Justyna Zandberg-Malec

Stronger position of creditors

It may be possible to obtain quicker, cheaper payment of debts secured by a bank guarantee, insurance guarantee, bank letter of credit or bank surety.

On 1 July 2010 a bill to amend the Civil Procedure Code was submitted to the Polish Bar Council for comment. The bill was prepared by the special parliamentary committee for a “user-friendly state,” whose brief is to cut bureaucratic red tape.

The purpose of the proposed amendment is to strengthen the position of a creditor holding security in the form of a bank guarantee, insurance guarantee, letter of credit or bank surety. Currently, if the principal debtor refuses payment, the creditor is left to the mercy of the bank or insurance company. The creditor’s only resort is a summary proceeding, but an order for payment issued in such proceeding cannot be used by the creditor to execute or secure its claim, and if the debtor files an objection the order for payment lapses. The creditor can then pursue its claim only in a full civil proceeding, which is time-consuming, not to mention costly, as the filing fee on the petition in a summary proceeding is 5% of the amount sought (but no more than PLN 100,000).

The changes proposed by the “user-friendly” committee are designed to equalise the position of a creditor secured with one of these instruments with the much stronger position of a creditor holding a bill of exchange, check, endorsement or warrant. Among other changes, the proposed amendment would add the security instruments mentioned to the list of instruments that serve as grounds for immediate issuance of an enforceable order for payment in a proceeding for order of payment (amending Civil Procedure Code Art. 485 §2 and 492 §3).