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Pros and Cons of the Revised EPC

Date of publication: 24 June 2019

Vadym Kizlenko, Counsel, Attorney at Law, Insolvency Receiver

Source: Yurydychna Gazeta

In my opinion, the new Economic Procedure Code of Ukraine (hereinafter referred to as the EPC) has in practice improved the business process.

First of all, it stands to mention the introduction of the principle of inadmissibility of abuse of procedural rights and the establishment of responsibility for violation thereof. This novelty disciplines the proceeding participants and, above all, prevents the delay of trial and provides the opportunity to quickly defend the violated rights.

The new EPC provides for the possibility of the court to leave the statement of claim without action and provide the claimant with an opportunity to eliminate the shortcomings. In practice, this also gives bona fide plaintiffs the right to quickly eliminate the deficiencies and resort to judicial defense of their violated rights. At the same time, the same provision of the EPC provides the dishonest claimants with the right to choose the judge who will consider their case (if the deficiencies are not eliminated within the period set by the court, the statement of claim is returned to the claimant and the claimant has the right to re-apply to the court with the same statement of claim that will be subsequently automatically allocated to another judge).

The best world practices provide for the opportunity of witnesses to participate in the economic proceedings. The new EPC introduced this novelty in the Ukrainian economic proceedings. Now the testimony of witnesses is considered to be the evidence in economic litigation.

Furthermore, the quality of judicial proceedings is now being improved by the introduction of the so-called “advocate monopoly” which means the representation of interests in court by the attorneys at law (advocates) only (with the exception of minor cases and self-representation).

The new revision of the EPC envisages two forms of economic proceedings, namely: 1) writ proceedings; and 2) action proceedings that are divided into general and simplified proceedings.

In order to simplify and speed up certain categories of cases, the Code provides for an opportunity to consider such cases in the form of writ proceedings in the event of claim to recover monetary debt under a contract concluded in writing, if the amount of such claim does not exceed one hundred subsistence minimums for able-bodied persons. Thus, the writ proceedings are intended for consideration of cases on claims for debt recovery under the contracts, where the claimed amount does not exceed one hundred subsistence minimums for able-bodied persons.

Another novelty of the EPC is a simplified action proceeding, designed to consider minor cases, cases of minor complexity and other cases for which a prompt resolution is a priority. In this case, the minor cases are: 1) cases in which the amount in dispute does not exceed one hundred subsistence minimums for able-bodied persons; 2) cases of minor complexity recognized by the court as minor, except for the cases subject to consideration by the rules of the general action proceedings only and cases where the amount in dispute exceeds five hundred subsistence minimums for able-bodied persons.

The revised EPC envisages a new procedure for consideration of motions to recuse the judge. The issue of judge recusal is decided by the court considering the case. The court shall satisfy the motion if it comes to the conclusion that it is justified. If the court finds that the said recusal is unjustified, it shall decide to stay the proceedings. In this case, the issue of judge recusal is considered by a judge who is not participating in consideration of the case according to procedure established by Article 32(1) of the EPC.

As a rule, a judge – in order to eliminate the questions pertaining to his/her bias (fairness) – rarely satisfies the motions for his/her recusal. Pursuant to the requirements of the EPC, he/she stays the proceedings and submits the motion for judge recusal to the colleagues, who are usually reluctant to satisfy such motions as well. As a result, the party seeking the recusal does not achieve the desired result and the proceeding is delayed. Moreover, the interested party is not deprived of its right to seek a recusal of the same judge on any other grounds.

In addition, the revised EPC establishes a new procedure for the consideration of cases due to newly discovered circumstances, namely, the relevant statements of claim are considered by a judge who has already decided on the merits in this case. On the one hand, this helps to reduce the time for consideration of the motion for review of a decision due to newly discovered circumstances, since the judge is already familiar with all materials and the actual circumstances of the case. On the other hand, this review procedure gives rise to doubts about the bias (fairness) of the judge.

The revised EPC introduced the Unified Judicial Information and Telecommunication System. Unfortunately, it is not working yet. Therefore, it is impossible to assess its practical application, however, in my opinion, such a system will definitely have a positive effect, since it will digitize the legal proceedings and allow all procedural actions to be carried out with a help of electronic means having appropriate identification and security mechanisms, which is a quite progressive step forward that will save time for both attorneys (representatives) and judges.