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Or a walk along the “pitfalls” of the assignment agreement

With amendments to the Bank Bankruptcy Act, the politicians made the assignments and the interceptions in the CCB void.

If the contractual relations in the Roman law had purely personal character, then in the modern economic turnover, when the commodity-money relations have reached a high level, the failure of performance by the debtor authorizes the creditor’s execution on their property to satisfy their claim. In order to assess this purpose, the modern legislator has adopted and reflected the legal mechanisms, allowing the transferring of claims from one individual to another.

Transferring a claim or assignment is an agreement by which the titular of the claim (old creditor or assignee) transfers it to a third party (new creditor or assignor).

Conditions for validity

According to the practice of the SCC (Decision №32 as of 9.09.2010), in order the assignment agreement to be effective, subject to the assignment agreement cannot be future, but only existing claims, which have property character, as this conclusion follows from the casual nature of the agreement, i.e. the existence of a specific legal ground. Most commonly the assignment is for a consideration and the ground is acquirendi causa (sale) or donandi causa (loan), but there is no prohibition the contract for transferring claim to be with gratuitous character, as in this case there will be a ground donandi causa (donation) or solvendi causa (instead of performance of debt).

There is no requirement for a form for validity of the assignment, but it is undoubtedly assumed that the transfer of claims, incorporated in securities, is made with the book’s delivery, and the assignment of mortgage-backed claims is subject to entry in the entry books, in order to be effective in terms of the mortgage.

Regarding a right, which is not required, as well as a not time-barred right, there is no prohibition for it to be transferred, but in the latter case the assignor cannot seek forced claim against the debtor. Because of their specific nature, certain rights shall be non-transferable, as this scope covers personal moral rights such as name, family rights and moral rights under art.15 of the Law on the copyright and related rights.

The property rights, whose occurrence is associated with the personality of assignee cannot be transferred also – claim for remuneration, claim for pension, claim for alimony, claim for compensation for moral damages, etc.

The non-transferability can exist also under the law, such as the real right of use, which is not explicitly declared non-transferable.

Regarding the associated rights, as the liability of the guarantor, the pledge and mortgage right, the right of retention, the claim for interest and the penalty the law provides their assignment only together with the main claim.

Effect of the assignment on third parties

In view of the fact that the assignment affects the interests of the debtor, the law requires the performance of an additional action while reporting the performed transfer of the claim. The old creditor must inform clearly and unequivocally the debtor for the assignment, as the importance of the message is for the purpose the transfer of the claim to make effect on third parties – the debtor, the successors and the creditors of the assignor and the assignee. When the creditor of a claim transfers it consequently to several individuals, as titular of the claim (the new creditor) is considered one of them, for whom the assignee has informed the debtor first.

In case that there is a distraint on the claim by creditors of the assignee and the distraint notification has been received by the debtor before the notification for the assignment, the transferring of the claim cannot be opposed to those creditors. In this case, the performed by the debtor payment to the new creditor is relatively ineffective against the creditors of the assignee, levied the distraint, and they can request the debtor for a repayment.

Objections of the debtor

The law allows the debtor to raise before the new creditor some objections about the performed assignment, as long as they have a connection with their relationships with the old creditor. The approach is different depending on whether the objection arises from the same legal fact, from which is the transferred claim.

In case the objection arises from the same legal fact, it should be able to oppose the assignee independently whether it incurred before or after the transfer of the notification for it. An appropriate example is a void sale, in which the creditor has transferred their claim and the buyer debtor refuses to make payment to the assignee.

As for the hypothesizes, in which the objection stems from other relationships between the old creditor and the debtor, those objections must have incurred before the notification of the assignment. Here, of particular importance are the objections for set off, as the law says that if the consideration of the debtor has not arisen or has become due before receiving the notification for the assignment, there is lack of opposite and set off is not admissible against the assignee. This situation could be clarified by the following example: X and Y have concluded two separate transactions. In one of them X transfers their claim to a new creditor (assignor), but on the other they continue to be a real debtor to Y. For Y there is possibility to object the set off against the new creditor on the assigned claim up to the amount of their claim on the second transaction, but under the cumulative requirement this claim under the second transaction to have arisen and to have become due before the receipt of the notification for the assignment.

