Litigation 2019 Second Edition

Last Updated December 05, 2019

Slovenia

Law and Practice

Authors



Rojs, Peljhan, Prelesnik & partners o.p., d.o.o. has been providing top-ranked legal expertise to clients on the most significant commercial projects in Slovenia since it was established in 1989. The firm is recognised by peers and clients alike as a market leader in corporate and commercial law, dispute resolution, banking and finance, pharmaceutical law, competition and M&A transactions. Clients include the Slovenian Motorways Company as the biggest investor in Slovenia, several domestic and foreign investment and commercial banks, leasing companies, automotive sector corporations, construction companies, insurance corporations, trade associations, pharmaceutical companies, state and private-owned funds and selected individuals.

The Slovenian legal system is founded on civil law.

Slovenian civil procedure is based on the adversarial model, whereby parties have to state all facts supporting their claim and provide the underlying evidence. This general principle is occasionally supplemented with ex-officio investigation if the court suspects that the parties’ actions contradict mandatory provisions or moral rules. Even in such cases, however, the parties’ right to be heard may not be breached.

The inquisitorial model also applies in certain specific types of civil procedures, such as family law disputes.

The procedure is conducted both through written submissions and orally, with particular weight being given to the principle of orality. Courts generally decide on the basis of oral, direct and public hearings.

District and local courts generally have competence to hear disputes in the first instance, with their competence being determined according to the value of the claim and the type of dispute. The courts of first instance are further divided into different departments (eg, criminal, enforcement, commercial, etc), although solely for organisational purposes. Higher (appellate) courts generally have the power to decide on all appeals against the decisions of local and district courts. In certain cases, parties have the right to initiate further judicial review before the Supreme Court of the Republic of Slovenia.

Slovenia also recognises certain specialised courts – ie, Labour and Social Courts, and the Administrative Court.

Upon the exhaustion of all other legal remedies, a party may appeal to the Constitutional Court of the Republic of Slovenia if its human rights and fundamental freedoms have been breached before the courts of regular jurisdiction. In this procedure, a party may also challenge the constitutionality of the law underlying the dispute.

First instance proceedings are public, and any person of full age may be present at the hearing. However, on its own discretion or at the proposal of the party, the court may exclude the public from the hearing, if so required by official, commercial or personal interests, or for reasons of public order or morals. No special appeal is allowed against the decree on exclusion of the public (it can, however, be asserted in the appeal against the judgment), although unjustified exclusion represents one of the absolute reasons for appeal, which demonstrates the significance of the right to a public trial in Slovenian civil procedure.

Publicity in certain types of civil procedures may be excluded already by virtue of law, such as in family law disputes. The public is likewise excluded from settlement hearings, which take place just before the first hearing is held.

Only the parties and other persons demonstrating justified interest are generally allowed to examine the case file.

Any person with full legal capacity may act as a legal representative in proceedings before local courts. In proceedings before a district court, high court or the Supreme Court, an attorney or another person that has passed the bar exam may act as a legal representative. The Slovenian Civil Procedure Act is even more stringent in the process of extraordinary legal remedies, wherein a party may only plead through an attorney.

Foreign attorneys may conduct cases in Slovenian courts, but they have to be admitted to the Slovenian bar. Different rules apply to attorneys from EU Member States and attorneys from non-EU Member States.

Until recently, the concept of litigation funding was not regulated in the Slovenian legal system, but the Republic of Slovenia has now implemented new legislation on collective actions, called the Collective Actions Act, which regulates litigation funding in collective actions. The concept of litigation funding is otherwise not regulated in Slovenian procedural law.

The Slovenian Collective Actions Act stipulates that the plaintiff shall publicly disclose and report to the court the source of the funds used to finance the collective action proceedings. A court shall not approve a class action where litigation funding is provided by a third party in the following circumstances:

  • if there is a conflict of interest between the third party and the plaintiff and members of his collective;
  • if the third party does not have sufficient resources to fulfil its financial obligations towards the plaintiff initiating the procedure of collective action; and
  • if the plaintiff does not prove to have sufficient funds or adequate insurance to cover the defendants’ costs, should the collective action fail to succeed.

Furthermore, if a collective action is financed by a third party (which is a private entity), it is also not permissible for a third party to seek influence over the plaintiff’s procedural decisions. Moreover, a third party shall not finance a collective action against a defendant who is a financier’s competitor or against a defendant on whom the financier is dependent.

As already mentioned, litigation funding by a third party is only regulated by the Slovenian Collective Actions Act, meaning that it applies only to collective actions and no other types of lawsuits.

