New Bill aims to streamline the Luxembourg Court system and increase legal competitiveness of the country
This article was originally published in Agefi Luxembourg, July 2021 and is reproduced with permission from the publisher.
As expected for a few years now, the Luxembourg Chamber of Deputies has adopted, on 8 June 2021, Bill No. 7307 (the Bill) aiming at improving and simplifying the procedural rules in civil and commercial matters.
The adjustments, long-awaited by litigators, are intended to relieve congestion in the district courts and to increase the efficiency of court proceedings. This modernisation of the Luxembourg civil procedure law further reflects Luxembourg’s willingness to streamline its judicial system and the way the courts operate. This step will certainly further enhance the country’s business attractiveness.
The key takeaways from the Bill are the following.
The adjustments to the courts’ jurisdiction
This Bill provides for two amendments to the jurisdiction of the courts. Currently, magistrates’ courts (Justices de Paix) hear, with certain exceptions, all claims in civil and commercial matters with a dispute value of less than EUR10,000. The Bill intends to raise that limit to EUR15,000 and allow more civil and commercial cases to be dealt with by the magistrates’ courts in oral proceedings in which the parties are not be required to appoint a lawyer. This increase will then help to reduce the workload of the District Court (Tribunal d’arrondissement), dealing with more substantial matters.
The increase will also impact the procedures for the provisional payment order, the European payment order and the European Account Preservation Order procedure (the debt collection may be pursued before the magistrates’ courts for any amount not exceeding EUR15,000).
This will ultimately also benefit consumers in dispute with businesses, who will be able to exercise their rights at a lower cost, since legal representation is not compulsory before magistrates’ courts.
As an additional change, the magistrates’ courts will have last resort jurisdiction up to the value of EUR2,000 (in lieu of the current rate of EUR1,250), in some matters for which the magistrates’ courts have exclusive jurisdiction (such as disputes between landlords and tenants).
Finally, disputes relating to a labour supply contract (contrat de travail intérimaire) which are currently exclusively dealt with in the jurisdiction of the District Court will be heard either by the magistrates’ courts, or by the district courts depending on the value at stake.
Modification of the appeal procedure for judgments issued by magistrates’ courts
Currently, the first instance procedure before the magistrates’ courts is oral, while the proceedings for appeals against judgments handed down before the District Court have so far been in writing (with the exception of appeals against judgments in respect of lease for residential use or commercial lease).
The Bill therefore contemplates that all appeals against judgments of the magistrates’ courts, brought before the District Court, will be subject to the oral procedure.
This innovation will allow a litigant who brings a dispute before the magistrates’ courts, and who therefore does not need to be represented by a lawyer at the court, to pursue the appeal procedure personally without the need to appoint a lawyer for representation purposes.
This amendment will prevent litigants from becoming discouraged and renouncing an appeal proceeding that would involve legal representation and subsequent additional costs.
The introduction of a simplified pre-trial procedure (procédure de mise en état)
The Bill establishes a simplified pre-trial procedure (mise en état simplifiée), in parallel with the current “standard” pre-trial procedure, which should enable a quicker review of the simplest cases by the judges and avoid delaying tactics by defendants. The simplified pre-trial procedure (i) will automatically apply to cases where the value of the litigation is less than or equal to EUR100,000 and which oppose only one plaintiff to a single defendant, or (ii) will apply upon a reasoned request by one of the parties accepted by the President of the relevant Chamber. In this case, the President of the Chamber will issue an order to decide whether or not to admit the case to the simplified pre-trial procedure. The order will set mandatory time limits for the parties to notify their submissions and communicate their documents.
Against this background, drawing inspiration from the procedure applicable before the administrative courts, a period of three months will be granted to the defendant to respond to the plaintiff’s writ of summons, followed by a period of one month for each party to file their reply (these periods being suspended during the judicial recess periods). These time limits may be extended once by the pre-trial judge, who may also order the production of additional submissions, either on her/his own initiative or at the motivated request of one of the parties.
