange for, inter alia:

  1. the jurisdiction of the court (art. 46 of the CPC),
  2. mediation (art. 183 (1) § 2 of the CPC),
  3. national jurisdiction (art. 1104 and 1105 of the CPC),
  4. the arbitration court (art. 1161 § 1 of the CPC),
  5. the rules and manner of conduct in the arbitration court (art. 1184 § 1 of the CPC).

However, there were inadequate tools which would have a real impact on the procedure and the scope of proving one’s rights in the process.

The concept of evidence agreement

The very concept of evidence agreement used in other jurisdictions implies that the parties may be able to influence the scope and course of taking the evidence, as well as the manner in which evidence is taken. Within this category of procedural agreements, we deal with agreements:

  • which extend or narrow down the possibility of evidence, i.e. which define a catalogue of evidence necessary or sufficient to establish certain facts by the court (called evidence agreements in the strict sense of the word). This category also includes agreements which exclude specific evidence for the future, e.g. the parties agree that a person who is not an expert cannot confirm any facts concerning a given business relationship, or which indicate that to prove a specific circumstance it will not be sufficient to take given evidence.
  • concerning the object of evidence, i.e. which determine the circumstances under which it is necessary to take the evidence.
  • as to the distribution of the burden of proof (onus probandi), i.e. who can prove what facts,
  • which regulate the manner in which evidence is taken, e.g. indicating that a witness may or must be examined in the presence of an expert, examined outside the court or by videoconference.

Evidence agreement in the Polish procedure

Since the evidence agreement is a new institution in Polish law, the legislator decided to limit its scope to the most obvious issue, i.e. the possibility to exclude certain types of evidence. The new art. 458(8) § 1 of the CPC, which reads as follows, contains an appropriate regulation concerning this procedural agreement:

“Art. 458(8)

§ 1. The parties may agree to exclude specific evidence in commercial proceedings in connection with a specific legal relationship arising under the agreement (evidence agreement).

2. The evidence agreement is concluded in writing under pain of invalidity or orally in a court. If there is any doubt, it is deemed that the later agreement maintains the provisions of the previous agreement which are reconcilable with it.

3. The evidence agreement concluded subject to a time limit is invalid.

4. The allegation of invalidity or ineffectiveness of the evidence agreement may be raised at the latest at the meeting at which the agreement was invoked, and if it was done in a pleading – at the latest in the next pleading or at the next session.

5. Including evidence taken in court before the agreement was concluded does not deprive it of its evidentiary value.

6. The court will not ex officio take into consideration evidence excluded by the evidence agreement.

7. The court may determine the facts to be proved by evidence excluded by the evidence agreement on the basis of the parties’ statements, taking into account the overall circumstances of the case. If the amount of due benefit needs to be determined, art. 322 applies accordingly”.

In order to prevent abuse of position by the stronger party to the agreement, the scope of applying the evidence agreement is limited to a particular (one) legal relationship arising under the agreement. Such an agreement binds the parties, and thus the court, in cases relating to this one legal relationship, and not in all matters between the same parties.

The evidence agreement must be concluded either in writing under pain of invalidity or alternatively orally in court, i.e. after commencing the proceedings. However, the agreement may not be concluded under condition or subject to a time limit, which would make it invalid.

Parties who have concluded an evidence agreement are obliged to present it to the court at the earliest possible stage of the proceedings. It seems that the most logical point in time to present such an agreement to the court is at the preparatory meeting, during which a hearing is planned. Since the evidence agreement significantly affects the shape of taking evidence, the allegation of its ineffectiveness or invalidity must be raised immediately after the agreement is presented to the court, while the late allegation will not be effective, as explicitly indicated in § 4 of art. 458 (8) of the CPC.

Content of the evidence agreement

Each business relationship has its own specificity. Arranging a given relationship between entrepreneurs, the parties should protect themselves against the most difficult moments when the relationship may break down and a dispute arises. In addition to safeguards and other typical contractual clauses securing the parties (e.g. confidentiality clauses or non-competition clauses), it is also worth considering the regulation of the evidence agreement.

