"I stand for the formula that the case should be considered on the basis of reasonable time limits", — Ivan Mishchenko, Managing Partner at Trusted Advisors Law Firm, says
— What are the objectives of adoption of new procedural legislation?
— The new economic process is a call of the times. To keep pace with the times, it is necessary to adopt a new Economic Procedural Code of Ukraine. For me, the main idea of the new EPC is to improve the quality of justice. This should enhance the confidence in the judicial system and interest of foreign investors, and it should lead to more clear and coordinated work of all economic jurisdictions.
— What procedural institutions should be taken into account when improving the draft EPC?
— There are institutions which it is necessary to introduce, but, due to external or internal reasons, they are not introduced. First of all, I am referring to the e-court. We are living in times when each year sees the release of a new iPhone, and 4G or 5G wireless systems may occur in the near future, but we keep filing written documents via an administrative office. The other party, in 99% of cases, sees these documents only before the court session and this is inconvenient. Even to obtain a simple petition on familiarizing oneself with case papers one has to draw up, sign, and queue in the office in order to file it, and wait for the judge's resolution, etc. Electronic technology will make going to court more convenient.
The second point to which I would like to draw attention in the new draft EPC is the abuse of procedural rights. It is notorious that abuse exists and nobody denies its existence. However, at the moment, judges do not have enough tools to combat it. For example, a judge cannot refuse to accept a statement of claim upon the pretext that it is filed exclusively with the purpose of delaying a process. If a statement of claim technically complies with the requirements of EPC (details, stamp duty and some text), the judge shall accept it and hear the case even if everyone understands perfectly well that there is no legal content. The same can be said about various other petitions filed during the process.
The draft EPC provides for tools to combat abuse of procedural rights. Only time and practice will show to what extent they are effective. In the course of public hearings devoted to this issue, a lot of courts criticized the corresponding regulations. According to them, the provisions are uncertain and are not clearly specified. However, this is where we can and should start. Currently, we have only the explanation of the Supreme Economic Court of Ukraine, which states, in general, that abuse shall be combated, but does not provide real tools, except for the interlocutory judgment and, to be honest, this is clearly not enough.
— Speaking about the mechanism of injunctive relief in the new EPC, what do you think about the necessity to post a bond?
— The draft EPC provides for the major change of the procedure and injunctive relief mechanism. This institution will be significantly improved. The basic difference is that a person wishing to obtain injunctive relief, shall post a bond on the deposit account of the court and this amount shall be a certain guarantee with regard to the defendant. If it turns out that the interim remedy is unfair or does not have solid grounds, the defendant will be able to recover his/her losses from the amount on the court's deposit account.
This tool has been discussed for many years and, in terms of striking a balance, it is necessary because, at the moment, the ratio of a plaintiff is higher. If the interim remedy is canceled at any stage, for example, at the stage of cassation, then the defendant cannot be charged with all these direct and indirect damages incurred by the defendant.
— Are there any proposals to settle the problem of endless review of judgments?
— The grounds and time limits for the review of judgments is another revolutionary point of the new draft EPC and it should be considered inseparably from the period of the examination of the case at first instance, from the quality and validity of judgments as a whole.
Judges say that in order to meet all procedural terms they should pass 7-8 judgments per day, but this is physically impossible. I stand for the formula that the case should be considered on the basis of reasonable time limits. There will definitely be a great deal of discussion as to what should be considered as "reasonable" and the judges may also have the opportunity for abuse, but the existing enormous workload is unheard of. The new code’s developers are working on mechanisms to reduce the number of applications to the courts.
The second important principle that, I hope, will be implemented through the new code is moving from formal justice to real justice. Unfortunately, judges like to hide behind the wording of articles, but at the same time, sometimes, it is difficult to understand why the court rendered exactly this verdict. We have a certain text with a lot of references to regulations of substantive and procedural law, but why the arguments of the one party seemed more preferable to the court than those of the other party is anybody's guess. By so doing, the court gives grounds for further appeals and for the case to be referred for fresh examination.
— What is your assessment of the influence of the attorney's monopoly on legal representation? What changes should be made to implement this constitutional provision?
— I, for one, support the monopoly. There are several reasons. Firstly, if we are improving the quality of justice it should be improved in all respects of the process. If we improve the quality on the part of a court, consequently, there should be improvement on the part of the representatives ad litem. Attorneys, unlike representatives, bear responsibility for their work up to decertification. An attorney, being aware of this, will not use his/her right to the detriment of another one.
The draft EPC proposed at the moment is more complicated and twice the size of the current one, a range of institutions is being included in it, the very process becomes more complicated, there are more tools (for example, summons of witnesses, the possibility to interrogate them during the very process and to engage experts in the law). The issue of specialty is quite relevant in such a case.
— Does the draft EPC provide for mechanisms of compensation of actual costs for legal fees?
— Court fees are an important innovation which cannot be set aside. If the draft EPC is fundamentally adopted in its current form, the parties will have the opportunity to claim recovery of legal fees both direct and those connected with the necessity to hire external advisers and attorneys.
All these years, judges, let's put it this way, have had a peculiar attitude towards compensation issues. Judges cannot be everywhere and it is difficult to explain to them hourly charges and their rate. It is considered normal if the judge provided for compensation of one tenth in his/her judgment, despite the fact that the issue here is set market rates that are known to everyone.