According to the Slovenian Collective Actions Act, litigation funding by a third party is only regulated for the plaintiff and not for the defendant.

With regard to the Slovenian Collective Actions Act, the minimum amount that a third party funder can provide should be equal to sufficient resources required to fulfil its financial obligations towards the plaintiff initiating the procedure of collective action, and to cover the defendant’s costs, should the collective action fail to succeed.

A third-party funder should consider the costs that the unsuccessful party must reimburse to the other party for the expenses incurred in the proceedings, such as attorney fees, court fees, expert fees, and other relevant expenses.

The closest resemblance to contingency fees may be found in the Attorneys' Act, pursuant to which an attorney may agree with a client to receive a maximum 15% share of the claim’s outcome, instead of receiving payment according to the Attorney’s Fee Act. Jurisprudence takes the view that the attorney’s payment awarded on the basis of their success in the litigation cannot be combined with ordinary payments for attorney services.

Contingency fees are also regulated in the Slovenian Collective Actions Act, according to which an attorney may also agree with the plaintiff on a payment structure by which an attorney may receive not more than 15% of the amount awarded by the court as a reward. If an attorney undertakes to bear all costs of the proceedings in the event of the collective action’s failure, the agreed award may be increased up to 30% of the amount awarded by the court.

Time limits for obtaining third-party funding are not explicitly regulated in the Slovenian legal order. Nevertheless, the plaintiff should accumulate sufficient resources before initiating a collective action, or the court will not approve the collective action.

Generally, there are no special prerequisites for filing a lawsuit, such as formal demand letters, mediation or the like. Special prerequisites are foreseen only in certain types of proceedings, such as labour law disputes and compensation claims filed against the State for impermissibly long trials.

The general statute of limitation in civil law is five years. In the case of commercial law disputes, the general statute of limitation is three years. Special statutes of limitation may apply for specific types of claims – for example, in respect of claims for the compensation of damages, whereby the barring period depends on the type of the claim.

The statute of limitation period generally commences on the first day after the day the creditor held the right to demand the performance of the obligation, unless stipulated otherwise by law for individual cases. Compensation claims for damages become statute-barred three years after the injured party learnt of the damage and of the person that inflicted it.

The statute of limitation period is not considered ex-officio by the court, but only on the proposal or pursuant to an objection of the other party.

In line with Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, persons domiciled in Slovenia shall be sued in the courts of Slovenia, regardless of their nationality. The general territorial jurisdiction is vested in the court of the territory in which the defendant (either a natural person or a corporation) has his permanent residence or registered office. Special territorial jurisdiction may apply in certain other instances, such as jurisdiction over co-litigants based on the domicile of one of the co-defendants.

In any event, in order to be sued before Slovenian courts, a defendant needs to have legal status (capacity) – ie, it has to be a bearer of rights and obligations.

Proceedings are initiated by means of filing a lawsuit, which must encompass all the preconditions stipulated by the applicable law. In addition to the information concerning the parties, the lawsuit must contain all the relevant facts and evidence underlying the factual basis, and a detailed specification of the claims. Additional facts and evidence may typically be submitted in the follow-up pleading until the first hearings at the latest, whereby changes in the lawsuit itself are possible until the end of the hearing. In principle, changes to the lawsuit take the form of increasing the claim, expanding it with additional claims or changing the factual basis of the claim. Once the lawsuit is served to the other party, the approval of such party is required in order for the change in the lawsuit to take effect. Even if the other party disagrees with the change, the court may still allow it if it deems the change to be reasonable – due to wide interpretation of the notion of "reasonable", the change is almost always attainable. In the instance of change and the expiry of the barring limitation period, the party may object on the grounds of limitation, in spite of the change of the lawsuit.

The adversary party shall be informed of the lawsuit through the court, which shall procure the service of the lawsuit and typically inform the party to respond to the claim in 30 days. The adversary party shall be warned of all procedural prerequisites regarding the response to the lawsuit, representation and the consequences of a failure to respond.

The rules contained in the Civil Procedure Act also apply in regard to foreign parties being sued before a competent court in Slovenia. Other rules may apply with respect to serving the judicial writings to the foreign party – for example, if the party is a national of an EU Member State, EC Regulation No. 1393/2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters is applicable. In instances of transmitting judicial and extrajudicial documentation to foreign nationals of non-EU Member States, the relevant bilateral and multilateral international treaties of the respective states need to be taken into account.

If the defendant has failed to file a reasoned response to the lawsuit within the required time period, the court shall render a judgment granting the claim (default judgment), provided that:

  • the lawsuit has been duly served to the defendant;
  • the action does not contain a claim that the parties may not dispose of;
  • the claim is founded upon the facts stated in the action; and
  • the facts upon which the claim is based do not contradict evidence adduced by the plaintiff or other facts known to the court.

