Anti-Crisis Shield 3.0 – suspension of court and procedural deadlines lifted

May 16, 2020 was the effective date for most provisions of the so-called “Anti-Crisis Shield 3.0.” The Act lifts the suspension of court and procedural deadlines. When will time limits start to run and how to count them?

Until now, during the coronavirus epidemic, time limits in court proceedings (incl. civil, criminal and administrative ones) have been suspended. This resulted from article 15zzs section 1 of the so-called Anti-Crisis Shield 1.0 to the Act of March 02, 2020 on Special Solutions Related to Prevention and Combating of COVID-19, Other Infectious Diseases and Crisis Situations Arising from them. Anti-Crisis Shield 3.0 revokes the aforesaid provision. Pursuant to article 68 sections 1 and 2 of the amended Act, time limits will start running after 7 days of the Act’s effective date, i.e. on May 24.

Anti-Crisis Shield 3.0 has some legislative deficiencies. The revocation of the suspending provision becomes effective on the day following the Act publication date (i.e. May 16). As a result, there is no legal basis for suspension of time limits between May 16 and 23, 2020. Nevertheless, the lawmaker’s intentions are clear. We believe there is no doubt that time limits will start running on May 24.

It needs to be noted that the terms which have not begun to run at all will start anew. Those which began to run before Anti-Crisis Shield 1.0, and were subsequently suspended, will continue (rather than start once again).

Example 1:
The act suspending time limits came into force as of March 31, 2020. The court delivered a payment order to the defendant on April 15, 2020. The two-week deadline for submission of an objection to the payment order did not start running at all. The new Act came into effect as of May 16, 2020. The term starts running after 7 days of the Act’s effective date. Consequently, May 24, 2020 is the first day of the term. We need to bear in mind that the time limit cannot end on a Saturday or Sunday. In this case, it expires on June 08, 2020.

Example 2:
The court delivered a payment order to the defendant on March 18, 2020. The act suspending time limits came into force as of March 31, 2020. The deadline for submission of an objection is suspended. However, 12 days out of that 2-week term have already passed (March 19-30). Only 2 days are left. The new Act came into effect as of May 16, 2020. The term continues running after 7 days of the Act’s effective date. Consequently, May 24, 2020 is the thirteenth day of the term. It expires on May 25.

Please feel free to contact us for any questions you might have.

Anti-Crisis Shield 3.0 – remote hearings and closed-door sessions in civil cases

May 16, 2020 was the effective date for most provisions of the Act of May 14, 2020, amending specific acts in terms of protective actions related to the spread of SARS-CoV2 (Dz. U. / Journal of Laws of 2020, item 875), commonly referred to as “Anti-Crisis Shield 3.0.” Civil procedure has been amended to extend the possibility to conduct remote hearings (videoconferencing) and issue rulings at closed-door sessions.

Pursuant to the newly-adopted Act, the following will apply to cases examined under the Code of Civil Procedure during the state of epidemic or epidemic threat, and for a year of the end of the later of them:

• videoconferencing will be used for court proceedings. In order to have a remote hearing, the parties to the procedure needed to be in court buildings, e.g. in their city/town of residence. Now they will be able to participate without leaving their home. Traditional hearings can be held under exceptional circumstances, as long as they do not pose a major threat to the participants’ health. The lawmaker left ample room for interpretation as regards the criteria to adopt for evaluation whether the hearing will not expose participants to excessive hazard. It seems that such criteria could include the age of participants, their total number, the stage of epidemic, etc.;

• if the court is unable to conduct a remote hearing, while a traditional one might pose a threat to the participants’ health, the court will be entitled to examine the case at a closed-door session, unless any party objects. An objection can be filed within 7 days of the delivery of a notice about a closed-door session. Only individuals that are not represented by a professional legal advisor will be notified about such right to object;

• if so decided by the president of the court, the judging panel (apart from the presiding judge and clerk) may participate in the hearing through means of electronic communication (i.e. they will be able to participate from home), except for the hearing at which the case gets closed;

• in cases where the evidentiary procedure has already been completed, the court may close the case and issue a ruling at a closed-door session, after receiving the parties’ (or participants’) written positions;

• the period of application of article 374 of the Code of Civil Procedure has been extended, making it possible to examine appeals brought before November 07, 2019 at closed-door hearings (unless a party applies for a standard hearing or for evidence involving testimony of witnesses/parties). A request for a standard hearing can be filed within 7 days of the delivery of a notice about a closed-door session. In same of withdrawal of a lawsuit or appeal, or with respect to invalidation of proceedings, the court examines the case at a closed-door hearing.

Please feel free to contact us for any questions you might have.

What changes in the procedural law issues and enforcement implementations are brought by Lex Covid?

This new Act allows, under defined conditions, relief from the effects of expiry of a time limit, even in cases where it would not otherwise be possible under the law. Lex Covid also sets out that until 30 June 2020, with exceptions, the courts will not undertake enforcements by selling movable assets and buildings in which the debtor has permanent residence.

