Commercial proceedings are back in the courts

The revolutionary changes to the civil procedure will enter into force in November 2019. One of the significant changes is the reintroduction of commercial proceedings. Commercial proceedings means new rules and stricter requirements for all business entities.

The priority of speedy proceedings

The duration of commercial proceedings is to be shortened. Under the new rules, cases should be resolved by the court of first instance within six months of the filing of a statement of claim. To meet the deadline, the parties will be obliged to present all assertions and supporting evidence in the first pleadings. Assertions and evidence submitted later will be ignored, unless the party justifies that their prior submission was not possible or that the need to submit them arose later. In such case, further assertions and evidence should be submitted within two weeks.

New rules on submitting evidence
In order to speed up commercial proceedings the parties will have a limited possibility of submitting commonly used evidence in the form of witness testimony. As documenting the facts is now available at no cost, the parties should document all important facts already at the contracting and post-contracting stage. In the case of a dispute, documented facts should be presented to the court, rather than questioning a witness (which most often leads to a prolonging of the proceedings) to establish those facts. The court will only exceptionally allow evidence in the form of witness testimony.

Moreover, the parties will now have the right to decide what type of evidence will be admissible in the court proceedings. Under the new rules, the parties may conclude an evidentiary agreement and exclude a certain type of evidence from the evidentiary proceedings. In such a case the court will not be able to allow excluded evidence. The court will have to establish the facts (that were to be demonstrated by the excluded evidence) based on the parties’ assertions.

Security based on a non-final judgement
The amended provisions allow the establishing of security by the bailiff based on a non-final judgement. The first instance judgment will have the feature of a security title without an enforcement clause appended to it. The party which wins the case will therefore have the possibility of securing its claim (i.e. by seizing the debtor’s bank account) before the case has been finally decided. In many cases it takes several years for the case to be decided in both instances, during which time the debtors can liquidate their assets, which makes potential execution impossible.

Costs irrespective of the outcome
As the courts are overloaded, the legislator wants the parties the settle disputes amicably out of court. In order to encourage the parties to negotiate before bringing an action to court, the court will be able to charge the proceedings costs to the party that failed to attempt to resolve the dispute voluntarily, irrespective of the outcome. This means that the party which wins the case may be charged with the costs of the proceedings.