Collective actions are governed by the Slovenian Class Actions Act, the purpose of which is to enable injured parties to obtain compensation in cases of mass harm for violations of rights arising from civil, commercial and labour relations. A class action may be filed for the following:

  • consumer claims arising from contractual relations with companies, as governed by consumer protection laws;
  • claims for infringement of other consumer rights guaranteed by the consumer protection laws;
  • claims for violations of Slovenian competition law;
  • claims alleging breaches of trading rules on regulated markets and prohibited market abuse practices under the laws governing market in financial instruments;
  • claims by workers, brought before labour courts; and
  • claims for liability for damages caused by an environmental disaster, as stipulated by environment laws.

The collective actions procedure is divided into two phases. The purpose of the first phase is to enable assessment of the appropriateness of a collective action, meaning that the court first renders a decision on whether a collective action should be decided on the merits. The second phase is the substantive assessment of the collective action at the main hearing, upon which the court renders a decision on the merits of the case.

The Slovenian Class Actions Act envisages both opt-in and opt-out systems. In deciding whether to apply the opt-in or opt-out system, the court considers all circumstances of a particular case – namely, the value of individual claims of the members of the group and the circumstances that are essential for the approval of the collective action for damages. The opt-in system always applies if at least one of the claims in the collective action for damages relates to the payment of compensation for non-pecuniary damage, or if, according to the assessment in the collective action, at least 10% of the members of the collective action claim payment in excess of EUR2,000. The opt-in system also applies to persons who are not domiciled or established in the Republic of Slovenia at the time a decision to grant authorisation for a collective action procedure is issued.

Notably, the concept of class actions as a means of executing group, collective or public interests is also regulated in individual special laws.

There is no requirement to provide clients with a cost estimate of potential litigation. The costs of the procedure are difficult to predict in advance because of different variables that may affect the final amount. As a general rule of thumb, the higher the amount in dispute, the higher the cost of litigation.

An interim injunction may be issued at the initiation of a party before the initiation of court proceedings, during the proceedings, or after the conclusion of the proceedings, until the conditions for a preliminary order or enforcement are given.

If the creditor does not file a lawsuit within the specified time limit, or if the period for which the interim injunction issued has expired, the court shall stay the proceedings and annul the actions performed.

The Slovenian legal system does not contain any detailed provisions on early judgment. The closest resemblance to an early judgment is a default judgment, which shall be rendered by a court if a defendant does not respond to a lawsuit in a timely manner.

Furthermore, if the lawsuit does not fulfil the minimum procedural requirements, a court may dismiss the case ex-officio, at its own motion, when conducting a preliminary examination of a lawsuit.

In certain circumstances, the courts may issue interim or partial judgments during the course of the proceedings. Subject to bifurcation, interim judgments may be issued if the defendant has challenged both the grounds and the quantum of the claim, and only the grounds are suitable for decision. Therefore, if appropriate, the court may give judgment on the grounds of the claim first. Contrary to interim judgments, partial judgments may be rendered if only some of several claims, or only a part of a single claim, is suitable for a final decision.

Even before the first hearing (in the trial), the court may dismiss the case if procedural requirements for the lawsuit are not fulfilled. The court may also issue a default judgment if the defendant does not respond to the lawsuit, a judgment based on acknowledgement of the claim by the defendant, a judgment by renunciation of the claim by the plaintiff, and a judgement without any hearing (based on the parties’ written pleadings and written evidence, which is mostly limited to cases where parties to the proceeding agree to waive the hearing in writing).

The Slovenian civil procedural law recognises the possibility of several categories of litigants joining the lawsuit on either side. These are called substantive, procedural or legislative "joinder parties" or co-litigants – ie, parties who are directly affected by the matter litigated, substantively or procedurally, or if the law provides for their co-joinder.

Substantive co-litigation exists if, in respect of the cause of action, the parties form a legal community, or if their rights or obligations are based upon the same factual and legal ground, or if they are joint and several debtors or creditors.

Procedural co-litigation exists if the disputed claims or obligations are of the same type and based upon similar factual and legal grounds, and if the same court has the subject matter and territorial jurisdiction over each of the claims and each of the defendants.

Legislative co-litigation can be formed to the extent stipulated by a statute.

Until the completion of the main hearing and subject to the above stated conditions, the plaintiff may be joined by another plaintiff, or the action may be extended to include another defendant, subject to the consent of the latter. The person joining the action and the person on whom the action is extended joins the litigation in the “as is” status.