As we have informed, the President of the Czech Republic signed an Act known as Lex Covid on 20 April 2020. The Act is intended to address practical problems arising in connection with the Covid-19 pandemic in judicial proceedings and bankruptcies, and it also deals with the functioning of legal entities. The purpose of this newsletter is to present the content of Lex Covid concerning the procedural law issues and implementation of enforcements.

Relief from the effects of expiry of procedural time limits

As a result of the adopted extraordinary measures, the courts have scaled down their activity and in particular they have significantly reduced access to the court buildings for the public whereby, among other things, they have limited access to case files. That, however, made it impossible or excessively difficult for some parties to proceedings to carry out the necessary procedural steps within the set time limits, e.g. submission of a response. In some cases, such situation could be addressed by filing a request for extension of the time limit to perform an act but the courts did not manage to deal with the requests within a reasonable time.

Lex Covid therefore enables relief from the effects of expiry of a time limit under set conditions, even in cases where this would be otherwise impossible by law. A condition for the relief is submission of a request/application by the party concerned within a set time limit, to which the omitted act must be attached.

The time limit for filing the application will start to run upon terminating or cancelling the extraordinary measure against the epidemic, which made it impossible or substantially difficult to carry out the act. The time limit will not end before a certain number of days after the emergency ends. The time limits for which it is possible to file an application or request for relief vary in different areas of the procedural law.

In civil justice, the application for relief must be filed within 15 days of the termination or cancellation of extraordinary measures. If the party has missed the time limit for submission of a response, as a result of which a judgement for recognition was issued, the court will decide based on the application of the party concerned on relief from the effects of expiry of the time limit for response and on an annulment of the judgement for recognition.

In administrative justice, the application for relief from the effects of expiry of a time limit must be filed within 14 days of terminating or cancelling the extraordinary measure that hindered or rendered it excessively difficult to carry out the omitted act.

In enforcement proceedings, the application for relief can be filed within 7 days of the termination or cancellation of the extraordinary measure. However, it is not possible to condone non-compliance with the time limit for filing an appeal against a decision in which the ownership of an asset was transferred to the purchaser at auction (an example can be a forced sale of immovable assets, or sanctioning of a business establishment by its sale).

It is newly possible under this extraordinary situation to launch proceedings for a stay of enforcement also after the enforcement has already been performed, provided that the performance took place during the extraordinary measures and the party could not file the application before the enforcement was performed due to the extraordinary measures. The party can launch proceedings for a stay of enforcement, if it was ordered based on an unenforceable decision, the enforcement decision is annulled or rendered ineffective, or if the enforcement was inadmissible because there is another reason why the decision cannot be enforced.

The same applies for enforcement proceedings. If, moreover, the party against whom enforcement is sought permits the time limit for fulfilling the enforced obligation to elapse, it can apply for relief from the effects of the expiry of that period. However, such party must pay the enforced claim and an advance payment for the reduced execution costs within 15 days of the termination or cancellation of the extraordinary measure, which will eventually mean lower execution costs for the party.

In insolvency proceedings, the person who permitted the time limit set for completing acts in this type of proceedings to elapse due to extraordinary measures can file an application for relief, with the omitted act attached, within 7 days of the termination or cancellation of the extraordinary measure. That does not apply if the case in question has already been decided or if the judgment against which the party failed to lodge an objection within the set period has become final and the party would like to file the objection presently.

In proceedings before the Constitutional Court, the application cannot be rejected solely on the grounds of being filed after the expiry of the set period, if the appellant filed it out of time due to restrictions arising from extraordinary measures against the epidemic. But the application must be filed no later than 15 days following the termination or cancellation of the extraordinary measure. That period will not end earlier than 15 days after the termination or cancellation the state of emergency.

If a person in criminal proceedings has allowed a period set for performing an act to expire, the person can apply to have his position restored to the status quo ante. That way, it is possible to restore also the period for lodging an appeal. It is necessary to apply for restoration of the status quo ante within 3 days of the termination or cancellation of the extraordinary measure in question, however, that period will not end earlier than 3 days after the termination or cancellation of the emergency. Such application must be accompanied by the act in question if it still has not been performed.

Lex Covid also deals with relief from the effects of expiry of a time limit in proceedings for satisfaction of property claims pursuant to the Act on the use of funds from material criminal sanctions imposed in criminal proceedings, and also with relief in procedures relating to applications for financial assistance pursuant to the Act on victims – in both cases, the entitled person can file an application for relief within 15 days of the termination or cancellation of extraordinary measures against the epidemic. The application must be accompanied by the submission which was to be made within the missed period.

Court decisions granting the relief, except for decisions of the Constitutional Court, do not have to be justified.

Enforcement and execution proceedings

Lex Covid has also laid down that until 30 June 2020, the courts will not implement enforcement and execution by forced sales of movable assets and buildings in which the debtors are registered as permanently resident. That does not apply if the person against whom the enforcement is brought makes a written notification to the court that the court should continue the enforcement or execution in the above manner, or if the subject of the proceedings is recovery of maintenance claims, personal injury claims or claims of compensation for damage caused by intentional criminal offences.

