In many respects, the Polish justice system is somewhere in the middle, and sometimes even at the top of rankings of EU countries, stated the European Commission in this year’s report on the condition of the EU judicial system, published on Monday, 11 April 2016. By way of example, the average duration of judicial or administrative proceedings has been approx. 2 months in the last few years, which is the fourth best score in the EU. The average duration of a dispute before a court of first instance in civil and commercial disputes was under 7 months in 2014, which places Poland in the middle ranks.
What does the report mean for the business community? Unfortunately, in categories relevant to business, such as the duration of bankruptcy proceedings or appeal proceedings against decisions of the Polish Antimonopoly Authority, the report reveals real problems. Bankruptcy proceedings last 3 years on average, which is one of the worse results in the EU. Over the past few years, competition cases have also taken 3 years on average (before the court of first instance alone). But on the positive side, the report states that this was reduced to approximately one year in 2014. An appeal against a decision of the President of the Antimonopoly Office in cases concerning practices that infringe collective consumer interests takes an average of 3 years in the first instance alone. In addition, most cases take an extra year before being finally resolved by the Court of Appeal in Warsaw.
There has been a slight improvement in the general commercial dispute adjudication practice. Some courts or judges set a good example and, for instance, do not schedule hearings at intervals of several months, but book several days in a row right away. Unfortunately, experience shows that these are still only exceptions, and not the rule. In order for companies to reduce litigation time and the associated court and attorneys’ costs, we need to see an actual change in the organisation of the courts and the manner of handling complex business cases. The legal tools to do this are already in place, but courts are not using them. A court can schedule a preparatory hearing at the very beginning of a case, at which the court agrees the trial schedule with the parties and decides what the actual contentious matter is and what evidence needs to be taken (e.g. how many witnesses to summon, whether an expert’s opinion is necessary, etc.). Such hearings occur extremely rarely, but they always reduce the duration of proceedings significantly and increase cost-effectiveness for the parties.
If court proceedings usually cost a lot of time and money, why not try to deal with it at the contract drafting stage? It is worth introducing other forms of dispute resolution into contracts, such as negotiation, mediation or a dispute adjudication board – which offer a chance to avoid long and costly litigation proceedings. Arbitration may prove more effective than courts in the case of complex disputes, so an arbitration clause in a large contract may make sense. However, every solution requires careful consideration about whether it will definitely meet the expectations of the parties to the contract and will be suited to the kind of dispute that may arise.
To view the full report click here: http://europa.eu/rapid/press-release_IP-16-1286_en.htm