I INTRODUCTION TO THE DISPUTE RESOLUTION FRAMEWORK
Greece is a civil law country. Its legal system is based on the Roman and German legal systems and as such it relies upon enacted legislation and codes, while jurisprudence is not considered as a source of law.
The Greek Constitution, the supreme law of the Greek state, entered into force in 1975 and has been revised three times since, most significantly in 1986, in 2001 and in 2008. The Greek Constitution distinguishes between two jurisdictions, namely the administrative, and the civil and criminal, which are organised in three instances: the courts of first instance (lower courts), the courts of appeal (higher, appellate courts) and the supreme courts. The Hellenic Council of State is the supreme administrative court of Greece, while the Supreme Court of Greece is the supreme court having jurisdiction over both civil and criminal cases. The Supreme Court of Greece acts as a ‘court of cassation’. Namely, it examines only legal matters and in the event of acceptance of the recourse, the case is reintroduced before the appellate court for a retrial.
The courts are divided into administrative, civil and criminal. Disputes of an administrative nature fall under the jurisdiction of the regular administrative courts (courts of first instance and courts of appeal). Disputes of a civil nature and voluntary jurisdiction fall under the jurisdiction of the civil courts (magistrates courts, courts of first instance and appeal courts), whereas jurisdiction on all types of criminal behaviour (i.e., petty crimes, misdemeanours and felonies) belongs to the criminal courts.
Public spending, contracts of a significant economic value where the Greek state is one of the contractors, the finances of public servants, the submission of a report to Parliament for the statement of accounts and balance sheets of the state, are matters that fall under the jurisdiction of the Court of Auditors. The adjudication of objections to the validity of national parliamentary elections and referendums, and the resolution of conflicting jurisprudence between courts and administrative commissions, between the Council of State and regular administrative courts, between the civil and criminal courts, between the Court of Auditors and other courts fall under the jurisdiction of the Special Highest Court.
II THE YEAR IN REVIEW
Through the adoption of Law 4335/2015 in August 2015, the Greek parliament enacted significant amendments to the Greek Code of Civil Procedure (GCCP).
The rationale behind the adoption of these new procedural rules was to expedite the civil court proceedings in an attempt to satisfy the country’s creditors and attract investors, allowing Greece to become a more competitive country and return gradually to economic growth. As such, the complete reform of the Greek (civil) judicial procedure was deemed imperative and was welcomed by the Greek and foreign business community. Nonetheless, and despite the undoubted fact that the speed of rendering justice in Greece was slow compared with other EU Member States, Law 4335/2015 imported significant changes to (1) the civil procedure rules and (2) to the rules of compulsory enforcement that have not been well received by the legal community (lawyers, Bar associations, union of judges, etc.) and have provoked reactions. Other changes that are being introduced concern the ‘special’ proceedings and interim measures.
The new Law came into effect on 1 January 2016 and, with respect to the civil procedure rules, has already started to affect the civil claims belonging to the ‘ordinary’ proceedings, filed as of that date before the courts of first instance.
In addition to the above, a new law has come into effect as of 22 December 2016 (Law 4446/2016) to include several amendments to the new civil procedure rules towards the direction of further expediting the court proceedings, as well as to facilitate access to justice. Hence, lower court fees are being provided for access to justice (filing of lawsuits, appeals, recourses, criminal complaints, etc.), and court fees are being introduced for the first time and imposed against any party requesting the adjournment of a case hearing.
Although it would be premature to proceed to an overall and systematic evaluation of the introduction and implementation of the new civil procedural rules, also taking into account that both systems (old and new) are currently being implemented by the courts (i.e., the old system for all suits filed before 1 January 2016 and still pending before the courts and the new one for all suits filed after 1 January 2016), the indications so far seem to be positive as regards the acceleration of the civil proceedings, which was the main target of the new procedural rules.
III COURT PROCEDURE
i Overview of court procedure
The procedure before the Greek civil courts is regulated by the GCCP.
