PAGE 05 THE NEW LEGAL REGIME ON SERVICE IN MEMBER STATES OF JUDICIAL AND EXTRA JUDICIAL DOCUMENTS IN CIVIL AND COMMERCIAL MATTERS

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1 Newsletter nr 17 December 2008 Abreu Advogados PAGE 02 NEW LAW OF ORGANIZATION AND FUNC- TIONING OF THE JUDICIAL COURTS PAGE 03 MEASURES TO SIMPLIFY THE ENFORCEMENT PROCEDURES PAGE 05 THE NEW LEGAL REGIME ON SERVICE IN MEMBER STATES OF JUDICIAL AND EXTRA JUDICIAL DOCUMENTS IN CIVIL AND COMMERCIAL MATTERS EDITORIAL The second semester of the current year has been distinguished by the enactment of several statutes of high importance, which justifies the publication of the present Aware with the purpose to highlight the most relevant aspects of those statutes. Attention is drawn to the new Law of Organization and Functioning of the Judicial Courts (Law nr 52/2008, of August 28th hereinafter only refer as LOFTJ ), as well as to the Decree-Law nr 226/2008, of November 20th, which has simplified the enforcement procedure, aiming to achieve a larger efficacy and, simultaneously, avoid unnecessary judicial claims. Regarding the new LOFTJ, it is important to point out the creation of a new judicial map, through which the previous 231 judicial districts are replaced by only 39 circuit courts or regional courts. Such innovation is subject to two year experimental period, beginning on January 2 nd, 2009 and establishes the judicial reorganization of the model districts Alentejo Litoral, Baixo Vouga and Grande Lisboa Noroeste. In what concerns the simplification of the enforcement procedure, several amendments allowing the enforcement procedure agents to extinguish enforcement procedures without the intervention of the Judge, as well as lawyers under certain requirements to perform the role of enforcement procedure agents have been introduced. The increase of intra-community transactions and its entry into force on the past November 13 th, 2008, justify that we focus our attention, even briefly, on the new regime of summons and notifications of both judicial and non judicial acts regarding civil and commercial matters in the European Union Member States, which are defined by Regulation nr 1393/2007, of November, 13 th,. We hope that you find these matters interesting and that they can lead us to a better Justice! Thank you for the attention provided. Merry Christmas and Happy New Year. Pedro Carreira Albano pedro.c.albano@abreuadvogados.com

2 2 aware nr 17 LITIGATION AREA OF PRACTICE NEW LAW OF ORGANIZATION AND FUNCTIONING OF THE JUDICIAL COURTS LAW NR 52/2008, OF AUGUST 28th After intense discussion, the new Law of Organization and Functioning of the Judicial Courts (hereinafter only refer as LOFTJ ) was approved by Law nr 52/2008, of August 28 th, that revoked the previous Law nr 3/99, of January 13th. The purposes underlying the new LOFTJ include the reinforcement of the judicial response skills trough the extension to all the territory of specialized Justice services which until the present moment were established within the principal urban areas, therefore introducing a new territorial division, a new competence model and a new management model for the judicial courts, that aim to assure a higher quality of the judicial response to both citizens and corporations. In fact, the new LOFTJ has introduced a new judicial map, characterized by the conversion of the previous 231 judicial districts into 39 circuit courts or regional courts, divided in 5 judicial districts, which are Norte, Centro, Lisboa e Vale do Tejo, Alentejo and Algarve. Simultaneously, Support Offices were created for public prosecution judges and judicial judges, which organically depend on, respectively, the Law Office of the Republic (Procuradoria-Geral da República) and from the Supreme Magistrate s Council (Conselho Superior da Magistratura). The president of the district court will be appointed by the Supreme Magistrate s Council, according to the legal frame of service commission for the period of three years. The choice will rely upon judges that have been in functions in the Court of Appeal (Tribunal da Relação) or in practice for, at least, 10 years and with a classification higher than Good with distinction. If a district court has more than three judges, the president may render a proposal to the Supreme Magistrate s Council for the nomination of a coordinator judge for those courts. The latter will fulfill delegated powers, such as the management of the vehicles, as well as the maintenance and conservation of the equipment and facilities. The new LOFTJ also introduces the entity of the district court manager who assists the president. Following the publication of the new LOFTJ, the Council of Ministers approved on the past November 27 th, a Decree-Law that executes the judicial reorganization of the model districts of Alentejo Litoral, Baixo Vouga and Grande Lisboa Noroeste. The experimental period for the judiciary map will last for two years and will be effective on January, 2 nd It is the Government s intention to apply it in all the national territory as of September1 st, Pedro Carreira Albano pedro.c.albano@abreuadvogados.com

