Enforcement of judgements - Poland
TABLE OF CONTENTS
What does enforcement mean in civil and commercial matters?
What are the conditions under which an enforceable title or decision may be issued?
Conditions associated with the launch of enforcement
Object and nature of enforcement measures?
What types of assets can be subject to enforcement?
What are the effects of enforcement measures?
What is the validity of such measures?
Is there a possibility of appeal against the decision granting such a measure?
1. What does enforcement mean in civil and commercial matters?
Enforcement is the implementation, by the competent authorities, of the coercive measures provided for in law with a view to obtaining the discharge of an obligation vis‑à‑vis a creditor on the basis of an enforcement order.
Enforcement proceedings are a set of measures taken in connection with enforcement following the lodging of an enforcement application.
Bodies involved in enforcement proceedings:
- legal bodies involved in "declaration of enforceability" proceedings in respect of an enforcement order: the presiding judges, district court, regional court and court of appeal;
- enforcement agencies involved in enforcement proceedings proper: district court, bailiff.
Parties to proceedings:
- "declaration of enforceability" proceedings;
- enforcement proceedings proper: once proceedings have been instituted, the parties indicated in the enforcement order as the creditor and debtor; until such time as proceedings are instituted, these are potential parties.
Enforcement measures designed to encourage debtors to take action:
- coercive measures (fine imposed by a court in lieu of a custodial sentence in the event of non‑payment, obligation imposed on a debtor to cover a creditor's potential losses, instructions issued to a bailiff by a court to remove a debtor's opposition to a creditor's application, performance of activities by a creditor at a debtor's expense, opening of an apartment, search of a debtor's possessions and clothing, fine imposed by a bailiff of PLN 500 for an unfounded refusal, on the part of a person responsible, to provide explanations and for failure, on the part of a debtor, to comply with their obligation to notify a change of address);
- seizure (of moveable property or real estate);
- sale by public auction of seized real estate or moveable property;
- sale of seized moveable property by direct agreement;
- placing in receivership of a business or farm – confiscation of debtor's moveable property by a bailiff;
- vacation of premises;
- removal of custody fights over a person subject to parental authority.
2. What are the conditions under which an enforceable title or decision may be issued?
An enforcement order featuring a declaration of enforceability serves as the basis for enforcement.
The following constitute enforcement orders:
- a res judicata judgment or a non-res judicata judgment subject to immediate enforcement (and immediately enforceable);
- a settlement reached in court;
- an award by a board of arbitration;
- a settlement reached in the board of arbitration;
- other judgments, settlements and instruments which by law are implemented by way of judicial enforcement;
- a notarial deed in which a debtor accepts enforcement (comprising an obligation to repay a sum of money or quantifiable fungibles, or an obligation to deliver individually designated items) if the deadline for repayment, settlement or delivery is indicated in the deed;
- a notarial deed in which a debtor accepts enforcement and which comprises an obligation to repay the sum of money specified in the deed or indicated by way of a valorisation clause;
- judgments by the courts of EU Member States, settlements concluded in or confirmed by those courts and official documents drawn up in EU Member States and certified in those States as European enforcement orders.
Only res judicata judgments which feature a declaration of enforceability or are immediately enforceable (by virtue of immediate enforceability conferred automatically or further to an application) may constitute enforcement orders. Judgments handed down by boards of arbitration must first be declared enforceable by a domestic court, and only then may a declaration of enforceability be issued; the mere fact of declaring a judgment enforceable is not, of itself, sufficient for the purpose of instituting enforcement proceedings. A notarial deed constitutes an enforcement order if it meets the conditions laid down by the Code of Civil Procedure and the Notaries Act.
