Šimonović announced initiatives to assist the judiciary in the economy

Minister of Justice Ivan Šimonović announced new legislative changes and initiatives to assist the economy, among which are changes to the bankruptcy and enforcement laws.

In addition, Šimonović announced at a working lunch of the Croatian Employers’ Association (HUP) the introduction of personal bankruptcy, the rationalization of the network of commercial courts, and changes to the Law on the Court Register, specifically the e-company project, which would reduce the process of establishing a company to hours rather than days or weeks. Entrepreneurs highlighted to the minister the pressing issue of more than 15,000 companies that have been blocked for over 180 days, with no one initiating bankruptcy proceedings against them or removing them from the court register. Šimonović responded that the laws are good but that the problem lies in practice, as state authorities have the right to initiate bankruptcy proceedings but do not use it sufficiently. He announced that there would also be a reduction in bankruptcy costs.

– Bankruptcy is not a death sentence but can be a chance for a breather, with the primary problem not being the bankruptcy law but the practice – said Šimonović, emphasizing that efforts will be made for better coordination among all bodies involved in initiating bankruptcy. He also announced the acceleration of enforcement proceedings and the introduction of a system of public enforcers similar to public notaries, i.e., private individuals with public authority who would carry out enforcements. To reduce the number of unresolved court cases, Šimonović announced the acceleration of proceedings through procedural laws, stricter judicial standards, and the rationalization of the court network. Announcing the Law on Personal Bankruptcy, Šimonović emphasized that this institution must be adapted to Croatian needs.

From 2004 to 2009, the number of unresolved court cases was reduced by 51 percent, from 1.64 million to 796,000 cases. In civil proceedings, there are 175,800 unresolved cases, of which 60,460 are older than three years. The highest number of unresolved cases is at the Municipal Civil Court in Zagreb and the commercial courts, so Šimonović’s priority is to accelerate proceedings at these courts. For this purpose, ‘specialists’ will be engaged – particularly motivated volunteer judges from other cities who will be assigned cases and will come to Zagreb only for hearings, increasing the number of court reporters and advisors who are cheaper than new judges.
In the Ministry of Justice, they want to deter parties from ‘frivolous litigation’ in commercial courts, as they are often used as a means of delaying payment, and procedural rules are abused to exhaust creditors.

For this purpose, an increase in fees to be paid by parties who lose a lawsuit has been announced, as well as encouraging mediation processes, which would be even cheaper. Šimonović estimates that Croatia would only need four commercial courts (Split, Rijeka, Osijek, and Zagreb) instead of the current thirteen, but he says that this network will be gradually rationalized. The current commercial courts are too small for judges to specialize, and judicial specialization would contribute to better and faster resolution of cases. He also announced the limitation of ‘ping pong’ with cases between the High Commercial Court and commercial courts. The High Commercial Court will no longer be able to return a case to the commercial court multiple times but will have to make a ruling on the second attempt. (M. B.)