3 3 aware nr 17 LITIGATION AREA OF PRACTICE MEASURES TO SIMPLIFY THE ENFORCEMENT PROCEDURES It is well known that the profound social transformations have caused a high growth of the families and corporate indebtedness. This indebtedness has lead to a fast growth of the enforcement procedures on the courts. In 1990 there were pending enforcement procedures and in 2005 this number has grown to more than procedures. It is also important to refer that the number of closed proceedings was lower than the number of new proceedings. Therefore in the year of 2007 the enforcement procedures have represented more than one third of the total number of judicial proceedings. So, the health of economy and judicial system requires a swift, cheap and efficient way to ensure the enforcement of debts. Consequently, since 1990 several reforms of the judicial system have been performed. The biggest reform occurred in 2003 with the creation of a new model of enforcement procedures. After five years, it is clear the necessity to improve the Enforcement Procedure Model in order to make it more simple, efficient and capable to avoid unnecessary judicial procedures. Consequently in the past 20 th of November was published Decree-Law n.º 229/2008. This and other legal instruments have amended the Portuguese Civil Procedural Code, the Statutes of the Bar Association and of the Chamber of Solicitors, the Decree Law nr 201/2003, of September 10 th ( Informatics Register of Enforcement Procedures) and the Decree Law nr 269/98, of Setember 1st ( Special Procedures to com ply with the contractual pecuniary obligations, if the case is within the jurisdiction of the Court of First Instance). These reforms were made to achieve three main goals: A Simplify the enforcement procedures and eliminate the unnecessary formalities. Restriction of the Judge s intervention for situations where his involvement is needed judgment on admissibility, opposition to enforcement or seizure of movable property; list and order of priority of creditors; complaints; objections and appeals of the acts of the enforcement agent or questions regarding these actions. Reinforcement of the importance of the enforcement agent meaning that the enforcement agent will have free access to the register of enforcement procedures, introducing and modifying information and extinguishing procedures without the need of the intervention of the judge or registry of the court. Elimination of the obligation of sending the reports which mentioned the causes of frustration of the seizure of movable property. The Plaintiff of a debt collection claim can (at any moment) decide to automatically enforce the court decision.

4 4 aware nr 17 LITIGATION AREA OF PRACTICE B Promote the efficiency of the procedures. The execution creditor is allowed (without restrictions) to substitute the enforcement agent. Creation of a Surveillance Authority of the enforcement agents Commission for the Efficiency of Enforcement Procedures. Introduction of the possibility to apply to the institutionalized arbitration on the enforcement procedures. Therefore arbitration centers will have jurisdiction to ensure the judgment of conflicts and to take judicial decisions, as well as execute material acts of enforcement. Lawyers will be allowed to perform the enforcement agents tasks, but they cannot represent the execution creditor in the following three years after the extinction of the enforcement procedure in which they have performed enforcement agent s tasks. C Avoid the unnecessary judicial proceedings. Creation of a public list available on the Internet with information relating to closed enforcement procedures due to inexistence of sizeable property. This list allows a previous evaluation of the utility of a judicial action, and is going to be a dissuasive instrument to prevent default. The debtor could avoid the inclusion of personal information, even after enforcement procedures have been extinct, with the payment of the debt or recurring to a specialized entity of failure situations, in order to adopt a payment plan. The large majority of the legal rules of the Decree-Law nr 226/2008, of November 20 th, are going to enter in force after March 31 st, The mentioned rules only apply to the proceedings started after the referred date. Hermínio Branquinho de Almeida herminio.b.almeida@abreuadvogados.com

