As a part of the measures taken by the Austrian legislator to beat the effects of the Covid-19-Pandemic, accompanying measures for civil proceedings were adopted as well.
Civil proceedings
On the 16th of March 2020 a regulation was adopted to reduce the number of citizens in first and second instance courts to the absolutely necessary minimum. Only a few days later, the 2nd Covid-19-Act additional rules were implemented to the effect that in urgent cases negotiations can also be conducted with the help of technical equipment. For example, the parties of the proceedings can now be connected via video communication.
Due to the Austrian “electronic legal transactions system”, the process of digitalization is well advanced in the Austrian court system. This is why legal actions and applications for execution can be filed even in times of limited party services.
Furthermore, the 2nd Covid-19-Act stipulates a legal interruption of procedural deadlines in civil cases (civil proceedings, non-contentious proceedings etc). However, the 4th Covid-19-Act explicitly excludes procedural deadlines in insolvency proceedings so that these proceedings can be continued without delay. The procedural deadlines were interrupted until the 30th of April 2020 and restarted on the 1st of May 2020.
Substantive deadlines have not been interrupted, but only suspended. Therefore, the period between the 22nd of March and the 30th of April 2020 is not to be included in the deadlines. Thus, substantive legal claims cannot become statute-barred during this period.
If a party has missed the observance of a deadline, for example due to a measure of the Federal Government with regard to Covid-19, an application for “restitutio in integrum“ (in German: Wiedereinsetzung in den vorigen Stand) together with the filing of the missed motion is possible.
Insolvency Proceedings
Regarding legal corporations, insolvency proceedings must be opened if the debtor is either insolvent or over-indebted and no positive forecast for continuation exists. If one of the reasons for opening insolvency proceedings applies, bodies of the company are usually obliged to file for insolvency as soon as possible, but within 60 days at the latest. With the 2nd Covid-19-Act, the Austrian legislator has effectively extended the 60-day period to 120 days, which means that managing partners can wait longer without incurring additional liability risks. The 4th Covid-19-Act (in force since 5th of April 2020) concerns only the over-indebtedness as a reason for insolvency. The obligation to file for insolvency will be suspended until 30th of June 2020 if the over-indebtedness occurs after 1st of March 2020. Other preconditions (such as the Covid-Crisis as a contributory cause of over-indebtedness or the setting of reorganisation measures) do not exist. Even creditors cannot file an insolvency application during this period because their debtor is over-indebted.
Enforcement Proceedings
If – due to the Covid-19-Pandemic – a possible payment agreement with the court bailiff cannot be adhered to, the affected persons have the possibility to contact the court or the court bailiff without immediate penalty.
In connection with the crisis, the court of enforcement may also grant a postponement of the execution proceedings. The Austrian Enforcement Act provides for a postponement of two types of enforcement: the forced sale of a property (in German: Zwangsversteigerung einer Liegenschaft) and the execution on movable property (in German: Fahrnisexekution). According to § 200b of the Austrian Enforcement Act, the enforcement must be postponed upon application by the obligated party without the obligation to provide a security if the obligated party has got into economic problems due to a natural disaster, which has led to the initiation of the enforcement and if the enforcement would destroy the economic existence of the obligated party. The expression “natural disaster” now also includes a pandemic (such as Covid-19 is). Postponement must take place unless there is a risk that the creditor might be seriously harmed by the postponement, in particular if his claim could become wholly or partially irrecoverable.
At present, the court of enforcement can also authorize partial payments of a claim to be brought in by way of enforcement. According to § 45a Austrian Enforcement Act, however, the enforcement must be postponed on application (without the obligation to provide security) if an agreement on payment has been reached between the parties.
Authors:
Univ.-Prof. Dr. Bettina Nunner-Krautgasser
Univ.-Ass. Mag. Lisa Prodinger
Stud.-Ass. Tobias Weidinger