Damir Site, Pravo-Justice EC Project Expert: Your legal procedure has inherent loopholes for avoiding enforcement of judgments

Judgment is worth nothing if it is not enforced. Therefore, the reform in the judgment enforcement system is no less important than all innovations related to ensuring an access to high-quality justice. Due to the increasing motivation of public enforcement officers and launching institute of private enforcement officers, the situation has changed significantly over the past year.

However not to such an extent as to achieve the figureфs existing in the European countries. Damir Site, Pravo-Justice EC Project Expert, told in the interview with Censor.NET about how the judgment enforcement system operates in the European countries and what can be changed.

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“IF EVERYONE MAY PUT JUDGMENT IN DOUBT, THEN THE COURTS WILL NOT EXIST”

– Until 2017 only 6% of judgments in Ukraine had been enforced. Over the past year, their number has increased three times. This became possible, among other things, due to the introduction of the institution of private enforcement officers. At the same time, both among large creditors, for example, such as banks, and among ordinary citizens who are trying to collect debts, there are those who believe that the reform of the enforcement process is lagging. How can we achieve the performance of the European countries, where up to 70% of judgments are enforced?

– Increasing the number of enforced judgments should always be considered as positive changes, because the rule of law is based on the fact that the court judgments should not be just an illusion. If a court judgment is not enforced, this is the greatest problem that the society can face. For example, you mentioned the banks. But banks are not the only creditors. Let’s take a situation where one of a child’s parents does not pay alimony. However, the person who is supposed to be paid alimony also acts as a creditor. The child grows up, and the family needs money now, and not when this child reaches 20 years old. Or, say, people work for a company, and their salary is delayed. They need money now, not within 10 years. Therefore, the fact that the percentage has grown is good, but there are always opportunities for improvement.

Private enforcement officers started working at the end of the last year. This had an obvious impact on the percentage of enforced judgments, and perhaps on the percentage of how much money was actually received. In addition, changes which take place indicate that the discipline of debtors is improving. People start paying, since there is the probability that someone will ensure the receipt of money forcibly.

As for Europe, the high number of enforced judgments does not depend only on the work of private enforcement officers. There are also tools which they receive from the state. The higher indices in Europe are actually achieved due to the fact that enforcement proceedings are being implemented by using not only the judicial methods.

– What do you mean?

– The litigation involves the plaintiff and the defendant who must pay certain amounts, and it is necessary to issue a judgment. As part of the process, the plaintiff says that the debtor must pay, and the latter claims that he should not. Based on the results of the judicial examination, the judge holds that the debtor must pay. This decision is then handed over to the enforcement officers and there is no longer a question of whether a person should pay or not.

Your procedure itself already implies the ways to avoid the enforcement of judgments and different procedural loopholes.

– Which ones?

– The enforcement of judgment consists of several stages. If it can be suspended at any stage, the enforcement will be delayed. By challenging the decision to the court of appeal and cassation, a person claims each institution to issue another decision. In Europe, there are severely limited possibilities for a debtor to challenge a court judgment. If a judge held in the judgment that the debtor must pay EUR 1,000, then as from the date of issuing the judgment, this money is already the property of the plaintiff. If he fails to pay it, then the plaintiff’s property is deemed illegally owned by the debtor. That is, money is actually stolen from the creditor.

Therefore, we do not ask whether we should pay or not. The question that we are raising is different: at the expense of which part of the debtor’s property this claim can be satisfied? This may be part of his salary, funds on a bank account or some property. The question is how much and what to pay, and not how to suspend the proceedings at each stage.

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– Are there mechanisms allowing to stop payment?

– There must be a good reason for this. But these arguments should not challenge the judgment itself. If a judge decided that you must pay, then no one in the world can change this, because otherwise it turns out that we do not have the court. If everyone can put in doubt the court’s judgment, then the courts will not exist.

– But any person has the right to challenge the court judgment if he does not agree with it, hasn’t he?

– When we talk about stages of the trial itself, the debtor has all procedural opportunities. But when the judgment may not be appealed, it should not be put in doubt.

There is one more interesting point. In Ukraine, the enforcement is usually relevant only to judicial decisions. In Europe, the enforcement proceedings can be initiated for different types of documents. For example, with regard to utility companies, they should not even refer to the court to collect debts from consumers. They can turn directly to enforcement officers, because the consumer lives in this apartment, uses services, and it is not necessary to prove this in the court.

Of course, such enforcement procedures for utility debts can always be appealed in the court. But first the proceedings begin, then a complaint is filed, and only then the proceedings are suspended.

– Which algorithm should be used by public enforcement service in its operation, so that its employees be interested in the enforcement of more number of judgments? How they can be motivated?

– In theory, we can say that every civil official must be well trained, have all necessary tools and, of course, there must be a motivating salary. This applies equally to public enforcement officers, prosecutors, and educators. They all must have such remuneration that they are interested in high-quality work. The state should consider this when determining the amount of their salaries. This is obvious. It should not be even discussed.

– Damir, you work as a private enforcement officer in Serbia. And you can judge also on the basis of your own experience. Is there any competition between private and public enforcement officers in the European countries?

– In the countries with a mixed system, they do not usually compete, and each has his own jurisdiction, his own scope of work. So, for example, in some countries taxes are never collected by private enforcement officers, because such decision was adopted by the state.

In the countries of Anglo-Saxon law, such as the UK and Scotland, private enforcement officers start to collect amounts exceeding 6,000 pounds. Claims for smaller amounts are deemed to be not so important. But the plaintiff can ask the court, even if the amount of his claim is less, to refer this decision to a private enforcement officer. And more than 80% of plaintiffs will use this opportunity. In other words, they are not competitors; they have different areas of responsibility.

