Civil asset recovery
Parallel proceedingsIs there any restriction on civil proceedings progressing in parallel with, or in advance of, criminal proceedings concerning the same subject matter?
Victims in criminal proceedings are entitled to be party to the criminal investigation and court proceedings and to demand and receive damages. Parallel proceedings before civil courts can also be maintained, although the maxim is that ‘penal proceedings hold civil proceedings in abeyance’. It is likely, therefore, that any independent civil proceeding will be suspended awaiting the outcome of the criminal proceeding.
A decision from the criminal court determining guilt and liability for the defendant and granting damages to the civil party victim will be considered res judicata for purposes of the civil proceeding. A decision acquitting the defendant of criminal responsibility will not definitively determine the outcome of the civil liability.
ForumIn which court should proceedings be brought?
As a microstate, Monaco has a single court building where all courts sit: the civil, penal and criminal courts - thus there is no choice of forum.
LimitationWhat are the time limits for starting civil court proceedings?
Civil statutes of limitations apply to civil actions. However, the victim cannot begin a criminal action requesting damages if the statute of limitations for the crime has run. Penal infractions are classed in three categories: contraventions, ‘offences’ (délits) and ‘crimes’. ‘Offences’ are tried before the correctional tribunal, and ‘crimes’ before the criminal tribunal. The statute of limitations for an offence is three years from the date of the infraction. The statute of limitations for a crime is 10 years (a special five-year statute of limitations applies to the délit of corruption and influence peddling).
The civil statute of limitations is generally five years from the time the claimant knew or should have known of the facts giving rise to the right to sue, although certain actions are time-barred only after 10 years, and others 30 years.
Where there is an action founded on the obtaining of consent on the basis of intentional misinformation the limitation period is five years, which starts to run from the date of discovery.
Any act taken to investigate a criminal offence in a formal proceeding suspends the running of the statute. The civil statute of limitations is suspended during the criminal procedure if the civil action has been initiated and suspended.
JurisdictionIn what circumstances does the civil court have jurisdiction? How can a defendant challenge jurisdiction?
Jurisdictional rules are set out in the Code of Civil Procedure (CCP) and in the Code of Private International Law adopted in 2017 (CDIP). Monégasque courts have jurisdiction over any defendant domiciled in the principality. They also have jurisdiction where the matter concerns the following:
- an obligation created in the principality or requiring execution there;
- inheritance issues where the equivalent to probate has begun in Monaco;
- cases involving companies that have their principal establishment in the principality;
- the execution of foreign judgments; and
- real property situated in the principality.
This list is not exhaustive.
The CDIP introduced the possibility for the judge to declare that the court does not have jurisdiction, even where neither party has contested jurisdiction.
Time frameWhat is the usual time frame for a claim to reach trial?
The usual time frame to reach a final judgment before the Court of First Instance is 18 months. This is shorter if the procedure is a référé or urgent action. Appeals will usually be heard within nine months. Appeals of refusals to issue freezing orders will be heard within six months, with sometimes less than one week’s notice to the parties.
Criminal investigations would take, on average, three to four years to come to trial, but have been known to take much longer.
Admissibility of evidenceWhat rules apply to the admissibility of evidence in civil proceedings?
Written evidence is admissible in civil proceedings provided it has been translated into French by a sworn translator. The evidence is communicated (by a Monégasque defence counsel, as members of the Monaco Bar - which is restricted to Monaco nationals - have a monopoly on communicating evidence, even where they are not lead counsel, as is often the case) to the defence counsel of the other party. Irrelevance to the proceedings will not prevent written evidence from being introduced. Foreign documents will require an apostille.
Oral testimony is not ordinarily taken during civil proceedings. Witness statements must be handwritten and signed with an acknowledgment that they will be used as evidence and that any false statement can be sanctioned in criminal proceedings. Parties to the civil action do not make witness statements or affidavits, as they are considered to be parties in interest. Related parties and employees may be witnesses, but their written testimony will be attacked as unreliable and not impartial because of their relationship with a party having an interest in the outcome. Nonetheless, the statements will not be excluded for that reason alone.
