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The practice of obtaining a predicate ruling requires reform

Pursuing compensation from the State Treasury for loss caused by issuance of an unlawful judgment is predicated on obtaining a finding in an earlier proceeding that the judgment was unlawful. But the regulations governing how to obtain such a predicate ruling generate serious doubts.

Under Art. 4171 §2 of the Civil Code, if injury is caused by a legally final judgment or a legally final decision, redress of the injury may be sought following a finding in a relevant proceeding that the judgment or decision was unlawful, unless otherwise provided by separate regulations. This means that before suing the State Treasury for damages, for example for issuance of an erroneous judgment, it is necessary to obtain a predicate ruling (prejudykat) in a separate proceeding.

In civil matters, the procedure for this is primarily a petition for a finding of the unlawfulness of a legally final ruling, governed by Art. 4241 and following of the Civil Procedure Code. But no such petition can be filed against judgments of the court of second instance against which a cassation appeal was filed (Art. 4241a §1). Thus in cases where the amount in dispute exceeds PLN 50,000 (Art. 3982 §1), a predicate ruling may not be obtained via a petition for a finding of the unlawfulness of the ruling. In that case, under Art. 4241a §2 of the Civil Procedure Code, the ruling of the Supreme Court issued pursuant to filing of a cassation appeal is treated like a ruling issued in a proceeding pursuant to a petition for a finding of the unlawfulness of a legally final ruling.

The regulation is one thing, the practice another

The literal reading of Art. 4241a §2 is clear: if the cassation appeal was denied, damages cannot be sought against the State Treasury because the judgment was lawful. However, if the cassation appeal is granted, this opens the way to pursuing damages against the State Treasury for the erroneous judgment.

Nonetheless, for a long time the case law of the Supreme Court under Art. 4241a §2 has taken a different direction. Contrary to what might appear at first glance from this provision, when a cassation appeal is upheld it is not equivalent to obtaining a predicate ruling enabling damages to be sought from the State Treasury. According to the Supreme Court, it is still necessary to determine whether the judgment causing injury was issued in gross violation of law, obvious and perceptible to any lawyer—only then is it permissible to award damages against the State Treasury. And because there is no special type of proceeding in which such a finding could be made in that case, this is left in the hands of the regional court considering the claim for damages against the State Treasury for issuance of an erroneous ruling. This position is presented for example in the Supreme Court judgment of 5 November 2015 (Case V CSK 122/15).

The statute is different

The holding by the Supreme Court in that case impermissibly marginalises the requirement to obtain a predicate ruling provided for in Art. 4171 §2 of the Civil Code. If this view were shared, it would seem that in all cases of cassation appeals there is no need to obtain a predicate ruling, but that was not the parliament’s intention—it unambiguously required a predicate ruling. Consequently, serious cases causing great loss (cassation cases must have an amount in dispute of at least PLN 50,000) are not subject to this regime at all. The requirement to obtain a predicate ruling was introduced specifically so that the regional court would not be deciding whether a judgment issued for example by the court of appeal was lawful or not. The parliament left this determination solely to the Supreme Court, but the Supreme Court has turned around and restored this power to the lower courts.

The regulation needs to be changed

If this understanding continues to predominate in the case law, then Art. 424 and following of the Civil Procedure Code should be amended. The Supreme Court could determine pursuant to a separate application by the petitioner whether the challenged judgment violates the law for purposes of Civil Code Art. 4171 §2. Meanwhile, the troublesome requirement of making a prima facie showing of injury (Civil Procedure Code Art. 4245 § 1(4)), which is not very useful at this stage of the proceedings, could be eliminated. Such an application could be subject to a separate fee and be decided independently of whether the cassation appeal is accepted for consideration or not, because the grounds for accepting a cassation appeal for consideration are different from the grounds for finding that the judgment was unlawful.

But all of these suggested changes first require reflection, discussion, and development of an exhaustive catalogue of the solutions in the area of the State Treasury’s liability for issuance of an erroneous ruling which are not currently functioning properly. This requires comprehensive reform.

Dr Marcin Lemkowski, Litigation & Arbitration practice, Wardyński & Partners