> Prevention and Resolution of Disputes

Preparations for the main hearing and main hearing according to the amendment to the Civil Procedure Act (ZPP-E)

(This article is a shorter and amended version of the article published in the magazine Odvetnik, no. 3 (81), the summer of 2017) The amendment to the Civil Procedure Act (ZPP-E) which enters into force on 14 September 2017 brought

Preparation for the main hearing

Limitations in respect of the written submissions

The new limitation that will with no doubt be interesting for the lawyers and the subject of further debate is that the party may without the court’s request submit up to two written submissions during the preparations for the main hearing. This can be done no later than 15 days prior to the preparatory hearing, otherwise the submission will not be taken into account. The reasoning behind the limitation of the number of submissions is to give the court the opportunity to plan the future conduct of the procedure at an early stage, when there are fewer submissions in the case file, and to direct the parties and the entire evidentiary process to focus on the core of the dispute.

The new limitation raises many issues, such as: what is considered a written submission in the first place? Does the limitation to two submissions apply until the end of the preparations for the main hearing (i.e. the announcement of the main hearing) or merely until the preparatory hearing? How to prevent the parties from stalling with the filing of written submissions immediately prior to the expiry of the deadline set by the law?

From now on, the court will be able to limit – in commercial disputes only – the volume of the parties’ submissions. It will be interesting to see whether and how the courts will use this option. In order to ensure that they are used without the risk of inadmissible interferences with the parties’ right to be heard, the court will have to precisely study and correctly assess the level of complexity of the case.

Preparatory hearing

The ZPP-E reintroduces the preparatory hearing (which was still optional in the early proposals) and abolishes the settlement hearing. The court must announce the preparatory hearing in such a manner that at least 30 days pass from the date of receiving the summons for the hearing. It can be announced at any time after the receipt of the response to the lawsuit.

The preparatory hearing will be intended for open discussion of the court with the parties about the legal and actual aspects of the dispute (emphasis on the transparent adjudication process), supplementation of statements of fact and legal reasoning, and submission of additional evidence, settlement efforts, decisions on procedural objections and, probably most importantly, more structured further planning of activities in the procedure (drafting of the programme for conducting the proceedings).

The court has the option of starting the main hearing immediately after the preparatory hearing, if both parties agree to that. The court also has the same option regardless of the will of the parties, if the invitation to the preparatory hearing is served together with the invitation to the main hearing. Considering the past practice according to which the courts invited the parties to the settlement hearing and the first hearing of the main hearing concurrently, it will be interesting to see how often the courts will use this option which, in more complex disputes, could represent the risk of reducing the significance and advantages of a separate preparatory hearing.

At the request of the court, the party must personally attend the preparatory hearing and personally respond to the court’s questions. If this could be considered reasonable for the natural persons or small legal entities in which the legal representative is informed of all aspects of the dispute, it is impossible to imagine the implementation of such a requirement in the case of a large legal entity, in which the legal representative might know nothing about the actual aspects of the dispute from own perceptions.

The sanction for the party’s non-attendance of the preparatory hearing is severe: the loss of the right to demand reimbursement of any future costs of procedure at the court of first instance. Even though this is not explicitly obvious from the wording of the law, this sanction could not be used in case a party’s authorised representative attends the hearing instead of the party personally.

Programme for conducting the proceedings

The key activity that could add value to the preparatory hearing is the drafting of the programme for conducting the proceedings which must be prepared by the judge or the president of the senate. The programme is mandatory even though the law does not foresee any consequences for the event it is not compiled. The programme will probably be recorded in the minutes of the preparatory hearing.

The programme for conducting the proceedings will be compiled after the discussion with the parties, which means that the lawyers will not only have the possibility but also the duty to consider individual issues concerning the process and organisation of the procedure in advance. When drafting the content and scope of the programme for conducting the proceedings, the law gives the court substantial flexibility, taking into account the complexity of the case regarding the legal or actual issues.

The ZPP-E lays down the minimum mandatory components of the programme for conducting the proceedings, among which the most interesting is probably the obligation of the court to disclose the legal basis which it considers relevant for adopting a decision on the claim, taking into account the statements made by the parties. This will require that the judges are well familiar with the case and the legal analysis already in the early phase of the proceedings. This is one of the most important procedure streamlining measures, since the parties will, on the one hand, be able to more specifically target their arguments and evidence, while on the other hand, it will prevent surprise judgements and their annulment due to procedural violations. If the court changes its legal interpretation during the proceedings, the president of the senate will be able to modify the programme for conducting the proceedings accordingly. The president of the senate is namely not bound by it and can either modify or supplement it during the proceedings.

The ZPP-E also included among the mandatory elements of the programme for conducting the proceedings the decision on evidence already submitted by the parties and – if possible – the number or dates of the hearings for the main hearing at which the court will take evidence. In fact, the court remains with a lot of room for manoeuvring when deciding whether it will set the dates of the hearings in advance, so that the answer to the question whether the provision will actually be used in practice in this part depends above all on the courts themselves.

The proposer of ZPP-E did not follow the proposal to add among the mandatory elements of the programme for conducting the proceedings also the identification of facts considered material by the court in view of the statements submitted by the parties, and the court’s position on which party bears the burden of proof in relation to individual facts. Moreover, the proposer did not include among the elements of the programme the determination of the number of written submissions that can be filed by the parties until the main hearing or after it, and the deadlines for such submissions. This does not mean, however, that the court could not include these elements in the programme for conducting the proceedings.

In the framework of the programme for conducting the proceedings or at the preparatory hearing, the court and the parties will be able to discuss many other procedural and organisational issues related for example to the parties’ approval to adjudicate the case without the main hearing, potential limitation of the volume of submissions, marking of attachments, written witness statements, selection and tasks of the experts, use of video conferences, use of technology at the hearing, method of communication between the court and the parties, direct serving, length of the closing statements, etc.

Main hearing

There were no major changes in the main hearing phase. One of them that should be mentioned is the expansion of the debarment to certain defensive procedural actions of the defendant, namely the raising of objections due to the offset and the statute of limitation. Thus, it is no longer sufficient for the objection of the statute of limitation to timely present the facts that serve as the basis for the objection, while the objection itself is presented after the first main hearing.

The debarment is now formally mitigated in accordance with the case law, so that the court can still allow the facts and evidence that were submitted too late, if it estimates that this would not postpone the resolution of the dispute.

There is one minor change, namely that the shortest possible period to be set by the court for filing a written submission is extended from 8 to 15 days, with the option of reducing it to no less than eight days, in special circumstances.

The new possibility of closing speech could also be interesting for the lawyers. If the senate believes that the time has come for adopting a decision in a case, the president of the senate must give the parties the possibility of making the closing speech, and this is (no longer) at the discretion of the judge. The purpose of the closing speech is to allow the party to present its own assessment of the evidence taken and the interpretation of the conclusions on the decisive facts, or the explanation of substantive law. The duration of the party’s closing speech can be limited. It is prudent to agree on such time limits in advance, possibly at the preparatory hearing or upon the announcement of the final hearing. If prepared in a quality and convincing manner, the closing speech can help the court in the assessment of evidence and can shift the balance in favour of one or the other party.

Another new provision in the commercial disputes is that the court may not decide on a case without a hearing, if one is requested by the party. Furthermore, in commercial disputes the court may limit the time of presenting oral statements by the parties at the hearing.