Should you have any questions concerning procedural law, not only related to the state of emergency, please contact Ladislav Peterka at ladislav.peterka@randalegal.com.

Possibilities of holding general meetings and members’ meetings during the state of emergency II.

As from April 11, 2020, a lately issued Hungarian government decree regulates how members’ meetings and general meetings should be held during the state of emergency. The new government decree also overrides the relevant provisions of the Civil Code and the articles of association of companies and other legal entities.

What additional rights does the government decree give to the management?

In the first part of our summary of this newest government decree, we have already explained the increased „freedom” of the management regarding corporate decisions.

In many company’s case, the adoption of the annual financial report under the Hungarian Accounting Act is due in the near future. Pursuant to the interim regulation introduced by the government decree, the management is entitled to decide on the approval of the company’s financial report and the use of the after-tax profit. Moreover, the management can take emergency measures during the state of emergency, which would normally fall within the competence of the decision-making body.

These are very far-reaching decisions. Aren’t the hands of the management tied?

Yes: the decisions mentioned before can only be taken if a meeting of the decision-making body cannot be held, either by the participation of the members by electronic means or by voting in writing.

In addition, the legislature intends to set limits on the “emergency measures” of the management as a guarantee: accordingly, the management (i) may not, as a general rule, amend the articles of association, (ii) decide on the dissolution of the legal entity without a successor, (iii) nor may it decide on the transformation, merger or division of the company.

An additional restriction is that (iv) additional payments or other capital injections may be ordered by the operational management of the legal entity only with the prior written consent of the members/founders. In the case of company forms where company law imposes a minimum capital requirement (i.e. in the case of limited liability companies and public limited companies), (v) the management may not decide to reduce the subscribed capital.

Can members hinder management decisions?

Yes, this is possible before the measure in question is taken; the management may not take a decision if in their written opinion, the majority (at least 51%) of members holding more than 25% of the votes object to the proposed decision of the management. (If the legal person has a member having majority influence or a qualified majority, such member can block the measures of the management on its own.)

What happens if the tasks of the management are not performed by one person but by a body?

Like in the case of decision-making bodies, the government decree intends to enable the widest possible use of electronic means in decision-making processes in the case of management acting as a body. If there is no agreed procedure for the use of modern means of communication (or deviates from the government decree), the chairman of the board (deputy in case of impediment) and ultimately the member requested by the management are entitled to determine the rules of meeting and decision-making. It is important that written consultation and decision-making can also take place by electronic message exchange (i.e. by e-mail).

These facilitations should apply not only to the decision-making of the board of executive officers, but also to the decision-making of the supervisory board (or, if one exists, the audit committee).

What happens to mandates that expire during the state of emergency?

If the mandate of the executive officer of the company expires during the time of the state of emergency, his/her position shall last until the 90th day after the end of the state of emergency. The executive officer shall perform duties during this period. The cited rule applies ex lege, i.e. without a decision of the decision-making body.

If the executive officer resigns, he/she shall still perform his/her duties during the emergency or for 90 days after its termination. The same is true if the mandate is for a fixed term and the fixed term would expire during the state of emergency.

On the other hand, the mandate of the executive officer shall terminate if he/she is removed from office by the supreme body or if a reason for exclusion or conflict of interest arises. It goes without saying that in the event of the death of executive officer, the mandate cannot be maintained either, the just implemented interim rules do not bring change in this, of course.

It is important to emphasize that in the above time interval – similarly to the rules described for the executive officer – the mandate of the permanent auditor does not expire, and the permanent auditor is also obliged to perform duties during this time.

Updated – Criminal Law: Review of the main measures provided by the state of emergency decree

The state of emergency initially instituted in Romania until 14 April has been extended for an additional 30 days as of 15 April 2020. Some additional measures have also been included regarding the criminal proceedings and we have listed below an updated review of their impact:

1. Criminal investigation activity has been slightly relaxed and although it can be particularly performed regarding the cases indicated in the decree and the cases considered urgent by the prosecutor, there is not anymore provided a specific restriction regarding the other cases. Essentially, the criminal investigation activity will be focused on:

  • cases in which preventive measures were ordered or proposed, cases regarding the protection of victims and witnesses, cases for applying medical safety measures and cases in which the victims are minors;
  • criminal investigation activities and evidence related activities the delay of which would endanger obtaining of evidence or catching the suspect/defendant and preliminary hearing activities, as well as imposing precautionary measures;
  • cases which are urgent given the purpose of the national state of emergency, cases regarding offences against human life, as well as urgent cases considered as such by the prosecutor and cases concerning flagrant offenses, cases in which preventive measures have been ordered, cases regarding appeals against enforcement of punishment, cases concerning appeals against precautionary measures, cases regarding international judicial cooperation in criminal matters, cases which include measures to protect victims and witnesses, cases regarding medical security measures, cases regarding crimes against national security, cases regarding acts of terrorism or money laundering
  • solving the cases in which the criminal investigation was completed before the institution of the state of emergency, verifying the resolutions by the hierarchical superior prosecutor and solving the complaints against criminal investigation measures and activities.

