Likely wording is now available for the civil procedure provisions governing separate commercial proceedings. The reform of the Polish Code of Civil Procedure restores commercial proceedings, which existed until 2012. It does not, however, simply reproduce the former rules. The bill’s authors have abandoned some earlier provisions and proposed several entirely new solutions.
At the outset, the bill’s authors assume that participants in commercial dealings act professionally. They therefore require parties to follow a rigid procedural framework. This speeds up proceedings but also makes the outcome dependent on detailed knowledge of the rules governing commercial proceedings and the diligence of parties or their representatives. As a result, even a party whose position is justified may lose in court if it does not know the new procedural rules well.
The former commercial procedure and the Code of Civil Procedure reform
Rules not being reinstated
More than seven years have passed since the former commercial procedure was abolished. Some provisions are therefore not being reinstated because they are unnecessary or conflict with current rules.
The bill’s authors analysed the former separate commercial procedure rules and concluded that some should not be reinstated for substantive reasons.
For example, they considered that a stay of proceedings at the parties’ joint request often allows out-of-court negotiations, which may in turn lead to a speedy resolution. The bill therefore does not exclude applications for a stay in commercial proceedings.
In the authors’ view, the court should decide whether a party should receive procedural guidance. They therefore do not propose reinstating provisions that would prevent such guidance regardless of the circumstances.
The authors give similar reasons for not reinstating the prohibition on taking evidence by examining the parties on the court’s own initiative.
New measures introduced into commercial proceedings
Evidence agreement
The evidence agreement is an entirely new mechanism. To be valid, it must be made in writing or by declarations before the court. It may not be conditional or subject to a time stipulation. Its purpose is to exclude specified types of evidence in a case arising from an identified legal relationship, for example witness testimony in disputes under a particular construction contract. An objection that the agreement is invalid or ineffective must be raised no later than the end of the hearing at which the opposing party relies on it. Similarly, if it is invoked in a pleading, the objection must be raised in the next pleading or at the next hearing at the latest, otherwise the right to raise it is lost.
Email address as a mandatory element of the claim and defence
The statement of claim will have to include the party’s email address or a declaration that it has none. Failure to provide either will be treated as a formal defect. The court will use email addresses to send procedural guidance.
How do separate commercial proceedings differ from ordinary proceedings?
Exclusion of certain procedural mechanisms
To shorten commercial proceedings, the bill’s authors have excluded several rules of ordinary procedure. The first exclusion concerns amendments to the subject matter: bringing a new claim instead of or alongside the original one. The second concerns changes of parties, namely replacing or adding claimants or defendants. The final exclusion is the possibility of bringing a counterclaim.
Short deadlines
Separate commercial proceedings will require judges and parties to act quickly. A lack of due care or a missed deadline at the very start of the case may have irreversible adverse consequences. This results mainly from the rules precluding late factual allegations and evidence.
As regards the court’s actions, a one-month deadline is to be introduced for transferring a case to ordinary proceedings. It will run from the date the defendant joins issue on the merits. Once it expires, the court will be unable to transfer the case to another division (more on this in our previous article).
The amended Code of Civil Procedure will also set a six-month period for deciding the case. It will begin when the defendant validly files a defence, after remedying any formal defects. Unfortunately, as the bill’s explanatory memorandum reveals, this is only a non-binding target period.
Failing to attempt an amicable settlement may prove costly
Before bringing any commercial claim, an attempt should be made to resolve the dispute voluntarily. The defendant, in turn, should neither avoid that attempt nor participate in bad faith. Otherwise, the court may order the party failing in these duties to pay the costs of the proceedings, irrespective of the outcome.
A judgment in commercial proceedings will provide a basis for protective measures
As under the commercial procedure in force until 2012, a judgment delivered under the restored procedure will constitute a basis for protective measures. No declaration of enforceability will be required to obtain them. Immediately upon receiving the judgment, a party may approach a court enforcement officer or apply to the land and mortgage register court. A claim may be secured, for example, by seizing movable assets or a bank account, or by registering a mortgage over property.
Taking evidence
Preclusion of factual allegations and evidence
The changes to the rules on taking evidence are the most important for businesses. Parties should present all factual allegations and evidence in their initial pleadings or risk their exclusion. Where a party has no representative, the court will set an appropriate deadline for doing so. To rely on allegations or evidence later, a party must make it plausible that this was not previously possible or that the need arose later. They must be submitted within two weeks of the obstacle ceasing or the need arising.
Restrictions on witness evidence
The general rule in separate commercial proceedings restricts witness evidence to cases where facts material to the decision cannot be established after other available means of evidence have been exhausted.
Witness evidence will not, however, be available to prove a declaration of intent or knowledge resulting in the creation, loss or alteration of a right. Such facts may be proved only by a document. An exception applies where a party cannot produce the document for reasons beyond its control, which that party must demonstrate.
Entry into force
The Act will probably enter into force three months after the President signs it. The transitional provision states that commercial procedure rules will not apply to cases commenced before the Act takes effect. However, the amendment also changes ordinary proceedings. Moreover, as a rule, courts will apply the amended provisions to proceedings already under way.
We also invite you to read our article on changes to service of procedural documents introduced by the same amendment.
