Litigation in Croatia
Croatia is a country with a strong economy, beautiful beaches, and a cool museum dedicated to breakups. And while its constitution is only 33 years old, it has a sophisticated system for resolving commercial disputes. I didn’t get to learn more about that system when I visited the country a few years ago, so I was excited to speak with Irena Pikija, an attorney in Varaždin, Croatia to learn more about litigation in her country.
Why should you continue reading this post about litigation in Croatia?
You learned all about litigation in Yugoslavia, but then learned that it ceased being a country in 1992, and now want to learn about litigation in the same geographic area.
You want to know more about how Croatia’s entry into the European Union has affected commercial litigation there.
You want to see a post with a Ž with a caron on top of it.
Irena Pikija is an attorney in Varaždin, Croatia.
Can you tell me about the kinds of disputes you handle in your legal practice?
My firm operates in Zagreb and Varaždin. And in our office, we mainly deal with civil law cases. To be more specific, we handle disputes in the field of compulsory law, which includes commercial, labour, and family law. In addition to rich experience in the aforementioned areas, we also have experience in economic criminal matters.
As for contractual relations, we cover various investments of foreign investors in the Republic of Croatia, based on significant experience in the field of land registry and administrative law.
What type of clients do you generally represent in disputes?
We have the most diverse client profiles: from large international corporations, various trading companies and craftsmen, to natural persons with whom we cooperate on various projects, including contractual relations, litigation, and land registry matters.
We also represent one small bank, both in collection procedures and in administrative procedures related to banking regulations.
Besides Microsoft Office, what software do you use in your practice?
In addition to Microsoft Office, in our work, like most lawyers in Croatia, we use Adobe Acrobat Reader and an application that supports electronic communication with the courts.
What books and websites do you use for legal research?
For the purpose of legal research, primarily searching for case law, we mostly use IUS INFO, a legal information portal where case law from all legal areas is available. It has a very simple search method and also very useful expert articles from a wide range of legal matters. It also allows us to monitor business entities and court proceedings at the Municipal and Commercial Courts.
It goes without saying that we enrich the legal library with updated editions from various areas of legal literature, as well as commentaries on laws and the like. Regardless of the availability of digitized forms of all kinds of legal sources, I must say that we still adore the smell of a book and the sound of turning pages.
Image credit: https://en.wikipedia.org/wiki/Supreme_Court_of_Croatia#/media/File:Supreme_Court_of_the_Republic_of_Croatia.jpg
Do you electronically file pleadings with the court? Or must you send paper copies of them to the courthouse?
Communication with the courts takes place electronically. It is not necessary to print documents or submissions except for your own file.
The Ministry of Justice edits and makes available an application that enables lawyers, notaries public, courts, court experts, and other official participants in court proceedings to communicate electronically with all courts. The application is available here: https://usluge.pravosudje.hr/komunikacija-sa-sudom/pregledOtpravaka.xhtml.
Only authorized persons who officially participate in the procedure, as well as the parties, have access to these electronic communications.
Does Croatia have specialized courts that only hear commercial cases?
Yes. Commercial courts are special courts that judge commercial disputes, which usually means that the parties are trading companies or entrepreneurs. These are, for example:
disputes regarding the establishment, operation, and termination of companies
disputes concerning the management of a company and the running of a company's affairs
disputes about the responsibility of management members or company members for the obligations of the company
bankruptcy disputes
disputes related to ships and navigation at sea in inland waters and disputes in which navigation law is applied
disputes related to aircraft
disputes related to the protection and use of industrial ownership, from intellectual property rights, unfair market competition, and the like.
Lawsuits are submitted to the Commercial Courts based on the type of dispute. Courts monitor real jurisdiction ex officio, so as soon as the Court receives a complaint, it must first check whether it actually has jurisdiction.
There are certain specifics in the proceedings before the commercial courts, so for example the parties will primarily communicate through submissions, the evidence will first of all be based on written documents and documents, but if necessary, personal evidence such as the hearing of witnesses or parties will be conducted. Courts may, even without the proposal of the parties, request expert opinions and information from third parties, especially chambers of commerce and trades, about which there is no knowledge, and they will also apply trade customs if they are in use. It is also possible for the parties or witnesses to give their testimony in writing, with signatures notarized by a notary public, instead of directly testifying.
Commercial courts in Croatia continue the work of courts from the former Yugoslavia, then called Economic Courts (Act on Economic Courts from 1954). However, it should be emphasized that the concept of commercial courts and commercial matters in Croatia (for the most of the areas of the Republic of Croatia today) has been known and active since the time of the adoption of the Croatian Commercial Code from 1875. In 1876, the Law on Commercial and Exchange Jurisdiction and Proceedings before Commercial and Exchange Courts came into force. At that time, the jurisdiction of the courts for keeping commercial registers was regulated, which also appeared as a need in the implementation of the Commercial Law.
