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The fiction of “service” will officially end, and a court bailiff will deliver court documents for a fee. The Social Insurance Institution, a bank or even a neighbour will help establish the debtor’s address. Court fees on claims of up to PLN 20,000 in simplified proceedings will be as high as PLN 1,000.
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These are amendments to civil procedure passed by the Sejm in early July, taking account of Senate amendments and thus concluding work on the act. The changes, now awaiting the President’s signature, will enter into force later this year. For some provisions of the amended Code of Civil Procedure, we will have only 14 days to adapt to the new legal reality. What fees must entities seeking to recover their debts prepare for? As experts from the Polish Association of Receivables Management (PZZW) point out, rising costs will severely affect not only creditors and the debt collection industry, but may also slow the national economy, which already feels the effects of growing payment backlogs.
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A bailiff will look for the debtor
The outcome of work on amending the Code of Civil Procedure may bring many changes to the legal system, which until now has guided everyone seeking to pursue claims in court. Currently, every uncollected court document notified twice is deemed served. This so-called fiction of service is to be removed by the amended Code. If the changes approved by the Sejm take effect, bailiffs will deliver such documents and search for the debtor’s current residential address. Bailiffs will take on more duties, in this case assuming the role of postmen. The entire proceedings will also take longer. In the planned amendment, the legislature shifts the burden of delivering the claim to the claimant and gives the defendant an effective tool to paralyse the proceedings. If the defendant fails to collect a summons twice, the claimant will have two months to present the court with confirmation that a bailiff served the document, provide the defendant’s current address, or prove that the defendant lives at the address given in the claim. In most cases the claimant will have to approach a bailiff and pay PLN 60. If the bailiff cannot deliver the document after visiting the location, the claimant may ask the bailiff to establish the defendant’s home address for an additional PLN 40. The bailiff will then provide addresses established through enquiries to banks, credit unions, pension authorities and tax authorities. The charge for finding the debtor’s residence and delivering the document is not everything. The bailiff will be entitled to another PLN 20 if the distance between the office and the place of action exceeds 10 km. The total cost of delivering one letter from a creditor to a debtor may thus reach PLN 120. A person deciding to recover their money will be forced to bear ever greater costs. There are also serious doubts about whether a bailiff may draw information from other enforcement proceedings they conduct and what other means they may use to obtain this information.
The delivery notice will not disappear
If delivery fails but the bailiff establishes that they have the debtor’s correct address, they will leave a notice in the letterbox allowing 14 days for collection. After this period, the document is deemed served, and the bailiff returns it to the creditor with information on the findings and date of service. The same situation will occur if the debtor does not live at the given address. The document then also goes back to the entity that commissioned its delivery. Within two months of receiving the obligation, the creditor may file confirmation that the document was served on the debtor with the court, return the document and provide the debtor’s current address, or present evidence that the defendant lives at another address. If none of this happens, the proceedings are suspended and, after a further three months, discontinued.
Court fees will at least double
The new regulations will drastically increase court fees, above all for claims not exceeding PLN 20,000, that is, in so-called simplified proceedings. What will this look like in practice? A fee of PLN 30, for example, will be charged for claims of up to PLN 500 rather than, as previously, PLN 2,000. Cases above PLN 15,000 will incur court costs of PLN 1,000. Fees for disputes in which entrepreneurs pursue large claims will amount to 5% of the claim value, capped at PLN 200,000.
Under the draft prepared by the Ministry of Justice, the fee will depend on the band into which the amount claimed falls. The recently adopted amendments simplify the rules for determining fees by providing seven bands rather than the original twelve. Nevertheless, this still means a severalfold increase in the cost of pursuing financial claims, with a significant effect on both consumers and businesses forced to pursue claims in court.
For example, under current law, a package of 1,000 cases each worth PLN 4,001–5,000 brought to court in payment-order proceedings would require total court fees of less than PLN 50,000. Following the amendment, the total cost will reach PLN 400,000, almost eight times as much. Creditors could previously expect a refund of three quarters of their costs when the payment order became final. Now fees will rise substantially, and the provisions for refunding fees will also be repealed.
Changes to procedural fees and costly statements of reasons
Ending the refund of three quarters of the court fee when a payment order in payment-order proceedings becomes final is not the only change ahead. The fee refunded by the court, including when a claim is returned, will be reduced by a PLN 30 “handling” fee. Nor will a difference be refunded if it is smaller than the cost of the refund.
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Summary
What, then, about the cost of a statement of reasons and so-called registry fees?
Until now, obtaining the reasons for a judgment was free; now a PLN 100 fee will be charged each time. The costs may be credited towards an appeal, but for creditors this still means higher costs of court proceedings. We can also expect higher registry fees: after the amendment, PLN 20 for every started 10 pages of a certified copy and PLN 20 for every started 20 pages of photocopies.
PZZW experts are certain that the forthcoming changes to court fees and service of documents will have a major impact on the whole economy. Businesses seeking to recover their debts will face enormous litigation costs, and this certainly will not solve the problem of payment backlogs, which ultimately affect the finances of us all.
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