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The present article is an overview of the development of court cases (civil or commercial) in Bulgaria under the rules of the Civil Procedure Code – from the filing of an application in court (in person or through an authorized lawyer), through the collection of evidence and other actions, to the issuance of the judgment, its appeal, entry into force and the issuance of a writ of execution for the opening of an enforcement case before the bailiff.
Court proceedings before the competent Bulgarian court are initiated either by a statement of claim (in performance claims) or by an application (in non-contentious proceedings). The subject of this article are the lawsuits in which there are 2 parties (plaintiff and defendant) and one of them wins the case and the other loses it (unless the claim is partially granted or the case is terminated before a judgment is rendered). In protective proceedings, there is only 1 party (the petitioner) who asks the court to make a particular judgment.
Claims in commercial and civil cases can be of 3 types:
1. Performance. The most common type, where the plaintiff asks the court to order the defendant to do something, most often to pay a certain amount of money, e.g. repayment of a sum owed, payment of monetary damages, etc.
2. Declaratory. In these actions, the sole purpose is to establish a fact of legal significance, e.g., a crime committed when the statute of limitations for criminal prosecution has expired.
3. Modificational. In this type of action, the purpose is to effect some change in an existing legal relationship between plaintiff and defendant. If, e.g., the parties have concluded a contract for the sale of immovable property under Art. 19, par. 3 of the Obligations and Contracts Act, each of them may bring an action for a declaration of the preliminary contract as final, requesting that it be declared final, with the result that the purchaser under the preliminary contract will acquire the status of owner by virtue of the court decision, which is the constitutive effect. If, on the other hand, a property is acquired by deed, the transaction may be rescinded by a judgment, as a result of which the property reverts to the ownership of the seller, who in turn is obliged to refund the sale price received from the buyer.
Every lawsuit in Bulgaria starts with the filing of a statement of claim by the plaintiff. The only exception is the filing of an application for injunction (securing a future claim), which seeks the foreclosure of immovable property, seizure of bank accounts and other appropriate measures aimed at preventing the defendant from concealing or transferring property once he becomes aware of the proceedings against him. If the application is well-founded, the court first allows the injunction measures to be imposed, and only then does the claimant file his application and the court notify the debtor-defendant, i.e. the injunctions have already been effectively imposed when the defendant becomes aware of the proceedings against him and cannot harm his creditor by selling off or otherwise alienating his property. A lien may also be imposed after the filing of the complaint, but this is best assessed by an experienced Bulgarian litigation lawyer who represents the creditor.
The statement of claim should be filed with the district or county/city court (for claims with a claim value of more than 25 thousand leva, etc.) of the defendant’s domicile (this is the general rule of local jurisdiction, to which there are exceptions). It shall be accompanied by all documentary evidence and copies thereof for the defendant. A state fee is also payable, which is generally 4% of the material interest. If there are any defects in the statement of claim, the judge shall leave it without motion and give instructions to the claimant to remedy them, and if they are not remedied he shall discontinue the case and the stamp duty paid shall be forfeited. In view of the latter, it is advisable to instruct an experienced trial solicitor in Bulgaria to represent the claimant (or, as the case may be, the defendant) in the proceedings. The costs incurred for court fee, lawyer’s fees, etc. (e.g. expert reports) shall be awarded to the successful party and paid by the losing party.
If the court finds that the statement of claim is in order and the state fee has been paid, the court shall order that the statement of claim be served by a court officer (summons officer) on the defendant, who shall have 1 month (14 days in commercial cases) to file a response to the statement of claim. Failure to do so may have very serious consequences for the defendant, including so-called procedural default – the inability to perform certain acts at a later stage of the case. If, for example, the defendant fails to plead a statute of limitations which has expired, even if it has de facto expired, the court has no choice but to assume that the statute of limitations has not expired de jure. This is a very good illustration of how, even if the law and the evidence are entirely on the plaintiff’s (or defendant’s) side, the party may lose the case because he or she did not properly or timely exercise his or her rights.
It is also important to note that, even if the defendant cannot be found at his address, there are a number of statutory situations where the defendant is deemed to have been duly summoned, even though the statement of claim or notice of proceedings may never have been served on him. Many defendants believe that if they deliberately abscond so that they cannot be personally served with papers in a case, then they cannot be sued, but this is categorically untrue and it is therefore strongly advisable that if a defendant becomes aware or even merely hears that a case is being brought against him, he should immediately contact a solicitor who can even trace the exact case being brought against his client if the latter is unaware. It should also be noted that a party is summoned only once, and thereafter it is up to him to keep track of the progress of the case.