Furthermore, persons other than the defendant or plaintiff who have a justified interest in the outcome of a civil dispute may join the proceedings as interveners ("intervenient").

In order to be actively eligible to join the litigation, an intervener is obliged to demonstrate justified interest in respect of the subject that is being litigated between the litigation parties, and may thereupon join the litigation on the side of the party whose success would satisfy their justified interest. An intervener may always enter the litigation during the proceedings until the final decision, and at all times during the continuation of proceedings, due to the extraordinary judicial review.

Either party may object to the intervener’s motion for intervention in the proceedings and move for the dismissal of intervention, although the court is able to approve the intervention against the parties’ objections. However, the court may dismiss the intervention at its own motion, even when the intervention is not objected to by the parties, if it determines that the intervener failed to demonstrate justified interest to join the litigation. The intervener may take part in the proceedings until such a decision on dismissal becomes final.

According to the Slovenian Private International Law and Procedure Act, only when a foreign citizen or a stateless person who is not domiciled in the Republic of Slovenia or the European Union begins an action before the courts, the foreign plaintiff shall provide appropriate security for the costs of litigation upon the defendant’s motion. The defendant shall submit the motion at the preparatory hearing or the first hearing at the main hearing, at the latest. The security for litigation costs shall be given in money or any other appropriate security.

The principle in the Slovenian legal system is that the unsuccessful party bears the litigation costs. The same is applicable to the costs associated with interim application proceedings. When the plaintiff initiates an interim application prior to litigation, the courts render a decision on the costs of proceedings following the aforementioned principle. When an interim application is lodged within litigation proceedings, the courts decide on the relevant costs in the judgment on the merits.

Under the Slovenian legal system, the general principle is that courts are not obliged to issue decisions or judgments within a mandatory timeframe. Nevertheless, according to Article 6 (Right to a fair trial) of the European Convention on Human Rights, courts shall render a decision within a reasonable timeframe. When a party believes that a court has not issued a decision or judgment within a reasonable time, it can file a motion that the application or lawsuit should be dealt with on an urgent basis.

Notably, the primary rule upon which the production of evidence is based is contained in the Civil Procedure Act, which provides that "Each party shall state the facts and adduce the evidence, upon which their claims are based, and by means of which they contest the facts stated and evidence adduced by the opposing party." As a civil law legal system, the concept of "discovery or disclosure" as it is known in common law systems does not exist in Slovenia. Furthermore, informative evidence is generally prohibited.

Nevertheless, if a party refers to the document and claims that the other party possesses a document, the court may, upon the party’s reasoned request, order the other party to produce the document, and set a time limit for it to do so.

A party may obtain evidence from third parties through a court order. The reasons for refusing to serve documents are the same as the reasons for refusing to testify.

The general principle is that there is no discovery under Slovenian law. Exceptions apply and, when necessary, courts may request the other party or third persons to produce evidence.

In the Slovenian legal system, evidence is typically developed and admitted into the record at the main hearing. Security of evidence prior to the main hearing at the party’s motion is also attainable.

During the proceedings, a party typically files an evidentiary motion, and the court decides whether or not to review the proposed evidence. Courts render evidentiary decisions in this regard. A party may file the following motions for evidence: inspection, documents, witnesses, expert evidence and party’s testimony.

Witnesses, inspection, experts and parties shall testify orally at the main hearing. Documents are generally not required to be read at the main hearing. Oral statements are managed by the judge at the main hearing.

The fundamental principle that applies to the evaluation of evidence is the principle of the free assessment of evidence.

The concept of legal privilege in Slovenia implies an attorney-client relationship pursuant to which the disclosure of information is protected by attorney-client privilege – ie, the attorney is not obliged to disclose the information affecting the client. This concept of legal privilege explicitly applies to external counsel (admitted attorney-at-law); however, in-house counsel might also reject disclosure of information if it has been obtained by the counsel acting as the proxy of the party to the procedure. In-house counsel cannot decline to answer questions regarding facts that have become known to them by virtue of their actual work and not in the role of a legal representative.

The following reasons would prohibit courts ordering the disclosure of a document:

  • attorney-client privilege;
  • documents about the party’s or other person’s confession to a religious confessor;
  • professional secrets, although professional secrets shall be disclosed if the disclosure of certain facts is necessary for the public benefit or the benefit of anyone else, and such benefit is more important than the preservation of secrecy;
  • a witness may refuse to answer individual questions if he or she has good reasons for doing so, in particular if a witness would cause severe shame or considerable property damage, or would risk criminal prosecution of himself or his blood relatives by answering such questions; and
  • trade secrets, unless the disclosure of trade secrets is objectively necessary to secure the right to judicial protection of the other party and it objectively outweighs the counterparty's interest in protecting this information as a trade secret.