The competent courts can be notified with an indictment or with an agreement of guilt plea only regarding cases mentioned al let. b above.

During criminal investigation phase, the Judge of freedoms and wrights will rule on the requests, proposals, complaints, appeals and any other notifications regarding the cases mentioned al let. a-d above.

2. The activity in the preliminary chamber and court trial shall be suspended during the state of emergency, except for:

  • cases in which the urgency is justified by the purpose of instituting the national state of emergency
  • urgent cases considered as such by the judge of the preliminary chamber or by the court, as well as
  • cases indicated in the decree (flagrant offenses, preventive measures, appeals against enforcement of punishment, appeals against assets seizure measures, international judicial cooperation, measures regarding the protection of victims and witnesses, medical security measures, offenses against national security, terrorism or money laundering).

During the state of emergency, in the cases mentioned above and given the specific circumstances, the courts can set short hearing terms, including from one day to another or even on the same day. Criminal liability statute of limitations is suspended during the state of emergency:

  • in the cases where criminal investigation is not performed and
  • in the cases where criminal proceedings are suspended.

Suspension operates legally, without the need to issue an ordinance or a ruling for this purpose

3. The consent for communication of procedural documents in criminal cases by electronic mail is presumed and, if needed, the judicial bodies will urgently request by telephone the e-mail addresses for communication of documents.

4. Time limits for communication of ordinances, for submitting a complaint and ruling regarding such complaints (other than those provided at point 1 above) are interrupted. Time limits for submitting appeals in criminal cases (except for the cases tired in accordance with the Decree) are interrupted. Once the state of emergency ends, a new time limit of the same duration will commence.

5. The hearing of individuals deprived of their liberty shall be made through videoconference.

6. If there are available means, the hearing of other persons shall be made through videoconference as well, if they agree.

7. Public tenders for sale of the movable assets seized in the criminal proceedings are suspended, except for the ones performed through electronic means

8. During the state of emergency, the assets in respect of which precautionary measures have been imposed may be commandeered, according to the Law no. 132/1997 if they are necessary to prevent and combat the spread of COVID-19 infections. Criminal investigation and criminal trial are performed according to the Criminal Procedure Code, with the possibility, if necessary and depending on the evolution of the situations generated by the state of emergency or its effects, to establish special rules regarding the procedure for the investigation and trial of the crimes committed during the state of emergency. or taking advantage of this condition, as well as in the case of flagrant offenses.

9. The defendants under a preventive measure such as judicial supervision or on bail shall not present themselves before the supervision body or judicial body which ruled the measure. For the supervision of the defendant, the designated body will go to the defendant`s domicile according to the supervision plan or whenever it is considered necessary.

10. Within 10 days as of the end of the state of emergency, the judge / court will take measures for setting the hearing dates and for performing procedural activities.

The Decree also provides measures regarding the Prosecutor`s Offices and courts` activity in the case when these units are prevented to function. In this respect it is provided that some of the cases pending before these judicial bodies might be investigated/tried by an equal Prosecutor`s Office or court.

There are provided measures regarding the enforcement of the punishments and deprivation and non-deprivation of liberty measures, some activities related to their enforcement being suspended during the state of emergency. Also, exercising certain rights of the incarcerated or arrested individuals was suspended, while the time for telephone and online conversations was correspondingly increased.

Updated – Disputes: Civil and administrative disputes currently registered with the courts

The state of emergency initially instituted in Romania until 14 April has been extended for an additional 30 days as of 15 April 2020. Additional measures have also been enacted with respect to the courts’ activity.

We have listed below an updated review of the impact the state of emergency will have on civil and administrative disputes currently registered with the courts:

1. Only especially urgent matters will be addressed by the courts; the list will be established by the management committees of the High Court of Cassation and Justice or of the courts of appeal, as applicable, for disputes within their respective jurisdiction. The courts will observe the following rules:

  • time limits will be set on short notice, i.e. for the following day or on the same day;
  • hearings may be held by videoconference and documents may be communicated by e-mail or fax;
  • the new measures enacted on 15 April provide for logistical aspects on the conduct of hearing by videoconference and set in place a series of obligations for the courts who have jurisdiction in the areas where the parties, their representatives and other participants to the trial (the Participants) are located (which may be different from the court hearing the matter); thus, upon request from the court hearing the urgent matter, the courts who have jurisdiction at Participants‘ locations will: (i) proceed to their identification in accordance with the applicable legal provisions, through a judge appointed by the president of the court to this end and (ii) provide them with all the necessary audio-video equipment for the purposes of the audio-conference hearing;
  • throughout the process for the implementation of the measures mentioned above there is no obligation to draw-up specific minutes (such as the ones required for rogatory commission measures);
  • when possible, the statements of claim, appeals, as well as any other procedural documents addressed to the court, for which the law requires the written form and which are not submitted directly during the hearing, will be filed by electronic means;
  • urgent cases may be adjourned upon request; if the request is dismissed, the court is bound, however, to adjourn the ruling and allow written statements by the parties, either ex officio or upon party`s request.

