Litigation in Lithuania

 

Preliminaries

What type of legal system has Lithuania got? Are there any rules that govern civil procedure in Lithuania?

There is a civil law system in Lithuania. Civil, administrative and criminal cases are examined by separate procedural rules. Civil procedure in Lithuania is governed by the Civil Procedure Code (Civilinio proceso kodeksas).

 

How is the civil court system in Lithuania structured? What are the various levels of appeal and are there any specialist courts?

There is three-level court system in Lithuania formed by:

• 54 District Courts.
• 5 County Courts
• The Court of Appeal
• The Supreme Court, which consists of: the Civil Matters Department; and the Criminal Matters Department.

District Courts are responsible for resolution of all civil cases, except those under the jurisdiction of County Courts.

County Courts resolve all claims exceeding 43,000 EUR , with the exception of claims regarding family and labour matters as well as claims concerning:

• author non-pecuniary relationship;
• public procurements;
• bankruptcy and restructuring;
• where one of the parties is a foreign state;
• involuntary sale of shares;
• investigation of activities of an undertaking;
• pecuniary and non-pecuniary rights of patients.

Rulings of first examination by District Courts might be appealed to the County Courts while rulings of County Courts might be appealed to the Court of Appeal. The rulings after the appeal review either by the County Courts or the Court of Appeal might be reviewed in cassation instance by the Supreme Court.

There are no specialist courts (commercial courts and such like) in Lithuania, therefore all civil disputes are examined by the general Courts according to their jurisdiction. Besides civil courts, there are also administrative courts which examine administrative (but not civil) cases. There are 5 County Administrative Courts and the Lithuanian Supreme Administrative Court.

 

What are the main stages in civil proceedings in Lithuania? What is their underlying timeframe?

The main stages in civil proceedings before the Lithuanian courts are:

• bringing of action;
• securing of claim, including freezing of assets and property arrest (optional);
• preparation for trial;
• trial; and
• judgment.

The timing of a case depends on the type of case. Some may be settled within one month and others may last for several years. On average, cases that are not appealed last up to one year.

 

What is your local judiciary's approach to exclusive jurisdiction clauses?

Lithuanian courts neither accept claims in case of foreign dispute resolution forum, nor recognise the ruling of foreign courts in case of breach of an exclusive jurisdiction clause in favour of a Lithuanian court. Contracting parties are entitled to determine the court of first instance where all disputes in respect of the contract or its performance shall be decided. However there are exceptions where parties are not entitled for such exclusive jurisdiction clauses - for example the disputes regarding real property shall be brought only to the jurisdiction of location of such real property.

 

What are the costs of civil court proceedings in Lithuania? Who bears these costs?

Litigation costs vary considerably depending on the type, size and complexity of the civil proceeding. In general the court fee will becalculated from the claim amount, which may be 1% - 3% depending on the amount of claim. Attorney's fees in general are calculated on a per hour basis in Lithuania. The bailiff, expert, translation/interpretation and document legalisation fees shall be considered by the party willing to litigate as well. In general the loser of the proceeding shall bear the costs of the wining party. Attorney's fees shall be borne by the losing party and not exceed fees set forth in the recommendations of the Lithuanian Ministry of Justice. Deviations from those recommendations are allowed in exceptional cases.

 

Are there any particular rules about funding litigation in Lithuania? Are there any contingency/conditional fee arrangements? Are there rules on security for costs?

There are no particular rules about funding litigation in Lithuania - a lawyer and his client are free to set up any fee arrangements by their agreement, which may include contingency/conditional fees. According to the Art. 50(2) of the Law on Bar, contingency fees may only be applied in civil cases. There are no rules on security for costs in Lithuania either.

 

Before Commencing Proceedings

Are there any pre-action procedures in place in Lithuania?

In particular categories of cases the pre-action procedures are mandatory (for example, violation of honour or reputation cases, bankruptcy cases and some others).

 

What limitation periods apply to different classes of claim for the bringing of proceedings before your civil courts? How are they calculated? Are time limits treated as a substantive or procedural law issue?

