Банкеръ Weekly

Briefs

SOCIAL CASES OBSTRUCT PRIVATE EXECUTION

The dilemma if private or public bailiffs should forcibly collect due amounts for alimony, housing rents or compensations under labour arguments, may turn out to be the most serious hindrance to the reform of the Civil Procedure Code. In the beginning of April Parliament approved on first reading the draft bill on private execution, giving a green light to the privatisation of forcible execution in Bulgaria. But a concensus was reached back in February during the debates on the draft in the Parliamentary Legal Commission. Under the decision both private and public bailiffs will be operating at least in the beginning. A panel of experts worked out new texts (presented in Issue 13, April 9 in the BANKER weekly) for the purpose, regulating the functioning of the bipolar model. The new version of the draft bill on the introduction of private bailiffs was publicly discussed on April 19 by all interested parties. The parliamentary discussion was organized by the Legal Commission, chaired by Anelya Mingova and the representative office in Sofia of the US Agency for International Development (USAID).Logically, the most controversial evaluations were provoked by clauses stipulating that private bailiffs be authorized to collect public state receivables, too (taxes, duties, social insurance payments, etc.). The Deputy Minister of Justice Meglena Tacheva declared she definitely opposed the idea. If private bailiffs collect the receivables of the state, then why do we need the State Receivables Agency?, she asked rhetorically. In her opinion, the collection of receivables due to alimony, housing rents, compensations under labour arguments as well as the activities relating to writ of possession of an estate should be left to the public executors. These are cases concerning small amounts which private bailiffs would not want to engage with, she explained. Therefore, a great part of the citizens will be deprived of the chance to get receivables awarded by court. The proposed introduction of territorial competency of private bailiffs similar to the notaries' competency (which means they will be authorized to only act in the area of the regional court where they are registered) appeared another dubious issue. The draft text approved on first reading stipulates that executors compete freely on the territory of the whole country and according to Bozhidar Danev, Chairman of the Bulgarian Industrial Association (BIA), the proposed zoning means retreating from the initial good intentions. In fact, the restriction has been taken from the experience of the European Union member states. England and the Netherlands are the only exceptions. However, in the Netherlands the free competition (introduced in 2001) caused some serious market shocks. That's why there will probably be one bailiff operating per each 30,000 people in Bulgaria.The BIA also opposed the possibility stipulated by the draft that the creditor who obtains an execution order and the private bailiff settle the payment of fees higher than those established by the Council of Ministers. According to the plans, private bailiffs will collect three types of fees - ordinary (relating to separate execution acts), proportional (representing a percentage of the material interest), and special (if the bailiff acts as a trustee in bankruptcy of an insolvent company).The Chairwoman of the Legal Commission, Anelya Mingova, is optimistic that the draft on private execution will be adopted on second reading before the end of the mandate of the 39th National Assembly. That will delight the representatives of the large business who frequently repeated that they supported the reform. Oddly enough, the reform was rejected by those who should feel most favoured by the changes - the bailiffs themselves.

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