Dr Ewelina Stobiecka

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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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Evidence agreement. New legal tool for entrepreneurs.

Ewelina Stobiecka18 November 2019Comments (0)

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

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