Among the detailed solutions which could be provided for in such an agreement, it is worth considering e.g. appointing an expert (assessor) at the stage of the performance of the agreement, which would be binding for the parties. This could be particularly important in the case of complex projects of high-value, where verifying the accuracy of the implementation of particular stages would be difficult after some time. Another element of such an evidence agreement could be, for example, limiting the possibility of taking into consideration and taking the evidence from an expert’s opinion and limiting such opinions to the private opinions of specific experts, research or scientific centres. The parties could also introduce restriction regarding hearing certain witnesses into the agreement, such as employees at a certain level, or limiting taking the evidence to certain types of evidence (e.g. the opinions of independent experts themselves).

The adopted regulation implies that the court will not ex officio take into consideration evidence excluded by the evidence agreement. On the other hand, facts which are to be proved by evidence excluded by the evidence agreement may be determined by the court on the basis of the parties’ statements, taking into account the overall circumstances of the case. If the amount of due benefit needs to be determined, the court, pursuant to art. 322 of the CPC, will assess the due amount to the plaintiff, taking into account all the circumstances of the case.

Whether entrepreneurs will use this new institution, practice will show. It is important that the issues of evidence agreements do not lose the basic objective of the amendment, which is to improve and accelerate the proceedings in commercial cases.

If you want us to help you solve a dispute in business, please contact us under:

tel.: +48 669 73 79 79e-mail: e.stobiecka@taylorwessing.com

Taking evidence in a new civil procedureTaking evidence is the most time-consuming and crucial stage of the proceeding in proving the parties’ points.

Also the legislator has foreseen a few novelties which are aimed at accelerating the proceeding and making it more effective. There are also many changes of a purely ordering or specifying nature. All amendments will enter into force on 7 November, so it is important to take a closer look at them, also in the context of considering the choice of alternative dispute resolution methods.

First of all, a good plan

The first important decision concerning taking evidence in the new civil procedure will be taken at the preparatory meeting, which I wrote about in the first part of this series of publications. It relates, in fact, to a plan for taking evidence submitted by the parties, described in detail in the so-called timetable of the trial prepared by the parties together with the judge during the preparatory meeting (added Article 205 (5) of the Code of Civil Procedure).

The very preparation of the trial timetable and planning the sequence of taking evidence activates the parties and makes them jointly responsible for the course of the proceeding.

Motions for evidence

The new provisions also explicitly describe that each party is obliged to make a statement as to the facts (no longer “factual circumstances”, which is a change of ordering terminology nature rather than of a substantive nature). A party is obliged to specify the facts which it denies (and some of them it admits), which is a novelty and is intended to prevent denial of all the other party’s statements in bulk. This wording of art. 210 of the Civil Procedure Code is intended to encourage the parties to clearly list the facts to which they deny, which will significantly restrict the process of proving evidence.

Similarly, the provision of art. 228 of the Civil Procedure Code relating to commonly known facts which do not require proof, has been clarified. Nevertheless, the previous provisions did not give the parties the certainty that such facts are taken into account by the court. In the current wording of the provision of art. 228 of the Civil Procedure Code, “the court takes them (facts commonly known) into account even without reference to them by the parties”.

Moreover, in order to improve the process of proving evidence, the provisions concerning the evidence motions formulated by the parties have also been clarified. So far, parties have been formulating their motions for taking evidence “on circumstances” instead of ” confirming concrete facts”. In practice, such motions were formulated very broadly and were often based “on the legitimacy of the claim”, which made it very difficult to assess the use of such evidence. In this respect, a new art. 235¹ of the Civil Procedure Code was added which introduces an unambiguous requirement that a motion for evidence must indicate the facts which a party wishes to prove with given evidence.

According to the wording of this provision, “In a motion for taking evidence a party is obliged to mark evidence in a manner which enables it to be taken and to determine and specify the facts which are to be proved by such evidence”.

