Litigation

Court system

What is the structure of the civil court system?

The court system in Cyprus has two tiers. The lower tier, the subordinate courts, is composed of the district and specialised courts. The second and final tier is the Supreme Court.

The district courts have jurisdiction to hear first instance civil actions, which do not fall under the exclusive jurisdiction of a specialist court. The specialised courts include the Labour Court, the Family Court, the Rent Control Court, the Military Court and the newly formed Administrative Court, which acts as the Administrative and Tax Court.

First instance civil proceedings before district courts are heard by a single judge.

The Supreme Court acts as the final appellate court, with jurisdiction to hear and decide on appeals from subordinate courts. It also has jurisdiction to act as the Supreme Constitutional Court and as the Admiralty Court. The Supreme Court comprises 13 members, one of whom acts as its president. Appeals, unless otherwise decided, are heard by a panel of three judges.

Judges and juries

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

The Cypriot trial system is adversarial in nature and consequently judges act only as umpires between the parties. There are no jury trials in Cyprus. All civil cases before district courts are tried by a single judge sitting without a jury.

All judges except those of the Supreme Court are appointed by the Supreme Council of Judicature; a body composed of the judges of the Supreme Court. This body is responsible for the appointment, promotion, transfer, discipline and dismissal of judges. Supreme Court judges are appointed by the President of the Republic, from within the ranks of the judiciary, upon recommendation from the Supreme Court.

There are currently no formal procedures or initiatives to promote diversity on the bench in Cyprus. The current ratio of male to female judges is 60:40.

Limitation issues

What are the time limits for bringing civil claims?

The time limits within which claims must be brought before a court are currently prescribed by the Limitation of Causes of Action Law of 2012 (Law 66(I)/2012), which entered into force on 1 July 2012. According to article 3 of the 2012 law, the limitation period of a claim commences from the date the cause of action accrued. Article 4 provides for a general time limit of 10 years, unless otherwise provided in the Law of 2012 or any other law. The Law of 2012 and other law provide for specific time limits for particular causes of action.

For instance:

  • torts: there is a six-year limitation period from the date when the cause of action accrued except for cases of negligence, nuisance and breach of statutory duty, where there is a three-year limitation period from the date when the injured person became aware of the cause of action;
  • contract: there is a six-year limitation period from the date when the cause of action accrued;
  • mortgage, pledge: there is a 12-year limitation period from the date when the cause of action accrued; and
  • bills of exchange, etc: there is a six-year limitation period from the date when the cause of action accrued.

 

The above limitation periods may be extended by the court by two years where the court considers this to be just and reasonable in all the circumstances.

Parties cannot agree to suspend the time limits. Nevertheless, time limits may be suspended if the parties fall within one of the categories provided by article 12 of the Law of 2012 (eg, cohabiting partners, spouses during marriage, or parents and children where the children are minors).

The transitional provisions of the Law of 2012 provide that all limitation periods will start counting from 1 January 2016.

Pre-action behaviour

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

Despite there being no general pre-action protocols or procedural formalities that must be followed prior to the initiation of proceedings in Cyprus, parties must bear in mind that in certain specialist proceedings (eg, winding-up proceedings or tenant evictions), there are specific procedures that must be followed prior to the commencement of the proceedings.

Courts in Cyprus may grant pre-action discovery orders, such as Norwich Pharmacal orders, to assist a party in bringing an action.

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?

Commencement of proceedings

Civil proceedings in Cyprus are commenced by filing a writ of summons, which provides for the extent and nature of the claim and the remedy or relief sought, with the registrar of the district court that has jurisdiction to adjudicate upon the case. The writ of summons may be either generally endorsed and include merely the relief sought, or specially endorsed and provide for the particulars of both the relief sought and the basis upon which that relief is being sought.

 

Notification of commencement and service of a claim

The persons against whom proceedings are commenced are notified of the proceedings via personal service of the writ of summons on them, namely delivery of a copy of the writ to the person being served by a private bailiff.

