30 march 2017 2017-03-30

The document will expand the range of cases suitable for simplified procedure, unload the judges and make it more difficult to abuse procedure. The draft allows to use simplified procedure in real estate disputes and repeals the value limits for certain categories of cases. These procedural amendments were discussed by the Supreme Court judges and lawyers of consultancy firms. 

Today on March 23 the Plenary Session of the Supreme Court has discussed and suspended the draft Resolution on simplified judicial procedure in courts of general jurisdiction and commercial courts. This is how the courts consider the cases with relatively small amount of claims: without preparatory stage, hearings, minutes and some other necessary attributes of the general procedure. The explanation is needed, because in March 2016 the simplified procedure was introduced in the Code of Civil Procedure and to some extent in the Code of Arbitral Procedure, stated Anatoly Pershutov of the Supreme Court at the hearing.

These novelties cast questions not only in courts of general jurisdiction, but also in commercial courts that have taken their chance to collect certain experience in this area, said Pershutov. He specified the main goals of the documents: to optimize procedure and to unload courts.

It was exactly because this new institution was questionable among judges they frequently avoided the simplified procedure in favor of more clear and well-functioning general claims procedure, stated Roman Zaitsev, partner at Dentons. Therefore the Supreme Court's clarifications are so necessary and long-awaited for legal community, he agreed. At the same time, these new rules are mostly based on the repealed resolution of the Plenary Session of the Supreme Court dated 8 October 2012 No. 62 “On certain issues of considering commercial cases in simplified procedure”, Judge Pershutov says.

The document expands the range of cases considered under the "simplified procedure" and thus relieves judges of unnecessary work and puts a barrier to procedural abuse. Its main points were commented on by Judge Reporters of the Plenary Session and - at the request of – by practitioners.

Distinctions between simplified, summary and general claims procedures.

How do they distinguish is a serious question, since under provisions of the law, many cases can be considered in one and another procedure, says Artem Kukin, partner at Infralex. As recalled in the draft resolution, summary procedure is needed where there is no dispute as to the law. And when there is one, the simplified procedure is allowed. As the document says, one can resort to it when the case can not be examined in the summary procedure. And also - when the court refused to issue a court summary judgment or the judgment was canceled. In this case, it is necessary to provide the court with a copy of the decision on refusal or cancellation, otherwise the application will be left without motion, warned the Supreme Court judge Elena Getman.

In turn, the simplified procedure can not be avoided where it is explicitly provided. It happens so that some third parties are “fastened” to the claim so that it could get the general claims procedure, says Kukin. But by itself the reference to third parties in the application does not clearly indicate that the general procedure should be applicable according to the draft resolution.

The final value of the claim may be clarified during the process, and this may affect the choice of the procedure in the case. For these purposes, the draft resolution clarifies how the judges how should proceed to the general order of procedure, when the plaintiff, for example, has increased the amount of claims. The court can produce a decision on this not only during the consideration of the case, but also during the adoption of the application, Judge Pershutov said at the hearing. It is impossible to appeal such a ruling, said the judge.

In a word, summary procedure has priority over the simplified one, and simplified has the same over the general claims procedure. But still the criteria in the draft lack clarity, Kukin states, and "there is still a wide scope for judicial discretion."

Which cases can be considered in simplified procedure

Laws define only the upper price limit for certain categories of cases: up to 50,000 Rubles for magistrate judges, up to 100,000 Rubles in courts of general jurisdiction, up to 250,000 Rubles or 500 000 Rubles in commercial courts for legal entities and individuals. But it is not specified, how is this amount established. The draft resolution specifies that it includes the main debt and all kinds of interest and penalties. If there are several claims, they must be counted in combination. It is possible to consider in a simplified procedure the claims in which there are certaim inseparable property and non-property claims side by side. For example, this happens when a consumer demands to recover a pecuniary amoun and compensation for moral damages.

In practice, there was often a question whether the disputes to demand real estate or to determine its value do fall under the simplified procedure, says Andrei Naberezhny of Liniya Prava. They do, replied the Plenary Session in the draft resolution. It also explained how to calculate the amount of the claim. The price of real estate is determined by the cadastral value. If there is no such information, market value should be taken as a basis. The price of movable property is also determined in this way. In practice, it will not be easy to find a price threshold for the simplified procedure, worries Kukin: "The market value can be substantiated by both parties or experts. The definition of the price can be a subject of a dispute, and a very difficult dispute. " The market value is a difficult criterion, Naberezhny admits: he doubts that before going to court, the plaintiff will be wasting money on the evaluation, if it has not already been made. At the same time, he adds, it is difficult to find an alternative to it. And meanwhile Kukin questions the very idea that complex real estate disputes may be considered in simplified procedure.