The general limitation period for contract and damage claims is 10 years in Lithuania. The limitation periods in particular cases can be different: starting from 1 month (for example, for claims deriving from contest's results. The general principle is that the time starts to run from the day the person found out or should have found out that his rights are violated. By some limited reasons the limitation period can be either suspended or started anew again (for example, actions of the debtor showing he recognizes his duty). The limitation periods applied to different classes of claim for the bringing of proceedings before the civil court are treated as an issue of substantive law, therefore such periods are not subject to the renewal tools by application of the Civil Procedure Code.

 

Commencing Proceedings 

How are civil proceedings commenced (issued and served) in Lithuania? What various means of service are there? What is the deemed date of service? How is service effected outside Lithuania? Is there a preferred method of service of foreign proceedings in Lithuania?

After acceptance of the claim, the court shall send the statement of claim to the defendant immediately by registered mail. The court shall set the term to submit the statement of defence 14-30 days from the receiving of the statement of claim. The courts prefer to perform the service of a summons by registered mail, although other means are provided by the Civil Procedure Code such as courier, serving by bailiff and etc. The Civil Procedure Code does not set the exact term by which such service shall be provided before a hearing - in general this is approximately one month, but not less than one week. In respect to service outside the jurisdiction, the Lithuanian court shall consider the numerous conventions (1954 Hague Convention, 1965 Hague Convention, 1970 Hague Convention, and other bilateral conventions) and EC Regulation 1348/2000 and EC Regulation 1206/2001.

 

Are any pre-action interim remedies available in Lithuania? How do you apply for them? What are the main criteria for obtaining these?

There are several pre-action interim remedies in Lithuania for the securing of a claim, which includes freezing of assets, property arrest and establishment of prohibitory endorsements in public registers. Those can be applied either during the proceeding or prior to the bringing of the action. The criteria for the obtaining the interim remedies during the proceeding is if there is reason to believe that the execution of the court judgment may become problematic or impossible. The criteria for the obtaining such remedies prior to the bringing of the action is if the debtor avoids his obligations by replacing or alienating his property, by leaving his place of residence without informing the creditor, of by performing other actions in bad faith. Other parties of the proceeding shall not be informed that such a decision is taking place.

 

What are the main elements of the claimant's pleadings?

The main elements of the pleadings in Lithuania are:

• the court, to which the statement of claim is addressed;
• the names and addresses of the parties;
• the infringed rights;
• the claim amount if any, and its calculation thereof;
• reasoning and evidence;
• claims;
• information if the plaintiff has an attorney;
• plaintiff's opinion on taking a judgement by default;
• list of documents attached; and
• the date.

In case any element is lacking, the court is entitled to not process the statement of claim. In this case the judge shall take a reasoned decision and set a time limit for rectifying the deficiencies (no less than 7 days). If such deficiencies are not rectified in the set time limit, the statement of claim shall be returned to the submitter.

 

Can the pleadings be amended? If so, are there any restrictions?

Pleadings can be amended in writing. Amendments can be made at any moment up until the commencement of the case review in substance, which starts with the decision of a judge to move to the stage of reviewing the case in substance. In particular categories of cases (labour, family cases) amendments can be made until the end of the case review in substance.

 

Defending a Claim 

What are the main elements of a statement of defence? Can the defendant bring counterclaims/claim or defence of set-off?

The main elements of a statement of defence are:

• whether the defendant admits the claim fully or in a part;
• objections against the claim and substantiation thereof;
• evidence;
• information if the defendant has an attorney;
• plaintiff's opinion on taking a judgement by default and
• other significant facts for the review of matter.

The defendant is entitled to bring a counterclaim up until the commencement of the case review in substance. A court shall accept such counterclaim if:

• the set-off of the claim and the counterclaim is possible;
• the satisfaction of the counterclaim excludes the satisfaction of the claim in whole or in part; or
• the counterclaim and the claim are related in a way, the joint examination of them would favour quicker and more correct adjudicating of the case.

What is the time-limit within which the statement of defence has to be served?

The court shall set time-limit between 14 to 30 days for the submission of the statement of defence. This period starts to run from the day the defendant has received the statement of claim and the request to provide the statement of claim. In case the defendant fails to submit his statement of defence on time, the judgement by default can be taken against him.