A court may issue injunctive reliefs (as well as interim injunctions) to secure a monetary and non-pecuniary claim. With regard to the former, the court issues an interim injunctive relief if the creditor can prove that the claim exists or that the claim against the debtor will arise. The creditor shall also demonstrate the probable risk that the debtor's disposal, concealment or other disposition of the property may make it impossible or substantially difficult to enforce the claim in the future. With regard to the latter, the court issues an interim injunction if the creditor can prove that the claim exists or that the claim against the debtor will arise. The creditor shall also demonstrate the probable risk of the enforcement of a claim being precluded or substantially impaired; or that the injunction is necessary to prevent the use of force or the occurrence of hardly recoverable damage; or that, if the interim injunction rendered would prove unfounded later in the proceedings, the debtor would not suffer more serious adverse consequences than those that would have occurred without the issuance of the interim injunction.

Furthermore, an application may be made to the Slovenian courts for provisional measures, including protective measures, even if the courts of another EU Member State have jurisdiction as to the substance of the matter.

In extremely urgent cases, interim injunctive reliefs may be obtained on the same day as the motion for interim injunctive relief is filed. A party shall file a motion for injunctive relief and give notice to the court that the case is extremely urgent. It is up to the court to decide if the circumstances are urgent.

Injunctive reliefs may be issued on an ex parte basis, and the opposing party may subsequently challenge the decision, after the decision was rendered. A party may propose issuing the injunctive relief on an ex parte basis, but it is up to the court to issue the relief before giving the opposite party the possibility to respond.

The respondent has a right to demand compensation for damages suffered through an interim injunction that was unfounded or not justified from the applicant; this also applies to injunctive reliefs granted ex parte. In certain cases, the court may, upon the applicant's motion, require the applicant to provide appropriate security for potential damages, even if the creditor has demonstrated the probable existence of the claim and the imminent danger of irreversible damages.

Injunctive reliefs may be granted against the worldwide assets of the defendant. However, the recognition and enforcement of injunctive reliefs are only harmonised at the EU level by Regulation (EU) No 1215/2012 (Brussels I BIS Regulation). With regard to third countries, cases should be assessed individually, since reciprocity is required.

In general, injunctive reliefs cannot be granted against third parties, except in exceptional cases – eg, a court may order a payment service provider to freeze the defendant’s assets on a transaction account.

When an order on injunctive relief is issued in civil or other proceedings, it has the effect of an enforcement order, so injunctive reliefs are directly enforceable under the general provisions of enforcement law. Therefore, in certain cases, enforcement actions are conducted by an enforcement officer.

Litigation proceedings are initiated by filing a lawsuit to the competent court, which serves the lawsuit to the defendant, giving him 30 days to lodge a response. Proceedings before courts of first instance are conducted by a judge. Parties are required to state all facts concerning their cause of action and adduce evidence underlying those facts.

After receiving a response to the lawsuit, the court schedules a preparatory hearing to facilitate an open discussion of the legal and factual aspects of the dispute, and to enable the parties to supplement their arguments and legal views, propose further evidence, make statements and seek a judicial settlement. The preparatory hearing is also intended to develop a procedure management programme.

Subsequently, the main hearing follows. In general, the Slovenian civil procedure involves oral argumentation and oral witness, party and expert examination at the main hearing, while written submissions are lodged as a preparation to the main hearing. Written arguments are normally filed through preparatory submissions.

Upon the full production of evidence, the judge will terminate the hearing and typically render the decision in writing. The period for drawing up the judgment is 30 days, but this period is not binding. According to the Civil Procedure Act, the court may also render the judgment orally, but this typically never occurs in practice.

The court schedules a preparatory hearing to facilitate an open discussion of the legal and factual aspects of the dispute, and to enable the parties to supplement their arguments and legal views, propose further evidence, make statements and seek a judicial settlement. In practice, preparatory hearings are often omitted and the court proceeds with the main hearing.

Jury or senate trials in typical common and commercial litigation proceedings are not legally foreseen, and in the first instance only one professional judge shall hear the dispute. In complicated commercial disputes, the judge can propose that a senate of three professional judges will decide about the dispute. The party cannot demand a jury trial. Nonetheless, a senate comprising one professional judge and two jury members is common in labour law disputes.

The fundamental rule governing the admission of evidence is envisaged in Article 7 of the Civil procedure Act, which stipulates that the parties shall state all facts giving rise to their cause of action and adduce evidence underlying these facts. The court may never render a judgment upon facts to which the parties have been denied access or have not been given the opportunity to be heard.