The phrase “determine and specify” stresses that this indication is to be individualised as to each fact and as to each piece of evidence, so the party is obliged, on the one hand, to exhaustively list all the facts which are to be proved by the requested evidence and, on the other hand, to indicate which piece of evidence provides the relevant proof.

Refusal of taking evidence

It appears that there is no need to differentiate between the decision concerning the refusal to take certain evidence on the rejection of a motion for evidence, its reimbursement, rejection, etc. Therefore, the legislator has opted for a collective, uniform formula of “omission of evidence”, which includes all these decisions.

The catalogue of conditions under which the court may refuse to take the evidence (which takes place by way of a decision) is provided for in the new art. 235² of the Civil Procedure Code, which states:

 “In particular, the court may disregard the evidence:

1) the performance of which is excluded by the provision of the Civil Procedure Code;

2) which is to prove an indisputable fact which is irrelevant for the decision on the case or which has been proved in accordance with the applicant’s statement;

3) which is not useful to prove a given fact;

4) impossible to take;

5) only aimed at extending the proceedings;

6) if the party’s application does not comply with the requirements of art. 235 (1), and the party has not remedied this despite being requested to do so.

2. Disregarding the evidence, the court makes a decision stating the legal basis on which it is based’.

The change of the requirements concerning the content of the motion for evidence similarly entailed a change in the mandatory content of the decision on admitting the evidence. The current wording of art. 236 was too imprecise.

“Art. 236. § 1. In the decision on the admissibility of evidence, the court will indicate the evidence and facts to be proved by it and, if necessary and possible, also the date and place of taking evidence.

2. If a party requested that the resolution should be given as to the evidence, it is sufficient to refer to the decision to the content of the application.

3. Commisioning a designated judge or a requested court to take evidence, the court will appoint the judge or the court. If no time limit or place for taking evidence has been specified, it will be specified by the designated judge or the requested court.

Activation of parties when taking evidence

The new Article 242¹ of the Civil Procedure Code introduces changes which are significant from a practical point of view, which provides for activating a party when taking evidence. Experience shows that it is difficult to take evidence from witnesses’ testimonies: it transpires that witnesses reported by a party, even those closely related to it, do not appear (for various reasons) in court. The new regulation imposes, as far as it is possible, the obligation on the party to make efforts to ensure that the person summoned to the court, upon the party’s motion, appears in the indicated place and time.

This provision makes the party co-responsible for the efficient conduct of evidence proceedings, and thus for the whole process.

“Article 242 (1) A party which has requested to summon a witness, an expert witness or other person to the court’s activities, should endeavor to have that person appear at the specified time and place, in particular to inform them of their duty, time and place of appearance”.

Documentary proof

In the current legal situation and in accordance with the letter of the law, the judge issued a decision on admitting evidence from a document attached to the case file. This was unnecessary for the judge, while the specificity of the documentary proof, i.e. the provision of information contained therein, only requires (for its performance) reading that document. Therefore, issuing a decision in this matter seems unnecessarily formal. Besides, issuing a decision on attaching a document to evidence would obviously be illogical: it would be necessary to read the document in order to convince oneself that it should not be read. In such cases, such evidence will be accepted (automatically) and taken (by reading it once).

Another situation occurs when we are dealing with the exclusion of an evidentiary document from the material evidence. Then issuing an appropriate decision should be necessary.

“Article 243 (2) Documents contained in the case file or attached to it constitute evidence without issuing a separate decision. Excluding evidence from such a document, the court will issue a decision”.

Witness statements

The appearance of a witness at the request of a court may be prevented by not only illness or lameness, but also by other insurmountable obstacles, such as imprisonment. Therefore, following the criminal procedure, the legislator has extended the grounds for examining the witness in the place where he/she is staying. At the same time, terminology has also been modernised, replacing the outdated term “lameness” with the term “disability”.

“Article 263: A witness who is unable to appear upon request because of illness, disability or other insurmountable obstacles shall be heard in his place of residence”.

An important novelty in taking evidence is the introduction of the facility to give evidence in writing. This facility, hitherto only foreseen in the European Small Claims Procedure, has just been extended to the whole civil procedure.