Invalidity of the assignment

In its legal nature the assignment is a bond transaction and as such the general rules for invalidity are valid for it, described in art.26-35 of the Law of obligations and contracts. To be declared as invalid, an assignment has to suffer of a vice, regulated by the law as such. The only competent authority, which can declare a transaction (assignment) invalid, is the court, provided that it is properly seized.

The article has been published in Bulgarian, in Capital Daily.

The process can take years and the costs can approach and even surpass the value of your property’s share

The court partition is one of the most common and at the same time one of the most deprecated methods for regulating property disputes between heirs and owners. The most commonly used application is if you have inherited one or more properties together with your close and distant relatives and you cannot reach a consensus with them for the future allocation of the resulting benefits and obligations. For example, the inheritor may want to occupy part of the jointly owned house, another – to repair and lease it, third – to sell it. In such a situation, you have to think carefully and you better consult a lawyer before you turn to the court in connection with the court partition of properties.

The court partition is also a possible method for termination of co-ownership between former spouses, for example about properties, acquired during the marriage, for which there was a regime of matrimonial property. However, in most cases, the property relations between the spouses shall be regulated in the very proceedings of the divorce, including the ownership of the family home and its use, but only if the divorce is on mutual consent, and not by claim procedure. Therefore, this hypothesis of court partition will not be examined in this article.

Usually, the court partition proceedings are reached because of stained personal relations between co-heirs. Often, sometimes even stubborn and leaded by personal motives, the parties do not take the best economically decisions for themselves. Our advice in such cases is to show understanding, to consult with a specialist in this area and to try in every way to arrange your relations out of the court through carrying out voluntary partition and equalization of shares with money. Even if a court partition is commenced, an agreement can be concluded at any time, which to be approved by the court. Be sure that the court will not resist, but will stimulate such behavior, because it will lead to the end of the legal proceedings. Otherwise, no one will return your time, nerves, ruined personal relationships with your relatives and not least – the wasted money.

Cases that can last years

The court partition is one of the most complicated proceedings, which the Bulgarian Code of Civil Procedure knows. If you are involved in such a process, load yourself with patience. The cases often last 3, 4 or 5 years, as they can linger also for more than a decade of the filing of the statement of claim in the court.

Each heir may initiate partition proceedings of co-owned properties. A necessary condition for the validity of the court partition is the participation of all heirs in the proceedings. The procedural law is clear what kind of applications should be accompanying the statement of claim, namely the certificate of death of the grantor, certificate of inheritances, deed and cadastral drawings (if available) of the properties, property tax assessment etc.

Costs, which are not negligible

The costs on the cases, related to the sharing of co-owned properties, are not small. The state fee for initiating the case is always bound to the value of the properties, for which the partition is requested. Its value is firm – 4%, calculated on a quarter of the taxable value of the partitioned properties. It is divided proportionally according to the shares of each of the co-partitioners. However, the costs do not stop there. The costs for the appointed court expertises follow, as well as the costs for carrying out the public sale of the properties, if it comes to this. The above mentioned costs do not include those for attorneys’ fees, travels, appearances at court hearings etc., as at one moment after years it can appear that you have wasted almost as much money and even more as the actual value of your shares of the inherited properties.

Process in phases

The court partition is biphasic proceedings. Competent to hear the case is the regional court at the location of the property, claimed for sharing. The first phase begins with the constitution of all participants in the process, as often an obstacle in time is the regular summoning of all the co-heirs. The practice shows that this leads to repeatable postponing of the proceeding of the case. This phase ends with a court decision, in which the panel of judges rules on who are the individuals, who will participate in the performance of the partition, which are the properties, which will be partitioned, and what is the proportion of each of the co-partitioners. At the request of any party the court has to rule also on which properties of which inheritances will be used until the final performance of the partition, as well as which amounts will pay some of them to the others for their use. In this phase, at the request of the parties, any other issues can be considered, regarding the clear determination of the aforementioned circumstances, such as disputes over origin and adoptions, wills, real estate transactions, subject to the partition, the authenticity of the documentary evidences, etc. The decision of the first instance court is subject to appeal by either party before the respective district court and the decision of the district court in turn is subject to appeal before the Supreme Court of Cassation only if there are grounds for a cassation appeal.