2. Civil cases which are not particularly urgent are automatically suspended during the state of emergency, without the need to file any formal request to this effect (such as a request to adjourn or change the hearing date);

3. At the end of the state of emergency, proceedings in non-urgent matters will be resumed ex officio; within 10 days as of the end of the state of emergency the courts will take measures for setting the hearing dates and summoning of the parties;

4. Time limits for filing appeals running at 14 April 2020 (i.e. the date when the state of emergency was instituted) are interrupted and new time limits with the same duration will run as of the date when the state of emergency ends;

5. Appeals already filed in non-urgent matters will be referred to the competent courts after the state of emergency ends;

6. Statutes of limitations and time bars do not begin to run and, if already commenced, are suspended for the duration of the state of emergency;

7. If due to the COVID – 19 pandemic, the number of judges necessary to form the panel in a hearing cannot be assured, the president of the court or his substitute orders the participation of judges from other divisions of the court, appointed by lot; and

8. During the state of emergency the drafting and notification of court decisions as well as the filing of new court applications and any other activities continues,  subject to the observance of sanitary discipline rules in force during the state of emergency.

Is there a risk for companies to be exposed to criminal investigations for non-complying with the measures implemented by the authorities?

Context

Following the accelerated spread of COVID-19, the President of Romania declared the state of emergency for a period of 30 days as of 16 March 2020. According to the latest press statements this will most likely be extended by an additional thirty days term.

One of the first measures announced by the Romanian prime minister was the tightening of the criminal laws regarding the offenses of spreading the infectious diseases. The purpose of adopting the new regulation was to enforce compliance with the measures taken by the authorities to prevent and stop the spread of COVID-19.

In recent weeks the national criminal investigation bodies have announced the opening of more than 200 criminal investigations.

The main crime pursued is the Preventing the fighting of diseases that incriminates the failure to comply with the measures taken for the prevention and combating of infectious and contagious diseases, if this resulted in the spreading of the disease.

Pursuant to Article 135 of the Criminal Code, the legal entities shall have criminal liability for offenses committed in relation to the performance of their object of activity or in their interest or their behalf. The criminal liability of legal entities does not exclude the criminal liability of the individual(s) participating in the commission of the same offense.

Which are the implications for companies who do not comply with obligations established by the authorities?

Although the main legislative changes concern the facts committed by natural persons who, for example, do not comply with the quarantine or isolation measures, the offense provided in Article 352 par. (2) of the Criminal Code also incriminates the acts committed by legal entities that do not comply with the obligations established by the authorities.

For a company to be liable, the following conditions must be met:

  1. The failure to comply with a pre-existing obligation or with measures ordered by public authorities in order to prevent or combat spreading of Coronavirus (such as the obligation of all companies to provide all the materials intended for personal hygiene, to disinfect frequently door locks and other exposed areas, like conference tables). The mandatory measures ordered by the authorities are established by the military ordinances or the emergency ordinances of the government . So far, the Ministry of Labor has issued a series of recommendations but not all of them mandatory for companies. The breach of the recommendations cannot trigger the criminal liability of legal entities;
  2. the breach of measures results in the infection of at least one person with COVID -19 virus.

Sanctions

The penalties applicable to legal entities breach the criminal law provisions include fines and other ancillary measures such as: the suspension of the activity or of one of the activities performed by the legal entity for a term between three months and three years or the closure of working points of the legal entity for a term between three months and three years or in worse case scenarios even the winding-up of the legal entities.

If a legal entity is held liable for Preventing the fighting of diseases as indicated in Article 352 par. (2) of the Criminal Code, the court can sentence the legal entity to a fine of up to 300,000 euros.

In case the preventing of fighting of diseases offence is committed involuntary, the fine can be established to a maximum of approx. 185,000 euros.

Also, the companies can be held liable for the offences regarding labor health and safety rules, such as the Failure to take labor health and safety measures if an employee is infected with COVID-19 following non-compliance with the labor protection measures. For instance if a company does not comply with the measures imposed by the authorities regarding the avoidance of the spread of COVID-19 and as a result of these non-compliance a client of the company is infected with COVID-19, the company will be criminally liable for  the crime of preventing the fighting of diseases. If this non-compliance has the consequence of creating an imminent danger for infecting the company’s employees with COVID-19 during the course of their professional activity, the company will be criminally liable also for the offense of Failure to take labor health and safety measures.

Recommendations

In order to avoid criminal investigations regarding this matter, the companies should develop a contingency and business continuity plan for an outbreak in the communities where their business operates, taking into consideration the guidance published by the World Health Organization.

