Month: April 2020

Prof. Jacek Gołaczyński[1], Piotr Rodziewicz, Ph.D.[2], Maria Dymitruk[3]

Research Centre on Legal and Economic Issues of Electronic Communication

Faculty of Law, Administration and Economics

University of Wroclaw, Poland

All of us have been facing an unprecedented situation happening nowadays all over the world. The COVID-19 pandemic affects our professional and private life. It has also very severe effects on the operation of European justice systems. In many European countries lockdown-type control measures have been widely introduced, court activities have been limited to hearing only very urgent cases, and there have been specific provisions introduced suspending the running of court time limits. For example, in Poland most hearings have been cancelled except for giving judgments and urgent criminal and family cases, court buildings are generally closed for public, and due to operational restrictions on Polish postal service, court presidents have issued internal orders to limit letters circulation in some courts. It generally means that activities of EU member states courts have been reduced to a minimum level. This clearly results in the difficulties for parties of cross-border proceedings, and negatively affects judicial cooperation in civil and commercial matters within the EU. Moreover, after the lockdown, EU member states courts will have to face with new growing phenomena like payment gridlocks, mass restructuring proceedings and insolvency.

Referring to the Polish example, cooperation in civil and commercial matters in the EU seems to be limited only to one category of cases, namely cases concerning the removal of a person subject to parental authority or custody, requiring an order pursuant to art. 569 § 2 of the Code of Civil Procedure Act. These cases may contain a crossborder element, therefore provisions of Brussels IIA are applicable to them. Nevertheless, consideration of these cases due to the scant use of electronic means of communication by Polish courts in family matters is significantly impeded.        

The obvious consequence of the COVID-19 pandemic is impediment related to the enforcement of foreign judgments. In order to enforce a judgment issued in one EU member state in another EU member state, a party who demand enforcement is obliged to provide, according to article 42 Brussels IA, a copy of the judgment which satisfies the conditions necessary to establish its authenticity and certificate issued according to article 53 Brussels IA, certifying that the judgment is enforceable and containing an extract of the judgment as well as, where appropriate, relevant information on the recoverable costs of the proceedings and the calculation of interest. Motions for a certified copy of judgment and certificate issued according to article 53 Brussels IA are not urgent matters that need to be solved immediately according to the communication of the Polish Ministry of Justice[4]. Therefore, requests for the delivery of a copy of the judgment or certificate during the pandemic are not considered. This means that the creditor will have to wait a long time for necessary documents, which may be base for enforcement abroad. The situation is slightly different when it comes to enforcement of a foreign judgment in Poland. Bailiffs have limited their work, like most professional groups in connection with the pandemic situation in Poland. Especially, bailiffs suspend or significantly limit enforcement activities outside their offices. Therefore, it regards, among others, real estate and movable property auctions, evictions and bailiffs’ service of documents. Nevertheless, a creditor is able to initiate enforcement proceedings concerning judgment from other EU member state during the pandemic, however the course of enforcement proceedings will be slowed down.

In the current situation, as a rule, applications for judicial assistance are not carried out by Polish court. These applications concern taking evidence at the request of foreign courts and service of courts and non-court documents on Polish territory, respectively on the basis of Council Regulation (EC) No 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters and Regulation (EC) No 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents), and repealing Council Regulation (EC) No 1348/2000.

Considering the above, the main conclusion is that judicial cooperation in civil and commercial matters in the EU from the paper age should enter the so-called paperless era. Within the EU there are in force legal instruments allowing for the computerization of the justice systems of the member states, as well as enhancing judicial cooperation in civil and commercial matters with use means of electronic communication. The legal instrument that appears to be of significant importance from this perspective is Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC (hereinafter: “e-IDAS”). E-IDAS lays down the conditions under which EU member states recognise electronic identification means of natural and legal persons falling under a notified electronic identification scheme of another member state as well as establishes a legal framework for electronic signatures, electronic seals, electronic time stamps, electronic documents, electronic registered delivery services and certificate services for website authentication. Thus, the general rules on electronic identification have really been around us for a long time. All we need in order to start paperless cooperation in civil and commercial matters within the EU are legal instruments that will allow us to use these general instruments for the purposes of judicial cooperation. Of course, the issue of computerization goes beyond merely judicial cooperation in civil and commercial matters within the EU, but the question seems to be whether the computerization of judicial systems could not have a common framework in the EU? Some EU member states have implemented solutions which allow to materialize the computerization of the judicial system and the creation of the best common model. A good example would be the elimination of the traditional service of court documents in Italy. In Italy each entrepreneur is obliged to possess a certified email address, so called PEC (posta elettronica certificata)[5] through which communication with the courts and public authorities takes place. Certified mails operate also in other states like Germany[6] as well as non-EU member states like Switzerland[7]. Indicated examples can serve as a starting point for the creation of modern delivery solutions of court documents. Let’s imagine… in case of paperless cooperation in civil and commercial matters, it would be not a problem to obtain a electronic authentic copy of the judgment with a certificate in a Polish court that issued a judgment, in order to send an electronic application to a bailiff in the form of an electronic document in other EU member state. On the basis of it, a bailiff would be able to apply to the debtor’s bank by means of an electronic communication to seize his bank account. In our view, the computerization can not only strive to preserve the efficiency of justice systems in the pandemic times, but it can also simplify and speed up the operation of courts later.

