ENFORCEMENT PROCEDURE

In enforcement proceedings, bailiffs enforce obligations under public law as well as claims under private law. The task of bailiffs is to collect, for example, fines imposed for a misdemeanour, or tax debts, but they also have to enforce court judgments for eviction from a dwelling and for removal or return of a child.

A person who is unwilling to comply voluntarily with a judgment or other enforcement instrument also has to pay the enforcement fee and enforcement expenses to a bailiff. Everyone is entitled to receive information about enforcement actions initiated against them.

In most petitions about enforcement proceedings, the Chancellor is asked about the right of bailiffs to seize income or an immovable, or about the size of the fee bailiffs can charge. Petitioners also ask for an assessment as to whether a bailiff has acted lawfully in enforcing a court decision regulating access arrangements.

Debtors and creditors

The rights of both debtor and creditor must be ensured in enforcement proceedings. Some debtors are in a difficult financial situation and need urgent compensation for health damage inflicted on them from someone who avoids payment. However, some debtors are completely without assets.

In enforcement proceedings, the legitimate interest of the person claiming the debt is placed first. Nevertheless, the rights of the debtor and their family to a decent life must also be considered. The Chancellor recommends that debtors should always submit exhaustive and truthful information about their financial situation, based on which a bailiff’s activity can be contested, if necessary. 

On account of violation of debtors’ rights, the Ministry of Justice initiated five disciplinary proceedings against bailiffs in 2019. The Ministry is also planning an extensive overhaul of the enforcement system with a view to making the process cheaper, quicker and more professional. 

Enforcement against income below the minimum wage

The Chancellor received several petitions where a bailiff had seized part of income below the minimum wage, such as a pension or work ability allowance. The Code of Enforcement Procedure in force to January 2018 did not allow seizure of a debtor’s income if it did not exceed the minimum wage. To ensure better protection of creditors’ interests, since 2018 seizing up to 20% of income below the minimum wage is allowed if it does not fall below the estimated subsistence minimum. The law leaves a margin of discretion to a bailiff in determining the proportion of income to be seized but in doing so the bailiff must ensure the debtor’s decent ability to cope. As a rule, bailiffs have usually seized the debtor’s income to the maximum possible extent, failing to consider the amount of a person’s income and their needs. However, the Supreme Court in its orders No 2-18-4482/25 and No 2-18-4480 has affirmed that a bailiff can and also should take into account a debtor’s ability to cope.

Use of unseized income in credit institutions

As at May 2019, approximately 150 000 natural-person debtors were subject to enforcement proceedings. Several of them complained to the Chancellor that banks restrict use of debtors’ bank accounts: for example, they do not enable payments by debit card; transfers through the internet bank or withdrawal of cash from ATMs to the extent of the unseized amount (hereinafter ‘core payment services’). These bank account transactions are indispensable for people in everyday life: benefits and compensation are received to bank accounts, utility bills are paid from them, and they are used to pay for a kindergarten place or for hobby education, or also a state fee.

A bank must ensure that everyone can use core payment services to the extent of the unseized amount. Restriction of these services cannot be justified merely by a wish to simplify control over a seized bank account. A debtor’s consumer rights may not be violated. On that basis, the Chancellor contacted the Consumer Protection and Technical Regulatory Authority with a request to consider initiating state supervision over such violation of consumer rights.

​​​​​​​Refund of deposit 

In the course of enforcement proceedings, assets are often sold at auction and the rights of a person wanting to buy assets at auction may also be interfered with. A security has to be paid to participate in an auction. In constitutional review proceedings, the Supreme Court asked the Chancellor’s opinion on the constitutionality of § 100(4) (second sentence) of the Code of Enforcement Procedure. Under that provision, unrefunded deposit is to be transferred to the common budget section of the Chamber of Bailiffs and Bankruptcy Trustees, and no discretion is allowed concerning a decision not refund a deposit. 

According to the Chancellor’s assessment, the contested provision was constitutional since bailiff proceedings constitute a formalised procedure and leaving extensive margin of discretion might harm attaining the purpose of an auction – i.e. to sell the assets at auction at the best price. However, the Supreme Court reached the opinion that § 100(4) (second sentence) was unconstitutional and repealed it. 

​​​​​​​Movable property in eviction from apartment 

In the course of eviction, a debtor may be deprived of both their immovable and moveable property. The Chancellor was contacted by an individual who was evicted from their apartment in the course of enforcement proceedings and was also deprived of some of their belongings, while the bailiff deposited the rest of the property. According to the petitioner’s opinion, this restricted their right to use and dispose of their movable property. 

The Chancellor found that provisions relating to depositing of belongings and eviction of items of small value were not unfairly strict towards debtors. These provisions are applied only as a last resort when a debtor has failed to comply with the duty to remove their immovable property. The debtor has several possibilities at their disposal to have the belongings returned to them.

​​​​​​​Voluntary compliance with a penalty payment claim

Public authorities may issue precepts to eliminate a violation. In the event of a failure to comply with the precept, a penalty payment may be imposed.

The Chancellor was contacted by an undertaking which had expressed a wish to voluntarily pay a penalty imposed by the Environmental Inspectorate to the Inspectorate’s bank account but the Inspectorate had not agreed to the proposal. The Environmental Inspectorate was of the opinion that enforcement proceedings should be initiated immediately when penalty payment is imposed and the penalty along with the resulting enforcement procedure expenses must be paid to the bailiff.

The Chancellor recommended allowing voluntary compliance with a penalty payment claim. The regulatory framework on penalty payments does not enable giving a person a deadline for voluntary compliance before recourse to a bailiff. In line with the principles of good administrative practice, administrative proceedings need to be carried out as simply and swiftly as possible. Involvement of a bailiff in a situation where it is not actually necessary causes both inconvenience and unnecessary expenses for a person.

​​​​​​​Compensation of damage caused by a bailiff

Bailiffs are liable for damage wrongfully caused in the course of their professional activity. The Chamber of Bailiffs and Bankruptcy Trustees asked the Chancellor to assess the constitutionality of § 9(6) of the Bailiffs Act. Under that provision, if damage caused by a bailiff cannot be compensated from the assets of a bailiff or any other person liable for the damage, first the Chamber and second the state shall be liable for the damage caused. 

The Chancellor found that, in view of the Chamber’s status as entity in public law, its financial autonomy and the role in ensuring the legality of professional activities of bailiffs, such a division of liability between the Chamber and the state is not unconstitutional. Moreover, in the event of compensation of damage caused the Chamber may file a claim of recourse against the bailiff or other person responsible for damage. If in some cases a question of disproportionately large-scale liability of the Chamber should arise, the Chamber may request that the legality of consecutive liability of the Chamber and the state should be assessed by a court.

​​​​​​​​​​​​​​Arrangement of a parent’s access to child

In recent years, the Chancellor has directed attention to problems arising in enforcement of court rulings regulating access arrangements between parents and children. In this connection, the Chancellor made a proposal to the Minister of Social Affairs to prepare legislative amendments protecting the interests of children. (See also the Chapter “Children and young people”).