Only after the admission decision for the partition enters into force, the second phase begins – the performance of the court partition. In the first court session after the admission of the partition, each of the co-partitioners can claim costs that are done, caring for and maintaining the property of the hotchpot. If they do not do that until its end, they lose their right to state such a claim in these proceedings. A mandatory step in the second phase of the court partition is the appointment of a forensic technical expertise with a basic question “are the properties divisible”. Or, with other words, can there be for separated an individual property for each of the co-heirs of the partition property, corresponding to their own ideal part, without violating the provisions of the Inheritance Act, Ownership Act, Spatial Development Act and other laws and secondary legislative acts.

Not everything can be divided

Which properties are indivisible? The regulated landed properties are indivisible, when they cannot be divided according to the Spatial Development Act, subject to quotas, determined by the court. As for the agricultural and other lands that are not regulated, art.72 of the Inheritance Act states that “at compiling of the portions the splitting of the fields into parts smaller than 3 decares, of the meadows into parts, smaller than 2 decares and of the vineyards and the orchards into parts, smaller than 1 decare, shall not be admitted”.

In these cases the court exports the property at a public auction. At the public auction all inheritances can bid, but in this case they are required to buy the property at a price not lower than the highest offered price of the sale. In other words, the public auction must be avoided in all cases, because it is inappropriate and its conducting makes the costs of acquisition the property more expensive.

If for your “joy” the properties appear to be divisible, the court based on the expert’s conclusion drafts a partition protocol, indicating the individual shares, as the smaller shares are equated with money. The parties can file their objections, after which the court shall prepare the final partition protocol. The decision by which the court declares the final partition protocol is subject to appeal by either party and after its entry into force, the court summons the parties to the drawing lots. By the order of the drawing of lots each party chooses one of the determined shares. Under the provisions of the Code of Civil Procedure (CCP), concerning the conduct of the court partitions, the court can execute out the partition also without drawing lots, when the constitution of shares and the drawing of lots proves to be impossible or very inconvenient.

The article has been published in Bulgarian, in Capital Daily.

The pledgee is entitled to exercise their right outside court

Although the law traditionally requires transferring of the pledged property, the Law for the registered pledges regulates the pledge to be established without transferring the holding, or this is the so called registered pledge, whose species are listed exhaustively in the LRP. The registered pledge arises from a formal contract between the pledgor and the pledgee, which is concluded in writing and when the subject of the pledge is a commercial enterprise or a share of a commercial company, the contract is concluded in writing with notarized signatures. Under the terms and conditions of the LRP, there can be established registered pledges on “shares of general partnerships, limited partnerships, partnerships limited by shares or limited liability companies”, as well as on a commercial enterprise as a set of rights, obligations and factual relations etc.

It is important to be mentioned that the pledge on shares has to be entered in the Commercial Register. After the establishment of the pledge on a share of a partner, the partner remains owner of the pledged shares. Subject of the pledge will be the share of a partner, forming part of the assets of the company, whose amount is determined according to its basic share, unless otherwise is agreed. The intangible rights of the partner cannot be subject of a pledge, because they have invaluable and personal nature. Therefore, only substantive rights can be subject of a pledge, since only the latter can be directed enforcement procedure.

Enforcement under the Law for the registered pledges

The indisputably advantage of the LRP: is that the pledgee is entitled to exercise their rights outside the court. The special nature of the enforcement is shaped by the specificity of the subject of the pledge. Below we will examine the hypothesis of corporate interest in a limited liability company. In this connection the LRP expressly refers to the provisions of the Commerce Act, regulating the rumination of membership of the partner, under which one partner has the right to terminate their participation in the company with a written notice, sent at least three months prior the termination.

LRP provides a possibility for the pledgee to exercise the right of the partner for a unilateral termination of the membership in the company and the corresponding obligation of the company to pay the share of the partner pledgor. The LRP provides the statement for beginning execution to be accompanied by an extract from the register of the registered pledge (certificate of good standing, issued by the CR in the account of the company).

Since the legal entity – a limited liability company differs from the partner, the statement has to be addressed to the company itself. The law does not provide any term for termination of the membership, but the court practice assumes that the termination is considered to have occurred by the time of expiry of the written notice and that the termination is not associated with other formalities (i.e. the general meeting of the partners).

