Amendments of the Civil Procedure Act (“CPA”)

On 1 July 2022, Croatian parliament adopted the Act on Amendments of the Civil Procedure Act (“CPA”) which is in force as of 19 July 2022.

The primary goals of such amendments is to expedite, simplify and modernize civil procedure. Thus, the amendment to the CPA introduces a greater number of deadlines for adoption of different court decisions, expands the scope of subjects obliged to use the e-communication system as well as introduces sound recording of hearings as a general rule. However, in addition to the provisions that aim to achieve the said goals, within the package of amendments there are also institutes that will necessarily require further elaboration through court practice.

Given that these provisions amend the fundamental procedural law of the Croatian legislation, there is no doubt that the presented amendments will be the subject of numerous academic and judicial discussions.

1. Elaboration of the audiatur et altera pars principle
   
   It is a rather rare case that the legislator decides to intervene in the basic provisions of one of the basic laws of a certain legal field. This is also the case with the CPA regarding the principles of civil procedure, which have not changed significantly (except when abandoning the principle of material truth) since the Civil Procedure Act of 1976.By the respective amendment to the CPA, Article 5 of the CPA, i.e. the principle of mutual hearing of the parties, has been amended, in a manner that the court will, to the extent necessary, allow the parties to raise their remarks on the legal grounds of the dispute. Also, a provision was added which prescribes that the court cannot base its decision on a legal basis that is significantly different from the one that was discussed within the proceedings and that a conscientious and prudent party could not have reasonably foreseen.It is interesting to note that with the provision in question, as well as the provision of Article 367.a of the CPA, the legislator also introduced the standard of due care in procedural legislation – the standard of a conscientious and prudent party.
2. Expansion of subjects obliged to use e-communication
   In the light of the trend of digitalisation of procedures, the amendment to the CPA expanded the scope of subjects who are obliged to use the e-communication system.Until now, the governmental bodies, the state attorney’s office, lawyers, notaries public, court experts, court appraisers, court interpreters, insolvency administrators, trustees and legal entities were obliged to use the e-communication. By the amendment to the CPA, employees in trade unions or employers’ associations also became obliged to use the e-communication system in those cases where they represent employees or employers as attorneys as well as trustees in consumer bankruptcy proceedings, liquidators, special guardians in family matters and natural persons who perform registered activities in disputes concerning such activity.
3. Changes regarding the holding and conducting oral hearings

• • Remote hearings
    The amendment to the CPA also regulates the issue of remote hearings.Namely, the provision of Article 115 Paragraph 4 stipulates that the court has the power to decide whether to hold a remote hearing or to present particular evidence remotely after receiving the statements of the parties and other participants who need to participate in the hearing that will be held remotely.Paragraph 5 of the same Article stipulates that the method of holding remote hearings with the use of appropriate audio-visual devices and technological platforms for remote communication or the presentation of particular evidence will be regulated separately by the ordinance issued by the Minister of Justice. Therefore, the operational implementation of remote hearings shall be prescribed by a special ordinance that should materially replace the Instruction regarding holding remote hearings of the Ministry of Justice and Administration of the Republic of Croatia Class: 011-01/20-01/50, Ed. number: 514-05-01-02-01/3-20-08 dated 10 November 2020.

• • Hearings in small value disputes
    According to the amendment to the CPA, the court will hold a hearing in proceedings in small value disputes if it deems such action necessary for the purpose of conducting evidentiary proceedings (for example, if there is a need for witness questioning) or if at least one party submits reasoned proposal, which the court can refuse by its decision, against which a special appeal is not allowed, if it considers, taking into account all the circumstances of the case, that the procedural due process can be ensured without holding proposed hearing.Therefore, procedure in small value disputes shall be, as a general rule, a written dispute.

• • Mandatory audio recording
    The amendment to the CPA also introduces mandatory sound recording of all hearings, while minutes of hearing shall be kept on:

• • • actions and statements for which it is expressly prescribed so by the law,
    • parties’ statements on recognition of the claim, waiver of the claim, waiver of the right to appeal, amendment or withdrawal of the lawsuit, recognition or disputing of certain facts and proposed evidence,
    • court decisions made at the hearing,
    • important statements or announcements made by the parties or other participants outside of the hearing. Minutes will not be drawn up about less important statements or announcements, but an official note will be drawn up instead,
    • conclusion of a court settlement and actions taken outside the hearing or outside the court building, when the said hearings are not audio recorded.