There is no process similar to deposition and discovery, and no obligation for either party to disclose evidence. However, prior to the start of proceedings, a party may request and be granted a compulsion order from the court to produce evidence. The order will be served by a bailiff, sometimes in the presence of police officers. However, there is no sanction for failing to produce the evidence despite the court order. Once proceedings have begun, the court can be requested by a party to order production of a document. The consequence for failing to produce the document without justification will be that the court will infer that it contains information contrary to the interests of the party failing to produce it.
Where documents are produced solely for the purpose of damaging a party’s reputation with the court, the opposing party may request that they be excluded and that the portions of the written pleadings referring to the libellous material be deleted. Lawyers are immune from prosecution for defamatory statements contained in their written pleadings or oral arguments, and there are no sanctions imposed in such cases.
WitnessesWhat powers are available to compel witnesses to give evidence?
The CCP provides for the possibility of compelling evidence (article 329 et seq) and sanctions, including fines for a refusal to testify. In practice, however, such coercive measures are unknown. Spouses - including former spouses - parents and children (ascendants and descendants) cannot be compelled to testify.
Recently, the Court of First Instance refused to enforce a common law court’s order to produce evidence against a party and against a child of that party.
A compulsion order can seek documents from a witness.
Publicly available informationWhat sources of information about assets are publicly available?
Information is publicly available about real property and companies.
For real property, the Registry of Deeds will provide a report for any individual or company of any real property transaction in which they engaged in the principality (however, the reverse is not the case: it is not possible to search the record to identify the owner of a particular piece of property or flat). The report will include the purchase price, liens and mortgages - both voluntary and judicial, which can lead to uncovering banking relationships - the description of the land and the name of the notary before whom the act or execution was signed. All transfers of property must be signed before one of the Monégasque notaries, of which there are three. A copy of the act of purchase can be ordered from the registry.
For commercial companies, there is a company register that will provide information on the company, its objects clause and the names of the directors. Further information can be obtained in respect of voluntary or judicial liens filed on the business. With sole proprietorships, partnerships and limited liability closely held companies it is possible to obtain information identifying the shareholders. This is not possible for Monégasque public limited companies and civil companies, although the compulsion order (see question 6) may order that information to be released.
A new register of beneficial owners is being established under anti-money laundering legislation. Parties will require a court order to obtain access, and the new law indicates that the request must involve money laundering, terrorism or corruption investigations.
Cooperation with law enforcement agenciesCan information and evidence be obtained from law enforcement and regulatory agencies for use in civil proceedings?
Lawyers for the civil party victims who have become ‘civil parties’ in a criminal action have access to the criminal file throughout the preliminary investigation and during the main portion of the investigation, which follows the formal indictment of the defendant. Copies can be made of the file and produced to the lawyers defending the accused or the civil parties. However, the documents in the criminal investigation file are subject to professional secrecy requirements, and use in a separate civil proceeding without authorisation can be considered a violation of professional secrecy and subject to sanction under article 308 of the Penal Code.
Once a matter has been tried in the criminal courts and all appeals exhausted the information in the criminal file can be freely used.
As a civil party, the victim through his or her lawyers may demand that the investigating magistrate take any steps that are considered necessary for the investigation, including requesting information both locally and internationally, hearing witnesses, holding a confrontation with the accused and naming experts to examine evidence. Costs for such investigations are borne by the state, although the civil party will be requested to file a deposit at the time that it joins the criminal procedure.
Third-party disclosureHow can information be obtained from third parties not suspected of wrongdoing?
The judge in a criminal investigation can obtain any information that is considered useful for the ‘manifestation of truth’, including any banking information. A compulsion order may be obtained (see question 6) forcing disclosure from public officials (for example, for statutes of civil companies, which are not otherwise publicly available, or information regarding employment).
A bailiff may be instructed to request or demand information from a third party. This has no force of law, but the answers to the bailiff from the third party may sometimes be revelatory and form the basis for a request for compelled evidence (compulsion order). It is a frequently used tactic, but may disclose to the potential defendant the fact that an action is planned (thereby giving advance warning of the intention to seek interim relief, see question 11).