In general, the writ of summons must be served within 12 months of its filing. The 12-month limit can, however, be extended for an additional six months if the plaintiff obtains permission from the court. The deemed date of service is the date on which the private bailiff served the writ of summons on the person being served.

If personal service is not feasible, an application can be made to the court for an order for substituted or other services (such as service through public advertisement, placing a notice on the board of the court, email or other).

In circumstances where the party to be served is located outside Cyprus, such service shall only be made after leave to do so has been obtained from the court. The court must be satisfied that there is a proper case for service outside Cyprus, that the plaintiff has a prima facie good cause of action against the defendant and that the defendant may be found in a particular country and place outside Cyprus. What is served outside the jurisdiction to a non-Cypriot defendant is not a writ of summons but a notice of a writ of summons.

 

Courts’ caseload

Further to a recent amendment of the Civil Procedure Rules, a ‘small track’ was established with a simplified procedure for claims under €3,000. The amendment, with a view to making the process more expedient, increased the case management options available to the judges in such cases, allowing them to give summary judgments.

The current delay for civil actions is between three and five years.

Timetable

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

Civil proceedings are initiated by filing a writ of summons that must subsequently be served on the defendants. Provided the defendant is within the jurisdiction of Cyprus, he or she is required to enter his or her appearance within 10 days from the date on which the writ of summons was served on him or her.

If the writ of summons is generally endorsed, the plaintiff must file and deliver to the defendant a statement of his or her claim, containing particulars of the relief or remedy that is sought and the basis upon which that relief is being sought, within 10 days from the defendant filing his or her appearance. Subsequently, the defence or the defence and counterclaim of the defendant must be filed and delivered to the claimant within 14 days from the filing of the statement of claim.

If the plaintiff files a writ of summons specially endorsed, then the defendant must file and deliver a defence and, if desired, a counterclaim within 14 days from filing an appearance. In both instances, the claimant may file a reply to the defendant’s defence within seven days of delivery of the defence (where there is no counterclaim), and shall file a defence to the defendant’s counterclaim and a reply to the defendant’s defence within 14 days from the delivery of the defendant’s defence and counterclaim.

Once the pleadings are completed, the parties may apply to the court for directions preparatory to the trial, including for discovery and inspection of documents, filing of witness statements etc.

During the main trial of a typical proceeding, each side is allowed to present its witnesses, who may be subject to cross-examination by the other side. Once all testimony is completed, the parties will be invited to present their final submissions to the court in support of their arguments.

During the proceedings, various interlocutory applications may be filed by the parties. If such applications are opposed by the other party, a hearing will be conducted in order for the court to determine whether to issue the requested orders or allow the applications.

Case management

Can the parties control the procedure and the timetable?

The procedure and the timetable of the claim is dictated by the court. Nevertheless, the timetable of a claim can be influenced by the number of interlocutory applications or other procedural steps of either party in the proceedings.

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)?

Any party may apply to the court for an order directing any other party to any cause or matter to make discovery on oath of the documents that are, or have been, in his or her possession or power relating to any matter in question therein. That application can be made at any time after the commencement of the proceedings. There are no particular classes of documents that do not require disclosure, but the discovery is subject to privilege and admissibility rules. If a party ordered to make discovery of documents fails to do so, he or she cannot later be at liberty to submit evidence in the action or allow any document he or she failed to discover to be inspected, unless the court is satisfied that he or she had reason for not disclosing the said document.

Evidence – privilege

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

A document may be covered by privilege, and as such, a party may refuse to produce it for inspection, on any one of the following grounds:

  • litigation privilege;
  • legal professional privilege;
  • without prejudice communications;
  • self-incrimination privilege;
  • public interest immunity; and
  • confidential nature.
Evidence – pretrial

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

Parties do not normally exchange evidence from witnesses prior to trial, except for situations where it is their intention to adopt written statements in the course of the examination of the witnesses they have called upon to give oral evidence and the court has ordered that such statements are exchanged between the parties prior to the hearing.