The computerization of judiciary systems of member states allows also to solve other significant problems that we face in the case of traditional forms of justice. By way of example, one of the issues within EU-En4s project concerns the verification of authenticity of judgments, settlements and documents. In the case of traditional judgments, it may be really difficult to asses by Polish bailiff whether the enforcement title which he obtains from Portugal is authentic or not. However, if the Polish bailiff receives a judgment of a Portuguese court in the form of an electronic document with an electronic signature and seal, he would not have the least problems with its verification in terms of its authenticity.

In summary, we want to emphasize that the use of electronic communication seems to be indispensable in times of the pandemic, but after it disappears it seems to be the only right direction in which changes in justice systems should occur making them more effective. The best evidence that it is possible to establish proceedings entirely computerized may be the procedure in electronic arbitration courts[8], which, in principle, conduct all proceedings using means of electronic communication, except for issuing a judgment, which as the only one document is prepared in a traditional written form due to the binding procedural regulations.

[1] jacek.golaczynski@uwr.edu.pl

[2] piotr.rodziewicz@uwr.edu.pl

[3] maria.dymitruk@uwr.edu.pl

[4] see https://www.gov.pl/web/justice/communication-on-the-organisation-of-work-of-courts

[5] see http://www.lineaamica.gov.it/posta-elettronica-certificata-pec

[6] see https://www.cio.bund.de/Web/DE/Innovative-Vorhaben/De-Mail/de_mail_node.html

[7] see https://www.post.ch/en/business-solutions/e-mail-encryption

[8] see example https://www.sadarbitrazowyonline.pl/en 

Corona effects are visible in all segments of the justice systems and they severely affect legal relationships in many countries in the world. Following the suspension of the court activities, especially at the fist-instance level where hearing is a regular stage of the proceedings, and ordering mandatory use of the annual leave for the judges, court officials and other personnel, the most recent intervention in the Croatian system concerns special part of the enforcement proceedings. It is motivated by the need to preserve the basic conditions of the increasing number of unemployed, and persons without or with lowered income.

The Amendments to the Implementation of Enforcement against Money Act (Narodne novine 47/20), which entered into force on 17 April 2020, have enabled the stay of the enforcement proceedings which are aimed against natural persons’ money in the course of the “special circumstances”. This is done by introducing two new articles into the Act, 25a and 25b. The former article in its paragraph 1 defines “special circumstances” as an event or particular state which could not have been foreseen and controlled, and which at the same time endangers life and health of citizens, property of greater value, considerably deteriorates the environment, disrupts economic activity or causes significant economic damage. This was designed to capture the situation in which Croatia, and the very large part of the world, found itself due to the spreading of the Corona virus. To avoid retroactivity or other complex legal issues, the Act states that the period of “special circumstances” commences on the day the Act enters into force, i.e. 17 April 2020 and lasts for three subsequent months. The Government is authorised also to extend this period for another three months should the circumstances so require.

The common requirements for the special regime to be implemented under the said provisions in the course of the “special circumstances” are: (1) the enforcement debtor is a natural person, (2), the enforcement is sought against money, and (3) the claim does not fall under the several exceptions, including the maintenance of the child and the employee’s wages.

The Financial Agency (Financijska agencija – FINA) is the body competent to carry out and coordinate enforcement against pecuniary assets, along with participation of the Croatian National Bank (Hrvatska narodna banka – HNB) and commercial banks. Two different situations may be distinguished when it comes to the Financial Agency’s actions. First, when the proceedings are already pending on 17 April 2020, the Financial Agency shall stay the implementation of the enforcement proceedings and ask the banks to unfreeze the debtor’s accounts (unless the condition is met for transfer of money seised prior to special circumstances). The other situation concerns the new proceeding commenced as of that date, when the Financial Agency shall receive the claims and enter them in the records, but shall not send them to the banks for enforcement against the debtor’s accounts or take any other step in the proceedings.