The competence of the courts is determined on the basis of two elements: local competence and monetary competence. In monetary disputes, magistrates courts hear claims up to €20,000, single-member courts hear claims between €20,001 and €250,000 and multi-member courts hear all claims exceeding €250,001.
Judicial proceedings are formally initiated with the filing of the claim with the competent court secretariat and service to the defendant. Upon filing, the secretariat issues a filing certificate and determines the date on which the trial will take place. The defendant is informed about this date through the service of the claim. The task of service of legal writs is appointed to court bailiffs, who issue and deliver the requisite certificate of service to the plaintiff, for official court use. Depending on the various types of proceedings, the parties either have the obligation to file their pleadings (or briefs) on the date of the trial ‘with the bench’ or in advance of the trial, with the court secretariat. On the date of the filing of their pleadings, the parties are also responsible for filing all evidential material that supports their allegations. All documents adduced in evidence to the court must be translated into Greek by the parties at their own expense. The parties have the right to file addenda, a few days later, counter-arguing the allegations of their opponent.
The GCCP provides for three different types of proceedings:
- a ‘ordinary’ proceedings, which apply to most civil and commercial matters;
- b ‘voluntary’ proceedings, which apply to petitions for probate, adoption, consensual marriage dissolution and similar matters; and
- c ‘special’ proceedings, which apply to interim measure petitions, labour and lease disputes, and payment order proceedings.
According to Article 118 of the GCCP, the claim must contain reference to (1) the court or judge before which the writ shall be heard; (2) the type of the writ (lawsuit, petition, appeal, recourse, etc.); (3) the full names (or trade names) of all litigant parties and their addresses, and the tax registration number of the claimant, (4) the scope of the writ in a clear, unambiguous and concise manner; and (5) the date and signature of the plaintiff or of his representative attorney whenever representation by a lawyer is compulsory.
The burden of proof generally rests with the plaintiff. However, in practice all parties have the burden of proving their own allegations and in convincing the court that the relief sought must – or must not – be adjudicated. The means of evidence accepted by the GCCP include, among others, affidavits, documentary evidence, witness testimonies, expert opinions and confessions; the first three are those most commonly used.
ii Procedures and time frames
As already said above, the GCCP recognises three main types of proceedings. Depending on the type of proceedings and on the degree of the court before which the proceedings are pending (i.e., court of first instance, appellate court or supreme court), the procedures and time frames vary considerably. In this chapter, we shall focus on the procedures and time frames applicable to ordinary proceedings before the first instance courts that will apply as of 1 January 2016, which we view as currently presenting the greatest interest.
Ordinary proceedings before the first instance courts
In the context of the intended accelerated process for the rendering of justice, the new procedural regime abolishes the determination of the ‘trial day’ upon filing of the claim. Instead, henceforth, all time frames are calculated by reference to the filing date of the claim. Another major reform is that the new rules also abolish the oral examination of witnesses on the day of the trial and confer an absolute discretion on the court on whether it shall proceed with such an examination. So, in the exceptional case that the court considers that the dispute has not been made sufficiently clear, enabling it to issue its decision, and considers that special grounds justify the examination of witnesses, it can issue an act summoning witnesses to an examination hearing.
In this respect, the previous partially oral proceedings have now been replaced by a written procedure.
The time frames are as follows: following the filing of the claim, the plaintiff has a deadline of 30 days to serve the claim to the defendant (60 days if service is to be made abroad). The defendant has a time frame of 100 days to file its pleadings and evidential material with the secretariat (130 days if the defendant resides abroad). Interventions, third-party notices, notices, enjoinments and counter-lawsuits are submitted and served to all parties within a term of 60 or 90 days (if the defendant is a foreign resident or of an unknown residence) from the filing of the claim, with the exception of the intervention following a third-party notice or notice submitted and served within a term of 90 days from the filing of the lawsuit. Thereafter, the parties have a deadline of 15 days to prepare and file their addendum. The case is then considered ‘closed’. Following this date, the secretariat appoints the case to a judge for review and sets a trial date no more than 30 days later. The ‘trial’, however, is just a typical formality in the sense that no advocacy takes place nor are witnesses examined.