With regard to experts, the reports of those witnesses are usually exchanged prior to trial, as their cross-examination is based on the content of their reports.

Evidence – trial

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

The general rule is that all evidence, whether oral, documentary or real, must be brought before the court during the hearing of an action. That evidence must be the best possible evidence at hand, must be admissible and must be relevant to the facts in issue. Witnesses, whether expert or of fact, are called to the court for examination or to produce a certain piece of evidence. The witness is first examined by the party that has called him or her and may then be cross-examined by any other party in the proceedings. The witness may then be re-examined by the party at whose instance he or she was called to give evidence.

For an expert witness to give evidence before the court, it must be shown, to the satisfaction of the court, that expert evidence is necessary for the proceedings to be disposed of and that the person in question has the necessary knowledge and skills to give such evidence. The expert may bring to court an expert report, which he or she then adopts under oath.

Interim remedies

What interim remedies are available?

Cyprus courts have a wide discretion to issue any interim orders they deem just and reasonable in all the circumstances, including the following:

  • freezing injunctions (with either local or worldwide application);
  • prohibitory and mandatory injunctions;
  • appointment of an interim receiver or a provisional liquidator;
  • search orders; and
  • orders for the discovery and inspection of documents.

 

Interim remedies are available in support of foreign proceedings, where the courts have jurisdiction in that regard by virtue of a Cyprus law or a relevant international or bilateral treaty. In particular, interim relief can be sought in aid of foreign proceedings in the European Union, Norway and Switzerland, by virtue of relevant European regulations, and in aid of international arbitration proceedings by virtue of Cyprus law.

Remedies

What substantive remedies are available?

The following substantive remedies are available, inter alia:

  • declarations of rights or liabilities between the parties;
  • general or special damages as compensation for any losses or injuries suffered by the plaintiff;
  • orders for restitution of any gains or benefits acquired by the defendant;
  • injunctive relief; and
  • specific performance orders.

 

Interest is payable on money judgments.

Enforcement

What means of enforcement are available?

A money judgment may be enforced in one or more of the following manners:

  • by a writ of movables, namely the seizure and sale of movable property;
  • by registering the court’s judgment on immovable property in the Land Registry;
  • by a writ of sale of immovable property;
  • by a writ of attachment, namely the seizure or payment of movables or debts owed to the judgment debtor by a third party;
  • by a charging order over shares and an order for the sale of the shares; or
  • by an order for repayment of the debt in question via monthly instalments.

 

With regard to judgments other than money judgments, compliance with the court’s orders may be achieved via contempt proceedings. The court, following a finding of contempt, may order the imprisonment of, the sequestration of the assets of, or the payment of a fine by anyone who does not act in conformity with a court order, including an interim order.

Additionally, a court may remove a person’s right to be heard in the proceedings, if he or she is found to be in contempt of a court order.

Public access

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

By virtue of article 30(2) of the Constitution, court hearings are generally held in public. Nevertheless, court documents are only available to the parties to the proceedings.

Costs

Does the court have power to order costs?

The court has a wide discretion to award costs, depending on the particular circumstances of the proceedings and the conduct of the parties; however, the general rule is that the losing party bears the costs of the proceedings.

The costs involved in civil court proceedings vary, depending on how protracted the case proves to be and the time dedicated by the lawyer handling the case.

The amount of costs awarded by the court is calculated on the basis of court fixed-fee scales, depending on the value of the claim. These describe the service provided throughout the proceedings and set out the minimum and maximum charges for each particular step.

Despite this, in practice, the costs recovered on the basis of the court’s scales only cover a very small portion of the actual costs, including legal fees, paid by the client for the purposes of the proceedings. This is the case especially in commercial litigation where the value of the claim is very high.