In the course of the “special circumstances”, counting of most enforcement proceedings deadlines, such as related to freezing of the accounts, is discontinued. Likewise, the statutory interests cease to run.

After the “special circumstances” end, the Financial Agency shall proceed as regularly and time periods shall continue to run.

Prof. dr. Ivana Kunda, University of Rijeka

Although digitalization has been mentioned as one of the fundamental areas for the development of the global economy for several years, many countries still do not follow rapidly changing trends. There is no doubt that companies that use information-communication technology for creating more user-friendly experiences and effectively adapting business models hold an advantage against others. The traditional approach is not a method, which Slovenia could rely on, but can accelerate economic growth through digitalization. This is also reflected in the current situation of the corona-crisis, where we need to aim higher and compare ourselves to the best. Some companies in Slovenia are relatively well digitalized, but the vast majority in my opinion are still not, or not as well as they could be. Digitalization strengthening can help countries to create a better and more attractive business environment for economy, develop the soft skills of the population and make day-to-day activities much easier by developing smart solutions. In this process digitization of public administration is a basic condition for the introduction of a digital model of state functioning. The aim of the whole process of digitalization must be primarily to facilitate cross-border operations, to overcome environmental barriers (language, diverse legal systems), and to speed up procedures. There is a great importance for law to follow the trends in modernization and digitization of procedures. While doing so, the integrity and legal certainty of the proceedings must be adequately ensured.

Proposal for a DIRECTIVE (EU) 2019/1151[1] explicitly recognizes the role of notaries as crucial in ensuring legal certainty and preventing abuse of company law in today’s increasingly digitalized world. Digitalized procedures already used for the interaction between notaries and company registers in many member states of the European Union show, that European notaries are ready to adapt to the digital business model. One of the fundamental objectives of the Member states by 2021 is to take all the necessary steps to allow the establishing of limited liability companies completely online.

As an example of good practice I would like to point out the Latvian arrangement and its sworn notaries portal, which enables the use of notarial services fully online, through the Internet (the web portal offers many customer services, such as an online notarization visit, an online notary consultation and a virtual notarial office). After resolving technical issues between countries regarding the implementation of the eIDAS Regulation[2], the service will be available to all EU citizens holding an e-signature issued in any EU Member State. This will greatly simplify the provision of cross-border services. This kind of online notary service is considered the first in Europe.

In the process of the establishing companies online, European Union Member states do also need to respect the “once only” principle asserted in the Union, as evidenced, inter alia, by Regulation (EU) 2018/1724[3], the European Commission’s e-Government Action Plan and the Tallinn Declaration about e-Government. This principle means that companies do not have to submit the same information to public authorities more than once. It would therefore make sense to design interconnected registers of individual Member states to allow the storage and transmission of certain information.[4] Introducing digital business in law would also make sense in other areas. Such an action would be, for example, the automatic enforcement of wills made in digital form. After the testator’s death was recorded in the register, such a will could be automatically executed.

Law is therefore an area where providing the security, privacy and integrity of data is particularly important. In my opinion It would also make sense to introduce blockchain technology into law procedures which is highly resistant to interventions of individuals. The use of the blockchain chain for legal services has many advantages in terms of security of stored documents and actions, access to documents with a private key, secure storage on blocks with appropriate timestamps, direct transfer of ownership of documents online. To conclude my thought, the possibilities of introducing digitalization into law are enormous, and it depends on us, how we will face the opportunities.

[1] DIRECTIVE (EU) 2019/1151 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL, of 20 June 2019, amending Directive (EU) 2017/1132 as regards the use of digital tools and processes in company law, Official Journal of the European Union, L 186/80.

[2] REGULATION (EU) No 910/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of, 23 July 2014, on electronic identification and trust services for electronic transactions in the internal market and  repealing Directive 1999/93/EC,Official Journal of the European Union, L 257/73.

[3] REGULATION (EU) 2018/1724 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL, of 2 October 2018, establishing a single digital gateway to provide access to information, to procedures and to assistance and problem-solving services and amending Regulation (EU) No 1024/2012, Official Journal of the European Union, L 295/1.

[4] Case study: By setting up linked registers, a company established in one member state and wishing to register a subsidiary company in another member state would use the documents or information previously submitted to the register in the country of incorporation of the parent company.

Primož Zupanič, master’s student of Faculty of Law, University of Maribor