The number of new distrainment proceedings keeps falling
THOUSANDS of Slovaks, with a large share of pensioners, have suffered from unresolved distrainments for a long time. Even younger Slovaks are unable to find steady jobs with high enough salaries to cover their debts.
The government’s solution, anticipated by those affected for several months, is a one-time distrainment amnesty that aims to stop the proceedings where claims are unenforceable and debtors do not have property that can be withdrawn.
“Propertyless distrainments must be terminated and an adequate mechanism for that must be found,” Justice Minister Gábor Gál (Most-Híd) told The Slovak Spectator.
Executors directly affected by the amnesty consider this step hazardous for the legal awareness of the responsible citizen. The numbers of old proceedings are declining substantially, so we do not consider their complete cancellation appropriate, said Stanislava Kolesárová of the Slovak Chamber of Executors (SKE). Besides the quicker settlements of distrainments, the decline stems from the growing interest in personal bankruptcies. However, this is not always the case, says Eva Kováčechová, director of the Centre for Legal Aid.
“Any solution to old distrainments could, therefore, help debtors and ease the courts,” Kováčechová told The Slovak Spectator.
Preparation of amnesty
With the Extraordinary Measures to Deal with Old Distrainments, which is the official name of the amnesty, the government wants to cover old, unsolved distrainments, an idea that began to emerge during the mandate of
former justice minister Lucia Žitňanská (Most-Híd), who prepared the paragraph text of the law in cooperation with all ruling parliamentary clubs. The current leadership under Gál wants to put the amnesty to real use. “I am currently waiting for the coalition partners to comment on the text and subsequently, I will open this topic,” said Gál.
Although the amnesty will probably only concern state claims, it can still burden the state budget by several tens of millions of euros, the Sme daily reported.
Accumulated cases The amnesty aims to tackle the historical accumulation of distrainment proceedings. Gál pointed out that the Slovak courts registered, and still register more than three million cases. There are often cases where debts have no chance of being recovered.
“However, the cost incurred by such proceedings must be paid, and that’s the mainstay of the problem,” Gál said. The most common reasons for stagnant cases are, according to Kolesárová, a targeted avoidance of payment of debts by debtors, even abroad, and the disagreement of creditors who have insisted on repeated surveys of the debtor’s assets. Often times, debt proceedings do not begin until the debtor reaches retirement age.
“The evidence of an increasing number of distrainments against retirees who were doing business in the past confirms that,” Kolesárová said. Although the amnesty may help thousands of people in hopeless situations and may unburden the courts, it will be unfair for those who fulfil their duties properly and on time, according to Marián Hutter, a lawyer from the
HMG Advisory Group. “The amnesty will help a large number of people, or even potential voters,” Hutter told The Slovak Spectator. Hutter perceives the decision to implement the amnesty as a decision of the representatives of the government parties rather than the Justice Ministry itself. Such a flat forgiveness of obligations should be rare, he added.
Real reduction in numbers Nowadays, the problem of stagnant cases is less common, according to the ministry. New proceedings have more precisely defined what the notion that the obligor is poor means, said Gál.
In terms of new proceedings, the Justice Ministry registered a total of 68,274 proposals to carry out the distrainment in the period from April 2017, when the amendment came into force, to April 2018, of which 57,454 received the commission of distrainment. The average time it takes to issue the commission is seven days. Kolesárová recalled a reduction of distrainments since 2013. Between 2013 and 2017, the number of proceedings decreased by 220,000 and between 2016 and 2017, it decreased by more than 44,000. “From February 28 to May 21 of this year, the number of old active files fell by 122,822 cases,” Kolesárová said. Many distrainments end with personal bankruptcy. In March 2018, there were 1,012 bankruptcies in
Slovakia and in the first quarter of 2018, the number reached 2,904, the TASR newswire reported. At one court These new proceedings do not burden all of the Slovak courts. As of July 1, 2017, the new cases are concentrated only at a specialised workplace at the Banská Bystrica District Court. In addition to the distrainment agenda, after the amendment, the court also received an agenda of accelerated proceedings specialised in payment orders. Experts consider the placement of proceedings under one court an appropriate measure. One distrainment court, strong formalism, exclusive electronic proceedings, the introduction of a system that states one obligor is equivalent to one executor, new executors’ obligations and shorter periods for the court significantly accelerated and streamlined the proceedings, according to Hutter. “However, in the year the amendment came into effect, the increased demands and new duties were partly to blame for 26 executors ceasing their activity while in 2016, there were only five,” said Hutter, as quoted in the press release. E-system works, but not perfectly Another change implemented after the 2017 amendment is the exclusive submission of applications for distrainments through the electronic system called eŽaloby (eActions). The system has not received good feedback so far. Mostly large institutions, such as health insurance companies, criticise the system for its slow processing speed and inability to deal with bulk claims. Minister Gál explained that all entities created applications for distrainments before the new law came into force. This led to the overthrow of the courts. “The system has not collapsed, has been effective for a year, has its childhood illnesses, but not such as
to suggest that it’s the wrong way,” Gál told the Pravda.sk website.
In terms of other drawbacks to the system, Hutter pointed to complications with the redistribution of proceedings for re-submission of evidence already submitted in the primary consumer proceedings, the limitation of the right to compensation for legal fees and the compulsory conversion of distrainment titles from paper to electronic. While the system has still not worked fully, executors meet all programme and technical prerequisites for their performance, including electronic communication and the conversion of documents, said Kolesárová. “Some creditors used the transitional provisions, tried to apply for distrainment even under old provisions of the act and have not used the new distrainments yet,” Kolesárová said.
Total number of distrainment
proposals (April 2017-April 2018)
Proposals for distrainment
Of which got the commission
Average time to issue commission
Source: Justice Ministry
Foto popis| The planned legislative change aims to stop proceedings with unenforceable claims.
Foto autor| Photo: TASR
O autorovi| BY PETER ADAMOVSKÝ, Spectator staff