Litigation

Court system

What is the structure of the civil court system?

The civil court system is divided between courts of general jurisdiction and commercial courts. General courts operate in the following hierarchy: basic courts, higher courts, appellate courts and the Supreme Court of Cassation. Basic and higher courts act as courts of first instances. The main difference between the competences of these two types of courts is in the value of the disputes – higher courts are competent for the disputes where the value is higher than €40,000. In most cases, higher courts decide on appeals against the decisions rendered by the basic courts. Appellate courts decide on the appeals filed against the decisions rendered by the higher courts. The Supreme Court of Cassation decides on extraordinary legal remedies in both commercial and non-commercial disputes.

Commercial courts serve as courts of first instance in commercial disputes (in general, disputes between two commercial entities). The Commercial Appellate Court decides on appeals on decisions issued by commercial courts.

The Constitutional Court decides on constitutional appeals. Constitutional appeals are appeals against final decisions that allegedly infringe rights granted by the Constitution.

In most cases, decisions of the court of the first instance are rendered by single judge. In second instance courts, three professional judges form a trial chamber. The Supreme Court of Cassation also decides in a trial chamber, which comprises five professional judges. 

Judges and juries

What is the role of the judge and the jury in civil proceedings?

The role of a judge is a passive role. However, the court is authorised to present evidence and establish the facts that have not been introduced or recommended by the parties, if it follows from the proceedings or presentation of evidence that the parties are disposing of claims being contrary to mandatory norms, public policy, moral or good customs.

There are no juries in civil proceedings, but there are lay judges involved in some first instance proceedings, such as family law disputes or some non-adversarial proceedings. A professional judge always serves as a president of a trial chamber.

When selected for the first time, judges are selected by the National Assembly for a period of three years. After this period, judges are selected for a lifetime by the High Court Council (the independent and autonomous organ ensuring and guaranteeing the independence and autonomy of courts and judges).

During the selection of judges, the following is taken into account: the national demographic, adequate representation of members of national minorities, and knowledge of professional legal terminology in the language of the national minority that shall be officially used by the court.

Limitation issues

What are the time limits for bringing civil claims?

For most civil claims, there are no time limits for bringing a claim to court. Nevertheless, in certain cases, statutes prescribe time limits for bringing claims. Examples include annulment of a decision of a company’s assembly: 30 days from the date of receiving the information about the decision, but no later than three months from the date when the decision was enacted; 30 days for filing a lawsuit of dissenting shareholders that were against the specific type of decision of the company; and, to initiate proceedings for protection of employee’s rights, 60 days from a day of receipt of a decision that violates employees’ rights. 

Parties are not allowed to agree on clauses to suspend time limits or other time limits.

A statute of limitation is not a procedural issue. The court will only pay attention to the statute of limitation expiring if parties invoke this argument.

Pre-action behaviour

Are there any pre-action considerations the parties should take into account?

There are no mandatory pre-action considerations that parties should take into account. Before filing a lawsuit against Serbia, a party may file a request for peaceful settlement of the dispute to the state attorney, which suspends debt for a time-barred 60 days.

If the court estimates that there is a justifiable danger that it will not be possible to present some evidence or that its subsequent presentation might be difficult, it can order a presentation of evidence. These proceedings are urgent, and the court can present evidence including a pre-action exchange of documents between parties or from a third person; however, there will be no examination of the parties as, in pre-action behaviour, the court cannot order examination of the parties.

Starting proceedings

How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?

Civil proceedings are initiated by filing a lawsuit before a competent court and are commenced once a respondent receives the lawsuit. A plaintiff is notified by receiving a piece of evidence that the court has received a lawsuit, while a respondent is notified by the court by receiving lawsuit and exhibits accompanied with instructions about its rights and obligations arising from the lawsuit.

Currently, courts in Serbia are short on capacities for handling their caseload and are unable to act within prescribed time limits. This is because there are not enough judges and administrative staff in comparison to number of cases. In most cases, judges share courtrooms, which results in one judge holding hearings on odd days and the other on even days. Some of the proposals to ease capacity issues are employing new judges, delegating some of the court’s responsibilities to public notaries, adopting the Law on Protection of the Right to Trial within reasonable time and introducing licensed mediators to help parties reach an agreement, before the lawsuit.

Timetable

What is the typical procedure and timetable for a civil claim?

Even though there are specifics for every kind of proceeding, a typical procedure is as follows:

  • the plaintiff files a lawsuit;
  • the court performs a formal check of the lawsuit;
  • if lawsuit passes this formal check, it will be delivered to the respondent for a response within 15 days of receipt;
  • the respondent then has 30 days to provide the response to the lawsuit;
  • the court schedules and holds a preparatory hearing within 30 days of the its delivery to the plaintiff of the response to the lawsuit. However, a preparatory hearing can be postponed an unlimited number of times, which can make procedures lengthy;
  • one or more hearings, with possible submissions between them;
  • conclusion of the hearing;
  • first instance decision (in writing within eight days of the announcement or, in more complex cases, within 15 days, which is rarely fulfilled in practice);
  • appeal: 15 days of the receipt of the written judgement;
  • the opposing party has 15 days to provide the response to the appeal (response is optional);
  • the appeal, response to the appeal and complete court records are delivered to the court of second instance within eight days of receipt of the response;
  • the court of second instance usually decides without the hearing, the deadline for decision being nine months after the receipt of a case file;
  • if the second instance court sends the case back to the court of first instance for another decision, it sends it within 30 days of the decision and the court of the first instance must hold a new hearing within 30 days of a receipt of records from the court of second instance;
  • if the second instance court decides not to send the case back for another decision, and to decide on its own, the decision becomes final; and
  • in certain cases, parties have the right to extraordinary legal remedies; however (unlike appeal), they do not have suspensive effect over the decision.
Case management

Can the parties control the procedure and the timetable?

The parties can only recommend the timetable to the court. The judge then issues a final decision on the timetable. Failure to conduct the proceeding in accordance with the adopted timetable is the basis for initiation of disciplinary proceedings against the judge. 

Evidence – documents

Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

During proceedings, both parties can request evidence, especially relevant documents to be obtained from other party and also, from a third party, that is not directly involved in the proceedings.

If one party states there is a relevant document that the party wants to use as evidence, and claims that document is in the possession of another party, the court can order that party to submit that document to the court. The party is allowed to refuse to submit the document if it contains privileged information. If the other party denies possession of that evidence, the court can perform a presentation of evidence to establish where the evidence is located.

Evidence – privilege

Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

Witnesses are allowed to withhold answers about the information entrusted to them by the party as the party’s proxy or as the party’s religious confessor. The facts learned by the witness in the capacity of lawyer, medical doctor or other professionals are also considered privileged if there is an obligation to keep professional secrecy. Parties to the proceedings, as well as witnesses, are allowed to refuse to give an answer or provide a document that contains sensitive information or could expose the party or witness to a criminal or civil (material) liability. This privilege of party or witness can be used as protection against exposing the party or witness, as well as his or her spouse, civil partner, direct ascendants and descendants, and distant relatives.

Advice from an in-house lawyer is not privileged, but a company’s representative is entitled to refuse to give an answer about the internal company conversation. The court will assess the importance of the party’s denial to testify.

Evidence – pretrial

Do parties exchange written evidence from witnesses and experts prior to trial?

Parties do not usually exchange written evidence before trial, except where documents must be obtained upon request. Although, it is not prohibited, parties are cautious regarding voluntarily disclosure of their tactics.

Evidence – trial

How is evidence presented at trial? Do witnesses and experts give oral evidence?

The presentation of evidence depends on the type of evidence, the most common being witnesses, experts and relevant documents. Witnesses usually give oral testimony. A witness may submit a written statement, which must be certified before the public notary. The court can call upon a witness to confirm his or her testimony before the court at the hearing or through a conference call, via phone or video.

Experts give written statements about their observations and opinions on facts. If observations and opinions issued by the expert are unclear, incomplete or contradictory, the court shall order the expert to supplement or correct the observations and opinions and set a deadline for elimination of deficiencies, or invite the expert to come to a hearing to orally present his or her submission.

Interim remedies

What interim remedies are available?

Interim remedy can be granted if party shows that its claim is probable, and that, without a granted interim remedy, collection of its claim would be jeopardised. The Law on Enforcement and Security, which regulates this topic in Serbia, stipulates a non-exhaustive list of possible interim remedies (measures). There are two groups of interim remedies, for securing pecuniary and for securing non-pecuniary claims. As regards freezing injunctions, the freezing of bank accounts is available. Search orders are available as a part of seizure of assets.

Interim measures can be issued in support of foreign proceedings.

Remedies

What substantive remedies are available?

The court can order a respondent to give or perform something to stand or prohibit the respondent from doing something to plaintiff’s detriment. If requested, the court can only determine the existence, that is, the absence of a right or legal relationship, violation of the rights of a person or the truth or inaccuracy of a document.

Punitive damages or liquated damages are not recognised by the Serbian legal system. Interest is payable on money judgment, after the voluntary obligation for fulfilment deadline, stated in a judgment, has passed, unless stated otherwise in the agreement or in the law. Courts can only order single interest, while compound interest is forbidden.

Enforcement

What means of enforcement are available?

In most cases, enforcement is performed by the public bailiffs by prescribed methods of seizure of assets and their monetisation or compulsory performance of specific non-pecuniary performance. A debtor that disobeys orders from public bailiffs or that alienates, hides, damages or diminishes its property or undertakes actions that may cause irreparable damage that is difficult to repair to the enforcement creditors can be sanctioned with a monetary fine. If a debtor does not fulfil its obligation to perform, non-perform or stand what is established by enforceable document, a court can give that party additional time for fulfilment and instruct debtor that if he or she fails to fulfil its obligation within additional time, it shall be obliged to pay to the creditor a certain amount of money for each day of default or some other unit of time (court penalties).

Serbian criminal law recognises refusal to act upon a final court decision or failure to act within stipulated time by the responsible person in legal entity as a criminal act.

