Insolvency of your counterparty versus securing claims

In the article on the evidence needed for the trial, we indicated that each case is different and, depending on the circumstances, the individual evidence may have different meanings. Of course, all this is absolutely true, but it is worth noting that evidence may be useful not only to prove your claim, but also to secure your claim.

What is the point of securing a monetary claim?

Securing a claim is a very useful institution. In short, it is about securing your claim for the duration of the whole procedure. So in practice it may look like this:

1. the claim that you are making is 10 000,00 Euros
2. we file a request to the court to secure the claim on your opponent’s bank account;
3. the court makes a decision to secure the claim;
4. during the entire duration of the proceedings, your opponent cannot do anything with the amount of 10 000,00 Euros – your opponent cannot pay this amount, cannot buy anything with it, this amount is simply frozen for the duration of the proceedings.

The above institution of securing the claim is useful in that you will not have to worry that your opponent will dispose of all the assets and in the end after winning the case you will not receive your claim, because the defendant will simply dispose of everything.

So what is the procedure of securing the claim? What should you do to get the court to provide security for your claim?

Polish law indicates what actions should be taken to secure a claim. Below in the sections I will briefly describe how it looks like, but here I would like to point out that in order to obtain a security, a Polish court must issue a decision on granting a security, and as our practice shows, it is not always easy.

1. First of all, we have to file an application for security – the court generally acts on an application, in exceptional cases it grants security ex officio. The application may be filed together with the statement of claim (in such a case there is no fee for the application) or during the proceedings in progress (in such a case, there is currently a fee of PLN 100 per application).
2. The basis for providing security is substantiation of your claim and legal interest in providing security: 1) substantiation of your claim means that we have to prove that there is a reasonable basis for assuming that you actually have a claim against the other party. As a matter of fact, we do not need to prove your claim, it is enough that we make it plausible; 2) there is a legal interest in providing security if the lack of security will prevent or seriously impede the enforcement of the decision made in the case or otherwise prevent or seriously impede the achievement of the purpose of proceedings in the case. In short, if we show that after the whole proceedings have been conducted and you have obtained a positive decision, your opponent will not have the money to pay you, then we will confirm that we have a legal interest in providing security.

To sum up, most often we can secure your claim when we prove that your opponent becomes insolvent and after winning the trial, it will not be possible to obtain from him the amount awarded in the judgment. Therefore, it is definitely worth submitting applications to the court for security, because then for the entire duration of the proceedings, your opponent will not be able to do anything with the secured amount.