Other enforcement orders:
- extract from a notice of claims in insolvency proceedings;
- extract from a notice of claims with extract from a res judicata decision confirming an agreement in insolvency proceedings;
- res judicata bank settlement;
- settlement concluded before a surveyor;
- settlement concluded by a board of arbitration responsible for trades unions;
- draft terms of division for an amount obtained from enforcement of real estate;
- bank enforcement order as provided for by the Banking Act, but only after a court has issued a declaration of enforceability;
- judgments handed down by foreign courts and settlements concluded before those courts after being declared enforceable by a Polish court;
- draft terms of division of the limitation of liability for maritime claims fund;
- rulings of the Assets Committee and settlements concluded before it in settlement proceedings (governed by the Relations between the State and the Catholic Church in Poland Act).
Enforcement is instituted:
- automatically - on a request from a court of first instance in cases which may be instituted automatically (by virtue of the Code of Civil Procedure);
- further to a creditor's application lodged with the district court with jurisdiction or with the bailiff attached to that court, depending on who is competent to proceed with enforcement;
- on the request of an authorised body (a court or public prosecutor in cases involving enforcement of fines, financial penalties, court fees and costs of proceedings owed to the Treasury).
Enforcement applications must be lodged in writing or entered to the record orally; the instructions of the enforcement agency must be made in writing. The enforcement order should be attached to the application or request.
Creditors' applications do not need to be lodged via the intermediary of a representative or of another body.
Bailiffs' enforcement costs, expenditure incurred in the course of enforcement and enforcement fees are governed by the Court Bailiffs and Enforcement Act of 20 August 1997 (as amended).
Rules governing the collection of fees:
- enforcement of payments: 15% of the amount of the enforced claim;
- securing of claims: 5% of the amount of the claim after it has been secured;
- seizure of property: fixed fee equivalent to 50% of expected average remuneration;
- transfer of ownership of real estate, designation of a manager on a company's board, vacation of premises (objects and persons): fee equivalent to 40% of expected average remuneration;
- inventory or other list of assets: fixed fee equivalent to 10% of expected average remuneration for every hour or part thereof;
- transfer of ownership to creditors in other cases: fixed fee of 25%; where enforcement is carried out pursuant to further violations of ownership, the fee is increased by 100% each time;
- sealing or removing stamps without drawing up an inventory at the same time: fixed fee equivalent to 4% of expected average remuneration;
- activities involving the police: fixed fee of 25%;
- helping to remove a debtor's opposition and issuing an order to imprison a debtor: fee of 25%, implementation of the custody order is contingent on the creditor paying the fee.
2.2. Conditions associated with the launch of enforcement
Application by the creditor with enforcement order attached. The contents of the application are important (the obligation in question and the way in which enforcement is carried out should be indicated, i.e. the property rights on the basis of which enforcement of payments is to be carried out; in the case of enforcement involving real estate, the land register and the name of the court in which it is located should be indicated; in the case of enforcement involving moveable assets, there is no need to provide further details of the assets involved because in principle enforcement concerns all moveable assets owned by the debtor).
3. Object and nature of enforcement measures?
3.1. What types of assets can be subject to enforcement?
Enforcement may be carried out in respect of:
- moveable assets;
- earned income;
- bank accounts;
- real estate;
- seagoing vessels;
- other claims and property rights.
Enforcement may not be carried out in respect of:
- household equipment, linen, bedding, everyday clothing, work clothes;
- one month's food and fuel supplies for the debtor and their family;
- one cow, two goats or three sheep;
- the requisite tools to engage in paid employment and the raw materials necessary for one week's production, excepting motor vehicles;
- any monies not subject to enforcement (i.e. other than the part of remuneration collected on a regular basis as specified in the Labour Code); if the debtor is not in permanent employment, such monies as are necessary to keep the debtor and their family for two weeks;
- educational materials, personal papers, awards, religious items and everyday items which could be sold only at a significant loss and which are of substantial value to the debtor;
- certain items owned by farmers (indicated in separate legislation);
- amounts and benefits in kind designated to cover business and travel expenses;
- amounts allotted by the Treasury for special objectives (grants, aid), unless the claim was generated by virtue of realising those objectives or as a result of an obligation to pay maintenance;
- non‑transferable rights;
- claims by debtors against State organisational bodies for supplies, work or services before completion thereof;
- personal insurance payments and non‑life insurance compensation.
