Planned amendments in the Polish Code of Civil Procedure – crucial changes for entrepreneurs

The amendment to the Polish Code of Civil Procedure was passed by the Parliament on July 4, 2019. It is currently awaiting the President’s signature. The draft amendment to the Code of Civil Procedure provides for numerous changes to the current form of civil procedure, especially when it comes to regulations concerning entrepreneurs. The new law, created at the initiative of the Ministry of Justice, is to restore separate proceedings in commercial cases, removed from the Code in 2012. The draft provides for the introduction of a new section entitled “Proceedings in commercial cases”. It is to deal with civil matters between entrepreneurs in the scope of their business activity.

The first change introduced by this amendment will be the so-called preparatory proceedings – obligatory and less formal meetings taking place outside the courtroom to resolve the dispute at an early stage. Their aim is to get the parties to reconciliation and settlement, and the court chairman has the task of pointing out to the parties the ways and effects of the out-of-court resolution of the dispute. These meetings should be considered an attempt to introduce the idea of arbitration to the Polish civil procedure.

The amendment to the Polish civil procedure also provides for the witness to give evidence in writing. This is a very beneficial change in the era of open borders and the mobility of both people and enterprises, which will also have a positive impact on reducing the number of hearings and reducing the time of proceedings.

One of the most serious problems of Polish courts was procedural obstruction, which is why the new draft of the Civil Procedure Code introduces sanctions for the abuse of procedural law. If the judge raises suspicions that the respective complaints of the parties lead only to delaying the proceedings, the judge will be able to decide to double the costs of the proceedings imposed on the violating party, or even to leave the applications submitted for obstruction without consideration.

A very crucial change in the civil procedure for the entities operating business activity will be the so-called fast track for entrepreneurs, that is the introduction of proceedings in commercial cases. It is supposed to be characterized by an even greater formalism and strengthening the evidence rules (the principle is that the applications for the admission of evidence must be filed within a strictly set time limit). The new rule will cover both small entrepreneurs with sole proprietorships and large corporations, which raises legitimate doubts as to maintaining the principle of equality of parties in the proceedings. Non-entrepreneurs and micro-entrepreneurs will be able to settle disputes in the ordinary course, if they request it at the appropriate stage of the proceedings. The procedure is supposed to be more difficult, but faster, however, due to limitations on the possibility of bringing counter-claims, courts in single proceedings will not settle all mutual claims of the parties, which will increase the total number of proceedings. The commercial track procedure, pursuant to the new provisions, is to include civil disputes between entrepreneurs, including contracts for construction works and construction contracts related to the execution of construction works.

Although the entire commercial proceedings will be very formalized, the entrepreneur will be able to communicate with the court using the e-mail address. The new procedure sets forth in commercial cases the introduction of an obligation to indicate the e-mail address of the party in the statement of claim or in the first procedural letter filed after the receipt of the copy of the claim. In the case of its absence, there has to be submitted a statement that the party has no such address. Failure to comply with this obligation will constitute a formal error of a court pleading and will make it impossible to give it a proper course.

The Act also introduces facilitations for consumers (by preventing the use of an alternate jurisdiction in cases against consumers), since consumers will be allowed to dispute with entrepreneurs in the court appropriate to their place of residence, and not – as currently – at the entrepreneur’s registered office. The new act is also to introduce the possibility of bringing an action against the State Treasury before the competent court according to the plaintiff’s place of residence. The institution will be exempted from court costs and fees in disputes with banks will be reduced to PLN 1000, however the procedure itself will be more formalized.

The change is also to be made in art. 139 of the Code of Civil Procedure, governing the delivery of correspondence. According to the planned provisions, substitute delivery should be minimized to the absolute minimum, and the fiction of service should disappear. According to the new wording of the article at issue, if the defendant does not receive a pleading addressed to him, the court will notify the plaintiff of this fact, at the same time obliging him to deliver the letter to the defendant through the court bailiff (at the expense of the plaintiff).

Another change in the civil procedure will be the introduction of the Court’s dismissal of the case which is declared obviously unfounded at the preliminary stage of court proceedings, settled at a closed sitting.

As part of the Plan for Responsible Development, the Ministry of Development also plans to introduce trial agreements (also referred to as agreements for evidence) in civil proceedings, thanks to which entrepreneurs will gain the right to regulate the rules of conducting court disputes between themselves. The agreements for evidence should be concluded in writing or orally before the court and under pain of nullity and these arrangements will be binding for the court hearing the case. So far, there have been two types of procedural agreements, i.e. the agreement determining the competent court and a prorogation and derogation agreement (for jurisdiction), provided for in Art. 46 § 1 of Civil Procedure Code and 1104-1105 of Civil Procedure Code. According to the proposed art. 4588 § 1 of Civil Procedure Code there will be introduced a new agreement for evidence, according to which the parties will be able to agree to exclude certain evidence in commercial trial based on a dispute under a particular contract. The parties will be authorized to conclude such an agreement before the commencement of the trial and in the course of the trial.