Sergey Shklyar On systemic reform in the field of execution of court decisions

Sergey Shklyar On systemic reform in the field of execution of court decisions

One of the problems of the Ukrainian legal system is the critically low enforcement of court decisions, barely reaching 15%. Recently, the country has adopted bills designed to improve the situation. The points of the law concerned both the reform of existing mechanisms and the launch of new ones - for example, the institution of private performers. Along with the emergence of a new profession, many myths and prejudices appeared. Deputy Minister of Justice Sergei Shklar talked about the rights and responsibilities of private performers, about training and the future development of the profession. Also, they discussed the reform as the only possibility of changing the unfortunate situation with execution of court decisions, the current situation on the market of private performers, plans and forecasts.

Next is a direct speech.

Finally, the laws on reforming the system of executive decisions came into force on January 5, 2017. After that it was necessary to carry out certain procedural actions - to develop normative documents, to prepare a new automated system of implementations, to develop a base for examinations and training. This was done by the Ministry of Justice and the Institute of Law and Postgraduate Education. Partners, EU, OSCE, USAID, Center for Commercial Law, helped us to develop the normative base, study the experience of other countries, publish scientific materials, conduct trainings and conferences. From the state budget, no penny was allocated for this project.

The reform also touched on the following points: the automated system of executive proceedings was introduced. Now it is transparent and public, we have as much as possible removed the items that previously prevented the enforcement of court decisions. Today, for example, accounts can be arrested on the day of departure, the maximum for the next, and the earlier term of arrest was two weeks, which allowed unscrupulous payers to withdraw funds. Now the debtor has to file a declaration of his assets after the violated enforcement proceedings, otherwise he may be fined by a private or public executor. We have introduced a publicly-opened register of debtors, so businesses can check their counterparties, and those in this register can not alienate their assets.

These bills at one time approved the council on judicial reform - all our scientists, representatives of higher courts, the best lawyers, all our donors. I do not know other laws in Ukraine that would have been so thoroughly and competently worked out. Even at the stage of the visa, we, along with deputies from different factions, traveled to Bulgaria, where the mixed system successfully worked more than three years and saw it with their own eyes.

Today in the country there are 60 private performers. The training was already almost 600 people. About 1,200 people were posted, although we were expecting more. Foreign experts recommend that in a year we have 1.5-2 thousand private performers. Each of them will have around 4 assistants. That is, in the near future, we get the emergence of a new market of 10,000 self-employed people.

How many public and private performers get?

Government executives charge 10% of the debtor in addition to the amount specified in the document. This executive fee is a service charge and a certain penalty for the debtor. These 10% fall into the budget, of which 5% remain in the national budget, and 5% remain in the state executive service fund. Part of this amount is spent on remuneration, which the performer receives only in case of actual collection. Proceedings are distributed among the performers in automatic mode, so no manipulation here can not be.

Private executives also charge 10% of the debtor. But at the same time, the private executor completely takes the amount and pays his salary to his assistants, keeps the office, pays taxes and provides his professional activities.

Basically, this would be 10%, because the amount should be the same so that the performers were equal.

There were no restrictions on the amount paid to private performers either in the law or in the resolution. Limit the amount that the state executor can get. Now they can receive 2%, but no more than 200 subsistence minimum according to one executive document.

No one will be able to limit the amount that private performers receive, I think that it is not possible at all, at least because the executive fee and the remuneration of the private performer should be equal. The executive fee is 10%, if you restrict someone, it will be unfair.

Why do we limit the amount that a private executor will receive if this leads to a decrease in motivation, and our goal, on the contrary, is to stimulate the development of this institution.

The state will only benefit from the introduction of the institution of private performers. The state executive service will be reduced, the expenses for its maintenance will be reduced. New jobs will appear, private executives will pay taxes, pay for office leases, tuition and salary for employees. If we restrict it, we can put a point on the reform.

Last year, state executives were charged UAH 678 million. After the Law of Ukraine "On Enforcement Proceedings" came into force and the introduction of the appropriate incentive system in the last three months of 2016, about 227 million hryvnias of executive fee were collected, which is almost 50% of the amount collected during the previous 9 months. Altogether, since the introduction of remuneration by state executives, about 810 million hryvnias of executive fee have been charged, of which this year more than UAH 583 million has been recovered. To date, executives have been charged 132 million UAH more than last year's figure.

There are no statistics for private performers yet. We can not list plans, because they are an open market, they themselves form the level of employment.

The difference between the collector and the private executor

The activities of collectors are not regulated by any law, while the activities of private performers are regulated by law, they are personally responsible for their actions, can not as collectors to join in a coma, carry full property and disciplinary responsibility up to the deprivation of the right to engage in such activities. As well as administrative and criminal recklessness in case of presence in their actions of certain violations of the legislation. In addition, they insure their activities.

It should be understood that private performers receive a substantial percentage of their work, which is also an additional incentive not to violate anything, to pay taxes, etc. The market of executive documents, which they can theoretically later take for processing, is large enough. It is about 360 billion hryvnia. They are remunerated 10% out of tax, so in principle they are financially motivated to work honestly and honestly.

Private or public performer?

If we choose between a private and a public executor, then I would turn to a private one if he has the right to engage in this category of business. The costs are the same, but private ones can work faster and more efficiently and regulate their workload themselves. They may have assistants, unlike government executives who do not have any assistants.

In addition, the private performer can not be influenced from above. If the state can be interested in the theoretically illegal way (before the reform was possible), it can still act "telephone law", then nobody can influence the private one. There can be no corruption in the field of private enforcement, because a private executive does not have a leader.

In September, the Ministry of Justice announced that since mid-August 2017, on the initiative of the leadership of the Ministry of Justice, all the heads of the structural units of the Department of the State Bailiffship Service of the Ministry of Justice had been checked on a polygraph.

According to the conclusions of the printing studies, there was no record of the exaction or order from the leadership of the Ministry of Justice to obtain the illegal benefit from the state executors.

Also, at the moment, there is no information that would confirm the assertions made in the media about possible bribery in the ICE.

Why is the future of private performers

Perhaps in the future we will have only a private system of execution. The Baltic states, for example, went into such a regime in one day. In Ukraine it would not be possible to instantly switch to a private system. Our state is bigger, we have a lot of non-privatized ones, including state-owned enterprises, so there were fears that unscrupulous private executives would take part in raider hunts of state property, and so on. But gradually it will all be transferred to the competence of private performers.

In addition, today private executives can work with executive documents for a total of no more than 6 million USD. The next year - with debts no more than 20 million USD for one executive document. After that - without restrictions.

It is also important to note that a private executor receives a remuneration of 10% only when the debtor has assets that can be recovered. For example, there is a debt of 6 million and the debtor has assets of 6 million plus 10%, that is, 6 million 600 thousand. And if he does not have anything, the private performer does not receive anything. Understanding whether there is an asset or not enough, it can only after it has opened the implementation. So do not think that if a private executor has taken ten actions, then he earned ten. He could not earn any hryvnia.

A private executor is essentially a private entrepreneur. In France, for example, a private executor buys an office, and in the Netherlands protects a business plan before a special commission. And he, like an attorney, a notary public or a restaurateur, can be very successful or bankrupt. In France, a private executor earns about 300,000 euros a year, in the Baltic States - more than 100,000 euros. This profession is respected and often dynastic.

(translated using google translate)