Implementation of a private Enforcement system in Bulgaria

The Commercial Law Reform Program in Bulgaria

The United States Agency for International Development (USAID) for some years is involved in the Commercial Law Reform Program in Bulgaria. One of the aspects of this Program involves a reform of the judgments enforcement system. Improving enforceability of judgments was considered to be vital for Bulgaria's efforts to reform the court system and enhance its ability to promote stable economic relationships.

Both the business and legal community in Bulgaria agreed that the judgment enforcement procedures are of great importance to support a growing market economy.
The former judgment collection process in Bulgaria was not able to respond on the rising demands. For example the system had unnecessary debtor protections, the system was run by executing magistrates - bailiffs - who, despite good intentions, were drastically overworked and was based on the responsibility of creditors to provide information to the court system about debtors' assets.

The Program is working with the Bulgarian Ministry of Justice, members of Parliament, representatives of the legal and court systems, the business community and other partners, to develop a plan for reforms. A working group was formed to overhaul the judgment enforcement process.

A study visit in the Netherlands

In 2004 (May 19-24) in the framework of the Law Reform Program in Bulgaria, UIHJ in cooperation with the Royal Dutch Organization of Judicial Officers, organized a study visit for the working group. Its members were mainly Bulgarian members of Parliament. The study visit focused on the private status of enforcement agents.

At that moment Bulgaria was one of the rare European countries that used a fully State-run system. The study tour was an opportunity for the members of the Working Group to see a modern and efficient enforcement model - a private system, which successfully assign key Judicial Officers functions to the private sector.

The study visit resulted in a close cooperation between USAID, UIHJ and the Bulgarian colleagues. At the request of USAID, Jos Uitdehaag, member of the Committee of UIHJ, was appointed as a legal advisor on enforcement matters to the USAID Law Reform Program.

The new law on Private Judicial Officers

On May 10, 2005, the Bulgarian Parliament adopted a new law on Private Judicial Officers. The law was supported by all political parties in Parliament - no votes against! and just few votes abstained from so called “independent” parliamentary members.
The changes in the Bulgarian enforcement system can be called radical. The most important change is the creation of the Private Judicial Officer profession. The PJOs will act as an independent professional in the enforcement of civil judgments.

The PJO has to compete with the former executive judges, now called State enforcement agents. PJO and State enforcement agent have the same powers and their actions are also governed by the same legislation. PJOs may collect both private and public (social security, tax, penalties, etc.) claims; State enforcement agents may collect only private ones. It will be up to the creditor to decide whether to instruct a state enforcement agent or a PJO.
In the law a quota is foreseen for the PJO: one per 30,000 inhabitants (within a district court jurisdiction). The authority of the PJO is limited geographically to the jurisdiction of the respective district court. The number of PJOs in each district will be complemented by the number of state enforcement agents.
PJOs are now appointed by the Minister of Justice after a competition. There are extensive requirements the candidates for PJO should fulfill in order to qualify to become PJO.

The governing body of the new profession is the Chamber of PJOs - an independent entity with its own statute, regulations, budget, etc. All PJO are members of the Chamber (by law).
On September 1, 2005, the law went into force. The first effective PJOs will start their work around February-March 2006. In the meantime regulations as prescribed by the law have to be adopted and the competition for appointment has to be organized.

UIHJ by its Committee member Jos Uitdehaag and, of course the Bulgarian colleagues are closely involved in the preparation of these regulations. A lot of regulations: the Tariffs need to be discussed, a Code of ethics, regulations on training, disciplinary measures and so.

And of course the establishment of the National Chamber of Bulgarian PJOs (See ou article in this magazine).
All of it significant challenges. But also challenges that can be met. By our Bulgarian colleagues, the Bulgarian experts and UIHJ.

Bulgarian colleagues: congratulations with your new law and good wishes for the future!