In aid of creditors

By June 12, 2017August 28th, 2017Other

A new Act amending some legal regulations came into force and effect on 7 April 2017. The Act is aimed to facilitate debt recovery by introducing  many procedures to the advantage of the creditors.

Apart from the Registry of Public Debt, which shall register the data on defined monetary sums that remain due and outstanding and are subject of administrative enforcement, its detailed description would much exceed the space allowed for a blog entry here, the Act also introduces two major changes described in brief below.

The first one is an increase of a debt amount from 10.000 PLN to 20.000 PLN, which now mandatorily falls under a simplified debt recovery procedure within the civil proceedings.

Firstly, we need to underline that the application of provisions on the simplified procedure is mandatory. Therefore, if a debt claim meets the criteria for its review under a simplified procedure, application of such a procedure is mandatory and neither the court nor the parties shall be permitted to apply any other procedure.

After the amendments the simplified procedure is applicable in such cases as:

  • debt claims arising from contracts provided that the value of dispute does not exceed 20.000 PLN, and in claims under guarantees, warranties, quality guarantees, producer’s liability for non-conformity of goods sold to a consumer provided that the claim amount does not exceed the aforementioned amount
  • claims for outstanding rent payments for residential apartments and charges payable by the tenants and operating and maintenance costs of residential apartments in housing communities, regardless of the value of dispute

This, in practice, means that the range of dispute values meeting the required criteria for a simplified procedure has been extended and in those cases the creditors will be able to use mandatory official forms [1] in order to file a statement of claim, reply to a statement of claim, appeal against a decision in default or to file evidentiary motions. If a party fails  to use the said forms, it will be called to correct formal defects. The aforementioned procedure furthermore applies to cases falling under the labour law.

A minor change in paragraph 1 of the Act under the discussion here adapts  terminology to the changes in the Civil Code which were implemented under the Act of 30 May  2014 on consumer rights,  in particular in the scope of non-conformity of goods.

The second change is significant for the pursuit of debt claims by creditors that are public finance institutions. Article 54a added to the Act on public finances of 27 August 2009 provides now a legal basis for conclusion of settlements by public finance institutions in cases of disputable civil law debt claims. In other words, public finance institutions have been granted a legal right to settle a dispute.

Such a settlement decision is, however, conditioned on an evaluation whether the effects of the settlement shall be more beneficial for the said institution than a probable result of the proceedings in court.

A public finance institution considering a settlement shall be obliged to draw up such evaluation in writing, with account for the circumstances of the case, in particularly in view of the justified grounds of disputable claims, possibilities of satisfying them,  expected duration of court  proceedings and their costs.

In consequence, the Act of 17 December 2004 on the liability for breach of public finance Discipline  was respectively changed. Under the new wording of the Act, undertaking a liability or changing a liability by virtue of a settlement concerning a disputable civil law claim concluded in compliance with the law will no longer be deemed as a breach of public finance discipline; nor will the performance of such a settlement

Author: Maciej Górny