Companies need to remain alerted and take note of and effectively implement the measures decided by the public authorities on an almost daily basis.

Impact of the COVID-19 Epidemic on Dispute Resolution

The epidemic of COVID-19 disease and the government emergency measures are already affecting the functioning of courts in the Czech Republic. In recent weeks, the courts have adjourned most of the hearings that did not have to be scheduled without delay. [1] An adjournment is likely in particular in proceedings involving a large number of participants or witnesses. In practice, this means that under the current conditions, it is not possible to expect an early ruling, especially of those disputes before courts that require an oral hearing being scheduled.

Current restrictions on the functioning of courts. In addition, courts have reduced physical contacts with members of the public, which is manifested, for example, by limitations to the possibility to inspect the court file or the complete closure of the court building. Inspection of the file can only be carried out at most courts in urgent cases and urgency must be demonstrated in each case. The buildings of the Constitutional Court and of the Supreme Court are completely closed to visitors. In addition, some courts have introduced special makeshift mailboxes to minimize contact with visitors and have stopped accepting cash at the court cash register.

No rapid improvement in scheduling hearings in individual proceedings can be expected after the state of emergency is over. The courts are preparing for a sudden increase in the bailiff and insolvency agenda. It is also likely that there will be an increase in claims (in particular against the state for compensation of damages caused by the emergency measures, as described in another newsletter issued by our law firm). The expected outcome will be an increased caseload of Czech courts and ensuing extension of the duration of court proceedings in the Czech Republic. However, this can be a serious problem in a situation where at least one of the parties to the dispute has an interest in a quick decision of the matter.

Be careful, all deadlines apply regardless of emergency! Nevertheless, the chairmen of regional courts have asked the Ministry of Justice to set rules governing the suspension and discontinuation of time limits during the period of the state of emergency (possibly even retroactively as of the date of the declaration of the state of emergency).[2] The chairmen of regional courts propose the suspension and discontinuation of time limits in all areas of law, namely the following time limits:

  • substantive time limits (e.g. statutes of limitation);
  • procedural time limits (e.g. time limits for replying to a motion);
  • time limits for issuing a decision or another measure.

The Czech Bar Association also supported the request of the chairmen of regional courts.[3] However, the standpoint of the Ministry of Justice to this request is not yet known.

What is the alternative to court proceedings during the state of emergency? Also under state of emergency, there is an alternative to the standard legal process, namely online dispute resolution (also referred to as “ODR”). Generally, the advantage of online dispute resolution is the speed of such proceedings [4] and lower costs associated with raising a claim.[5] Currently, an undisputed advantage is that online dispute resolution does not require parties to the dispute to meet in person. Thus, unlike usual court proceedings, online dispute resolution can also take place under the current extraordinary conditions.

What are the forms of online dispute resolution? On the Internet, disputes can be resolved both in arbitration and by mediation. Procedures for online dispute resolution may be determined by the parties to a certain extent, in an arbitration agreement or in a mediation contract. In the case of proceedings before the Arbitration Court attached to the Economic Chamber of the Czech Republic and the Agricultural Chamber of the Czech Republic, the Rules for Online Arbitration issued by the Arbitration Court shall apply. [6]

When it is suitable to choose online dispute resolution? Online dispute resolution can be recommended especially for disputes between entrepreneurs. As mentioned above, online dispute resolution is particularly useful in cases where the dispute needs to be decided quickly and it is not suitable to wait for an end to the state of emergency. Additionally, online dispute resolution is also possible in disputes among entrepreneurs and consumers, which can however only be initiated by the consumer in certain cases. [7]

How can we help you? Our law firm has extensive experience in representing clients in alternative dispute resolution. Our team of attorneys-at-law also includes (i) mediators registered in the list of mediators maintained by the Ministry of Justice and (ii) arbitrators registered in the list of arbitrators maintained by the Arbitration Court attached to the Economic Chamber of the Czech Republic and the Agricultural Chamber of the Czech Republic. If you wish, we will be pleased to assist you in the above alternative ways of online dispute resolution.

