New proceedings involving consumers are now in force – what has changed?

On 1 July of this year, a major amendment to the Code of Civil Procedure came into force. The reform primarily aims to correct and supplement the changes introduced by the legislature in 2019. It is indicated that the changes are intended to simplify existing procedures, expedite proceedings, facilitate communication between parties and the court, and fill the gaps identified in the current regulations. Among other things, the amendment introduces a completely new type of proceedings involving consumers and business entities. The main purpose of this procedure is to improve the situation of consumers in court disputes and facilitate the enforcement of their claims. It will apply to cases brought by consumers against business entities as well as by business entities against consumers. It is worth adding that even if a business ceases trading during the course of proceedings — for instance, by liquidating the company — the proceedings will still be conducted under these regulations. What matters most is whether the dispute arose during the time the entity was conducting business activity and is related to that activity. This means that a matter which originates from a business activity remains permanently connected to it. This procedure introduces new principles and rules that will apply to the parties both during and outside court proceedings. 

In the article below, we will take a closer look at the most important changes that have been introduced and attempt to assess their usefulness and relevance for the affected parties.

New consumer-related proceedings – what will they look like?

The new consumer-related proceedings have been regulated in the Code of Civil Procedure in Articles 458¹⁴ to 458¹⁶. The new provisions will apply to all cases where a consumer is a party, although they will not apply if the consumer is represented by an organisation specialising in consumer rights protection. One important change introduced by the amendment concerns the territorial jurisdiction of the court. According to Article 458¹⁴ §4 of the Code of Civil Procedure, the consumer will be entitled to bring an action before the court in their place of residence, rather than the place of business of the entrepreneur, as was previously the case. However, this mechanism will not apply in instances of exclusive jurisdiction.

Another key issue is the new rule concerning the submission of facts and evidence by the business entity. These must be submitted in full at the stage of filing the claim or in the statement of defence, if the business is the defendant. Failure to comply will result in adverse procedural consequences for the business. Pursuant to Article 458¹⁵ §4 of the Code of Civil Procedure, any facts and evidence that are not submitted in accordance with the regulations will be disregarded at a later stage of the proceedings. The only exception is where the business can show that it was not reasonably possible to submit them earlier, or there was no prior need to do so. In such cases, further statements and evidence must be presented within two weeks of when it became possible or necessary to submit them.

The legislature has somewhat relaxed the rules on evidence for parties not represented by professional legal counsel. According to §2 of the same article, the party must be informed about their obligations under Article 458¹⁴ §§1 and 4 of the Code of Civil Procedure. Following such notice, the business may submit all relevant evidence and statements within two weeks.

In addition to procedural obligations, the new provisions also impose certain pre-litigation duties on business entities. Under Article 458¹⁶ of the Code of Civil Procedure, a business may face significant financial sanctions if it fails to attempt an out-of-court settlement. In such cases, the court may order the business to bear all or part of the legal costs, and in justified circumstances, even double them. The same penalty may be imposed if the business did attempt to resolve the dispute amicably but acted in bad faith during the process, leading to the failure of the settlement and the unnecessary filing of a claim.

Consequences of the new separate procedure – what outcomes can be expected?

The new provisions introduce consumer-friendly solutions, placing them in a more advantageous position relative to businesses. Primarily, they facilitate access to the courts by allowing consumers to file claims in their local jurisdiction. The regulations impose both procedural and pre-litigation obligations on businesses, which are not mirrored for consumers. These provisions demand a high level of accuracy and thoroughness from businesses when preparing claims or defences, based on the assumption that as professionals, they should be able to adequately protect their interests in court.

The procedural requirements relating to evidence and factual claims, which must be submitted in the early stages of the proceedings, and the associated penalties for non-compliance, may lead to faster and more efficient resolution of disputes between consumers and businesses. However, it should be noted that for smaller enterprises without legal expertise or ongoing support from law firms, and with limited court involvement, these requirements could pose a challenge and result in negative procedural consequences. Therefore, when in doubt about the construction or content of a claim or defence, it is advisable to consult a legal professional for proper preparation of court documents.

When analysing the new provisions, it is also worth noting the emphasis placed on alternative, amicable, and out-of-court methods of resolving disputes between consumers and businesses. The regulations impose a duty on professional entities to attempt such resolutions under the threat of being penalised through court costs. They also seek to prevent superficial or bad-faith attempts at settlement by stipulating penalties in such situations as well. The changes brought about by this new procedure may increase the rate of conflicts being resolved through alternative, amicable methods. It is worth seeking the assistance of professional mediators when attempting an out-of-court resolution. Such solutions can be beneficial for both parties, as they are often quicker, less stressful, and less costly than litigation.