 

Is there a mechanism in your civil justice system whereby a defendant can pass on liability by bringing an action against a third party?

The defendant on his own is able to pass on liability by bringing an action against a third party in separate proceedings only.

 

What happens if the defendant does not defend the claim?

In case the defendant fails to defend the claim, a default judgment may be entered against him. A default judgment is a judgment, which is entered into at the request of plaintiff by the court of first instance in matter, where the defendant has failed to provide explanations regarding the claim and has failed to attend the hearing pursuant to the court summons without first notifying the reason for their failure to attend.

 

Can the defendant dispute the court's jurisdiction?

The defendant is entitled to dispute the court's jurisdiction by submitting a petition for the change of jurisdiction to another court.

 

Joinder & Consolidation

Is there a mechanism in your civil justice system whereby a third party can be joined into ongoing proceedings in appropriate circumstances? If so, what are those circumstances?

The Civil Procedure Code provides a mechanism where a third party can be joined into ongoing proceedings, if the rights and duties of such third party may be affected by the judgment. The joinder is possible up until the end moment of the hearing of the case substance in first instance. Such third parties have all procedural rights, with the exception of modifying the subject matter or the amount of the claim, admitting the claim or entering into a settlement; third parties cannot require the execution of a judgement. Third parties with separate claims have the same procedural status as the plaintiff. The request to join the third party in ongoing proceedings shall be addressed to the court, which determines the joinder.

 

Does your civil justice system allow for the consolidation of two sets of proceedings in appropriate circumstances? If so, what are those circumstances?

A plaintiff is entitled to join several mutually related claims in one statement of claim. The court is entitled to consolidate several sets of proceedings into one, if there are several sets of proceedings before the court between the same parties, or if a plaintiff brings an action against several defendants, or if several plaintiffs bring an action against the same defendant.

 

Do you have split trials/bifurcation of proceedings?

The court is entitled to split the case into several claims if the court finds that separate reviews of such claims will be more preferable.

 

Duties & Powers of the Courts

Is there any particular case allocation system before the civil courts in Lithuania? How are cases allocated?

This is case allocation system in Lithuania, which is provided in the Code of Civil Procedure. Generally, the case is justiciable for a court in which territory a defendant is. There are exceptions to this rule related to particular categories of cases (for damages, consumer rights and others) or object of the dispute (e.g. real estate). In some cases the plaintiff can choose the court between few alternatives.

 

Do the courts in Lithuania have any particular case management powers? What interim applications can the parties make? What are the cost consequences?

The courts have the following management powers:

• controlling the process of the case in a cost-conscious and efficient manner by setting a procedural timetable and giving other appropriate directions;
• notifying parties that no evidence for some facts has been submitted and setting a time period for the submission thereof;
• encouraging the parties to reach a settlement.

The parties can make the following interim applications:

• securing a claim, including freezing of assets and property arrest;
• securing evidence;
• requiring the court to request the documentary evidence;
• ordering the expert-examination; and
• joining a third party to the ongoing procedure.

For some interim applications court fees exist. In order to freeze assets, arrest property or apply other measures the court can order the party to pay a deposit to the bank account of the court. The amount of deposit is determined by the court according to the circumstances.

 

What sanctions are the courts in Lithuania empowered to impose on a party that disobeys the court's orders or directions?

The courts in Lithuania are empowered to impose on a party that disobeys the court's orders or directions the following sanctions:

• a warning;
• expulsion from the court room;
• a fine;
• arrest; or
• enforced delivery of person to the court.

Do the courts in Lithuania have the power to strike out part of a statement of case? If so, in what circumstances?

The courts of Lithuania have no power to strike out part of a statement of case. As far as formal requirements are observed, the court shall process the statement of case.

 

Can the civil courts in Lithuania enter summary judgment?

Courts in Lithuania can enter preliminary judgement which in essence is similar to summary judgement as it is adopted without full trial. Preliminary judgement can only be adopted in cases which follow document procedure.

 

Do the courts in Lithuania have any powers to discontinue or stay the proceedings? If so, in what circumstances?