_____________________________________________________________________________

[1] Courts postpone hearings to May, measure temperature of visitors or don’t allow members of the public to enter their buildings [online]. Česká justice [cit. March 25, 2020]. Available at: https://www.ceska-justice.cz/2020/03/soudy-odrocuji-jednani-na-kveten-meri-lidem-teplotu-nebo-do-budov-nepousti-verejnost/
[2] Procedural deadlines need to be urgently addressed, the chairmen agree. They are also preparing for quarantine [online]. Česká justice [cit. March 25, 2020]. Available at: https://www.ceska-justice.cz/2020/03/lhuty-rizeni-se-musi-urychlene-resit-shodli-se-predsedove-pripravuji-se-i-karantenu/
[3] The Czech Bar Association supports the suggestion of the chairmen of the courts for a speedy resolution regarding the time limits [online]. Česká justice [cit. March 27, 2020]. Available at: https://www.ceska-justice.cz/2020/03/cak-podporila-vyzvu-predsedu-soudu-k-urychlenemu-reseni-lhut-rizeni/
[4] For on-line arbitration, the whole procedure usually takes a maximum of 35 days – see JANKŮ, Martin. Rozhodčí řízení před Rozhodčím soudem při HK ČR a AK ČR [online]. Bulletin advokacie [cit. March 25, 2020]. Available at: http://www.bulletin-advokacie.cz/rozhodci-rizeni-pred-rozhodcim-soudem-pri-hk-cr-a-ak-cr?browser=mobi
[5] Eg. the fee for on-line arbitration before the Arbitration Court attached to the Economic Chamber of the Czech Republic and the Agricultural Chamber of the Czech Republic is 3% of value of the object of the dispute. – cf. https://www.soud.cz/sazebniky#online-spory
[6] Available here: https://www.soud.cz/rady/zvlastni-dodatek-radu-pro-rozhodci-rizeni-online-2017
[7] cf. Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online consumer dispute resolution. Available here: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32013R0524

Changes in civil procedure following COVID-19 outbreak

In an effort to counter the coronavirus outbreak, the Ministry of Justice has unveiled a set of emergency regulations designed to mitigate the impact it has on, i.a. civil procedure.

The regulations proposed by the Ministry of Justice have been included in the draft bill on amending the act on emergency solutions designed to prevent, counteract and combat COVID-19, other infectious diseases and emergency situations caused thereby (the “Draft Bill”), which is currently the subject of inter-ministerial consultations.

Key changes:

Urgent matters

1. The Ministry of Justice is to compile a list of urgent matters. The idea behind the list is to avoid a standstill in the administration of justice in respect of the most urgent matters, which must be dealt with by the courts, even if the court with territorial jurisdiction over the matter is shut down due to COVID-19, e.g. in the case where judges, associate judges and other court staff need to be quarantined.

In accordance with the Draft Bill, the act currently in place would be to include a provision listing the following matters (among others) as urgent:

  • preventive detention applications,
  • arrest cases,
  • cases regarding criminal preventive measure orders,
  • European arrest warrant cases,
  • cases regarding temporary release from a correctional facility with the use of electronic monitoring system,
  • cases regarding detention orders where a foreigner in placed in a detention center or under arrest,
  • cases regarding imprisonment or other sentences or coercive measures resulting in imprisonment, so long as the court’s decision regards the release from jail or prison or is necessary to enforce the sentence or coercive measure,
  • cases regarding the removal of a person from the care of a parent or legal guardian,
  • the case referred to in the Act on Mental Health Protection,
  • cases regarding the placement of a juvenile offender or extension of a juvenile offender’s stay in a juvenile detention facility,
  • cases regarding the placement of a minor in a child and youth care facility,
  • preliminary injunction applications,
  • cases involving the examination of a person for the purpose of securing evidence or examination of a person with respect to whom examination in a trial may not be possible,
  • administrative cases which must be heard by a court within the deadline prescribed by law and cases regarding applications to prevent the enforcement of an act or performance of an action.

2. The course of action for a case which ends up on the urgent matters list would be the following:

  • if a common or military court has been shut down due to COVID-19, the chief judge of the appeals court will be able to assign cases of urgent nature within the jurisdiction of the court which has been shut down to a different court of the same instance, located within the same appellate circuit;
  • if all common or military courts within an appellate circuit have been shut down due to COVID-19, the First Chief Judge of the Supreme Court, upon the request of the chief justice of the appeals court within the appellate circuit all courts of which have been shut down, will be able to assign cases of urgent nature within the jurisdiction of the court which has been shut down to a different court of the same instance, located (as far as possible) within the adjacent appellate circuit;
  • if a voivodship administrative court has been shut down due to COVID-19, the Chief Justice of the Supreme Administrative Court would be able to assign cases of urgent nature within the jurisdiction of the court which has been shut down to a different voivodship administrative court.

3. The court assigned to an urgent case in accordance with section 1.2 above would handle the case until the end of proceedings within given instance.

Deadlines

1. In accordance with the Draft Bill, following the announcement of a state of epidemic threat or the state of epidemic due to COVID-19, the procedural deadlines in court proceedings, incl.:

  • administrative court proceedings;
  • enforcement proceedings;
  • criminal, fiscal penal and minor offence proceedings;
  • administrative and administrative enforcement proceedings;
  • as well as the deadlines in other proceedings pending on the basis of the act;
    would not be triggered and, if they have already been set running, would be suspended until the state of epidemic threat or the state of epidemic announced due to COVID-19 is called off.

1.2. The abovementioned rule would also apply to:

  • the deadline for declaring an administrative case handled as a result of an implied decision;
  • deadlines in other cases where the lack of a public agency’s objection, decision, ruling or another determination serves as the grounds for a party to proceedings to take action or complete a formality or affects the scope of the party’s rights and obligations;
  • the deadline for a public agency to issue a ruling of general or individual nature.