As a consequence of the termination the pledgee can be satisfied by the price of the pledged property, as the company is obliged to pay the share of the partner pledgor. In accordance with the provision of the CA the consequences of the termination shall be regulated on the basis of the balance sheet at the last day of the month of termination of participation. It has to be mentioned that the pledge is a right of satisfaction from the price of the pledged property and the acquisition of the pledged object cannot in any way be allowed (i.e. shares).

Moreover, the law does not provide guarantees against a possible reduction of the capital of the company. The company itself is considered as a third party to the contract between the pledge and the pledgor partner. Therefore, there is a legal risk the liquidation share to be reduced during the operation of the company. Furthermore, in case of failure to sell shares (i.e. the partners are reluctant to buy them), there is a risk the company to be terminated and subsequently put into liquidation. However, there is e legal possibility for the pledge to exercise their rights in court.

Enforcement under the Code of Civil Procedure

According to the CPC the procedure starts at the request of the pledgee by the bailiff to send a security notice to the Commercial Register in the company’s file of the respective company. The security is effective from the moment of its entry, and from that moment the debtor partner does not exercise their right to dispose with the shares secured.

In case of failure to satisfy the creditor (i.e. non-payment), there is a risk for the company to be terminated with a court decision (the district court at the seat of the company). The bailiff sends to the company the statement of the creditor to terminate the participation of the debtor partner in the company. After the expiry of three months the bailiff must empower the pledgee to file a statement of claim for its termination before the district court at the seat of the company. The court rejects the request if it decides that the company has paid to the pledgee the share of the property, which belongs to the partner. If it finds that the claim is justified, the court shall terminate the company. The termination has to be registered officially and then the liquidation is carried out.

The liquidation procedure is carried out in the Commercial Register in the company’s file of the respective company and the company is subsequently deleted. It is believed that the consequences of termination are regulated on the basis of the balance sheet at the last day of the month of termination of participation of the partner. Attention has to be paid to two hypotheses. In case the company has been terminated and liquidated by a court decision, the value of the debtor partner’s share should be their liquidation share and this is specified after regulating all liabilities of the company. Therefore, there is a risk, the liquidation share to be reduced during the operation of the company of the obligations of the company to be significantly increased and as a consequence the pledgee not to be fully satisfied with the price of the pledged property. In case of voluntary payment of the debt by the company, the amount of the shares is determined according to the last balance sheet of the company. From the practice it can be concluded that the pledgee often tends to focus on the enforcement procedure under CCP.

The article has been published in Bulgarian, in Capital Daily.

There must be an unjustified property reversal between the giving and the receiving the benefit

The unjust enrichment stems from the Roman private law, as the main motive of the legislature for regulating the institute in ancient time, as well as nowadays, is the justice and the principle, prohibiting the unjust reversal of benefits. Every performance suggests presence of a debt and when it does not exist, there is no excuse to allow the enriched to keep the received. It should be returned to those who gave it.

Therefore, the prerequisites that must be proved by the claimant in case of unjust enrichment are: presence of impoverishment of the claimant, presence of enrichment of the defendant, connection between the impoverishment and the enrichment and lack of legal merits for the reversal. In case of absence of any of these elements, there will be no composition of unjust enrichment.

The modern legislation of unjust enrichment includes some separate claims available for the impoverished in order to protect their rights.

Firstly, these are the claims for returning the given without merits, because of lapsed merits or non-existing merits, when there is a direct connection between the impoverished and the enriched individual, i.e. direct performance between the two individuals. These are concrete active steps that lead to a direct property reversal between the giving and the receiving the benefit. The second major opportunity is the so called general claim, under which whoever has enriched himself without merits at the expense of another shall be liable for the return of the enrichment, up to the amount of the other person’s loss.

In this case the enrichment and the impoverishment are performed indirectly, the property reversal is not due to a direct subject consideration, but it can be complicated, as the obligation, arising from the relationship is for restoring a certain value – the difference between the impoverishment and the enrichment.