Public access

Are court hearings held in public? Are court documents available to the public?

Generally, hearings are public, except for special proceedings, such as family law proceedings. The court may exclude the public from all or part of the hearings to protect the interests of national security, public policy and morals in a democratic society, as well as to protect the interests of minors or the privacy of participants in the proceedings, if the measures for maintaining the order prescribed by law cannot ensure a smooth running of the hearing.

Parties, their representatives and proxies are allowed, with a permission of a judge, to review, photocopy, photograph and transcribe the case file in which they participate. A third party that has a legitimate interest can also request this insight in case files. 

Costs

Does the court have power to order costs?

The court has the power to order costs. Costs consist of court fees, attorney fees and other expenses necessary for conducting a hearing (eg, experts). The general principle is that ‘loser pays’, that is, if the party succeeds with its claim or its defence in full, the opposing party will be entitled to reimbursement of costs in full; if the party succeeds partially, the court will order an equal per cent of the requested costs. The party is obliged, regardless of the outcome of the proceedings, to reimburse the opposing party for the costs caused by its own fault or by a case that has occurred to that party. This rule also applies to proxies of the parties.

A foreign or stateless plaintiff may be required to provide security for the respondent’s costs if the respondent has requested it. The main exception to this obligation is the exclusion of this obligation by international convention or if the domestic respondent is not obliged to provide security for costs in the jurisdiction from which the respondent originates.  

Funding arrangements

Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

In the proceedings related to property claims, lawyers are entitled to conclude a written agreement with their clients stipulating that lawyer’s fee will be paid in proportion to the success in the proceedings. The agreed percentage must not exceed 30 per cent. ‘No win, no fee’ agreements are available for parties, but only for property claims, while for non-property claims parties are only allowed to agree to a 50 per cent deduction of the lawyer’s fee. An agreement that would stipulate that lawyer would purchase a disputed right entrusted to him or her, or contracted for itself participation in the division of the amount awarded to his or her principal is null and void.

Third-party funding is not regulated by Serbian law. Court decisions can award the costs only to parties in the proceedings, not to third parties. Regarding participation in the liability, the respondent is entitled to conclude an agreement on the assumption of fulfilment with a third party, subject to the deferred condition that the party needs to pay anything to a plaintiff. Nevertheless, in this scenario, the plaintiff has an obligation to accept payment from a third party, but it would not have any right toward third persons. During the proceedings, the parties are not explicitly obliged to disclose these agreements on third-party funding, but since it can lead to a conflict of interest and threaten the judge’s impartiality and independence, it is recommended to disclose those agreements.

Insurance

Is insurance available to cover all or part of a party’s legal costs?

Insurance as the protection of an obligation to pay all or part of the legal costs of a party is not used in Serbia and, to the best of our knowledge, insurance companies do not offer these types of insurances. Insurance legislation does not prevent the conclusion of these types of agreements.

However, an insurance agreement is considered null and void if:

  • insured risk has already occurred;
  • it was certain that it would occur; or
  • it is possible it had already ceased to exist (therefore, frivolous claims are uninsurable).

 

During the negotiation process, the party is obliged to disclose to its insurance company all information about the case, since hiding this information can lead to an insurance agreement being void. 

Class action

May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

The Serbian legal system does not recognise class action litigation. Previous attempts to introduce consumer class action lawsuits ended when the Constitutional Court decided that those lawsuits were unconstitutional. There were many attempts, mainly from organisations for the protection of consumer rights, to change laws so they permit class action lawsuits. So far, these attempts have been unsuccessful.

Appeal

On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?

The first instance judgment is always subject to appeal. General grounds for appeal are: significant breach of provisions of rules governing the adversarial proceedings, erroneously or incompletely established factual situation, and erroneous application of substantive law.

The Serbian legal system recognises three types of extraordinary legal remedies – revision before the Supreme Court of Cassation, motion to reopen the proceedings filed by the party and motion to reconsider final and binding judgement that can only be filed by the public prosecutor.  

Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

Recognition and enforcement of foreign judgements is regulated by the international treaties, as well as by the domestic private international law act. There are two types of proceedings: the first one is a non-adversarial proceedings, which is limited to the process of recognition. After these proceedings are completed and if the foreign judgment is recognised, it has a status of a domestic judgement.

The second type is a proceedings for recognition of judgment as preliminary issue in some other proceedings, including enforcement proceedings. In these proceedings, the decision on recognition has effect only for the main proceedings.

Condition for recognition is reciprocity with the country where the decision is rendered. Reciprocity can be established by the law, by international treaty or by the fact.

Foreign proceedings

Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions?

These proceedings do exist in the Serbian legal system. Rules regulating these proceedings are prescribed mainly by international or bilateral treaties on international legal aid or in the Law on Adversarial Proceedings, which are applicable unless stated otherwise in the particular agreement.

The general rule is that the procedure of international legal aid is initiated at the request for help from foreign court that is communicated via diplomatic channels. Presentation of evidence is done in accordance with domestic procedural law or in accordance with the foreign procedural law, unless such presentation of evidence is not contrary to the public policy of Serbia.

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20 May 2020