Novelties in Litigation in Serbia

Draft Law on Amendments to the Law on Civil Procedure was published

On 19 May 2021, the Ministry of Justice of the Republic of Serbia (the “Ministry“) published on its official website the Draft Law on Amendments to the Law on Civil Procedure (the “Draft“).

Following the application of the Law on Civil Procedure (“Official Gazette of RS“, No. 72/2011, 49/2013, 74/2013, 55/2014, 87/2018 and 18/2020, the “Law “) Ministry noticed the shortcomings that affect the efficient conduct of the procedure itself.

In this regard, some of the changes that should address these shortcomings include the following:

First of all, there are changes in the provisions on local jurisdiction for certain types of disputes, as follows:

• The court in whose territory the plaintiff’s domicile or seat is located has territorial jurisdiction to try disputes in which the Republic of Serbia, the Autonomous Province, a unit of local self-government and their bodies are sued. If the plaintiff does not have a permanent residence in the Republic of Serbia, the court in whose territory the plaintiff has a permanent residence has territorial jurisdiction. The court in whose territory their seat is located has territorial jurisdiction to try disputes against legal entities.

• For the trial in disputes for the protection of the rights of consumers, i.e. users of financial services, the court in whose territory the consumer, i.e. the user of financial services has a residence or seat, has exclusive territorial jurisdiction.

• For the litigation against a company that has a branch outside its seat, if the dispute arises from the legal relationship of that branch, the court in whose territory the seat of that branch is located has exclusive territorial jurisdiction.

In order to further increase the efficiency of litigation, it is envisaged to enable the electronic submission of initial acts initiating the first-instance procedure or the procedure for legal remedies. The submission is submitted in the form of an electronic document via an information system provided by the Ministry (“E-court”).

The submission must be provided with a qualified electronic signature, i.e. a qualified electronic seal in accordance with the law governing the electronic document.

The Draft envisages the right of a party to submit a special revision in order to consider legal issues of general interest or legal issues in the interest of equality of citizens, in order to unify court practice, etc. The special revision is precisely regulated, bearing in mind that precise criteria for determining the admissibility of its submission, mandatory content of the proposal and initiating the procedure for assessing the fulfilment of conditions for its admissibility, the manner of its submission, as well as the procedure for deciding on this extraordinary legal remedy.

Furthermore, the Draft regulates the procedure for issuing a payment order. It comes to deleting the provisions relating to the issuance of a payment order on the basis of a credible document.

The existence of the possibility to issue a payment order on the basis of a credible document was very useful in the period when the possibility to initiate enforcement proceedings on the basis of a credible document was not prescribed. However, with the amendments to the law regulating enforcement proceedings and the introduction of the possibility to initiate enforcement proceedings on the basis of a credible document, the need to issue a payment order in civil proceedings has decreased, as the creditor can directly submit a motion for enforcement on the basis of a credible document. In this way, the litigation court will be relieved of cases related to the issuance of a payment order, which in a certain number grows into a litigation, most often into a dispute of small value.

It comes to change the provisions relating to the dispute of small value. Bearing in mind that the average salary of employees in the Republic of Serbia in 2021 amounts to RSD 62.280,00 net, i.e. RSD 85.864,00 gross, it is not justified to prescribe that a dispute of small value is a dispute in which the claim relates to a claim in cash. which does not exceed the dinar equivalent of EUR 3.000, 00 at the middle exchange rate of the National Bank of Serbia on the day of filing the lawsuit, because the monthly net salary is almost six times less than this value.

Certainly, most of the public reaction was provoked by the new provisions which stipulate that a submission for which the court fee has not been paid within the due date prescribed by the law governing court fees is considered withdrawn.

We note that the public debate on the Draft has just begun, and that the goal of amending the Law is to achieve harmonization with EU standards, improve the efficiency of the judiciary, shorten the length of lengthy proceedings, evenly burden the courts, create conditions for a trial within a reasonable time all in accordance with the revised Action Plan for Chapter 23 and the Action Plan for the Advancement of Serbia on the World Bank rankings.