It should be noted that before the deadline referred to in section 2.1.1 expires, a public agency or entity would be able to issue ex officio a decision on full acceptance of the party’s request, statement on the lack of grounds for objection and a ruling of general or individual nature.

The relevant public agency, court or entity would be able to request a party to proceedings to perform certain action within the prescribed deadline, if a failure to perform the action might result in:

  • danger to human or animal life or health;
  • severe damage to the public interest;
  • irreparable property damage.

In such a case, the party to the proceedings should perform its obligations within the deadline.

Actions performed as part of the proceedings listed above during the state of epidemic threat or the state of epidemic are effective.

Moreover, pursuant to the Draft Bill, during the state of epidemic threat or the state of epidemic announced due to COVID-19:

  • the regulations covering public agencies’ idleness and the obligation of a public agency and entity to notify a party to the proceedings about the failure to deal with the case on time would not apply;
  • public agencies or entities would not be liable to a fine in the case where they fail to issue a decision within the prescribed deadline.

The Draft Bill also provides that legal measures cannot be pursued on the grounds of idleness, excessive length of proceedings or the right of a person to have their case handled without undue delay in the case where a public agency or entity has stopped operating during the state of epidemic threat or the state of epidemic announced due to COVID-19.

2. In addition, certain other deadlines, provided for in civil and administrative law, would not be triggered or would be suspended, namely:

  • deadlines which must be met in order to obtain legal protection before a court or a public agency, and deadlines for the performance of actions which affect the scope of rights and obligations of a party to a legal relationship;
  • periods of adverse possession, statute of limitation, prescription;
  • final dates which, if not met, produce adverse effects for a party to proceedings;
  • deadlines for entities or bodies required to be listed in the register of business or register of associations, other community and professional organizations, foundations and independent public complexes of health care facilities, the National Court Register (Krajowy Rejestr Sądowy) or a different register kept by a public administration agency to perform an action which must be reported to the relevant register, as well as deadlines for the above-named entities or bodies to perform obligations resulting from regulations pertaining to them.

Similarly as in the case of deadlines discussed in section 2.1, the relevant public agency, court or entity would be able to request a party to proceedings to perform certain action within the prescribed deadline, if a failure to perform the action might result in:

  • danger to human or animal life or health;
  • severe damage to the public interest;
  • irreparable property damage.

It is pertinent to mention that actions performed to exercise a right or discharge an obligation at the time when the deadlines listed above are stopped, triggered or interrupted are effective.

Pleadings

The Ministry of Justice intends to use the Draft Bill to add a provision to the applicable act stating that, during the state of epidemic threat or the state of epidemic, or if a universal postal service provider stops its operations, a pleading may be filed with the court through e-PUAP platform. A pleading filed in this manner should be executed by a qualified electronic signature.

In addition, a pleading with a qualified electronic signature or an electronic copy of a pleading signed by hand may be filed with the court through e-mail.

If a pleading is sent from the sender’s e-mail addressed provided beforehand or if there are no doubts as to the sender’s identity, the pleading is deemed to be executed with a signature producing legal effects equivalent to the effects of a handwritten signature.

Appendices to pleadings filed in one of the above manners should be submitted in digital form, with no need to provide them in hard copy.

It should be noted that the Draft Bill is a work in progress, which means that the final shape of the changes discussed above is yet unknown.

Let us know if you have any questions.

COVID-19 lockdown, impact on civil proceedings.

Italy is under lockdown due to COVID-19 emergency and the Italian Government has implemented also rules  to handle the administration of justice both for the purposes of avoiding material adverse effects on the system and protecting the parties’ rights of defence.

In particular, on 17 March it has been issued the Law Decree no. 18/2020 in which, in addition to economic measures to counteract the effects of COVID-19 outbreak, are contained some rules that affect the organization of justice, amending or clarifying what is already provided for in the Law Decree 11 March 2020 no. 9.

First of all, art. 83 of the new Law Decree expressly repeals articles 1 and 2 of the Law Decree 8 March 2020, providing, with immediate effect, for a “Buffer Period” from Monday 9 March to Thursday 15 April 2020.

During this period, save for the few exceptions provided for in the Law Decree (e.g. urgency proceedings,cases involving minors, alimony, precautionary measures on fundamental rights, etc.):

  • the hearings of civil proceedings scheduled within the Buffer Period shall be rescheduled to a new date after 15 April 2020;
  • all procedural deadlines falling within the Buffer Period are stayed and postponed after 15 April 2020.

Furthermore, during the Buffer Period, the statute-limitation and forfeiture of rights are also suspended if the underlying right can be enforced only by means of filing a petition or any other procedural initiative prevented by the suspension.

In addition, from 16 April 2020 to 30 June 2020 the Chairman of each Court, having consulted the local health authorities, shall implement measures to protect the health and safety at work and the relevant activities to be performed.

Considering that the positive effects of the measures adopted need time to widespread, it is likely that additional measures also on the management of justice will follow in the next due course.

Stay tuned for further updates.