The Penal Code provision making it a crime to reveal confidential information (article 308) is very broad and covers people who, by their profession or position, have received confidential information. Bankers, lawyers, doctors and accountants are covered, but it is not clear whether other professionals (corporate service providers, tax representatives and building managers, for example) are also covered.
Interim reliefWhat interim relief is available pre-judgment to prevent the dissipation of assets by, and to obtain information from, those suspected of involvement in the fraud?
In criminal cases, the investigating magistrate may order the seizure of assets. If a declaration is made to the financial intelligence unit of the principality (SICCFIN) by a professional of a suspected transaction (and a fraudulent transaction will be among these), the SICCFIN may act very quickly to request the prosecutor to block accounts.
In civil cases, a party may file an ex parte request to seize assets with the court of general jurisdiction of the principality. The request need not identify specific bank accounts, but it must name banks in which such accounts are likely to be situated. The order freezing the accounts will specify a specific amount to be blocked. Regardless of pending actions in other jurisdictions, an action will have to be filed in Monaco to validate the seizure. The existence of assets in Monaco will be sufficient to justify jurisdiction for the action in validation.
A party may declare ‘temporarily indisposable’ funds held by a third party by filing a request with the clerk of the court, prior to obtaining a court order. This measure must be contained in the request for a seizure order, it cannot be filed independently.
The action and request for seizure must be filed through a Monégasque defence counsel (or member of the Monaco Bar). The Monaco defence counsel has a statutory right to fees of 0.4 per cent of the amount at issue. Although this should be the stated amount in the request and seizure orders, there have been cases of statutory fees being awarded for much larger percentages when these have been mentioned in subsequent pleadings. The statutory amount will often be claimed whether or not assets have been found and, if litigation ensues, the defence counsel of the winning party (and each defence counsel if there is more than one) is entitled to the statutory fees. Care must be taken when instructing Monégasque counsel that the issue of statutory fees is determined at the outset.
Seizure orders can apply to bank accounts, real property, movable property (art collections, for example), motor vehicles and yachts having either Monaco registration or found in Monaco, and safety deposit boxes.
The seized party may move to have the seizure lifted, but must do so (by an urgent action known as an expedited summons) before the first hearing of the action on the merits.
In respect of obtaining evidence, the compulsion order discussed in question 6 is available.
Non-compliance with court ordersHow do courts punish failure to comply with court orders?
There is no equivalent to a contempt of court citation for failing to observe court orders. Both civil and criminal courts may order a defendant to do or to cease doing something, and assess a fine for each day that he or she fails to comply. This fine is paid to the party requesting the measure.
Obtaining evidence from other jurisdictionsHow can information be obtained through courts in other jurisdictions to assist in the civil proceedings?
Monaco has ratified the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters of 1970 (the Hague Convention). Monaco will not, however, entertain requests for pretrial deposition and discovery. The authority for the receipt of requests for assistance is the Director of Judicial Services. Monaco is not a member of the EU and, therefore, EU regulations for the taking of evidence will not apply.
For countries that have not ratified the Hague Convention and where bilateral judicial assistance treaties do not exist (Monaco has several bilateral treaties for judicial assistance, notably with France), the CCP (article 975) provides that Monégasque judges may issue rogatory commissions through the appropriate authorities, but this is seldom done in civil matters.
Assisting courts in other jurisdictionsWhat assistance will the civil court give in connection with civil asset recovery proceedings in other jurisdictions?
Monaco’s ratification of the Hague Convention provides the framework for assisting foreign courts in obtaining evidence in Monaco. In addition, article 975 of the CCP provides that requests from foreign courts may be entertained provided they are transmitted in French or Italian translation through diplomatic channels, unless the Prince (as the high authority) authorises otherwise.
Enforcement of foreign judgmentsMonaco will order the enforcement of foreign judgments (known as exequatur) under the provisions of article 13 et seq of the CDIP. The court will order the judgment to be effective in Monaco without examining the matter on the merits provided that it is not proven:
- that it is issued by a court whose assertion of jurisdiction is in conflict with Monégasque rules on the matter;
- that the parties have not had an opportunity to defend;
- that the judgment is definitive and can be executed in the country that issued it;
- that it contains nothing contrary to public order; and
- that there is not a prior action pending in the principality between the same parties on the same subject. (The CDIP introduced lis pendens so that where there is a prior pending action in another jurisdiction the Monégasque court can now suspend proceedings.)