RETURNING THE GIVEN WITHOUT MERITS OR FOR NON-EXISTING OR LAPSED MERITS

What is common in these hypothesizes, is the direct giving and receiving of a benefit and the lack of merits, the lack of a valid relationships between the giving and the receiving, on which base the material benefits can pass between them. The legislation provides that the absence of merits can occur in three different ways:

In the cases of transmission, respectively receiving of something with an initial lack of merits, i.e. when there is no merit for transferring benefits from one individual’s property to another during the actual receipt. Initial lack of merits occurs when the transfer takes place without presence of any relationship between the parties. The most common example of giving something without merits is the performance on a void transaction, which suffers from such a defect from the beginning that does not lead to any legal consequences. When there is a payment under a contract for sale of a real estate, concluded in a simple written form, but not in the form of a deed, because of the invalidity of the contract the buyer has the right to bring an action against the seller to return the paid without merits. There is primordial lack of merits in the hypothesis of payment of the price as a result of adjustments to the accounts of the consumers carried out by the electricity companies. In these cases, the court finds that the calculated as a result of the adjustment amount is not payable and is accordingly not paid on a fitting merit, so that the consumer’s claims for returning these amounts are respected as legitimate.
In the cases, when the performance is carried out in view of the expected future merit, with a view to a future goal, which has not taken place, it is assumed that the received is due to return because of an unfulfilled merit. This happens most often in transactions with deferment clause. Giving the benefit has been made after the conclusion of the transaction, but before the occurrence of the clause. In this sense, if the clause is fulfilled, then what is given, is without merits and it must be returned.
There can be also giving on an unfulfilled merit, when it is performed under a preliminary contract. In a number of court decisions, the Court considers that the claim based on the claimed amount of return, received under the preliminary sale contract, which cannot be declared as final because of the lack of prerequisite, is founded, and the defendant shall be judged to pay the claimant the amount, as due to the unfulfilled merit. It is typical for the claim for returning the given because of lapsed merits that the merits exist at the time of giving, i.e. there is a valid relationship between the parties, on which base the performance is made and which justifies the property reversal, but then it falls down retroactively. The dropping of the plea can be due to various reasons – cancelling a contract due to non-performance, invalidation of a contract, if it is concluded by persons of legal incapacity, under mistake, fraud, threat, upon the occurrence of a deferment clause to the obligation, which is not performed, in performance based on an effective decision, which has been subsequently cancelled. There is performance under lapsed merits in those hypothesizes, when the obligation arises from an issued administrative act, subject to prior performance, which has been cancelled later by the court as unlawful. This cancelation according to the legal framework and the permanently established court practice is retroactive as it deletes retroactively the legal consequences. Therefore, an obligation arises under the law for recovering the respective benefit to the individual that performed under the repealed administrative act.

In conclusion, no matter which composition took place, an obligation arises for the individual to return the given to the other one. These claims have to be submitted before the court, before they are extinguished upon the expiry of the five-year limitation period, which runs from the day, when the taking in the different hypothesis has become due. It has to be mentioned that although in all cases for the successful implementation of the claim for returning the received without merits before the court, the impoverished, i.e. the claimant must prove the fact of property reversal between them and the defendant, while burden of the enriched, i.e. the defendant is to prove the fact, from which the claim arises, or with other words – the presence of merits.

When there are no elements of any of the three described compositions and there is no other possibility for any legal protection, but the property of a individual has been increased at the expense of another without merits, for the impoverished remains the possibility to claim that, what the other one has enriched himself to the amount of the other person’s loss.

The article has been published in Bulgarian, in Capital Daily.

Or what are the grounds for unilateral termination of the employment contract by the employer

The employment contract is the oldest and most common form of occurrence of an employment relationship and it applies whenever other ground is not specifically regulated by the law. Following the constitutional principle of protection of wage labor, the legislator provides a number of provisions to defend the relationship between the employer and the employee, arising on the basis of a concluded employment contract.

The legislation about the termination of such relationships is regulated by the Labor Code, where the common grounds (mutual agreement and unavoidable necessity) are exhaustively listed, as well as those for which the will of only one of the two parties will be sufficient. Undoubtedly, the possibilities for the employer to terminate unilaterally an effective employment contract are more limited than those in favor of the employee.

Dismissal with notice

The law provides two groups of grounds, as distinguishing criteria is the need to send a notice. It is typical for the dismissal with notice that after the expiry of the notice period, the employment contract is terminated automatically without need of a further action by the employer. In case that either party fails to meet the deadline, this party owes compensation in the statutory amount. The employer can dismiss with notice both fixed-term or permanent employment contract. In the first case the parties can agree on notice of 30 calendar days to 3 months unlike the fixed-term employment contract, where the term is legally defined – 3 months, but not more than the remaining term of the contract.

