Settlement attempt will not interrupt the statute of limitations
Amendment of Polish Civil Law and Litigation Rules
Our Polish Litigators as well as the Contacts Attorneys report that on December 27, 2021 the President signed an act amending the Civil Code and the Civil Procedure Code (Civil Litigation Code). The amendments primarily concern the effects of a motion for a settlement attempt and a motion for mediation, and they also significantly modify the institution of so-called exploitation in civil law relations.
Settlement attempt and mediation vs limitation period in Poland
Starting from June 2022 practice of interruption of limitation period in litigation in Poland will look differently. This is because filing of a motion for a settlement attempt or the commencement of mediation proceedings conducted without the involvement of the court will result in suspension of the statute of limitations and not, as so far, in interruption of the limitation period. As indicated by the authors of the amendment to Polish Civil Procedure Law (Litigation Rules), the purpose of this law is to eliminate the common practice of filing subsequent motions for a settlement attempt and motions for out-of-court mediation that were not aimed at reaching a settlement but only at interrupting the running of the statute of limitations.
Litigation in Poland regarding exploitation in contracts
In addition, the amendment to Polish Contracts Law introduces significant changes to the regulation of so-called exploitation. Exploitation takes place when one of the parties to a contract, exploiting the other party’s forced position, infirmity or inexperience, in exchange for his own benefit accepts or reserves for himself or a third party a benefit whose value at the time of concluding the contract exceeds the value of his own benefit to a gross degree. As the Polish Contracts Law stands now, a party aggrieved by exploitation may within two years from the conclusion of a contract demand its modification or even its annulment. The law amendment extends the time limit to three years, and furthermore introduces a presumption that if the value of one party’s consideration at the time of the conclusion of the agreement exceeds at least twice the value of the consideration, then it is gross. The definition of the prerequisites of exploitation of „forced position, infirmity, inexperience” has also been modified to include the additional prerequisite of „lack of sufficient knowledge of the other party about the subject matter of the contract.
Entry into force – amendments to Contracts Law and Litigation rules in Poland
The changes of law introduced by the amendment will enter into force as of the end of June 2022. However, already now entrepreneurs should take care to plan further actions concerning time-barred claims, as well as – if they are the stronger party of a given legal relationship – take care of proper construction of concluded contracts in order to avoid the possibility of challenging those contracts as exploitative.