The issuance of the judgment is usually expected within four to eight months after the hearing. Article 307 of the GCCP provides that a judge must render a decision at the latest within eight months from the hearing. Upon issuance of the judgment, the defeated party has the right to file an appeal. An appeal can only be filed once and within a deadline of 30 days (or 60 days if the appellant resides abroad or is of unknown residence), starting from service of the judgment to the defeated party. If neither of the parties serves the judgment to its adversary, the deadline for filing an appeal is two years from the publication of the judgment. Failing to file an appeal within these deadlines renders the judgment final and irrevocable.
The defeated party has the right to file a cassation appeal against the judgment of the appellate court before the Supreme Court of Greece. The deadline for filing a cassation appeal is 30 days from service of the judgment under review to the adversary (or 60 days if the litigants reside abroad or are of unknown residence). As with appeals, if the judgment under review is not served by either of the parties, the deadline to file a cassation appeal is two years from the publication of the judgment.
Special proceedings – amendments to payment orders
Special proceedings are now systemised in three basic categories (disputes arising out of family matters, property disputes and payment orders) and the number of the respective provisions is radically limited. The third category relates to amendments to payment orders, particularly regarding matters pertaining to their issuance and jurisdictional matters. In this regard, impediments on the issuance of a payment order against foreign residents or persons of unknown residence, but who have an appointed agent for service, are lifted.
Finally, the possibility of accumulation of the opposition against the payment order with the opposition against compulsory enforcement in the same document is provided, so as to avoid simultaneous proceedings for the same claim and the same enforceable title (payment order).
Important changes have also been made to the GCCP with regard to compulsory enforcement law. These relate to the limitation of the number of legal recourses that may be exercised during the conduct of compulsory enforcement actions, and the limitation of the time required for the completion of the actual materialisation of the enforceable titles.
The application of a system of opposition against defaults of the compulsory enforcement – if any – in two stages has been elected: the first stage takes place before the auction and includes all reasons of invalidity, and the second stage is after the auction and includes the possibility of the exercise of an opposition against all complaints related to possible defaults. The amendments related to the ranking of creditors at the distribution of the auction price and the preferential treatment of the secured in rem creditors are also of significant importance. In particular, changes regarding the structure of the ranking of creditors with general privileges come into effect. According to the new provisions, employee salaries, educator claims and lawyers’ fees and expenses that arose within the two years prior to the day of the first public auction or the declaration of bankruptcy are included in the same rank (third place of general privileges) with claims of the state arising out of the value added tax and any attributable or withholding taxes (together with any increments and interests imposed on such claims), as well as claims of social security funds, alimony claims in case of the debtor’s death, and compensation claims due to disability exceeding 67 per cent that arose up to the day of the first public auction or the declaration of bankruptcy. Moreover, claims of the state and municipalities arising out of any cause, together with any increments and interests imposed on such claims, are ranked fifth.
Additionally, in case of concurrence of general and special privileges (i.e., a mortgage or a pledge) and non-privileged claims, the percentage of satisfaction of the creditors with general privileges is limited to 25 per cent, whereas the percentage of satisfaction of creditors with special privileges is broadened to 65 per cent. The remaining amount of 10 per cent of the distribution price of the auction is fortified to the non-privileged creditors. In case of concurrence of privileged and non-privileged creditors, an amount of 10 per cent of the distribution price of the auction is fortified to the latter. In case of concurrence of claims with general privileges and non-privileged claims, the percentage of satisfaction of the former is 70 per cent.
