On 14 September 2017, one of the most substantial reforms of the Slovenian Civil Procedure Act (ZPP-E) became fully applicable. All civil and commercial proceedings initiated after this date will be subject to new rules most of which were designed to improve the quality and efficiency of adjudication of civil and commercial disputes. Leaving aside numerous other significant amendments (affecting also the appellate procedure and the access to the Supreme Court), some of the most noticeable ones have been introduced in the phases of the main hearing and the preparations for it.
Preparation for the main hearing
Limitations in respect of the written submissions
A new limitation that will with no doubt be interesting for the counsel is that the party may without the court’s request submit no more than two written submissions during the preparations for the main hearing. This can be done no later than 15 days prior to the newly introduced 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 an opportunity to plan the future conduct of the proceedings at an early stage, and to direct the parties and the entire evidentiary process to focus on what the judge considers relevant for 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 filing written submissions immediately prior to the expiry of the deadline set by the law?
From now on, the court will also 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 possibility. In order to ensure that it is 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.
The ZPP-E introduces a mandatory preparatory hearing 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 is 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, submission of additional evidence, settlement efforts, decisions on procedural objections and, perhaps most importantly, more structured further planning of activities in the proceedings (drafting of the so-called "programme for conducting the proceedings" which resembles to certain extent to "terms of reference" known from arbitration proceedings).
The court has the option of holding 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 proceedings incurred at the 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 (counsel) 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 so-called "programme for conducting the proceedings" (case management plan) which must be prepared by the judge or the chairman 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 counsel will not only have the possibility but also the duty to consider in advance individual issues concerning the process and organisation of the proceedings. 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 that they perform a 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 chairman of the senate will be able to modify the programme for conducting the proceedings accordingly. The chairman of the senate is namely not bound by it and can either modify or supplement it at any point in time during the proceedings.
The ZPP-E also includes 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 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 legislator 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, it 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 thereafter), and the deadlines for such submissions. This does not mean, however, that the court may not include these elements in the programme for conducting the proceedings anyway.
During preparation 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 holding a main hearing, potential limitation of the volume of submissions, organisation of written evidence, written witness statements, selection of experts and definition of their tasks, use of video conferences, use of technology at the hearing, method of communication between the court and the parties, direct service, duration of the closing speech, etc.
Although there are no major changes in the main hearing phase, one of them that should be mentioned is the extension of the restriction for timely presentation of new facts and submission of new evidence to certain defensive objections of the defendant as well (related to set-off and statute of limitation). Thus, it is no longer sufficient for a successful 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 restriction for presentation of new facts and submission of new evidence by the end of the first main hearing 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 delay the resolution of the dispute.
One minor change is 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 having a closing speech could also be interesting for the counsel. If the judge or the senate believes that the time has come for adopting a decision in a case, the chairman must give the parties the possibility of making a 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 will help the court in the assessment of evidence and could shift the balance in favour of one party or another.
Another new provision affecting commercial disputes is that the court may not decide on a case without holding a hearing if one is requested by the party. Furthermore, in commercial disputes the court has been given the right to limit the time of presenting oral statements by the parties at the hearing.