Distribution of competences between commercial courts, courts of first instance and justices of the peace has changed significantly

Spotlight
15 September 2014

The Act of 26 March 2014 (Official Gazette 22 May 2014)  aims to allocate the settlement of certain disputes to the "natural judge". This specialisation of the courts is intended to increase the quality of the judgments.

The purpose of the Act of 26 March 2014 to amend the Judicial Code (…) with a view to the allocation of certain disputes to the natural judge (hereinafter the "Act of 26 March 2014") is to appoint the "natural" judge to settle those disputes for which he/she has the most appropriate expertise. The legislator intends to achieve dispute resolution that is more efficient, faster and more consistent.

The most important changes regarding the competences of the courts introduced by the Act of 26 March 2014 affect the commercial courts. The commercial court is to settle all disputes of a commercial nature that relate to undertakings, irrespective of the amount involved. The amended regulation is incorporated in article 573 of the Judicial Code, which establishes the basic principles regarding the material competence of the commercial courts.

As a result of these amendments, the "amount of the dispute" no longer plays a decisive role in determining the competence of the commercial court. In addition, the "capacity of the parties" has also become a less important element in this respect. Unlike the old article 573 of the Judicial Code, the current provision does not require disputes to relate to "conflicts between traders". Regarding the "capacity of the parties", the amended article 573 of the Judicial Code provides the possibility for claimants that are not undertakings to submit their claim to the commercial court, provided that their claim relates to an economic activity of the defendant. As a result, the amended provision mainly focuses on the "nature of the dispute" in order to determine whether the commercial court is competent to hear the case.

Another important amendment introduced by the Act of 26 March 2014 relates to article 591 of the Judicial Code, which is the basic provision that deals with the competence of the justices of the peace. There is a transfer of competences from the court of first instance to the justices of the peace for disputes between providers of utilities and natural persons that are not undertakings, in connection with the recovery of an amount of money for failure to pay for the supply of utilities.

In this respect, article 628, 25° of the Judicial Code has provided, since the introduction of the Act of 26 March 2014, that the justice (of the peace) of the defendant's place of residence is competent to hear the dispute.