– Why do they refer the decision to private enforcement officers? Are public enforcement officers ineffective?

– Differently. For example, they are effective in Scandinavian countries, in Germany, Austria. There are only public enforcement services. But we are talking about countries where people understand that they must pay. And debts are not necessarily collected in cash, they can be withdrawn from bank accounts, it’s easy to do. For example, in Serbia salaries are quite high, so there are no problems with recovery.

– The issue of prompt certification of private enforcement officers has not been yet resolved by the Ministry of Justice. During the year only about one hundred officers have been registered. Should this process be accelerated and how?

– The number of people in this profession should grow. One hundred people per year for Ukraine is very slow. Public authorities should be interested in the increasing this figure, because such specialists deal with the enforcement of court judgments, and therefore represent the state.

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“THE DEBTOR’S OPPORTUNITIES TO APPEAL THE ENFORCEMENT PROCEEDINGS AT EACH STAGE SHOULD BE LIMITED”

– You take part in the reform of the enforcement service and actively communicate with colleagues. In your opinion, do they depend on political or any other pressure?

– They remain independent as long as they are guided by the law. And if the argument they make is the law, with respect to everything they do, then they are independent.

I started to work as a private enforcement officer in 2012. At first, the police in my hometown also did not understand my motivation and asked who stands behind me and which ties I have. I honestly answered them that the most influential force in Serbia stands behind me – the law. I repeat: when the court decision becomes illusory, the society begins to destroy.

– So, we have 80% of illusory decisions, because they are not enforced, haven’t we?

– Yes, I agree. But the society evolution is something that cannot be stopped. And the existing statistics are not the final figures. They can and must change.

The biggest problem that the Ukrainian colleagues face is a writ of execution. I usually use a somewhat rough comparison with the work of a butcher. If he wants to cut meat quickly, smoothly and neatly, he must have a sharp knife. Otherwise he will lose. Therefore, what is needed is better executed writ of execution, which will not allow so many loopholes or opportunities for the debtor.

The enforcement proceedings currently consist of stages. Usually there are at least three of them. However, depending on the ways of execution, there may be four or more. This is relevant for things, such as sale of property or access to bank accounts. If the debtor can appeal against actions of the enforcement officer at each of these stages, imagine how this will delay the process. It is necessary to limit the debtor’s ability to appeal against the enforcement proceedings at each stage and to reduce number of these stages.

You cannot turn the enforcement proceedings into a lawsuit. Otherwise, it seems that you appeal against the court decision itself.

And secondly, the enforcement officers should be able to obtain information about the debtor’s assets as quickly as possible. We need access to registers of salaries, real estate and everything they need to know about. Such data should be obtained by them immediately. For example, if the plaintiff comes to my office, I can find out most data about the debtor in one click.

The enforcement officer should not treat the debtor as a child or take care of him. He must invigorate a person and make him to pay. The enforcement proceedings are a mandatory process. The debtor has an opportunity to suspend it at any time. To do this, you just need to pay and thereby execute a court decision.

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– Are there separate registers in Serbia with separate access or are they all focused on a single platform?

– Previously, we had a lot of separate registers. Over time, they have been consolidated. Several separate registers still remain, but the Ministry of Justice of Serbia is working to combine all the data.

– Do you agree upon with the debtor which of his assets can be sold or not?

– No. People will not pay voluntarily. They will pay only if they are obliged to do so. Do not be afraid to make decisions.

I’ll give an example from life. Have you ever been to Belgrade?

– No. And what?

– If you had ever been thereto, you would have paid attention to payment of fare in public transport. For example, in Belgrade, local citizens did not want to pay a bus fare, because there were no permanent inspectors. Buses are usually crammed, they are very old. There is no money in the city budget to buy new ones. And people just thought they did not need to pay for that.

When inspectors started to work on the routes, people began to beat them. Then people rebelled. People were angry: why do we need these inspectors in buses. They were used not to pay fare for 50 years.

The same is with the enforcement proceedings. If people are not forced to pay, they will be stalling, so that the debt cannot be recovered at all because of the limitation period.

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– Do they often hide income and property?

– Yes, they do.

– Do you find them?

– In such situations you should turn to a private detective, the enforcement officers are not magicians.

– How much do private enforcement officers earn in the European countries? Is this a fixed percentage of the amount specified in the decision?

– There are several types of fees and rewards. Everything depends on the country. For example, in Serbia the higher is the amount of the claim, the lower is the percentage of payment.

– If you were offered to work as a private enforcement officer in Ukraine, would you agree?

– Yes. This is a good job – a job in which you are a part of the rule of law. The only problem is that I’m not a citizen of Ukraine, so I would not be employed (smiling – author).

– The Ministry of Justice expects to reach the level of enforcement of judgments at 50-70% within 5 years by increasing the number of private enforcement officers up to 2,000. Do you think this can be done within such period? Or do we need to pay attention to public enforcement officers who are still not very effective? Perhaps, it is worth to increase their number?

– It is possible, if both private enforcement officers and public services adhere to clearly expressed political will. To do this, all participants of the process must take it seriously. And again, it is necessary to amend the law by eliminating obstacles preventing the enforcement of court decisions.

You can do a lot of things during 5 years. It is not so difficult, but it is necessary to take responsibly the achievement of goals.

The European standards suggest that there should be 1 enforcement officer per 25 thousand people. This includes both public and private officers. So, 2,000 is quite enough to reach the European level of enforcement of court decisions.

Tetiana Bodnia

The article was originally published on Censor.NET

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