Court order, court fee and bailiff in Lithuania: what happens next

A debt is often recovered not by a statement of claim but by an application for a court order for payment (teismo įsakymas). The court fee (stamp duty, žyminis mokestis) is paid before the application is filed and is calculated on the amount claimed. The debtor has twenty days from service of the notice to pay or to object. If the debtor does nothing, the court order becomes final and is itself an enforcement document that you can hand to a bailiff (antstolis). If the debtor objects, the creditor files a statement of claim within fourteen days of service of the court’s notice and tops up the missing part of the court fee. Below is what most often surprises clients on this path.

We have written separately about limitation periods and documents: Debt recovery in court: limitation periods and documents. Short answers about the service are in the FAQ.

Court order or statement of claim

Article 431(1) of the Code of Civil Procedure of the Republic of Lithuania (CPK Art. 431(1)) allows a creditor’s application for monetary claims arising from a contract, a tort and other grounds to be heard under the court order procedure. At this stage the court does not check whether the claim is well-founded – this is set by CPK Article 435(3) (CPK Art. 435(3)).

This route does not always fit. CPK Article 431(2) lists the cases where the court order procedure does not apply. In practice we most often meet three of them:

• the debtor lives abroad or has its registered office abroad (CPK Art. 431(2)(3));
• the debtor’s place of residence and place of work are unknown (CPK Art. 431(2)(4));
• the default interest claimed exceeds the rate set in the Law on the Prevention of Late Payments in Commercial Transactions (Mokėjimų, atliekamų pagal komercines sutartis, vėlavimo prevencijos įstatymas) (CPK Art. 431(2)(6)).

In these cases a statement of claim is filed straight away. A creditor may also choose a statement of claim of its own accord – CPK Article 431(4) (CPK Art. 431(4)) allows it. But one consequence is worth knowing. CPK Article 434(4) (CPK Art. 434(4)) provides that if the court order procedure was available but a statement of claim was filed, the court fee and other litigation costs are awarded only on the amount the defendant disputed. The exception is where the defendant’s conduct gave grounds to believe that the claim would be disputed.

Court fee: when and how much

The court fee is paid before going to court, and proof of payment is attached to the application.

The amount is set by CPK Article 80(1)(1) (CPK Art. 80(1)(1)): in property disputes it is calculated on the amount of the claim. In cases for recovery of money, the amount of the claim is the sum claimed – CPK Article 85(1)(1) (CPK Art. 85(1)(1)). For an application for a court order, one quarter of the fee payable for a statement of claim is paid (CPK Art. 434(1)). Where documents are filed only by electronic means and you ask to receive them the same way, 75 per cent of the court fee is paid (CPK Art. 80(7)).

Clients often ask: if the debtor objects, should the court fee be topped up at once, or should we wait until the court asks? Wait. Having received objections, the court notifies the creditor that it may, within fourteen days of service of that notice, file a statement of claim and top up the missing part of the court fee (CPK Art. 439(3)). The amount already paid for the court order is credited against the fee for the statement of claim (CPK Art. 434(2)). Only the difference is paid.

This deadline must not be missed. If no properly drafted statement of claim is filed within it, the application is deemed not filed, and the court order and the interim measures are lifted (CPK Art. 439(6)). In that case the court fee paid for the court order is not refunded (CPK Art. 434(3)).

Why a court order takes long to become final

This is the most common question after a few weeks: twenty days have passed, but the court order is still not final.

The twenty days run not from the issue of the order but from the day the notice is served on the debtor (CPK Art. 437(2)(1)). The court order becomes final only if the debtor raises no objections within that period (CPK Art. 436(7)). Even late objections may be accepted: at the debtor’s request, the court may renew the period if it was missed for important reasons (CPK Art. 439(2)). If the court fails to serve at the first attempt, it tries again, and that takes time.

Service is the weakest point of the court order. In this procedure CPK Article 438 (CPK Art. 438) does not allow documents to be served on a guardian ad litem (kuratorius) or by public notice. If it turns out that the debtor’s place of residence and place of work are unknown, the court first sets the creditor a deadline to clarify the place of residence or to take steps so that the documents can be served in another way. If that fails, the court annuls the order and leaves the application unexamined (CPK Art. 431(3)). What remains is to file a statement of claim under the general procedure. In that case the court fee paid for the court order is refunded on application (CPK Art. 87(1)(5)). On request, the court may credit the unrefunded amount as a court fee payment for a new procedural document (CPK Art. 87(6)).

