A package of amendments to the rules of the Civil Procedure Code came into effect in Lithuania on July 1, 2017. A number of these amendments are significant for business and for advocates.
Among other things, the amendments increased the amounts of the stamp duty. When in 2015 the currency in Lithuania changed from litas to the euro, all the amounts indicated in the Code (stamp duties, fines, etc.) were converted according to the official rate of exchange and, therefore, were not rounded. Now, the stamp duties have been rounded upwards – so, for example, whereas in non-property disputes it was previously set at EUR 41, now it is set at EUR 100. In addition, a new type of stamp duty has been introduced, making it EUR 500 for a creditor’s request to start bankruptcy proceedings. Presumably, a tax on this type of court petition is designed to curb a popular means of pressing a debtor: institution of bankruptcy proceedings. Such abuse by creditors often failed to develop into real bankruptcy proceedings, but created a lot of inconvenience for the debtor.
The amendments also prohibit courts from awarding costs for legal services provided by non-advocates or associate advocates. Until now, legal entities were able to provide legal services without having professional civil liability insurance, without being bound by any requirements of professional ethics, and without acting via advocates. This distorted the legal services market and resulted in the illegal circumvention of the Law on the Bar.
The amendments also establish that from now on only advocates can draw up appeals. Of course, a provision remains that employees of legal entities and civil servants with higher legal education will be able to represent their employers in the appellate court, and that natural persons with that level of education will also still be able to represent themselves.
The amendments establish a judgement on the cause of action. Until now, the Code provided the possibility of a partial judgement, but that was not widely used as, according to case law of the Supreme Court of Lithuania, claims settled by partial judgement had to be sufficiently independent to be settled separately from other claims made by the claimant. From now on, courts will be able to pass judgement on the cause of action if evidence in the case is enough to substantiate the judgement. In this way, examination of a case will be faster and more cost-effective. Referring to an effective judgement on the cause of action, a court must issue a judgement on the amount of the statement of claim via written process, except for cases in which a party requests that the issue be examined under oral process. If a judgement on the cause of action is appealed, the court will stay the case until the effective date of the court’s judgement on that cause of action.
The amendments provide public prosecutors the right to join an ongoing process as a third person submitting independent claims. Previously, even in cases involving the need to defend the public interest, the court could not allow a public prosecutor to become involved in a process which had already started, but had to act itself by imposing interim measures, collecting evidence, and so on. This regulation unreasonably expanded court functions in defending the public interest, as the primary office vested with the authority to act in defence of the public interest is the public prosecutor.
The amendments simplified service of a summons and/or other court-issued official documents related to the dispute to natural persons. Previously, natural persons sometimes used to evade service, thereby obstructing the course of the case. From now on, service will be deemed made to natural persons if it is delivered to the natural person’s place of residence that coincides with his place of residence declared under the procedure set by the state. An additional note: the e-service portal of Lithuanian courts allows people to track all proceedings in which they are involved: they may see all procedural decisions, download electronic copies of documents in the case file, and file process documents and annexes with courts in real time.
By Adomas Kuncius, Head of Dispute Resolution, TGS Baltic Lithuania
This Article was originally published in Issue 4.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.