Under Art. 227 (2) (1) of the Code of Arbitral Procedure it is possible to challenge the regulations issued by public bodies or officials, if the fine or other penalty does not exceed 100,000 rubles, the draft resolution says. In addition, it allows one to appeal against warnings, which is a milder form of administrative punishment than a fine. Thus, the Plenary Session is interpreting the procedural norms extensively and seeks to expand the number of disputes in simplified procedure. Given the number of such administrative offenses, this may significantly relieve courts, as Naberezhny predicts.

The parties can agree that their disputes to be considered in simplified procedure, regardless of the nature of the case. This explanation is offered by the Plenary Session. In addition, irrespective of the amount of the claim the simplified procedure may cover the disputes in which the defendant recognizes the debt in writing, but does not pay. The same rule is proposed to apply to cases on the basis of documents confirming the debt under the contract. If they, of course, are not considered in summary procedure, the draft specifies. There are many such cases, therefore, the simplified procedure may involve disputes regarding significant amounts, Zaitsev believes.

The draft resolution does clarify how to confirm the debt. Monetary obligations are established by, for example, contracts, and the debts on them can be confirmed by the documents in which the respondent agrees that he has a debt to the plaintiff (a receipt signed by the respondent, a response to the claim, an endorsed reconciliation statement), the resolution says. It refers to such papers and the "unpaid" tax return. It is important to specify only those documents that clearly indicate the recognition of the debt, Naberezhny considers: "Often the court accepted as such confirmation various indirect evidence, for example, correspondence with an employee who was not authorized to recognize the debt."

How to issue judicial decisions in simplified procedure

A motivated decision is made only upon the application of the party to the dispute (Code of Arbitral Procedure), but it can also be issued by sole discretion of the court (Code of Civil Procedure). Most often there are short decisions, which, however, should contain the basis for the occurrence of a duty (for example, a contract specifying its requisites), the composition of the recovered debt (principal debt, interest and penalty), the period for which the recovery was made. Naberezhny finds these requirements quite favorable: the defendant and third parties should know the basis of the debt. Often, to find it out, one had to go for a motivated decision, says Alena Bachinskaya of S&K Vertical.According to judge Pershutov, who spoke at the Plenary Session, this will help to avoid problems when executing a decision or re-collecting the same sums. And it will be useful while considering other disputes of the parties, added judge of the Kaluga region Marina Nosova.

In addition, the draft resolution allows to ask for a full decision only after the court has passed the operative part of its decision. It is inconvenient for the participants of the dispute, as several lawyers stated altogether. But, adds Naberezhny, the rule will save the superfluous work of judges, because the party can in any case ask for a motived decision in advance, even if it is not needed.

"Based on the essence of simplified procedure," not only decisions, but also rulings (for example, rulings to terminate of to establish judicial costs) can be compiled with very quickly," Pershutov said.

How does the Resolution fight with abuses?

The resolution obliges the participants of the case to take all measures to ensure that the necessary papers (including electronic ones) arrived to the court before the expiry of the term specified in the ruling. At the same time, one should take into account the mileage of letters at the post office, which does not excuse the late party with the documents. It could have sent them in advance. This clarification will help to curb the process and facilitate the work of the court, Naberezhny suggests: "In practice, unscrupulous defendants often filed a large number of complaints on the grounds that they formally sent documents on time. The judges tried to get reinsured and waited until the deadline for the submission of documents. "

If the party in the case proposes documents to the court, but has not proved that it sent them to other parties to the dispute, such evidence is not accepted, the draft resolution is quite categorical in this sense. Such a refusal can not be appealed, the document says. The court does not reject those papers that arrived late without valid reasons.

Amicable settlement and appeals

The draft resolution allows an amicable agreement in simplified procedure. The parties can propose its project before the expiry of the case (including electronical ways). The court assesses the settlement agreement in the hearing. If the document is not approved - the case goes on the "general" rails, reads the draft document.

The plenary session tried to resolve the disputed issue in the agro-industrial complex: it is possible to draw up a complete decision only upon the request of the party, but what if there was no such desire, and the appeal was appealed against in appeal? Pershutov said that in preparing the draft the working group considered three options. The first was to apply legal analogy with the Code of the Civil Procedure, which allows making a complete decision when the court thinks they were due. The second was to oblige the court of first instance to draw up a motivated act based on the proposal of the appeals court. And the third (which eventually won) was to provide the commercial courts with the discretion to decide whether a complete solution is necessary.

In addition, the clarifications eliminated the ambiguity of Art. 229 of the Code of Arbitral Procedure, which provided for appealing against "simplified" decisions only to the appellate and cassation courts. In the Supreme Court, too, says the document, it was also possible. True, it does not say on which grounds - on general ones or only on unconditional procedural grounds, notes Ilya Dedkovsky, senior lawyer at KIAP.

The draft resolution of the Plenary Hearing of the Supreme Court "On certain issues of application by courts of Code of the provisions of the Code of Civil Procedure of the Russian Federation and the Arbitral Proecure in the Russian Federation based on the Simplified Procedure" is available here.

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