Which interest can be recovered

We set the exact amount of interest and default interest only after reading the contract and the invoices. But the rules are these.

• Contractual interest and default interest. Article 6.37(1) of the Civil Code of the Republic of Lithuania (CK Art. 6.37(1)) provides that interest may be set by law or by agreement of the parties. If the contract sets default interest, the court may reduce it where it is unreasonably high (CK Art. 6.258(3)).
• Statutory interest where the contract says nothing. CK Article 6.210(1) (CK Art. 6.210(1)) sets annual interest of five per cent on the overdue amount. Where both parties are business operators or private legal persons, the interest is six per cent, unless laws or the contract set a different rate (CK Art. 6.210(2)). For payments under commercial contracts a different rate is set by the Law on the Prevention of Late Payments in Commercial Transactions, so for business debts we check that law first.
• Procedural interest. CK Article 6.37(2) (CK Art. 6.37(2)) obliges the debtor to pay interest at the statutory rate on the amount awarded from the day the case is opened in court until the judgment is performed in full. It keeps running during enforcement by the bailiff.

The application must state the rate of interest or default interest, its amount and the period of calculation (CPK Art. 433(1)(4)). A single total figure with no calculation works worst of all.

Which costs can be recovered

The court awards the winning party its litigation costs against the other party (CPK Art. 93(1)). These include, among others, the costs of serving documents, of enforcing the judgment and of an advocate’s assistance (CPK Art. 88(1)). So we ask for all the costs the client has incurred – this is standard practice.

Two conditions matter in advance. The request for an advocate’s costs, with a calculation and evidence, must be filed before the hearing on the merits ends – after that they can no longer be awarded (CPK Art. 98(1)). And no more is awarded than the recommendations approved by the Minister of Justice together with the Chair of the Lithuanian Bar Council (Lietuvos advokatų taryba) allow (CPK Art. 98(2)).

After the judgment: the enforcement document and the bailiff

A final court order is itself an enforcement document (CPK Art. 587(2)). The court sends it to the creditor within three working days (CPK Art. 438). If the case ended with a judgment, the court of first instance issues a writ of execution (vykdomasis raštas) on a written application once the judgment has become final (CPK Art. 646(1)). Until it is final, the judgment is not enforced, unless the court ordered immediate enforcement (CPK Art. 588(1)).

A writ of execution under a court judgment may be submitted for enforcement within five years of the judgment becoming final (CPK Art. 606(2)). Enforcement documents are allocated to bailiffs by the Bailiffs’ Information System (Antstolių informacinė sistema) (CPK Art. 650(3)). What the bailiff does first – the demand to comply with the judgment and the deadline for it – is described in the FAQ on the contractual disputes page (in Lithuanian).

Clients ask what else they will have to pay at the bailiff stage. At this stage the costs are the bailiff’s enforcement costs. The creditor pays the costs of administering the enforcement file and, in cases set by the Government, also third-party costs and the bailiff’s fee. The enforcement costs are recovered from the debtor (CPK Art. 610(1)). Their amounts are set by the Government – CPK Article 609(3) (CPK Art. 609(3)).

When the debtor still does not pay

If the debtor has no assets or income from which recovery can be made, the enforcement document is returned to the creditor (CPK Art. 631(1)(2)). That sounds like the end, but it is not.

• The document can be submitted again. Its return within the statutory period does not prevent it from being submitted for enforcement again (CPK Art. 631(3)). A new period runs from the day the document is returned to the creditor (CPK Art. 607(3)). In practice it is worth resubmitting the document when you learn of the debtor’s new workplace, assets or bank account.
• Where the debtor is a legal person – bankruptcy proceedings. In its court fee rules the law expressly mentions the case where an application to open bankruptcy proceedings is based on the legal person having no assets or income, and the bailiff having returned the enforcement documents to the creditor for that reason (CPK Art. 80(1)(10)). How much can actually be recovered in bankruptcy depends on the ranking of creditors – we covered this in the article on limitation periods and documents.

We say this openly from the start. A court judgment establishes how much the debtor owes. Whether the money can be recovered depends on whether the debtor has assets. That is why, before we start, we check that the debtor is not bankrupt or in bankruptcy proceedings.

How to start

Send us the contract or other basis of the debt, the invoices, the payment statements and your latest correspondence with the debtor. We will tell you whether the court order procedure fits, which interest and costs are worth claiming and what is missing from the documents.

Phone +370 5 212 1506, email info@linden.lt

More about this service: debt recovery in court.