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1 November, 2011  ▪  Ivan Hryhoriev

Expensive Justice

Court fees have been greatly increased in Ukraine. This will ease the financial situation of courts but will also limit court access for most citizens

The law “On Court Fees,” sponsored by Party of Regions MP Yuriy Miroshnychenko and two MPs close to Andriy Portnov — Volodymyr Pylypenko and Valeriy Pysarenko — will enter into force on November 1, 2011. Natural and legal persons that have reasons and intentions to go to court over violations of their rights should hurry up. (This does not concern those who want to seek material damages.) The said law raises court fees that citizens must pay. It cancels additional payments for informational and technical provision in civil proceedings (UAH 13-120) and economic cases (UAH 236), but not everyone will be able to afford the new court fees. At the same time, fees for bringing damages claims to court will be significantly lower. This measure may restore the practice of million-hryvnia lawsuits against the mass media and other targets.

BARRED BY THE HRYVNIA

The court fee for filing a non-damages civil claim, currently set at UAH 17, will rise to UAH 98.5 on November 1. The property lawsuit fee will increase from UAH 51-1,700 (depending on the claim) to UAH 197-2,955. Claims against the actions or inactivity of authorities (including refusals to award pensions, bonuses and non-payment of legally fixed benefits) will also cost more – UAH 29.94-1,970, up from UAH 3.4. Economic agents, which formerly had to pay UAH 102-25,500 for a suit brought to an economic court, will have to pay UAH 1,475-59,100. The fees for non-property lawsuits will increase more than tenfold – up to UAH 985.

A separate law, “On Court Fees,” had to be adopted under the Civil Procedure Code which entered into force back in 2004. The Administrative Code and the Economic Procedure Code also foresee the payment of court fees, but no-one had been particularly bothered by the absence of such a law until now. Olha Prosianiuk, chief of the court department at the AKTIO law firm, says the initiative is linked to the government’s general policy to limit citizens’ access to justice. “Suing will become a costly affair. Only the well-to-do will be able to afford it,” she says. In contrast, Leonid Fesenko, justice of the Higher Specialized Court for Civil and Criminal Cases, claims that a lower overall number of cases will speed up justice and increase efficiency. Among other things, he points to the fact that the per capita rate of cases is higher in Ukraine than in other European countries: “There are thousands of plaintiffs who continue to sue relatives, neighbors and journalists just because they get a kick out of it. The new parameters set for court fees will restrain such people.” In a sense, he is right. Many specialists believe that with the implementation of this law, conflicting parties will often opt for out-of-court settlements. Antonina Zahura, a lawyer with Derevianchuk and Partners, even said she supposed that mediation may become popular (like in the USA and the European Union) with specialists being invited to work out a compromise. But this is just one side of the coin.

The other side is that the law opens the way to everyday violations of citizens’ rights and defiance of laws by government bodies and to total corruption. This leaves the population with no other choice than to seek justice in court. It is this factor, rather than Ukrainians’ propensity to sue, which swamps Ukrainian courts with lawsuits.

SEEKING THE TRUTH

In one conspicuous case, the government refused to disburse the required social payments to its citizens. Its debt to Ukrainians has grown to more than UAH 130 billion in 2011 and continues to increase with each passing day. Now courts are considering hundreds of thousands of “social” cases, while the powers-that-be come up with new ways to stall the proceedings. For example, in order to avoid a snowball of social claims, the government tried to push the infamous bill No. 9127 “On State Guarantees Regarding the Enforcement of Court Decisions” through parliament. Concealed under the pleasant-looking cover was a norm that would strip 16 categories of citizens of their benefits. Afghan war veterans and Chornobyl disaster victims – two of the affected groups – rallied in protest on September 20 and stopped the bill in its tracks.

Higher court fees are just another way to contain those who have been hurt by the state. The bill grants privileges to certain categories of people, like war veterans, the disabled (1st and 2nd category), Chornobyl disaster victims (1st and 2nd category) and so on. Surprisingly, however, it excludes pensioners but includes the Pension Fund and other social funds. The reason is simple: when a pensioner wins a lawsuit against the Pension Fund in a first-instance court, the Fund will challenge the ruling and then submit a cassation appeal. After the new law enters into force, the pensioner will think twice before suing, because he will not be able to be certain that the court will be fair, but the fees will have to be paid anyway. The Pension Fund will be free of such worries.

It should also be noted that the new law gives courts the right to postpone the payment of court fees or even grant exemption in view of the financial situation of the parties. But this norm is unlikely to become popular in practice. Zahura notes that it does not set any clear criteria for assessing the financial condition of a party and leaves it to the court to decide. Similar norms are contained in the Civil Procedure Code but are applied reluctantly.

MASS MEDIA AS A TARGET

As they limited court access for most citizens and small enterprises, MPs simplified norms for those seeking moral damages. For example, Institute of Media Law Director Taras Shevchenko says that under the old regulations, if you wanted to sue for UAH 1 million, you had to pay UAH 100,000 to the state. That was the reason big lawsuits were rare and the number of people suing was low. Now filing a million-hryvnia suit carries a much lower price tag – 1% of the sum claim but no more than UAH 2,955.

The experience of many mass media outlets proves that people whose reputation has a financial dimension (such as oligarchs) can, if need be, easily and successfully defend it in foreign courts, for example, in London. In contrast, there are plaintiffs who put an incredibly high value on their reputation even if they stand no chance of defending it in a fair, unbiased trial. There are plenty of such people among Ukrainian politicians, and the new law gives them a rare chance to harass journalists and get publicity for their million-hryvnia lawsuits.

MP Pylypenko, co-sponsor of the bill, notes that this norm pertains not only to the mass media but also to all natural and legal persons: “Every citizen and every organization have obtained the right to defend their honor and dignity by paying a lower fee. In particular, the mass media and journalists have the right to defend their business reputation.” He points to the current court practice: courts of the first instance largely award UAH 1,000–10,000, sometimes up to UAH 15,000, in moral damages, while appellate courts trim these sums down. In other words, the mass media have no reason to worry. But who will guarantee that this practice will not change after the new law takes effect?


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