The new provision of art. 271¹ of the Civil Procedure Code states that “a witness gives evidence in writing if the court decides so. In such a case, the witness makes an oath by signing the text of the oath. The witness is obliged to give the text of his/her testimony to the court within the time limit specified by the court (…)”.

This solution may give rise to controversy and concerns regarding the possibility for the interested parties to influence the content of the statements written down by the witness. A significant limitation of this type of written statements is that one cannot verify all the elements of the witness’ examination, which are important to acquire the truth, such as, the possibility to  ask  precise questions, observing the witness’s behavior and his/her body language, etc.

To what extent and how this new institution of witness’ testimonies in writing will function in practice, we will probably see very soon.

In addition, following an institution which has been operating for a long time in criminal proceedings, the civil court has also been granted an additional tool allowing it to determine whether a witness is suffering from any disability. This tool is to ensure that a medical expert (psychologist or neurologist) or a psychologist may participate in the proceedings when hearing a given person.

The new art. 272¹ of the Civil Procedure Code provides for the appropriate regulation, which stipulates that:

“If a court doubts the ability of a witness to perceive or communicate observations, it may order that the witness be heard in participation with a medical expert or psychologist, and the witness may not object to this”.

Participation of experts

The hitherto judicial practice is based on a complete separation of a witness and an expert as two sources of evidence: no statement is taken from the expert and no opinion is given by the witness.

However, judicial practice has shown that in certain situations it is purposeful to repeal this incompatibility. Often, before the trial, the parties commission specialists in a given field to draw up expert analysis, initially to show them the subject matter of the dispute. It is clear that the value of such statements cannot be over-estimated because they are often made by the best specialists in a given field. However, such person may be heard in court at most as a witness, but he or she must not draw conclusions from the described facts with the use of his or her own expertise.

To this end, the court “must ” appoint an expert, which of course prolongs the proceedings and duplicates the costs of such analysis. As practice shows, an opinion commissioned by the court is usually drawn up by a weaker expert than a “witness” interviewed by the court, who has been commissioned to prepare a private opinion.

The solution to this disadvantage is to repeal the prohibition of combining the roles of a  witness and an expert. However, the legislator has not decided to make wider use of such a facility and, as the justification for the amendments reads , “(…) until such time as the criteria for admissibility and evaluation of such evidence are developed in the case-law, its use should be limited to simplified proceedings, and thus to cases with a lower value of the subject-matter of the dispute, in which the consequences of possible errors when applying to a new institution will not be too severe (…)”.

Thus, the relevant provision was only introduced for the simplified procedure in art. 505 (7) § 3.

“Article 505 (7). § 1. Whenever the legitimacy of or the amount compensation should be determined using special information, it is up to the court to decide whether to make an independent assessment based on the overall circumstances of the case or to consult an expert.

2. The expert’s opinion should not be sought if its foreseeable cost would exceed the value of the matter at issue, unless exceptional circumstances justify it.

3. Giving evidence by a witness should not prevent him/her from being consulted as an expert, including the facts about which he/she has testified (witness- expert), even if he/she has previously drawn up an opinion commissioned by an entity other than a court.

In legal transactions, experts’ opinions are widely used which are prepared at the entire private request or at the request of an entity conducting proceedings provided for a separate law (e.g. insurance winding-up proceedings, the complaint proceedings) or at the request of an out-of-court body conducting proceedings other than a judicial one (criminal preparatory proceedings, all types of administrative proceedings), or at the request of a court in another case, whether civil or criminal.

Nevertheless, the existing provisions which regulate the evidence from an expert’s opinion do not explicitly state whether it is permissible in civil court proceedings to take evidence from an expert’s opinion which has not been prepared at the request of the court which is conducting the case (out-of-court). If so, what is the nature of such evidence? However, practical benefits, including the efficiency and speed of proceedings resulting from the use of such evidence in civil proceedings, are clear.

Therefore, in accordance with the new art. 278 ¹ of the Civil Procedure Code, “The court may admit evidence from an opinion commissioned by a public authority in other proceedings provided for in the act”.