Croatia joined the European Union about ten years ago. Has its entry changed the process for commercial lawsuits at all?
Since Croatia’s accession to the European Union in 2013, Croatia has been continuously implementing judicial reforms, i.e., harmonization of the system with the acts of the European Union, in order to achieve harmonization in principles and the right to access justice and a fair trial.
As a member state, Croatia has incorporated into its legal system the Regulations of the European Parliament and the Council and European procedural rules. One example is the application of EC Regulation No. 1896/2006 of the European Parliament and the Council on the introduction of the procedure for a European order for payment. Another example is Regulation No. 2020/1784 of the European Parliament and of the Council of 25 November 2020 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters.
Who decides the facts in a commercial case? Is it a judge or a jury?
In Croatia, there is no jury in the sense of the Anglo-American jury system. Judicial power is exercised by professional judges, who are lawyers.
In the criminal process, except the professional judges, lay judges are involved. Jury members in criminal proceedings are citizens who are not lawyers, and who thus represent the citizens of the Republic of Croatia and their presence in judicial matters and represent the “voice of the people.”
Generally speaking, how many pages are the complaints or initial pleadings you see in your work?
Every application is drafted individually, but generally speaking initial pleadings are roughly between 3-25 pages.
Generally speaking, how long does it take for a case to go from complaint to judgment?
The duration of court proceedings depends primarily on the type of court before which they are conducted, but also on the type of the proceedings themselves.
The law allows for urgent procedures, such as enforcement procedures, procedures based on proposals for temporary measures, procedures for interfering with property, and procedures in labour disputes that must be completed within a certain period.
For procedures which are not defined as urgent, Croatian law provides for reasonable deadlines within which they should be completed. These deadlines are, however, of an instructive nature, that is, they serve as guidelines for the Court and are not enforceable.
The duration of the proceedings before the Commercial Court also depends on the merits, i.e., whether it is a relatively simple charge for services or goods or whether it is a complex dispute, for example from a construction contract. Therefore, it is difficult to average the duration of the procedure, but it can be said that the average procedure under the jurisdiction of the municipal courts will last two to three years, until the final conclusion, while commercial disputes will still take longer on average until the final conclusion.
Generally speaking, how is evidence exchanged between the parties before trial? Do you get to interview the opposing witnesses before the trial?
In Croatia, there is no preliminary presentation of evidence as there is in Anglo-Saxon law. The parties may not officially interrogate or officially collect evidence outside the scope of the procedure being carried out.
In criminal proceedings, however, it is possible for the lawyer to officially question the witnesses and make an official note about it.
As a rule, evidence is presented at the main hearing. Whether in criminal or civil proceedings, the principle of contradiction is expressed, which implies the right to cross-examine witnesses and parties.
If you win, does the other side reimburse your attorneys’ fees?
The costs of the proceedings shall be borne by the party that loses the dispute. If the result of the procedure is a partial success, the Court decides to what extent each party bears the costs.
In criminal proceedings, the costs are borne by the court’s decision if the defendant is found guilty.
Are the Croatian courts open to the public? Can ordinary people watch a commercial trial?
Proceedings in Croatia are public, which means that the public is free to attend discussions pursuant to the principle of publicness, according to which the work of state services should be public. In this context, every citizen can follow the proceedings before the Commercial Court (although this is extremely rare due to lack of interest).
In some situations, the public can be excluded, either because the law directs such an exclusion (for example, in personal status matters such as marriage disputes, custody disputes, or about who a minor child will live with), and it is also possible for the public to be excluded by a Court decision (when for example required by reasons of morality or general safety).
Do you believe that Croatian courts have a particular strength for resolving commercial disputes? How about a weakness? What are they?
The strengths of the Croatian commercial court system is that the courts specialize in cases between economic entities, such as for bankruptcy process and in other cases as I have mentioned above. Also, the procedure before the commercial courts is faster and is based on documents primarily, meaning the process can be efficient.
What could be improved is further sub-specialization of judges to be even more focused on specific commercial areas, and the improvement of information technology support for the remote submission of evidence or hearing of witnesses, especially in disputes with an international element.
How often do you go to the courthouse?
We go to court as scheduled, sometimes every day during the working week.
When you are there, do you need to wear a special robe or wig?
In Croatia, there is no obligation for lawyers to wear special clothes or wigs. It goes without saying, however, that the lawyer will be formally trained in accordance with the fashionable rules of the business world.