Important changes to laws regulating civil disputes

On 4 July 2019, the Sejm approved amendments introduced by the Senate to the legislative Act of 13 June 2019 regarding amendment of the Civil Process Code and certain other acts. As a result, there is nothing apart from a signature by the Polish president separating us from a major rearrangement of Polish civil procedure.

The raft of amendments (at 85 pages of print, a voluminous one) goes to a number of fundamental rules of the Polish law of civil procedure. As far as business enterprises are concerned, many are likely to feel the effects of the amendments insofar as they restore a separate procedure for commercial disputes which had been eliminated in 2012. Some of the imminent changes, particularly those inspired by arbitration, have already been commented upon by GESSEL lawyers at earlier stages of work on the novation (link).

In this Newsletter, we propose to focus on the most important changes effectuated by the new rules. As a general note, the authors of these solutions have defined their aim in terms of shortening the duration of cases before the civil courts. Time will tell whether these legislative changes can fulfil the hopes invested in them.

Amendments with universal effect

• Introduction of what is referred to as an introductory session during which the parties and the court will map out the trial and the attendant evidentiary proceedings.
• Another new solution, borrowed from criminal procedure, is comprised in the duty incumbent on the court to inform the parties that the application in question may be ruled upon on a different legal basis than cited by them.
• The judge will now have the right to inform the parties of the outcome of the case anticipated by her based on the evidence adduced to date. This is a noteworthy change in that, in Polish procedure as it was until now, the role of the judge was essentially that of a silent observer in the sense that, for as long as the proceedings were underway, she provided no intimation as to the judgement she expects to ultimately hand down.
• The new rules also introduce a number of restrictions, substantive as well as formal, on claims for offset. A claim for set-off may only refer to a receivable rooted in the same legal relationship as that constituting the object of the statement of claim. Moreover, a setting off may be requested only in a document in the course of proceedings not later than upon embarking on a dispute on the merits of the case or, alternatively, within two weeks after the receivable to be offset has become due and payable.
• Other changes introduced by the novation concern evidentiary proceedings, viz a catalogue of reasons for which evidence may be omitted and a possibility for witnesses to give evidence in written form (if allowed by the court).
• The catalogue of cases in which the court may hand down its judgement  behind closed doors has been expanded. Furthermore, decisions in the course of proceedings may now be issued by the court behind closed doors by default, which constitutes a reversal of the rule hereuntil applied.
• Consequent to the changes, the courts will no longer embark on double examination of an appeal’s formal aspects at first and second instance, and the court at first instance will no longer be empowered to reject an appeal (this will be the sole purview of the court at second instance). More types of complaint will be eligible for consideration in what is known as the “horizontal instance”, with the appeal considered by a different panel of the same court. A new type of complaint referring solely to delays in the proceedings will be introduced; such complaints shall be included in the case files by the court at first instance with no further measures taken.
• Climbing down in the face of objections by the Senate, the authors of the amendments abandoned the controversial concept whereunder incorrectly paid up appeals submitted by advocates, attorneys, patent ombudsmen and the Office of General Counsel to the Republic of Poland could be rejected out of hand, without a preceding call to rectify the defects, and could also incur an additional fee.

Amendments affecting special classes of proceedings, including proceedings for business enterprises

• Significantly enough, the present round of amendments restores (after their elimination in 2012), if in a slightly changed form, separate proceedings in commercial cases. This is combined with expansion of the purview of the commercial courts, which will now be competent to rule on disputes arising from leasing agreements and agreements for construction works, irrespectively of whether or not the parties concerned have the status of a business enterprise. In its purely procedural aspects, the new rules significantly delimit evidentiary proceedings. In what is a major novelty, the parties to a commercial dispute will have the possibility of executing “evidence covenants” in which they agree to exclude certain pieces of evidence from the proceedings. This development is likely to have considerable implications for day-to-day business operations, in that the type of materials / potential evidence that they require and retain in the course of their business dealings will affect the direction – and the chances of ultimate success – of potential future disputes. In another new rule, evidence from witness testimony will have only auxiliary significance in commercial disputes.
• Important changes are also introduced to the procedure for injunctive proceedings (in their “full” form and in the “softer” variant of upominawcze, Mahnverfahren). The catalogue of grounds for issue of a payment injunction has been reduced (e.g. by eliminating the possibility of issuing a payment injunction on the basis of an extract from a bank’s accounting books); at the same time, it will now be possible to issue both types of payment order in cases where the plaintiff is based outside Poland, or even outside the European Union.

Timeline

While the general timeline for effective implementation of the legislative amendments discussed above is three months, in the case of some specific solutions this has been shortened to a mere 14 days following promulgation of the amendment Act (which is likely to become a fact within the next few weeks). Given the sheer scope of the amendments, a vacatio legis of such duration may reasonably be seen as brief, and all those concerned – judges, parties and their counsel alike – will have little time to apprise themselves of the new rules in all their fine detail.