• • Absence from the hearing
    According to the provisions of Article 291 Paragraph 4 of the CPA, before the entry into force of the amendment to the CPA, the presumption of withdrawal of the lawsuit existed if (i) both parties were unjustifiably absent from the preliminary hearing or (ii) they came to the hearing but did not participate in the discussion, or (iii) they left the hearing, and in these cases, it was considered that the plaintiff withdrew the lawsuit.According to the amendments to the CPA, the presumption of withdrawal of the lawsuit now exists if (i) both parties are unjustifiably absent from the preliminary hearing, or (ii) if the plaintiff is unjustifiably absent from the preliminary hearing and the defendant does not engage in discussion. The cited amendment places emphasis on the necessity of the plaintiff’s presence at the preliminary hearing as the party on whose initiative the litigation started.The same solution was introduced in the case of the hearing for the main hearing. However, unlike the preliminary hearing, an exception to the presumption of withdrawal of the lawsuit is prescribed for the main hearing, as the acting judge has at his disposal, evaluating all the circumstances, the possibility to:

• • • conclude the main hearing and decide on the lawsuit or claim on the basis of the evidence already presented and the state of the file, if they consider that the case has been sufficiently discussed, or
    • postpone the hearing due to the important reasons, but no more than once during the entire main hearing.

• • Procedure management plan (process calendar)
    The amendments to the CPA also introduce a procedure management plan, i.e. a process calendar, which the court will create if it determines that it is not possible to conclude the preliminary proceedings and to hold and conclude the main hearing, as the same hearing. The procedure management plan should contain:

• • • a summary of disputed factual and legal issues,
    • means of evidence to establish disputed facts (which witnesses will have to be examined, which documents, contracts, files should be reviewed, etc.),
    • deadline for obtaining evidence that still needs to be obtained (excerpt from a register, etc.),
    • deadline for submission of written statements of the parties to the statements of the opposing party and the findings and opinion of the expert,
    • date and time of the hearing for the main hearing.

• • Deadlines for completing the procedure
    In terms of the implementation of the principle of economic efficiency of the procedure, by amending the CPA, the legislator introduced a number of deadlines for carrying out actions in the procedure, i.e. for making decisions.A deadline for holding a preliminary hearing is introduced, which must now be held within 3 months from the date of receipt of the reply to the lawsuit, i.e. the expiration of the deadline for reply to the lawsuit, while the main hearing must be held no later than 6 months after the conclusion of the preliminary hearing.Furthermore, the civil proceedings before the court of first instance must be concluded within a reasonable period, and certainly within a period shorter than 3 years from the date of filing the lawsuit.
    The Supreme Court of the Republic of Croatia is obliged to make a decision on the motion for revision within a reasonable time, and certainly within a period shorter than six months from the receipt of the motion for revision at the Supreme Court of the Republic of Croatia.

    In small value disputes, the second-instance court is obliged to decide on the appeal within a reasonable time, and certainly within a period shorter than six months from the receipt of the appeal at the second-instance court.

• • The “surprise decisions” institute – prevention of decisions modified by appeal procedure
    According to the new provisions of Article 367a of the CPA, the second-instance court will, in the appellate proceedings, invite the parties to declare the legal basis if it considers that, according to such legal basis, a decision should be made that is significantly different from the one that was discussed in the proceedings and which a conscientious and prudent party could not foresee.The parties may state their opinion on this legal basis at the meeting of the council, the hearing or in the submission within a period specified by the court which may not be shorter than 15 days.

• • Amendments to the provisions on revision
    The amendments to the CPA deleted the provision of Article 382.a of the CPA, which until now prescribed an exception that the parties can, in a dispute (i) on the existence of an employment contract, i.e. the termination of an employment or for the purpose of establishing the existence of an employment relationship, (ii) on the determination of motherhood or paternity, (iii) in the context of lawsuits for protection against discrimination, (iv) in the context of lawsuits for publication of corrected information, submit a revision against the second-instance verdict without the need for the Supreme Court of the Republic of Croatia to previously allow the submission of a revision.In other words, according to the new legislative solution from the amendment to the CPA, the revision mechanism, in which it is necessary to first obtain the permission of the Supreme Court of the Republic of Croatia on the motion for revision before submitting it, applies as a rule for all types of disputes, without exception.

• • Illegality of evidence in civil proceedings
    Certainly, the most interesting change is related to the explicit introduction of the illegality of evidence in civil proceedings.Namely, the concept traditionally related to criminal procedural law is now introduced into civil proceedings as well.According to the new provisions from Article 220.a of the CPA, a court decision cannot be based on evidence obtained illegally (illegal evidence). Such a solution follows the constitutional provision from Article 29 Paragraph 4 of the Constitution of the Republic of Croatia, which stipulates that evidence obtained illegally cannot be used in court proceedings, and the relevant amendment to the CPA resolves the dilemma of whether the cited constitutional provision also applies to civil proceedings.

    Article 220.a Paragraph 2 of the CPA grants the court the authority to allow the presentation of illegal evidence and take into account its content if it deems it necessary to establish a decisive fact. Thereby the court should be guided by the prescribed test of proportionality from the same paragraph, which mandates that when deciding on the admissibility of evidence, the court takes into account the severity of the violation of rights due to the production of illegal evidence and the interest to properly and completely establish the factual situation in the proceedings.

    However, unlike the criminal procedure in which it is clearly determined which evidence is illegal, the amendment of the CPA did not deal with that issue, so the doubt remains as to which evidence should be considered illegal.

Tin Aničić