As regards participation of an expert in the case, the legislator has introduced a number of other improvements aimed at meeting the needs of practice and the demands of an efficient process.

The changes concern, among others, clarifying the procedure for excluding an expert from a case, issues related to taking the statement from an expert concerning the reliability of his/her opinion, providing the expert with materials for his/her opinion, the procedure for supplementing and explaining the opinion and allowing for an additional opinion, as well as issues related to determining the expert’s remuneration.

It seems that the new provisions on evidence proceedings have met the needs not only of judicial practice but also the need to “dust off” and modernise the regulation which has been operating for over 50 years.

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The procedural law abuse clauseThe new Civil Procedure Code includes a completely new clause on the abuse of procedural law as a response to issues of judicial practice related to procedural “creativity” of the parties.

During the work on the new regulations, situations were identified in which, in the opinion of project providers, there is no doubt that the party concerned abuses its procedural rights.

Among such situations, it has been highlighted:

  • filing, as a statement of claim, a letter which does not contain a request to hear a court case,
  • filing a statement of claim which is manifestly unfounded,
  • filing a number of applications to exclude a judge,
  • filing a number of complaints in the same or a similar subject matter,
  • filing a number of applications to correct, supplement or interpret the judgment.

Moreover, procedural law may also be abused in situations where such characteristics cannot be clearly attributed to, although in principle they have two features in common:

  • they are taken on the basis and within the limits of procedural law (the rights to bring an action, the rights to lodge a complaint, etc.),
  • do not, however, pursue the objective for which the relevant procedural institutions have been established.

The primary objective of such actions is to prolong the proceedings and to lead to a paralysis of the judiciary. An example of such can be e.g. lodging a chain of complaints – a “trick” often used by efficient litigators, intertwined with e.g. a number of procedural applications, e.g. those for exemption from court costs. Paralysis can also be introduced by a series of applications to exclude a judge or a series of applications to appoint a counsel provided through legal aid.

The current status

Under the current legal framework, a court has the opportunity to prevent abuse of procedural law by a party in fact only in one situation: when it comes to the excessive number of applications for evidence. Here, the judge, as the host of the proceedings, takes the appropriate decisions.

However, there are no tools to prevent the situation where as a result of such actions of one party to the proceedings, the other parties’ right for the case to be heard within a reasonable time, the right to a fair trial or the right of other individuals to act efficiently were actually infringed.

It was therefore clear that the system of the civil procedural law needs to be supplemented by a limitation of the admissibility of parties’ actions based on the misuse of procedural rights.

The general clause

Given the circumstances of our legal system, the abuse of procedural law has been strictly regulated in order to prevent, as far as possible, any possible overuse of this clause. It was considered that the assessment of whether an act of a party constitutes an abuse of procedural right should be based on determining the objective which the party wishes to achieve by taking the act and on assessing whether that objective is justified.

The general clause is included in the added art. 4¹ of the Civil Procedure Code, which reads as follows: “The parties and participants to the proceedings must not make use of the power provided for in the provisions of the proceedings which is inconsistent with the purpose for which it was established (abuse of procedural law)”:

The sanctions which the court may impose on the abusing party are also provided for in the new Article 226 ² § 2 of the Civil Procedure Code and may consist of:

  • imposing a fine,
  • charging an additional part or even all of the costs of the process,

and at the request of the opposing party it may also consist of:

  • ordering to pay the costs of the proceedings increased in proportion to the increase in the opposing party’s workload caused as a result of the abusive practice, to run the case,
  • increasing the interest rate to be paid on the sum awarded in proportion to the delay in dealing with the case caused by the abusive nature, for the time corresponding to that delay.

Since the abuse can often only be established by reference to the circumstances of the case as a whole, sanctions may only be applied in the decision closing the proceedings.

Specific solutions

The regulation of the general clause on the abuse of procedural law has gone a little further by specifying the provisions in an appropriate manner in order to prevent situations which are exhaustive in terms of abuse of procedural law.