An application for security for costs can be made by a defendant against a claimant (and by a claimant against a defendant in respect of a counterclaim that is not merely in the nature of a set-off) at any stage of the action where:

  • the respondent is ordinarily resident outside of Cyprus or any other European member state;
  • the respondent has no assets in Cyprus to satisfy any order as to costs that is made against him or her;
  • the respondent is acting through a nominal plaintiff or defendant; and
  • where the court orders security for costs to be given, it may stay the proceedings until such security is given and may dismiss the proceedings where the time period for providing such security has expired.

 

The current framework on costs was revised in 2017.

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?

Funding of litigation proceedings is normally arranged for by the parties. A lawyer may negotiate his or her legal fees for litigation proceedings and can reach any special arrangement or retainer freely with his or her client, failing which the matter will be governed by the rules of the court and the court’s fixed-fee scales.

The Cypriot courts have not yet considered the issue of conditional or contingency fee agreements; however, it is assumed that such arrangements are not permissible as they offend the equitable principle against champerty. Champerty is an agreement where a person who maintains an action takes, as a reward, a share in the property recovered in the action. Accordingly, lawyers involved in the conduct of litigation are precluded from taking a share in the property recovered in the action pursuant to a conditional fee agreement.

Similarly, third-party funding is not available in Cyprus because of the application of the aforementioned principle of champerty that, coupled with the principle of ‘maintenance’, aims to restrict the selling and funding of litigation (the principle of ‘maintenance’ precludes a person from maintaining a case without just cause or excuse). On that basis, third-party funding and assignment of a cause of action are not permissible.

However, the matter is not regulated and there is no case law or other precedent on the above.

Insurance

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

Although it is permissible to take insurance to cover legal costs, this course is not normally followed in Cyprus and may not be practically available.

Class action

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

Where there are numerous persons having the same interest in one cause or matter, one or more of such persons may be authorised by the court to sue or defend in such cause or matter, on behalf or for the benefit of all persons so interested, provided a power of attorney signed by the persons to be represented is filed in court.

In such proceedings, the persons represented shall be bound by the judgment of the court and the same may be enforced against them in all respects as if they were parties to the action.

Appeal

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

An appeal of any interim decision must be brought within a strict time limit of 14 days from the date the relevant judgment or order was issued. Any other appeal of a judgment on the merits of the case must be brought within 42 days from the date the relevant judgment was issued. The court may, upon a relevant application, extend the time limit for filing an appeal.

Appeals are brought by filing a written notice to the registrar of the court appealed from. That notice shall specify the part of the judgment or order being appealed and the grounds of appeal. The notice shall then be served on any party that is directly affected by the appeal.

The appellant may appeal the whole or part of any judgment or order. An appeal may be made against the findings of specific facts if the appellant considers that there was insufficient evidence to support the decision, or it may be made against specific points of law.

Appeals are currently heard by the Supreme Court and there is currenlty no right to further appeal.

Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

A foreign judgment or order issued by a European court can be recognised and enforced in Cyprus pursuant to the provisions of the European Judgment Regulations and other European regulations on specialised proceedings (such as the European Regulations on Insolvency Proceedings). As the Judgment Regulations do not require any specialised procedure for the recognition of foreign judgments, normally, European court judgments can be directly enforced in accordance with the local procedures.

A non-European judgment or order may be recognised and enforced in Cyprus pursuant to bilateral or multilateral agreements that Cyprus has ratified. Alternatively, a separate action may be initiated in Cyprus regarding the same cause of action brought in the foreign jurisdiction.

Foreign proceedings

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

Pursuant to bilateral or multilateral treaties or EU regulations, Cyprus courts may provide assistance in connection with foreign proceedings via the gathering of evidence in Cyprus, on the basis of letters rogatory or other letters of request sent by the foreign court.

Law stated date

Correct on

Give the date on which the above content is accurate.

27 April 2020