3.2. What are the effects of enforcement measures?
Unless specified otherwise, under an enforcement order the whole of the relevant claim can be enforced from all parts of the debtor's property. Debtors are entitled to manage their assets unless, as a spouse, they are deprived by the court of the right to manage joint assets. However, when enforcement proceedings involving moveable assets are instituted, the bailiff takes over the said assets and writes an attachment report. Disposal of real estate after attachment does not affect the further course of proceedings, whereas enforcement proceedings involving attached moveable assets may also be instituted against purchasers. However, where there are good grounds for doing so, a bailiff may, at any stage of proceedings, place attached moveable assets under the supervision of a third party, who may be a creditor. In the case of enforcement involving real estate, the bailiff first instructs the debtor to repay their debt within two weeks, failing which he will prepare a description and valuation of the property. Disposal of real estate after attachment does not affect the further course of proceedings. Purchasers may take part in proceedings as debtors. However, legal action taken by a debtor (who runs a business or farm) after enforcement is instituted by the receivers is null and void.
Where debtors are bound by an obligation not to take a certain course of action or not to obstruct action taken by a creditor and they have failed to comply with that obligation, the court imposes a fine on them further to an application from the creditor; debtors who fail to pay the fine are liable to imprisonment. Accordingly, in such cases debtors who fail to settle a fine constituting a coercive measure may be deprived of their liberty.
A bank which fails to comply with the rules governing banks' obligations in terms of attachment of bank accounts, including savings accounts, is liable for the resulting losses incurred by the creditors in question. The civil and criminal liability of banks is governed by the Banking Act. Persons who make false statements or who conceal correct data when providing information to the authorities responsible for banks and banks' customers are liable under criminal law (fine and up to three years' imprisonment), as are persons required to maintain banking secrecy who disclose or misuse information constituting a bank secret (fine of up to PLN 1 million and up to three years' imprisonment).
3.3. What is the validity of such measures?
The Act does not specify any time limit for lodging enforcement applications; however, checks must be made to ensure that the procedural conditions for enforcement proceedings are met (admissibility of court proceedings, national jurisdiction, ability to sue, fitness to stand trial). If these conditions are not met enforcement is annulled.
4. Is there a possibility of appeal against the decision granting such a measure?
Judicial remedies in enforcement proceedings:
- complaint lodged with a district court against action taken by a bailiff (time limit: one week from the date of the action);
- appeal against a court decision to reject a complaint;
- complaint to a district court against a bailiff's decision to impose a fine;
- appeal against a court decision not to annul the aforementioned decision;
- appeal against a court decision in the event of duplication of administrative and court enforcement;
- appeal against a court decision regarding the issue of a declaration of enforceability;
- appeal against a court decision regarding the suspension or annulment of proceedings;
- appeal against a court decision concerning the limitation of enforcement;
- court action against a judgment rendered without the debtor being heard;
- appeal against a court decision concerning the repayment of expenditure incurred by and remuneration of a party responsible for supervising enforcement proceedings involving moveable assets;
- appeal against a court decision concerning the release of monies seized within the framework of enforcement involving moveable assets;
- appeal against a court decision concerning a description and valuation of property within the framework of enforcement involving real estate;
- verbal complaint lodged with a supervising judge against action taken by a bailiff in the course of a sale by auction;
- appeal against a court pricing decision;
- objections to the draft terms of division for the amount obtained from enforcement (within two weeks of the date on which notice was given to the enforcement agency which drafted them);
- appeal against a court decision concerning the resolution of objections to the draft terms of division;
- appeal against a court decision concerning the performance of activities by a creditor at a debtor's expense and appeal against a court decision to order a debtor to perform certain activities, to threaten the debtor with a fine or imprisonment and to cover a creditor's losses;
- objection to a court decision concerning the exemption of property from enforcement with the involvement of the Treasury and businesses.
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