The court may reject an evidentiary proposal if the proposed evidence is unnecessary, irrelevant or manifestly not related to the alleged facts. Such a decision on the rejection of proposed evidence must be reasoned by the court.

All evidence should typically be submitted to the court at the first hearing at the latest. The evidence can be submitted later if the party can demonstrate that it is not by virtue of its fault that it was not submitted earlier, or if the submission of evidence would not delay the resolution of the dispute.

According to the Slovenian civil procedure law, the primary rule in respect of expert testimony is that the court examines and verifies evidence by means of introducing expert witnesses when expert knowledge is required for the purposes of determining or clarifying a certain disputed fact. Expert testimony is deemed to be one of the means of producing evidence, which implies that a party carrying the respective burden of proof is required to propose expert testimony.

The parties may propose expert testimony, but the expert examination will be carried out only by experts appointed or approved by the court. Under its procedural leadership, the court may seek to appoint the expert at any time for the purpose of clarifying disputable or disputed facts. Prior to the appointment of an expert, the court gives the parties the opportunity to be heard thereon.

Expert opinion obtained and submitted by the parties is not considered as an expert opinion, but only as a statement of such party.

The principle of publicity is a constitutional principle under Slovenian law, and judicial hearings are public. In exceptional cases, the public may be excluded in paternal disputes, matrimonial disputes, and disputes concerning administrative, trade or personal secrets, due to reasons of public order and morality.

Although hearings are public, transcripts of court hearings are only available to the parties, and not to the public.

The first to examine evidence is the judge, meaning that he or she is the first to question witnesses, experts and the parties, followed by the parties and their representatives. The judge holds the procedural and material leadership of the proceedings, and facilitates the parties’ right to be heard and the proper performance of evidence. Several hearings are usually required before the judgment is adopted, which often causes considerable judicial delays.

The average length of proceedings before the courts of first instance for commercial disputes is 11.1 months, and the average length of proceedings before the high courts for commercial disputes is 4.5 months. The length of procedures before the Supreme Court is 4.5 months in commercial disputes.

Please note that the average length varies according to the complexity of the specific case.

Settlement could be agreed without the court’s approval. Two types of settlement are available: in-court and out-of-court settlement. Court settlements are directly enforceable, whereas out-of-court settlements are not, although direct enforceability may be achieved differently (eg, as a directly enforceable notarial deed).

The parties are independent with regard to their settlement; however, the court observes if the parties’ claims that are subject to the settlement are such that they may be freely disposed of by the parties.

Given the broad possibilities of accessibility to court files based on the Slovenian Public Information Access Act, it can hardly be assured that the court settlement, which has similar effects as a judicial decision, remains confidential. In out-of-court settlements, confidentiality can be assured with greater probability, given that the court files only contain the consequences of the settlement (ie, withdrawal of the claim).

Court settlements are directly enforceable, whereas out-of-court settlements are not enforceable in themselves. In order to achieve the enforceability of out-of-court settlements, a lawsuit is required. However, the parties may adopt the out-of-court settlement in the form of a directly enforceable notarial deed.

A party may challenge the court settlement by lodging an action for annulment of the court settlement.

An action for annulment of the court settlement may be filed in the following circumstances:

  • if the court settlement is concluded in mistake or under the influence of force or fraud;
  • if the court settlement has been concluded in respect of claims of which the parties cannot dispose;
  • if a judge who should have been excluded by law or was in fact excluded participated in the conclusion of the court settlement; or
  • if a person did not have the capacity to conclude the court settlement.

Courts are restricted to the claims sought to be invoked by the parties. A court may render a variety of condemnatory, declaratory and constitutive judgments, subject to the fulfilment of certain statutory requirements.

With a condemnatory judgment, a court orders the defendant to provide, do, omit or endure something. A condemnatory judgment may only be issued if the defendant’s obligation is due.

With a declaratory judgment, the court determines whether or not a certain right or legal relationship subsists. A declaratory judgment can only be issued if the plaintiff demonstrates legal interest for such a judgment.

A court renders a constitutive judgment to annul, alter or redefine a particular legal relationship.

The injured party typically has the right to the reimbursement of ordinary damage (diminution of property) and the reimbursement of lost profit (prevention of the appreciation of property).

Considering this, the concept of punitive damages is generally not permissible under Slovenian laws. Nevertheless, the Industrial Property Act and Slovenian Copyright and Related Rights Act envisage a possible 200% civil penalty (on top of the agreed or customary amount), if certain rights under the Industrial Property Act or Copyright and Related Rights Act are breached intentionally or due to gross negligence.