The courts in Lithuania have a right to discontinue proceedings if:

• the case is not subject to the civil procedure;
• the plaintiff has not followed the interim pre-judicial order in particular categories of cases and it's not possible to use this order anymore;
• there is a stand up court or arbitration decision in the analogous matter;
• the plaintiff has renounced his claim and the court has accepted that;
• the parties have made a peaceful agreement and the court has accepted that;
• one of the parties died (if natural person) or was liquidated (if legal person) and takeover of their rights is impossible.

The court shall stay the proceeding if:

• a party to the proceeding died (natural person) or ceased to exist (legal person) if takeover of the rights is possible;
• a party to the proceeding lost his legal capacity;
• it's not possible to examine the case as long as another civil, criminal or administrative case has not been examined;
• the court decides to submit the application to the Constitutional Court of Lithuania;
• the court assigns for the preliminary ruling from the European Court of Justice; and
• another circumstances set in the law.

The court is entitled to stay the proceeding if:

• a search of the defendant has been announced;
• the court appoints an expertise;
• a party serves in the Lithuanian State safety division where the war status is;
• other circumstances when the court decides it's necessary to stay he proceeding.

Disclosure

What are the basic rules of disclosure in civil proceedings in Lithuania? Are there any classes of documents that do not require disclosure?

The court is entitled to request the documentation, explanations, witness testimony and other evidence from the opposite party and any other person or state authority as well. The court may do so on its own initiative or following a request of a party. The party, who requests the court to require  a specific piece of evidence shall provide the reasons why this piece of evidence is in possession of the person referred to and why it is important for the proceedings. If the person is not able to provide the requested document on time or at all, such person shall notify the court in writing of the reasons. Otherwise such person might be fined.

 

What are the rules on privilege in civil proceedings in Lithuania?

A person is entitled to refuse to provide the requested documents because of reasons of legal or medical profession, confidentiality constraints, state secret and etc.

 

What are the rules in Lithuania with respect to disclosure by third parties?

The rules with respect to disclosure are general and the same ones apply to the parties of the proceeding and any third party/state authority. Please see question 7.1.

 

What is the court's role in disclosure in civil proceedings in Lithuania?

After the application of a party, the court decides if the request for documentation shall be made and, if so, the court will oversee the performance of such request.

 

Are there any restrictions on the use of documents obtained by disclosure in Lithuania?

The documents provided at the request of the court shall be used only for the purposes of a particular proceeding. After the judgment comes into effect, the person who submitted the requested document is entitled to apply in writing for the originals of the document(s) to be returned to him.

 

Evidence

What are the basic rules of evidence in Lithuania?

Each party shall prove the facts upon with they substantiate their claims. No evidence shall have a predetermined effect that would be binding upon the court. No evidence is necessary to prove the facts not challenged by the opposing party.

 

What types of evidence are admissible, which ones are not? What about expert evidence in particular?

The Civil Procedure Code may admit the following types of evidence:

• the statement of a party of the proceeding (if such facts are confirmed by other evidence);
• testimony of a witness;
• documentary evidence (including audio and video tapes, CD's and such like);
• physical evidence;
• expert evidence; and
• others.

As a general rule hearsay is not admissible as evidence. Certain facts must be proved by particular documents only. Parties are entitled to apply to the court to order expert examination. In this case each party is entitled to provide questions to be answered by the expert, but the final scope and edition of questions to the expert shall be decided by court. It is done by making a separate order in writing addressed to the expert. The expert opinions made before the proceedings are admissible as evidence as well.

 

Are there any particular rules regarding the calling of witnesses of fact? The making of witness statements or depositions?

The calling of witnesses is made by the court in accordance with the respective application by a party. If a witness fails to appear in hearing, he might be enforced to come. Witness statements in writing shall be considered as evidence only in exceptional cases if this would not affect the disclosure of essential circumstances of the case.

 

What is the court's role in the parties' provision of evidence in civil proceedings in Lithuania?

The parties make applications to the court to make orders either to call witnesses, to provide documentation from other persons, to perform expert examination, to secure evidence and such like. The court is entitled to inform the party that the some facts have not been proved by evidence and set the term for the respective submission.

 

Judgments & Orders

What different types of judgments and orders are the civil courts in Lithuania empowered to issue and in what circumstances?