In no event can a judgment rendered by a foreign court be examined on the merits. The Monaco court may not issue a revised judgment.
The request for exequatur is filed with the court on an ex parte basis and then served on the party against whom execution is sought. The defendant can object to execution through a legal procedure.
Documents accompanying the request for exequatur are as follows:
- an authentic (certified) copy of the judgment;
- the original of the service documentation, or any other act proving service of the judgment in the foreign jurisdiction; and
- a certificate delivered by the foreign judge or by the clerk of the court confirming there has been no appeal and that the judgment can be executed in the foreign country.
Documents must either be legalised or carry an apostille. They must be translated into French.
Causes of actionWhat are the main causes of action in civil asset recovery cases, and do they include proprietary claims?
The main cause of action in civil recovery cases is the equivalent of tort (article 1229 et seq of the Civil Code), which provides that any act that causes another person damage obliges the person by whom the damage was caused to repair it. Proprietary claims will have little use where money is involved since this is fungible. An action requesting rescission or nullity of a contract because consent was obtained with intentional misinformation (as provided in article 1152 of the Civil Code) is also used.
Contractual causes of action based on failure to repay obligations will also frequently be used.
RemediesWhat remedies are available in a civil recovery action?
The typical remedy is damages, although rescission of a fraudulently obtained contract (see question 15) can be ordered, with restitution.
Judgment without full trialCan a victim obtain a judgment without the need for a full trial?
A procedure known as an expedited summons (different to the procedure set out in question 11) can be initiated to obtain temporary relief or a money judgment. The claimant suing by this method must allege that the issues cannot be seriously contested by the other party (although it almost inevitably will) and that there is urgency. The judge is said to be the ‘judge of appearances’ and will judge only on the issues presented and according to the documentation. If there are serious legal arguments, the judge will declare that it is not within his or her jurisdiction to decide. The procedure is similar to an action on the merits, although oral argument and a judgment can be issued relatively quickly.
The order issuing from an expedited summons can be appealed, but can be executed despite appeal.
Post-judgment reliefWhat post-judgment relief is available to successful claimants?
Post-judgment, conservatory measures such as seizures of assets can become definitive and will render the assets subject to execution.
EnforcementWhat methods of enforcement are available?
Title IV of the Civil Code is dedicated to the compulsory execution of judgments, following notification of the judgment and expiration of the time to appeal (unless the judgment orders provisional execution). If third parties are holding funds, and the judgment is by default (the defendant having failed to appear), execution can be enforced two months following the notification. If the judgment provides for provisional execution, only notification of the judgment to the defendant and the third party is required.
Where the assets seized are real property, objects or shares of companies, then a procedure for public sale at auction is required.
Special provisions in the Commercial Code apply to pledges of assets, depending on their nature and depending on whether (for companies) the shares are traded on a public exchange.
Funding and costsWhat funding arrangements are available to parties contemplating or involved in litigation and do the courts have any powers to manage the overall cost of that litigation?
Contingency fee arrangements are prohibited for Monégasque and French lawyers. However, fee arrangements providing for retainers on an hourly fee basis and to cover costs, with additional payments based on outcome, are allowed. An agreement should be reached with the Monégasque defence counsel who will be assisting foreign counsel (whether or not Monaco-based) as to the statutory fees discussed in question 11. Some counsel will require that the statutory fees be deposited with them in order to commence proceedings. Other counsel request their own clients to pay the statutory fees awarded against the opponent, prior to requesting the opponent to pay. There does not appear to be an agreed route among the defence counsel at the Monégasque Bar as to how the statutory fees apply, and these can be a source of both surprise and contention as they come in addition to fees paid for the Monaco counsel’s intervention. There is no agreement possible with opposing counsel and, as indicated, if there is more than one opposing counsel, the statutory fees will be requested by each. Statutory fees are again applicable on appeal.