Grounds

The grounds for dismissal with notice could be on grounds, relating to both the employer and the employee, as the common between them is that they are not related to the fault of the employee.

Reasons, related to the employer.

The reducing of the volume of work and stay are among the most common reasons, which determine the choice of the employer to deprive the workforce of one or more of their subordinates. In reducing the volume of work there is an objective condition, where for various reasons the employer cannot burden the employee with sufficient amount of work and this inevitably leads to a reduction of the production. These reasons are always external to the enterprise, such as a decline in the demand, introduction of competition, loss of markets, and they are characterized by the presence of expectation the condition will be overcome.

The stay as a ground for dismissal with notice is a work stoppage for more than 15 days. It is expressed in the temporary inability to perform the activity of the enterprise, of a part of it or of a certain position, as it can be due to organizational, technical and other reasons. According to the court practice, the expected stop of work cannot be a ground for dismissal.

There is a specific ground for dismissal with notice, which applies to commercial companies and the presence of e concluded management contract. The manager in a limited liability company, respectively the executive director in a joint-stock company acquires the right to impose dismissals in order to select the team, with which to achieve the business task of the enterprise, which is assigned to them with this contract, but this right is limited in several ways:

It applies only to the current employees by the management of the enterprise once
It can take placed until the expiration of 9 months from the beginning of the performance under a management contract
The right arises from the conclusion of the management contract, and not of its entry in the Commercial Register

Among the grounds for dismissal with notice are the cases, where objective reasons require closure of the enterprise, part of the enterprise or staff cuts (position closure), as well as when the position, occupied by the employee must be released in order to be restored a unlawfully fired employee, who had occupied the same position before.

Reasons, related to the employee

These hypothesizes suggest the presence or absence of facts of the reality that are in close connection with the employee and are relevant to the performance of their work function. Among them are the lack of necessary skills or education (professional qualification) for effective performance and the employee’s refusal to follow the enterprise or its subsidiary, where they work, when it is moved to another location or area.

Of great importance for the practice is the ground for dismissal with notice, concerning the circle of persons, who have acquired the right for pension for retirement and age, as well as professors, associate professors and PhDs, who have reached the age of 65.

Dismissal without notice

The protection function of the labor law is most widely expressed within the limits that the law imposes on the employer in the exercise of its right to terminate the employment contract without notice.

The law lists exhaustively the cases, in which the employer could require the dismissal of their employees, as deviations are not allowed.

Among the grounds of such a dismissal are the hypothesizes in which the employee is sentenced by a sentence entered into force, which imposes a penalty of imprisonment or deprivation of the right to exercise a particular profession, as the latter can be imposed by a penal provision for committed administrative violation.

Without any doubt the reason that most often causes labor disputes, is the disciplinary dismissal. It represents the most severe penalty and can be used only in severe violations of labor discipline, which are exemplarily listed in the LC.

Delays or premature leaves of work, as they have to be at least 3 of the total number, each at least 1 hour, and to be within 1 month
Absence from work for 2 consecutive days
Systematic violations of labor discipline – system means at least three, as it is irrelevant whether these violations are of the same type, as long as one of them is not extinguished by prescription
Abuse the trust of the employer, as the abuse must be conscious, desired and achieved with misconduct
Intentionally defrauding citizens, as the other workers and employees of the enterprise are not covered
Participating in games of chance via telecommunications means of the employer
Other serious violations – SCC considers as such appearance at work drunk, caused significant damages to the employer, physical and mental violence by a teacher on student etc.

The disciplinary dismissal is a right of the employer and it must be imposed by them in compliance with the criteria of the LC – the severity of the violation, the circumstances, in which it has been committed, as well as the conduct of the worker or the employee. This discretion of the employer is subject to the judicial review in proceedings for unlawful dismissal.

The article has been published in Bulgarian, in Capital Daily.

Or what are the features of the default judgment?

The default judgment is a legal institution, known to Roman law and it is used in the contemporary legislations. The Civil Procedure Code (CPC) (effective as of March 1, 2008) introduced the institution of the so-called default judgment. This kind of decisions are stated most often under claims with submitted money claims arising from contracts between merchants and/or natural persons and entities for sale, delivery and other transactions. Such decisions could be stated against both the claimant and the defendant in the case.

