Bill proposes significant amendments to Bulgarian Civil Procedure Code

On 7 July 2017, the Bulgarian Parliament adopted the first draft of a bill (“Bill”) to significantly amend various areas covered by the Civil Procedure Code (“CPC”) and other civil laws. The second parliamentary vote on the Bill will likely take place in September 2017. Further changes may be adopted before the second round of voting. The amendments currently address:

Service of court documents

The Bill addresses the confusion in the existing law regarding service of process. Under the Bill, a party will be considered ‘not present’ if: they are contacted at their address, at least three times in one month, with each contact being one week apart, and one attempt being on a weekend. Moreover, if the party cannot be found at their address, the court should attempt to serve the notice at their workplace. Only after this final attempt may the court declare that the party although not being found, should be considered as if having been served with the court documents.

Appeal before Supreme Court of Cassation

Under the current CPC, access to the Supreme Court of Cassation (Bulgaria’s high court) is very restricted; appellants must argue that an issue of law has been decided contrary to prior Supreme Court of Cassation case law, that the issue has been decided inconsistently by different court, or that the issue is important for the development of the law. These requirements have made access to the Court very rare and difficult and thus the Supreme Court of Cassation reviewed very few cases on the merits. The Bill seeks to allow cases above a certain threshold (BGN 5000, amounting to EUR 2500, for civil cases and BGN 20,000, amounting to EUR 10,000, for commercial cases) to reach the Court.

Enforcement procedures

The 2007 CPC introduced the order for execution, a faster procedure for certain monetary claims. The Bill adds one more ground for issuance of an order for execution - claims for labour remuneration or labour compensation.

Under the Bill, banks will no longer be able to apply for execution orders based on their own financial statements; only state institutions will be entitled to obtain execution orders in this manner. Currently banks use most frequently their own financial statements to initiate proceedings against bank debtors.

The Bill also introduces changes to the CPC enforcement procedure by expanding the options a debtor has to oppose enforcement against his assets by enforcement agents. Both the creditor and the debtor will be entitled to ask the enforcement agent to prepare a new assessment of the value of the assets subject to enforcement, and if the enforcement agent refuses, both parties will have the right to appeal. The current law does not provide means to challenge the value assessment made by the enforcement agent. Moreover, the debtor will have the right to appeal suspension or termination of the enforcement proceedings.

Currently a natural person debtor can suspend enforcement by paying 30% of the amount due; the Bill reduces this to 20%, but only if the debtor agrees to pay instalments of 10% of the remainder each month.

The Bill also amends the bid price for real estate properties that are auctioned by enforcement agents.

Bids for real estate should not exceed 30% of the value assessed by the enforcement agent. If the property is not sold in the first round, the second round of bids should start at 90% of the first round value, unlike 80% under the current rule.

Limitation periods

The Bill significantly changes the Obligations and Contracts Act, the main regulation on contractual and non-contractual civil obligations under Bulgarian law. As of now, the general limitation period is 5 five years, though this can be three years or one year in some cases. The Bill envisages a total and absolute 10-year limitation period for claims against natural persons. As such, the Bill will more easily absolve debtors because the 10-year period may expire even while there is a pending court procedure regarding the claim.