In addition to the principal, the creditor is also entitled to statutory default interest and, if so agreed in the respective contract, the contractual interest. The default interest, set at a rate of 8%, is defined as a means of civil punishment for the debtor’s delay and may typically be claimed from the very first moment the claim has matured (with some exceptions) – ie, from the moment when the debtor should have executed its obligation.

With some exceptions and if so requested by the lawsuit, a successful party may collect interest stemming from the period before the judgment (ie, from the delay onwards). Interest accruing after the judgment is entered may be collected, but has to be requested by the lawsuit.

Default interest can also be claimed on any unpaid default or contractual interest, although only from the day the claim for its payment is filed with the court (procedural interest).

A successful party may enforce a domestic judgment through a variety of mechanisms. Pecuniary as well as non-pecuniary claims may be enforced. The efficiency of enforcement depends on the type of assets held by the unsuccessful party. The most commonly used enforcement mechanisms for pecuniary claims are the enforcement of assets held in a bank account, the enforcement of movable property, the enforcement of immovable property, the enforcement of debtor’s receivables, etc. The enforcement mechanisms that are most commonly used for non-pecuniary claims are the handing over and delivery of movable property, the supply of alternative items, the eviction and delivery of immovable property, the issuance of penalties (fines), etc.

Typically, enforcement actions are conducted by the enforcement officer and co-ordinated by the enforcement court.

Foreign judicial decisions typically have the same effect as a judgment adopted by a Slovenian court if and only to the extent that it is recognised by a Slovenian court. Judicial recognition of the foreign judgment renders it ipso iure enforceable in Slovenia. The procedure of recognition and enforcement is governed by the Slovenian Private International Law and Procedure Act and the applicable EU regulation, notably Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

Upon the recognition of enforceability, an ordinary enforcement procedure according to the Slovenian Enforcement and Securing of Civil Claims Act can be initiated.

According to the Slovenian Civil Procedure Act, the parties may appeal to the high court within 30 days of receiving the first instance judgment. In disputes concerning bills of exchange and check disputes, the appeal period is shorter – ie, 15 days. The other party may respond to the appeal in the same time period.

A party may file a motion for admissibility of judicial review (“revision”) to the Supreme Court within 30 days after service of the final judgment of the high court. A party may subsequently file a judicial review within 15 days of being served a decision on the admissibility of the judicial review.

Lastly, a party may lodge a constitutional appeal only after all legal remedies – regular and irregular – have been exhausted, within 60 days of the date of service of the individual act against which a constitutional appeal is permissible.

The parties may also appeal certain other court decisions (such as orders), if such a legal remedy is envisaged in the law. If not, such court decisions may be appealed in the appeal against the final judgment.

An appeal may be filed by the party that was entirely or partially unsuccessful in the respective litigation. It may be filed against the judgment in its entirety or partially, at the court that rendered the judgment in the first instance. The court of first instance examines whether the appeal is timely, complete and permissible, and then sends it to the other party for response. After the court of first instance receives the response to the appeal, whereby the response itself is not mandatory, it sends the appeal and the case file to the high court for deliberation.

The parties may appeal to the high court within 30 days of being served with the judgment of the court of first instance. In disputes concerning bills of exchange and check disputes, the appeal period is shorter – ie, 15 days.

A judgment may be challenged for material breach of civil procedure rules, error of facts and misapplication of substantive law. The high court examines the judgment of the first instance to the extent it is challenged by the appeal. The high court shall review the challenged judgment with regard to the misapplication of substantive law and certain procedural breaches ex officio.

The appellant may only adduce new facts and propose new evidence if it proves that it could not have pleaded them without its fault earlier.

In certain events, the high court conducts a re-hearing – for instance, if the high court panel determines that, in order to establish the facts correctly, all or some of the evidence already presented must be repeated, or if the essential violations of the provisions of the civil procedure can be remedied by performing procedural actions before the high court.

The court shall render an appellate judgment only after the court fee is paid; no other specific conditions apply.

Contrary to the high court, the Supreme Court renders a decision on the admissibility of a judicial review only if the decision of the Supreme Court relates to an important legal issue that is intended to ensure legal certainty, uniform application of the law or the development of law through case law.

The high court may render a decision and:

  • dismiss or reject the appeal;
  • set aside the judgment of first instance and refer the case back to the court of first instance for a retrial;
  • set aside the judgment of first instance and retry the case itself;
  • set aside the judgment of first instance and dismiss the lawsuit; or
  • amend the judgment of first instance itself.

The high court may not amend the judgment to the detriment of the party who appealed if the other party did not appeal.