The most common hypothesis is statement of a default decision against the defendant, i.e. the individual against whom the particular case is formed. A specific request by the claimant is necessary in order such decision to be stated. In order such a court’s decision to be stated, the law requires the defendant not to have submitted (filed) a response to the filed against him statement of claim, not to appear in the first hearing in the case, not to have made an explicit request for its hearing in his absence.

In addition to the mentioned prerequisites, the court has to examine whether the statement of claim is probably justified in view of the specified in it circumstances and statements, and in view of the presented evidences. With other words, there must be a complete disinterest and inaction on the part of the defendant. The statement of the default judgment is a sort of penalty for the defendant, based on the assumption that once not having taken any actions on the case, the defendant admits the statements of the claimant in the statement of claim.

Protection of the legal interests

The statement of a default judgment does not imply the respect of the submitted statement of claim by the court as a result of a full and comprehensive clarification of the case from the factual and legal site. The reason is that the case cannot be completed with the necessary evidences to clarify the dispute due to failure of one of the parties’ participation in the proceedings. Therefore, the court does not rule on the merits of the particular dispute, but only insofar as the put forward factual and legal statements of the claimant are supported by the presented with the statement of claim evidences. For this reason, upon receipt of a court summons, notice or other judicial document for a formed case, it is advisable to take actions in order to protect our legal rights and interests.

Mirror and rare hypothesis is the statement of a default judgment against the claimant, i.e. the person, on whose statement of claim the case was initiated. In this case, the defendant could request the termination of the case and the award of costs or statement of a default judgment against the claimant, if the claimant is not presented at the first hearing, has not given an opinion on the answer of the statement of claim and has not requested a hearing within their absence. The court examines whether the statement of claim filed is likely unfounded in view of the made objections and the supporting evidences on the part of the defendant.

In order to schedule the case for hearing, the court shall summon the parties, as in the summon it is necessarily to be indicated that the failure to submit a written response and the failure to appear in court hearing without a request for hearing the case in the absence of the party, could lead to that the opposing party could request the statement of a default judgment or termination of the case, as well as award of the costs. The aim of the legislator is to inform the parties for the consequences of their lack of interest on the occasion of formed by or against them cases, as well as for the possibility of statement of a default judgment.

Exceptions and specifics

It should be noted that it is not possible for the court to state a default judgment in all types of cases. The law expressly prohibits stating such a decision to cases of civil status (e.g. cases for establishing paternity or maternity, contesting paternity, termination of adoption), matrimonial claims, as well as to proceedings for putting under interdiction. The reason for this is that subject of these cases are rights with purely personal character. One of the most important features of the default judgment is that it is not motivated. The court points that the decision is stated on the basis of the legal conditions for its statement. The court also states why it considers the statement of claim as probably founded or unfounded.

It should be mentioned that there is a possibility the party against whom the default judgment is stated not to know about it. This happens most often when the addresses of the parties are outdated, which makes the service of court papers difficult. Furthermore, these decisions cannot be appealed. This is the most severe consequence of the inaction and lack of interest of the party.

It is possible, however, the party against whom the default judgment is stated, to have been deprived of the opportunity to participate in the case in the following cases: 1) unduly service of a copy of the statement of claim or summons for the hearing; 2) failure to learn about timely service of a copy of the statement of claim or summons for the court hearing due to unforeseen circumstances; 3) failure to participate personally or by attorney because of unforeseen circumstances which could not be overcome.

In those cases, the party against whom the decision was stated, could submit within one month of its receipt a request for its cancellation to the higher court. The same, however, should provide their claims, that they have been deprived of the opportunity to participate in the case.

The law provides also another opportunity for the party against whom the default judgment was stated, namely, when the party has found new circumstances or new written evidences, which are essential to the case and which the party could not have obtained timely, the same could ask for cancellation of the decision again through court action, as the law provides specific deadlines for the implementation of this protection.

Statement of a default judgment represents a warning to the parties that their failure to appear and their lack of interest to the case cannot be unpunished. The party that was negligent, regarding initiated from and against them cases should bear the consequences of such a decision.

The article has been published in Bulgarian, in Capital Daily.