After the filing of a statement of defence (or after the expiry of the time limit if no statement of defence is filed), the court shall schedule the first public hearing in the civil action. In commercial cases, the so-called double exchange of documents applies – after the defence, the court gives the opportunity for a supplementary statement of claim and a supplementary defence. At the first hearing in open court, the parties should clarify their positions and make additional requests for evidence, if any. After the conclusion of this first hearing, the parties may neither allege new facts nor adduce any further evidence (unless newly discovered). Appearance of the parties is not compulsory, and it is common practice for their legal representatives – authorised civil litigators – to appear in their place with a power of attorney.
Almost always, at the first hearing, the case is adjourned to another date for the collection of evidence – experts’ reports, examination of witnesses, procurement of documents through court certificates, etc. If the defendant does not appear and has not filed a statement of defence, the court may issue a so-called default judgment, which is not subject to appeal and the plaintiff may immediately thereafter obtain a writ of execution against the defendant and file an enforcement action with the bailiff. The collection of evidence is usually carried out in several consecutive hearings of the case and in general it takes about 1 year to complete the case in each court instance, this time limit is indicative and varies according to the complexity of the case and the court’s workload (the busiest courts are in Sofia, then in Plovdiv and other large cities).
With the delivery of the judgement, the first instance proceedings come to an end. And the judge who issued the decision is no longer competent to rule, and if the parties are not satisfied with the decision, they can appeal it to the upper court. Exceptionally, the court may supplement (if it has omitted to rule on a request by the parties, e.g. on costs) or correct (in the case of a manifest error of fact) its own judgment, but not revise it. The court may give a single judgment, and all other acts it gives in the course of the case are called orders and directions and concern the development and progress of the case (e.g. admission of evidence, amendment or increase of the claim, etc.). Some of these acts are not subject to appeal, and for those that are subject to appeal, time limits apply, which the party must either monitor himself or authorise a civil or commercial lawyer in Bulgaria to conduct the case and take all necessary action to protect his client’s rights. Missing a deadline to appeal a judgment or order can irreparably harm a party’s chances of winning the case.
An appeal may be lodged either by the claimant or by the defendant (or both at the same time if the claim is partially upheld) if dissatisfied with the first instance judgment. It is filed through the court of first instance to the court of second instance (appeal), which is either a district court (or Sofia City Court) or a court of appeal. The state appeal fee is 2% on the material interest appealed against. For example, if the claim was brought for 100 thousand leva but was upheld to the amount of 70 thousand leva, one party would owe 1400 leva and the other 600 leva state fee for its own appeal against the first instance decision.
After the appeal has been filed and the appeal fee has been paid, the court of second instance sends the appellant’s appeal (appellee) to the opposing party (appellant), and the latter may file a response to the appeal. The appellate court then sets the date for the first public hearing, at which the parties may make further requests for evidence, which the court may in turn grant or refuse. If there is evidence to be gathered, the case is adjourned to another date, and if there is none, it is called for decision at the first hearing. Unlike the criminal court, in civil proceedings the court never announces its decisions immediately, but gives its decision within a time limit – by law 1 month, in practice the time limit is often 2-3 months. In cases of factual or legal complexity, or where there is a large volume of evidence, the time limit may be even longer.
After the second instance decision has been delivered, it is subject to cassation appeal. However, any party may obtain a writ of execution for the amount awarded by the appellate court and institute enforcement proceedings with the bailiff, even though the judgment may not be final and may subsequently be set aside by the Supreme Court of Cassation. Cases of lesser material interest (BGN 5 thousand for civil cases and BGN 20 thousand for commercial cases), as well as some other categories of acts in which the appeal judgment is final, are not subject to cassation appeal. The appeal is lodged through the Court of Appeal to the Supreme Court of Cassation, which is always the third and final instance in commercial and civil disputes in Bulgaria. The cassation appeal procedure is more complex and the appeal itself must be signed by a lawyer. Initially, a state fee of BGN 30 is payable, and if the cassation appeal is allowed, a 2% state fee is payable on the appealable interest.
With the exception of cassation appeals, the participation of a Bulgarian litigation lawyer in a court case is not mandatory and the party may personally carry out all necessary procedural actions. In the latter case, however, it is doubtful whether the party, especially if he has no legal education and knowledge, can succeed in the case and therefore, as a rule, parties in civil and commercial cases authorise competent lawyers to defend their interests in the best way.