Urgent or interim applications available
The GCCP also contains a chapter (Fifth Book) on ‘Safety Measures’ (i.e., injunctions). In disputes involving an element of urgency, or to avert an imminent danger, the court can order interim remedies, such as the granting of a guarantee, the inscription of a pre-notation of mortgage, the seizure of the assets of the defendant, injunctions (i.e., an order to abstain from performing a certain action), the application for the production of certain documents, etc. The ‘safety measures application’ is filed with the secretariat of the competent single-member court of first instance. Upon filing, a hearing date is set and the writ is served to the defendant for their knowledge and to attend the trial and defend the petition. In theory, this procedure is considered ‘fast-track’, in the sense that the hearing is scheduled in a relatively short period, the hearing takes place without the presence of a court secretary (therefore no minutes are kept), and the sole presiding judge issues his or her decision in a shorter period than required in ordinary proceedings. In practice, however, and particularly in Athens because of the great number of cases being addressed to the Athens Court of First Instance, it may take a petitioner anything between four and 12 months to achieve the granting of the interim remedy. The main criterion for success in the granting of interim remedies is to demonstrate to the court the existence of an element of urgency or of a necessity to avert an imminent danger. Interim measures are temporary by nature. This means that, at the very latest, 30 days following the granting of the remedy the petitioner must file his or her ‘ordinary’ lawsuit against the defendant. Failure to do so means that the remedy awarded is ex officio withdrawn.
iii Class actions
Class actions are not common in Greece. Law 2251/1994 on Consumer Protection provides for such actions in line with European Union Directive 93/13/EEC, as amended by Presidential Decree 301/2002 (implementing Directive 98/27/EC), Law 3587/2007 and Joint Ministerial Decisions Z1-891/2013 (implementing Directive 2011/83/EU) and 27764/2014.
Specifically, according to its Article 10, consumer organisations, in order to protect the general interests of consumers, may bring class actions before the multi-member court of first instance of the respondent’s residence or registered seat within six months from the unlawful conduct of the service provider or the supplier of goods, aimed at the prohibition of such conduct and claiming damages and restitution.
iv Representation in proceedings
In principle, each litigant is obliged to appear before the court represented by an attorney-at-law. Exceptionally, in interim measure proceedings and in ordinary proceedings regarding small claims (up to €5,000 – Article 466 of the GCCP), the litigant is allowed to appear before the court without legal representation. Whenever deemed necessary, the court may oblige the litigant to appoint an attorney-at-law to defend his or her case. The presence of an attorney is no longer imperative during the signing of certain types of contracts, such as the founding of sociétés anonymes and donations.
v Service out of the jurisdiction
In most cases, the court serves the claim out of jurisdiction pursuant to one of the international instruments to which Greece is a party. The EU Service Regulation (Council Regulation No. 1393/2007/EC) applies to service of judicial and extrajudicial documents in civil or commercial matters in the EU Member States.
Greece is also a signatory state of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters of 15 November 1965, pursuant to which service of legal documents occurs via a central authority appointed in each Member State. The legality of service is then assessed based on the law of the jurisdiction where service is effected.
vi Enforcement of foreign judgments
Greece is party to all EU regulations in the field of ‘judicial cooperation in civil matters’. A large number of these regulations are important for international business transactions.
Judgments of EU Member State courts of civil and commercial nature are enforceable in Greece, following their declaration as enforceable under Regulation (EC) 1215/2012. Judgments regarding social security, arbitration, insolvency proceedings, inheritance issues and matrimonial property issues do not fall under said Regulation and are regulated by separate legal instruments. Furthermore, under Regulation (EC) 805/2004, European enforcement orders are directly enforceable in Greece. Furthermore, Regulation (EC) 861/2007 establishes a European small-claims procedure. In addition, Council Regulation (EC) 2201/2003 applies to foreign judgments regarding matrimonial matters and matters of parental responsibility, regulating their enforceability in Greece.
vii Assistance to foreign courts
According to Council Regulation (EC) 1206/2001 on the taking of evidence in civil and commercial matters, Greek civil courts will provide their assistance to Member State courts in taking evidence for use in judicial proceedings either commenced or contemplated. Furthermore, Greece is a contracting state of the Hague Convention of 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters, according to which a judicial authority of a contracting state (including non-EU states) may, in accordance with the provisions of the law of its state, request the competent authority of another contracting state, by means of a letter of request, to obtain evidence or to perform some other judicial act. The latter does not cover the service of judicial documents, the issuance of any process by which judgments or orders are executed or enforced, or orders for provisional or protective measures. The relevant central authority for Greece is the Ministry of Justice, and particularly the Department of International Judicial Cooperation in Civil Cases.