Initially, each party carries the burden of costs, whereby the burden of court fees for the lawsuit is carried by the plaintiff, and the burden of the court fees for any other pleadings are carried by the party filing them. Final litigation expenses are typically allocated on the basis of the principle of success in litigation, which means that the unsuccessful party is typically obliged to reimburse the other party for all expenses, including fees, attorney expenses and costs. The unsuccessful party is typically obliged to pay the other party’s attorney expenses in accordance with the Attorneys’ Tariff, whereby actual attorney expenses paid by the client are not taken into account, and are therefore reimbursed. The client is typically entitled to the repayment of expenses, insofar as the expenses are specified and demanded until the end of the hearing. The court usually decides on the expenses together with the main subject.

Parties may also appeal on the court’s decision on costs.

With the courts of first instance, parties are able to request the reimbursement of costs in proportion to their success. A party that partially succeeded is entitled only to a partial repayment of expenses. In addition, the high courts also consider whether the costs were necessary.

Default interest, set at a rate of 8%, accrues on costs awarded by the judgment from the date when the final judgment becomes final and enforceable.

Alternative dispute resolution is regulated under three main legal codes:

  • the Act on Alternative Dispute Resolution in Judicial Matters;
  • the Arbitration Act; and
  • the Mediation in Civil and Commercial Matters Act.

The most popular ADR method in Slovenia is mediation.

On the basis of the Civil Procedure Act, the courts schedule a preparatory hearing before the main hearing, wherein they facilitate settlement discussions. The aim of such preparatory hearing is to openly discuss the factual and legal aspects of the dispute, examine the possibilities for court settlement and endeavour to reach its conclusion. To the extent that the settlement hearing does not result in the conclusion of a court settlement, the court generally commences with the main hearing.

This process of preparatory hearing is ordinary practice and a legislative precondition for the initiation of the main litigation hearing.

ADR systems are not mandatory in Slovenia. Nevertheless, the court offers the parties the possibility of alternative dispute resolution in each case, unless the judge considers that it would not be appropriate.

The courts enable parties to use ADR systems such as mediation by adopting and implementing an ADR programme. Therefore, the ADR institutions are well organised.

The Slovenian Arbitration Act regulates arbitration as a means of alternative dispute resolution, whereby it applies primarily to domestic arbitrations and exceptionally to foreign arbitrations. The Act governs the recognition and enforcement of foreign arbitral awards and provisional orders.

With regard to the recognition and enforcement of foreign arbitral awards, the Act stipulates that an arbitral award adopted on behalf of a foreign arbitral tribunal shall have effect in the Republic of Slovenia when and if the District Court in Ljubljana determines the award as recognised in accordance with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (the “New York Convention”).

Any monetary claim may be the subject of an arbitration agreement, and therefore referred to arbitration. Other – non-pecuniary – claims may be the subject of an arbitration agreement only if the parties can settle the claim.

Typically, family matters and disputes concerning the validity of intellectual property rights may not be referred to arbitration. Additionally, significant barriers occur for employment disputes, whereby employer and employee may conclude an arbitration agreement only after the dispute has already occurred.

The arbitral award may be challenged in the following circumstances :

  • if the party did not have the capacity to enter into an arbitration agreement;
  • if the party was not properly informed about the appointment of an arbitrator or the arbitral proceedings, or was in some other way deprived of the right to be heard;
  • if the decision does not relate to a dispute covered under the arbitration agreement, or contains decisions on matters that go beyond the limits of the arbitration agreement; or
  • if the composition of the arbitration panel or the arbitration procedure was not in accordance with the parties’ agreement.

Domestic and recognised foreign arbitration awards are enforced in accordance with the Slovenian Claim Enforcement and Security Act, in the same manner as any other domestic enforceable titles.

Rojs, Peljhan, Prelesnik & partners o.p., d.o.o.

Tivolska 48
1000 Ljubljana
Slovenia

+386 1 23 06 750

+386 1 43 25 123

testen@rppp.si www.rppp.si
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Law and Practice

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Rojs, Peljhan, Prelesnik & partners o.p., d.o.o. has been providing top-ranked legal expertise to clients on the most significant commercial projects in Slovenia since it was established in 1989. The firm is recognised by peers and clients alike as a market leader in corporate and commercial law, dispute resolution, banking and finance, pharmaceutical law, competition and M&A transactions. Clients include the Slovenian Motorways Company as the biggest investor in Slovenia, several domestic and foreign investment and commercial banks, leasing companies, automotive sector corporations, construction companies, insurance corporations, trade associations, pharmaceutical companies, state and private-owned funds and selected individuals.

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