Issues of admissibility
Means of defence on the admissibility of the action or the jurisdiction of the courts are sometimes raised by defendants only at a late stage in order to delay the proceedings. The Bill thus obliges the parties to raise these grounds based on lack of jurisdiction, nullity and dilatory exceptions in the first submissions (conclusions) or, if not, as soon as they are revealed. The Bill also restricts the exchanges of submissions between the parties on these grounds to only two per party in order to allow the pre-trial judge to take a swift decision on the admissibility of the action. Failure to comply with these new rules will preclude the parties from raising these grounds at a later stage.
This procedure should allow the courts to quickly evacuate proceedings that are doomed to be unsuccessful, thus avoiding that proceedings drag on for several years and finally result in a judgment of inadmissibility.
Filter to determine the appealability of intermediate judgments
Intermediate judgments, i.e. judgments that only order an investigative measure or a provisional measure during the proceedings without deciding on the merits, can be appealed independently of the judgment that decides the main issue. Thus, such an intermediate judgment may be appealed only when it decides on a part of the merits of the dispute or in cases expressly provided for by law.
As a matter of practice, the application of this rule does not always make it possible to determine with certainty whether an interim judgment is appealable or not, which sometimes results in unnecessary appeals, causing costs and loss of time for litigants.
The Bill addresses this issue by implementing a filter under which parties may seek permission to lodge an appeal from the President of the Court of Appeal. Through a fast-track procedure, the President can then check whether the judgment deserves to be reviewed by the Court of Appeal.
The conduct of judicial expertise
The Bill requires judges to set a time limit within which experts they appoint must submit their reports. Thus, the decision appointing the expert will set a deadline for the submission of the report, which must take into account the complexity of the case as well as the scope of the services to be provided by the expert.
In principle, non-compliance with this deadline allows the judges to replace the expert unless the expert requests an extension of the deadline. The expert must justify the reasons why it was not possible for her/him to issue its report within the time limit initially set.
This amendment could help the parties avoid getting stuck in endless proceedings due to an unresponsive expert.
The introduction of a legal basis for appeals for interpretation (recours en interpretation) and rectification (recours en rectification)
The purpose of the Bill is also to formally introduce a procedure for the interpretation of judgments, when the parties disagree on the meaning of a decision, and the procedure for rectification of clerical mistakes, when the decision is affected by a clerical error.
In fact, at the moment, no legal provision expressly provides for an appeal in these matters, even though the case law has accepted the principle of such appeals for a long time.
Inspired by the French Code of Civil Procedure, the Bill now introduces a legal basis for :
- the appeal for interpretation, to be presented on a simple request or a joint request by the parties to an appeal for interpretation before the judge who rendered the judgment concerned, provided that the judgment is not subject to an appeal; and
- the appeal for rectification of clerical mistakes, to be presented by simple request or joint request of the parties before the judge who rendered the judgment in question or the court can also raise the matter of its own motion.
The acknowledgement of these remedies by the lawmaker is intended to strengthen legal certainty for litigants.
Other important procedural changes
The practice of the summary submissions (conclusions de synthèse) will be introduced by the Bill. The summary submissions, that must be submitted at the end of the proceedings (with the exception of the simplified pre-trial procedure) and before the ruling, must contain all the claims and arguments raised by a party for the purpose of effective analysis of the case by the judge.
As a result of this change, the juge-rapporteur in the written procedure should disappear. As it stands now, the purpose of the juge-rapporteur at the oral hearing is to read his brief summarising the claims and arguments of each party to the litigation.
In another vein, the Bill also intends to improve the efficiency of the interim relief procedure (référé-provision). Indeed, the procedure has not been used much in recent years due to the case law of the Luxembourg Supreme Court (Court of Cassation), which denies the possibility of having recourse to compulsory enforcement measures on the basis of summary orders. To address this issue, the Bill now specifically provides that the enforcement of an order for interim relief (ordonnance de référé-provision) may be pursued by the implementation of enforcement measures having definitive and irreversible effects, with the exception of seizures of property.
Entry into force of the amendments
The vast majority of the provisions will come into force on 16 September 2021, right in time for the end of the traditional summer recess of the courts.