Letter which is not a statement of claim

Among the identified procedural issues, the project providers indicated, among others, lodging a letter under the pretext of the statement of claim which was not the case in reality, i.e. which did not contain a request to hear any case by the court.

Under the current legal framework, the court is in each case obliged to treat such a letter as if it were a statement of claim and give it the course of action by (in particular) forcing the claimant to make a claim. Such situations require an exceptional amount of time and effort from the court, and they somehow “block” judges who are thus forced to conduct procedural correspondence with the claimant of such a letter, motivating him/her to properly formulate the request.

Apart from the objectives of the party’s action who submits such an unclear or vague letter, it seems that, taking advantage of the possibilities offered by wide access to legal aid or even using the available tools, it is uneconomical to pass on to the judge the care for clarifying an unclear letter.

The project providers rightly claim that in such a situation the defendant could also expect assistance from the judge in clarifying the response to the statement of claim.

Therefore, the new procedure includes the provision of art. 186¹, according to which:

§ 1. A letter which has been filed as a statement of claim and from which there is no demand for the settlement of a civil law dispute, shall be returned by the chairman to the claimant without any further action, unless exceptional circumstances justify giving it the course of action”.

In order to ensure adequate procedural guarantees and appropriate review by the court, a decision in this case may be appealed against.

The statement of claim, of course, unfounded

What if the statement of claim is filed correctly and is clearly formulated but unfounded?

A statement of claim is obviously unfounded if its content makes it possible to foresee that it will never be taken into account, so that giving it the course of action and the work of the court is futile. This also includes an apparent statement of claim by which a party pursues an objective other than asserting its rights by means of procedural institutions.

The legislator provided for the facility to dismiss such a claim at a closed session without taking any additional action concerning the statement of claim and, crucially, without delivering the statement of claim to the individual who has been indicated as the defendant.

Such a solution is part of the procedural measures allowed in such situations by the Recommendation no. R(84)5 of the Committee of Ministers of the Council of Europe to the Member States concerning the rules on civil procedure which intend to improve judiciary and where it is permissible to provide for a “simplified” procedure for such cases.

The essence of this simplification in this case is, according to the project providers, to waive from carrying out activities required by the procedure to give the statement of claim a normal course of action, i.e:

– it is not called upon to remove the formal defects of the statement of claim,

– it is not called upon to pay a fee,

– it is not called upon to enclose copies,

– additional applications contained in the statement of claim (for security, for exemption from costs, for appointment of a counsel provided through legal aid, etc.) are not considered,

– no copy of the statement of claim is delivered to the defendant.

The only activity of the court is the chairman’s order to send the case to a closed session and to draw up a verdict and justification ex officio.

The corresponding standard which refers to this situation can be found in the new art. 191¹ of the Code of Civil Procedure, according to which:

“§ 1 If it follows from the content and the annexes and from the circumstances of the statement of claim, as well as from the facts referred to in art. 228 that the statement of claim is manifestly unfounded, the following provisions apply.

2 If the actions which the law requires to be taken following filing a statement of claim are manifestly unreasonable, they can be omitted. In particular, the claimant may not be summoned to remove defects in the statement of claim or to pay a fee, as well as not to check the value of the subject matter of the dispute or to transfer the case.

3 The court may dismiss the claim at a closed session without delivering the statement of claim to the person indicated as the defendant or examining the applications filed with the statement of claim.

4 The justification of the judgment is made in writing ex officio. It should only contain an explanation why the claim was found to be manifestly unfounded. The court, ex officio, delivers the decision with justifications only to the claimant with instructions on the manner and deadlines for filing a complaint”.

The chain of complaints

The chain of complaints is one of the most frequently used tools of procedural non-violent resistance aimed at delaying the proceedings. In order to avoid discrepancies in assessments, the project providers indicate that the second (and of course, further) complaint is considered to have been filed for delay only, brought by the same party against the same decision, as well as a complaint brought against the decision made as a result of actions brought about by lodging an earlier complaint  by the same party against which is the most typical situation.