viii Access to court files
Almost all civil hearings are conducted in public; consequently, all members of the public may obtain information on ongoing proceedings. However, a member of the public may not obtain pleadings or evidence in relation to ongoing proceedings unless he or she demonstrates a specific legitimate interest, namely that his or her rights or obligations are directly affected by the outcome of the case.
ix Litigation funding
There are no provisions for the funding of litigation by a disinterested third party. Although the notion of third-party funding is not very popular, several insurance companies offer legal expenses protection, thus covering the costs of litigation.
IV LEGAL PRACTICE
i Conflicts of interest and Chinese walls
Under Article 233 of the Criminal Code, it is forbidden to represent both parties in the same case, unless they so agree. The conflict of interest issue is governed by the rules of ethics established by the various Bars. Under the Code of Ethics of the Athens Bar, an attorney is entitled to undertake a case against a former client, provided that the case is unrelated to the one he or she has handled in the past for said former client and that the attorney does not disclose or use the information he or she has obtained through the representation of said former client.
ii Money laundering, proceeds of crime and funds related to terrorism
Money laundering is governed by Law 3691/2008, as amended by Laws 3875/2010 and 3932/2011, implementing Directives (EC) 2005/60 and (EC) 2006/70 respectively. By virtue of Law 3424/2005, as amended by Law 3691/2008, the list of persons and legal entities that are obliged to abide by its provisions includes lawyers and public notaries (Article 5 of Law 3691/2008). With regard to money laundering or the funding of terrorism, one of the most important obligations imposed on lawyers is to report to the competent authority any transaction that seems suspicious or unusual, without informing, however, their client or the third party suspected to be involved in such an action that such a report has been filed. Lawyers are also obliged to verify the identity of their clients. Nevertheless, lawyers are not obliged to provide information on facts that have been disclosed to them by their clients within the offering of legal advice or the preparation of their defence. In cases where any of the above-mentioned duties is breached, lawyers and public notaries can face serious criminal charges.
iii Data protection
The legal framework governing the processing of personal data includes Law 2472/1997, as amended by Law 3471/2006. Pursuant to its Article 7A paragraph 1(e), lawyers are discharged from the obligation to notify or seek permission from the Hellenic Data Protection Authority to process personal data regarding the provision of legal services to their clients, under the condition that they are bound by legal privilege and that such data is not announced or notified to any third parties.
iv Other areas of interest
Lawyers are also entitled to translate documents from and into languages in which they are proficient (Article 36 paragraph 2(c) of the Greek Lawyer’s Code (Law 4194/2013)) and to produce authenticated copies from originals presented to them (Article 36 paragraph 2(b) of the Greek Lawyer’s Code (Law 4194/2013)).
V DOCUMENTS AND THE PROTECTION OF PRIVILEGE
The concept of legal privilege aims at the protection of the free and trustful contact and communication between the lawyer and the client. The protection afforded by legal privilege starts with the initial contact with a lawyer, be it in writing or orally, and continues irrespective of the termination of the professional relationship between the client and the lawyer or the payment of lawyer’s fees, the retirement of the lawyer, the client’s death or the use of the services of a different lawyer.