5 5 aware nr 17 LITIGATION AREA OF PRACTICE THE NEW LEGAL REGIME ON SERVICE IN THE MEMBER STATES OF JUDICIAL AND EXTRAJUDICIAL DOCUMENTS IN CIVIL AND COMMERCIAL MATTERS THE COMMUNITY REGULATION NR 1393/2007 OF NOVEMBER 13th The Community Regulation Nr 1393/2007 of November 13 th, 2007, repealed the previous Regulation Nr 1348/2000, innovating and consequently changing the legal provisions regarding the service in the member states of judicial and extrajudicial documents in civil and commercial matters in the Member States of the European Union. The new Community Regulation aims to speed and render the transmission and communication of judicial and extrajudicial acts between the Member States in a more efficient way, which is essential to the proper functioning of the internal market. On the article 1 of the mentioned Regulation, the Community legislator makes a clarification, inexistent on the repealed Regulation, being said that the new regime shall not extend to the summons and notifications made on tax, customs or administrative matters or on situations related with liability of the State for actions or omissions in the exercise of its authority. Apart of the mentioned clarification, the new Regulation also states that the State of Denmark will not be part of the applicable scope of the new Regulation. As already stated on the previous Regulation, the receiving agencies, i.e., the Member State of residence of the recipient of the act, shall itself serve the summons or the notification, or have it served, either in accordance with the law of the Member State addressed or by a particular method requested by the transmitting agency, unless that method is incompatible with the law of that Member State. Thus the receiving agencies shall take all necessary steps to effect the summons or the notification as soon as possible, and within a term of one month of the receipt. Consequently, the receiving agencies shall have its powers increased, when compared with the previous Community Regulation. Actually if it has not been possible to proceed with the summons or the notification within a term of one month after the receipt, the receiving agency shall: Immediately inform the transmitting agency by means of the certificate, which shall be drawn up in one language accepted on the Member Estate of the transmitting agency, and Continue to take all necessary steps to proceed with the summons or the notification of the act, unless indicated otherwise by the transmitting agency. On the repealed Regulation it was establish that the receiving agencies shall inform the addressee, using the standard form, that it may refuse to accept the summons or the notification at the time of service, but no reference was made to the term in which this refusal should be made. The new Regulation establishes that the addressee may refuse to accept the act, either on the time of the summons or notification, or by returning the document to the receiving agency within one week term. 1 That is why it was inapplicable to acts from the jurisdictional office or the acts from the legislative office.

6 6 aware nr 17 LITIGATION AREA OF PRACTICE One last reference to the fact that costs related with the recourse to a judicial officer or to a person competent under the law of the Member State addressed shall correspond to a single fixed fee laid down by that Member State. On the other hand the applicant shall bear any costs of translation prior to the transmission of the document, without prejudice to any possible subsequent decision by the court or competent authority on liability for such costs. New provisions aim the simplification of the transmission proceeding in order to avoid starting a new proceeding when the service is rendered invalid. It is expected that the new Community Regulation becomes more efficient the necessary judicial cooperation in civil and commercial matters, with all the inherent advantage to the international commerce. The new Community Regulation has entered in force on the past , nevertheless, only become applicable on the last , in accordance with the article 26 of the referred Community Regulation. Nevertheless, the ground for the refusal of the service remains the same; thus, the addressee can refuse to accept the judicial act if it is not written in or accompanied by (i) a translation into a language which the addressee understands, (ii) one of the official language of the Member State addressed or (iii) if there are several official languages in that Member State, the official language or one of the official languages of the place where the summons or the notification must be effected. The legal consequence for the inexistence of the translation of the documents, according with the above stated, is the invalidity of the act, nevertheless said invalidity could be remedied through a new summons or notification dully accompanied by the needed translation. In this case, the date of the summons or notification shall be the date on which the document accompanied by the translation is served, except for the situations according to which the law of the addressed member state requires that the service performed within a particular term. In this specific case, the date to be taken into account with respect to the applicant shall be the date of the service of the initial act. José Tavares Varanda jose.t.varanda@abreuadvogados.com LITIGATION AREA OF PRACTICE AWARE PARTNERS: GUILHERME SANTOS SILVA, JOSÉ MARIA CORRÊA DE SAMPAIO, LEONOR CHASTRE, MIGUEL CASTRO PEREIRA, MIGUEL DE AVILLEZ PEREIRA, NATÁLIA GARCIA ALVES, PAULO DE TARSO DOMINGUES,RUI PEIXOTO DUARTE, RUI PEREIRA DE MELO. ASSOCIATES: ALEXANDRA NASCIMENTO CORREIA, ANDRÉ PEREIRA DA FONSECA, BRUNO CORTES LOPES, BRUNO SAMPAIO SANTOS, CARLOS DE ALMEIDA LEMOS, CRISTIANA FERREIRA, FILIPA PINTO MACHADO, GUILHERME MATA DA SILVA, HUGO TEIXEIRA, JANINE GOMES, JOANA COSTA NORA, JOÃO GONÇALVES DE ASSUNÇÃO, JOSÉ CARLOS VASCONCELOS, LUÍS FRAÚSTO VARONA, MADALENA MOREIRA DOS SANTOS, MARGARIDA MUÑOZ DE OLIVEIRA, PATRÍCIA PERESTRELO, PEDRO CARREIRA ALBANO, PEDRO SOUSA UVA, RICARDO MARTINS ALVES, SANDRA SEVERINO, SOFIA CASTRO CALDEIRA, SOFIA MENDES MARTINS, TIAGO CASTANHEIRA MARQUES. Lisboa Avenida Forças Armadas, º Lisboa Tel.: (+351) Fax: (+351) info@abreuadvogados.com LISBOA PORTO MADEIRA ANGOLA (EM PARCERIA) 1 That is why it was inapplicable to acts from the jurisdictional office or the acts from the legislative office.