Judgments can be issued either for the recovery of an amount of money, transfer of goods, or performance of a certain action. In case the defendant is absent, the court may issue a default judgment. In case the parties agree on a settlement, the court provides a decision approving the terms of the settlement - this decision can be executed as a judgment. The court is empowered to issue several types of orders such as requesting documents from persons, joining a new party to the proceeding, establishing interim measures, applying procedural fines and sanctions and such like.

Intermediate decision can be adopted in class action cases. Intermediate decision confirms the facts which are common to all the members of the group, however claims regarding pecunary damages are not resolved by intermediate decision.

 

What powers do your local courts have to make rulings on damages/interests/costs of the litigation?

Only rulings to recover loss suffered and lost profit can be made by Lithuanian Civil Law. The interest from the debt can be awarded by the court; in case the rate is not stipulated in a contract, the rate can be calculated based on the Civil Code and other laws (approx. 5-15% per year). Costs of litigation shall be compensated by the losing party; however the lawyers' fees shall be compensated according to the recommendations of the Ministry of Justice.

 

How can a domestic/foreign judgment be enforced?

When a domestic judgment comes into effect, the beneficiary is entitled to apply in writing to the court to provide Execution Writ. Based on this document the state officials are entitled to compulsory execution. The foreign judgment shall be recognised by the Court of Appeal at first. The Civil Procedure Code provides several reasons why such judgment shall not be recognised - for example, lack of jurisdiction of a foreign court. If the foreign judgment is recognised, the court issues a decision about recognition and execution of the foreign judgment, which might be appealed at the Supreme Court. Nevertheless, the decision to recognise a foreign judgement adopted by the Court of Appeal comes into force immediately, therefore cassation does not stop its execution.

 

What are the rules of appeal against a judgment of a civil court of Lithuania?

The judgment of first instance may be appealed within 30 days from its announcement by providing reasons why it is wrong. This is done by the submission of an appellation petition to the same court, which issued the judgment. If there is no contradiction to the formalities required by the Civil Procedure Code, the court proceeds the case to the higher level court. The appellation court reviews the case once again in the range requested by the party, but not exceeding the scope of the initial claim. The judgment of the appellation court may be appealed in cassation instance within 3 months from its announcement by providing reasons how the court wrongly applied the rules of material or procedural law.

 

 

 

Dispute resolution in Lithuania

Preliminaries

What methods of dispute resolution are available and frequently used in Lithuania? Arbitration/Mediation/Tribunals/Ombudsman?

Parties are entitled to agree to settle their dispute in arbitration, which might be either ad hoc or permanent. If there is an arbitration agreement clause the court shall not accept the case covered by it. If arbitration award is not performed voluntarily or made in accordance with the rules of law, the court shall grant the execution writ and therefore such award shall be executed mandatory in the same way as a court judgment. The courts shall assist in applying interim measures, such as freezing of assets.

Parties are also entitled to resolve a dispute by way of mediation.

 

What are the laws or rules governing the different methods of dispute resolution?

There is a Lithuanian Law on the Commercial Arbitration and major rules are set in the Civil Procedure Code. Mediation is governed by the Law on Mediation in Civil Cases.

 

Are there any areas of law in Lithuania that cannot use arbitration/mediation/tribunals/Ombudsman as a means of dispute resolution?

There are several areas of disputes, which shall not be resolved in arbitration. Otherwise such arbitration award will not be accepted by the court and consequently will not be enforceable. In general it applies to: constitutional, employment, family, administrative relationship, as well disputes arising from competition, patents, trade and services marks, insolvency and consumption; the party is the state or a municipal institution. Mediation cannot be applied in disputes related to consumer rights. 

Dispute Resolution Institutions

Do the mentioned dispute resolution mechanisms provide binding and enforceable solutions?

Court decisions are binding and enforceable. If a court decision is not executed voluntarily by the guilty party, another party can seek bailiff’s assistance.

Domestic or foreign arbitration awards made in accordance with the Civil Procedure Code and Law on Arbitration and accepted by the court are binding and enforceable in the same way as a court judgment.

If an amicable agreement is reached by the parties during mediation, such agreement can be approved by the court in order to ensure its execution.