The information covered by legal privilege mostly relates to facts not publicly known and information not publicly available. Provisions relating to legal privilege are included in several legislative texts. The main provisions are Article 38 of the Greek Lawyer’s Code, Article 36 paragraph 3 of the Lawyers’ Code of Conduct, Articles 232, 233 and 371 of the Criminal Code, Articles 212, 261 and 262 of the Code of Criminal Procedure, Article 400 et seq. of the GCCP dealing with the discharge of lawyers from their obligation to testify as witnesses before civil courts, Article 26 of Law 3691/2008 on money laundering, and Article 7A paragraph 1(e) of Law 2472/1997 on the protection of the individual from the processing of personal data. The Lawyers’ Code does not make any distinction between in-house lawyers and ‘independent’ lawyers, therefore legal theory takes the view that the provisions relating to legal privilege cover in-house lawyers as well. Recent trends actually include the restriction of legal privilege due to the national and international efforts towards combating money laundering and terrorism.
ii Production of documents
There is no obligation for disclosing documents under the GCCP (i.e., the rule of discovery does not apply) and, generally speaking, each side is free to adduce the documents that prove its own allegations. Obviously, the parties have a general duty of truth under the GCCP (Article 116).
Where a dispute has not yet been brought for adjudication before the courts, any person with a ‘lawful interest’ may request the production of a certain document through the interim measures procedure.
VI ALTERNATIVES TO LITIGATION
i Overview of alternatives to litigation
The vast majority of cases in Greece are resolved through litigation or out-of-court settlements. A smaller fraction of disputes are resolved through arbitration, while the method of mediation in commercial law disputes is still not very popular.
Greek Law provides for two different categories of rules, to apply to domestic and international arbitration respectively. International arbitration proceedings fall within the scope of Law No. 2735/1999 on international commercial arbitration, which incorporated the UNCITRAL Model Law in the Greek legal system. Domestic arbitration proceedings are regulated by the provisions of Articles 867–903 of the GCCP. The Greek legal framework is supplemented by numerous international conventions, such as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958).
In Greece, there are two major arbitral bodies: the Athens Chamber of Commerce and Industry (ACCI) and the Hellenic Chamber of Shipping (HCS), which have both published relevant rules. The latter was established in 1936 and, as its name suggests, carries out arbitration relating to shipping disputes.
Mediation is not a common form of alternative dispute resolution in Greece. Law 3898/2010, which implements Directive (EC) 2008/52, governs, among other matters, confidentiality issues, enforcement of agreement procedures and the certification process for mediators. Mediation can be an option for resolving a wide range of disputes of a civil or commercial nature, such as marital, labour or intellectual property disputes. In every court of first instance there is a list of judges who are appointed for one year to serve as mediators.
iv Other forms of alternative dispute resolution
Several other methods of dispute resolution are also recognised such as conciliation, expert resolution and banking ombudsman. These methods are not frequently encountered in practice.
VII OUTLOOK AND CONCLUSIONS
Reform of the Greek legal system, particularly with regard to the speed of proceedings to sufficiently address the exigencies of a modern economy, has been long awaited. It remains to be seen, however, whether the new and most recent amendments will improve the efficiency of the national courts, thereby leading to a faster but still high-quality, fair and equitable award of justice.
Currently, there is still scepticism and concern that they will affect the rights of litigant parties to their detriment. Especially, with respect to the deadlines applicable to foreign legal entities involved as defendants in Greek litigation, there is an increased concern that the short deadlines provided by the new rules will not allow for their proper preparation and defence, since in essence they will have a time frame ranging between 70 and 130 days to engage lawyers, gather evidence, identify witnesses, obtain affidavits, draft pleadings, translate documents and so forth, when it is common knowledge that in complex cross-border contractual or commercial disputes the issues at stake cannot be dealt with within such strict deadlines. Furthermore, it is worth noting that the Greek lawyers voted in a majority in excess of 90 per cent against these new rules in a referendum conducted by the Greek Bar Associations. The main reasons of opposition are the abolition of the oral examination of witnesses at trial in ordinary proceedings and the changes brought in compulsory enforcement proceedings. Last but not least, criticism has also been exercised against the new provisions due to the serious lack of infrastructure and personnel of the Greek courts to accommodate these changes.
Time will tell if this latest amendment of the Greek procedural rules is therefore for better or for worse.
1 John Kyriakides is a partner and Harry Karampelis is a senior associate at Kyriakides Georgopoulos Law Firm.