28 Dec, 2015

The New Enforcement and Security Act

The new Enforcement and Security Act was adopted on 18 December 2015, and will be effective as of 1 July 2016.

The most prominent changes under the new act are:

  • the introduction of certain legal institutes which were, in an effort to promote expediency and efficacy, omitted in the current version of the act;
  • a redefinition of the competence of the courts and public enforcers;
  • the status/role of public enforcers, and their increased disciplinary accountability.

Most importantly, the new Act introduces the possibility to lodge an appeal against both the decisions  of the court and of the enforcer, except in cases where the law explicitly excludes the possibility of an appeal. As expedience is certainly one of the hallmarks of modern enforcement procedures, an appeal does not delay enforcement of the contested decision.  Additionally, both the appeal and the complaint can be lodged only once, with the adjudicating court being obliged either to reverse, confirm or revoke the contested decision.

Unlike the current version of the Act, which explicitly prohibited it, the new Act makes a provision for deferment of enforcement proceedings where a reasoned proposal is filed by a creditor, debtor, and in some instances – a third party.  Likewise, it introduces the use of expert witnesses and also allows restitutio in integrum in limited cases.

The Act also introduces certain changes to the competence of the courts and enforcers.  What remains unchanged is their competence for deciding on motions for enforcement – the courts have exclusive competence to adjudicate on motions for enforcement based on enforceable or credible documents, while it is within the exclusive competence of private enforcers to rule on motions for enforcement based on credible documents for utility services provided.  On the other hand, the courts and public enforcers no longer share “parallel” competence in conducting enforcement proceedings.  The courts have exclusive competence over the conduct of enforcement proceedings that entail comprehensive sale of real estate and the movable property, and enforcement proceedings with regard to family law and the reinstatement of employees.  Enforcers are given much broader competence, as they are exclusively competent to conduct all other enforcement proceedings based on enforceable or credible documents.

The new Act also regulates in detail the status of enforcers and their role in enforcement proceedings.  As previously mentioned, they are given broader competences and are no longer seen as a stakeholder whose dominant role is to ensure the expedience of enforcement proceedings, but also to ensure that the vested interests of both the creditor and debtor in the enforcement proceedings are preserved.  Their new position is also highlighted through the change of their title to “public” enforcers.  But with this title also comes the responsibility, as the Act sets down additional eligibility criteria for appointing public enforcers (such as having passed the bar exam) and increases their disciplinary accountability.

———————————–

1Decision allowing restitutio in integrum, Decision dismissing a complaint (Rešenje o odbijanju prigovora), Decision deferring enforcement proceedings

Share on LinkedInShare on FacebookTweet about this on TwitterShare on Google+Email this to someone