In order to prevent the chain of complaints, a new sanction has been introduced into the catalogue of procedural means, namely that a complaint should be left in the case file without further action by a simple order of the Judge-Rapporteur.

The only action taken by the court in such a case is to notify the party who lodged the complaint regarding leaving it in the case file without further action, which is an absolute minimum requirement by the principle of internal transparency of the trial.

The appropriate regulation is contained in the new art. 394³ of the Civil Procedure Code, according to which

Ҥ 1. A complaint only lodged to delay the proceedings is inadmissible.

2. A complaint only lodged to delay the proceedings shall be deemed as:

1) the second and further complaint lodged by the same party against the same order,

2) a complaint against a decision issued as a result of actions caused by filing an earlier complaint by the same party – unless the circumstances of the case exclude this assessment.

3. The complaint referred to in § 1 should be left in the case file without any further action, in particular it should not be submitted to the competent court for consideration. The party’s further letters which relate to lodging the complaint should also be dealt with in the same manner.

4. The party lodging the complaint should only be notified once about leaving the complaint and further letters without any further action – when lodging the complaint.

5. The provision of art. 380 shall be applied accordingly”.

Applications to exclude a judge

This further abuse of procedural law consists of the fact that a party submits an application which is in fact unfounded and, as a pretext, uses circumstances connected with the decision of the court on evidence or submits further applications relating to the same judge and invoking the same circumstances.

Here, too, the legislator suggested that the application should be left without further action as a sanction, and where an application is submitted orally, the judge instructs the parties on the ineffectiveness of this action and the lack of influence on the further actions of the court.

A new fundamental regulation of this issue is contained in art. 531 of the Civil Procedure Code, which states that

㤠1. Application to exclude a judge is inadmissible:

1) based exclusively on circumstances connected with the court’s decision on evidence;

2) submitted once again to the same judge, invoking the same circumstances.

2. The application referred to in § 1 should be left in the case file without any further action. The same applies to the letters relating to its filing. The party submitting the motion should only be notified once on leaving the motion and other letters without any further action when submitting the first letter.

3. In the situation when the motion, referred to in § 1, is submitted orally, the chairman notifies the party of its ineffectiveness.

Of course, other provisions concerning the exclusion of adjudicating panels were also subject to supplementation in this respect”.

Applications to correct, supplement and interpret a judgement

As judicial practice shows, the applications to correct, supplement and interpret a judgement, provided for in art. 350-352 of the Civil Procedure Code, are also used as a tool to play for time.

Certainly, the first such motion submitted by a party should be treated as made in good faith, but each subsequent should be assessed firstly in light of the procedural law abuse clause, i.e. whether, in fact, when submitting it, the party does not only aim to delay the proceedings.

The appropriate regulation is contained in art. 352¹ of the Civil Procedure Code, which states that:

Ҥ 1. A motion to correct a judgment only submitted to delay the proceedings is inadmissible.

2. A second and subsequent motion lodged by the same party as regards the same judgment, shall be deemed to be a motion only submitted to delay the proceedings, unless the circumstances of the case exclude that assessment.

3. The application referred to in § 1 should be left in the case file without any further action. The same applies to letters which relate to the submission. The party who submits the motion should only be notified once about leaving the motion and other letters without any further action when submitting the first letter.

4. The provisions of § 1-3 shall apply mutatis mutandis to applications to supplement and interpret a judgment”.

All these solutions which make the procedural law abuse clause more detailed, are certainly a response to procedural ills and excessive “creativity” of the parties or their proxies”.

However, will these solutions be an effective remedy for protracted processes, including an obstructive activity of the parties? Undoubtedly, such a tool as the procedural law abuse clause will contribute to discipline the parties, giving the judges appropriate weapons to fight against destructive actions against the trial.

How this clause will work in practice,  probably only the practice of its application and the first statistics will show. One thing is certain: users of the justice system acting in bad faith will have a much harder time.

If you want us to help you solve a dispute in business, please contact us under:

tel.: +48 669 73 79 79e-mail: e.stobiecka@taylorwessing.com