CIVIL PROCEDURE CODE REFORM TO COST BGN15.3MN
The possible introduction of private bailiffs in Bulgaria after 2008 will cost BGN15.3MN. They will be responsible for collecting cash receivables due to valid writs of execution. The amount is indicated in the analysis jointly prepared by the Institute for Market Economics (IME) and the USAID on occasion of legislative amendments in the field of judge enforcement discussed in the Bulgarian Parliament. The treasury spends BGN13.6MN per year to support the bailiffs. Should the National Assembly vote the proposed entirely new Law on Private Execution and the amendments to the Civil Procedure Code (CPC) in its part for judge enforcement within the current mandate, BGN3.17MN will be spent for the start of the reform, the study notes.The document was presented by the IME Director Krassen Stanchev and the Chairman of the parliamentary economic commission Valeri Dimitrov on a press conference held on February 22. The two repeated to the journalists that both the business and the people will profit if, instead of receiving budget salaries, bailiffs start working on a percentage of the collected receivables. At the end of January the parliamentary legal commission gave a principle approval for the idea. Still, a few members favoured the introduction of two parallel working regimes. It means that bailiffs will be allowed to choose whether to go on working the same way or become freelance like their colleagues in the notary's office. According to unofficial information, the drafts on the private execution and the Civil Procedure Code are about to be discussed on first reading in early March. Anyway, there will hardly be an MP who will refute the inefficiency of the currently operating system.According to data provided by IME, 15,000 new out-standing enforcement cases have accumulated from the beginning of 2001 till the middle of 2004. They have to be added to the 375,693 cases initiated before 2000 and not settled yet. The total amount for which creditors have favourable court decisions but are unable to collect goes up to BGN1.7BN, or 2% of the country's 2003 GDP. If the present judge enforcement model remains valid in the next five years, the amount of recognized yet uncollected debts is expected to grow by another billion.The study also reveals that the process of collecting receivables in Bulgaria is two and a half times more expensive and ten times longer than the one in the Netherlands, for example. In turn, an inquiry held by the institute in the financial sector (among banks, lease and insurance companies, etc.) indicates that 42% of their managers do not believe the court is able to ensure the implementation of the agreements signed in case the debtor fails to fulfil his duty.The introduction of private bailiffs was already supported by the Association of the Commercial Banks, the Association of the Bulgarian Insurers, the Bulgarian Economic Chamber, the Bulgarian Chamber of Commerce and Industry, BIBA, and other branch organisations.