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Last update: 30-10-2006
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Interim and precautionary measures - Finland

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TABLE OF CONTENTS

1. What are the different types of measures? 1.
2. What are the conditions under which the measures may be issued? 2.
2.1. Procedure 2.1.
2.2. Substantive conditions 2.2.
3. Object and nature of measures of this kind 3.
3.1. What types of assets can be subject to the measures? 3.1.
3.2. What are the effects of the measures? 3.2.
3.3. What is the validity of the measures? 3.3.
4. Is there a possibility of appeal against the measure? 4.

 

1. What are the different types of measures?

In Finland a debtor or other defendant in civil or commercial proceedings may obtain precautionary measures in his favour. The purpose of precautionary measures is to ensure that a ruling to be given later on the merits can be enforced. The provisions governing the ordering of precautionary measures are set out in Chapter 7 of the Code of Procedure and provisions on the enforcement of judgments in Chapter 7 of the Debt Recovery Act. There are three types of precautionary measures of this kind:

  1. seizure to secure a financial debt owed,
  2. seizure to secure ownership or another prior right and
  3. other precautionary measures (general precautionary measures).

These precautionary measures, which are available in civil matters of any kind, are described below. There are also precautionary measures which are available in certain kinds of disputes under special legislation. Examples include precautionary measures to secure evidence in civil matters concerning industrial rights and copyright. In criminal matters the Coercive Measures Act may be applied; coercive measures provided for in the Act include seizure, restraint on disposal and sequestration.

There is a distinction between precautionary measures and preliminary (interim) enforcement of a judgment in a civil matter. The latter refers to the enforcement of a judgment before it has become final or non-appealable. A judgment in a civil matter which is not yet final is generally directly enforceable in law, but enforcement cannot usually be carried out in full. For example, under a non-final judgment given by a court of first instance on debts due, the debtor’s property may be seized where the debtor fails to lodge security on the debts due. The property seized may, however, be disposed of and the proceeds settled on the creditor only if the creditor lodges security for them. By contrast a judgment by default is immediately fully enforceable.

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2. What are the conditions under which the measures may be issued?

2.1. Procedure

The decision to order the precautionary measures referred to is taken by a general court (a district court of first instance). Precautionary measures ordered by a court are implemented by a bailiff. Applications for precautionary measures are made to the court where the legal proceedings on the merits are pending. Where legal proceedings have not yet been instituted, an application for precautionary measures should be made to the district court where the proceedings on the merits are likely to be brought. There is no requirement to be represented by a lawyer in Finland, but where representation is through a lawyer, the type of lawyer engaged is usually a lakimies.

The court cannot finally approve an application for precautionary measures without giving the defendant an opportunity to be heard. The court may, however, grant an applicant’s request for interim precautionary measures without giving the other party a hearing where the purpose of the precautionary measure may otherwise be defeated. In practice precautionary measures can be obtained very quickly. An interim decision is valid until a decision is made to the contrary.

Where an applicant already has grounds for debt recovery but the recovery cannot be implemented immediately, a bailiff may, under certain conditions, directly issue temporary precautionary measures. Below we will consider only precautionary measures ordered by a court.

2.2. Substantive conditions

The requirements for ordering seizure to secure a debt due or a prior right are as follows:

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  1. the applicant must make an arguable case for having a distrainable debt due from the defendant or prior right to given property and
  2. there must be a danger that the defendant will act in such a way as to endanger the debt due to the applicant or the applicant’s right.

Correspondingly, other precautionary measures require prima facie evidence of another right and a danger that the defendant may infringe that right.

Before the precautionary measures are enforced the applicant must lodge security with the bailiff.

3. Object and nature of measures of this kind

3.1. What types of assets can be subject to the measures?

Property of all kinds can be the subject of precautionary measures. If the purpose of seizure is to secure a debt due, the court orders moveable or immoveable property belonging to the defendant to be seized to the value known to secure the debt due to the applicant. The bailiff then decides which items of the defendant’s property are to be seized under the interim order. If the purpose of seizure is to secure a prior right, the court orders specific property which is the subject of the right to be seized and the bailiff enforces the order against that property.

By way of other precautionary measures, the court may:

  1. under threat of a penalty, prohibit the defendant from doing something or from entering into something;
  2. order the defendant, under threat of a penalty, to do something;
  3. authorise the applicant to do something or have something done;
  4. order the defendant’s property to be placed in the possession or custody of an agent; or
  5. order some other precautionary measure required in order to secure the applicant’s rights.
3.2. What are the effects of the measures?

When an order to seize property is implemented, the debtor forfeits his authority over the property. It is an offence to handle property which is the subject of a seizure order. Where funds in a debtor’s bank account have been made the subject of a seizure order, the bank must not release the funds to anyone other than the bailiff. A seizure order does not, by contrast, afford the person who applied for the order any preferential right, in relation to the debtor’s other creditors, to the funds which are the subject of the order.

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The effects of other precautionary measures depend on the content of the measures.

3.3. What is the validity of the measures?

Within one month of the decision ordering precautionary measures being given, the applicant must bring an action on the merits before a court or institute another procedure which may result in an enforceable decision, such as arbitration. If he fails to do so, the precautionary measures will be withdrawn. They may also be withdrawn if for some other reason the grounds on which they were issued no longer obtain. When a court is to give a ruling on the merits it must at the same time make an order on the precautionary measures.

The applicant is primarily responsible for costs incurred as a result of the precautionary measures. Where the precautionary measures prove to be unfounded, the applicant is liable for damage caused to the defendant because of the measures, regardless of whether he was negligent. To cover that eventuality the applicant must lodge security prior to the enforcement of the precautionary measures. Generally speaking, the defendant may prevent precautionary measures from being enforced by lodging security.

4. Is there a possibility of appeal against the measure?

An appeal may be lodged at a higher court (Court of Appeal, Supreme Court) against the decision of a court to order precautionary measures. Appealing does not prevent a decision from being enforced unless the court hearing the appeal suspends that decision. However, there is no possibility of appeal against a decision on interim precautionary measures.

An appeal may be lodged at a District Court against a measure or decision taken by a bailiff concerning the enforcement of precautionary measures. The appeal can also be made by, for example, a third party who takes the view that his own property has been seized as a result of the debtor’s debt.

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Last update: 30-10-2006

 
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