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How will arbitration change when the respondent also covers the fee?

How will arbitration change when the respondent also covers the fee?

How will arbitration change when the respondent also covers the fee?

How will arbitration change when the respondent also covers the fee?

How will arbitration change when the respondent also covers the fee?

10 Mar 2019

When we ask about common courts in Poland, entrepreneurs are generally disappointed and helpless. They often file lawsuits for overdue invoices hoping for quick recovery of their receivables. The courts issue a payment order on average after 3.5 months, but the law allows debtors to file a free objection. This is enough for the payment order to lose its validity, and the case goes to ordinary proceedings. There, it will be examined over the next 13 months. As a result, companies believe that debtors can indefinitely prolong cases and avoid repaying debts, because it costs them nothing. "It is different in our Court" – we are quick to respond.

 

At Ultima Ratio, a fee is charged both for the lawsuit and for the response to the lawsuit.

In this way, we aim to ensure efficient and non-protracted proceedings. Ultimately, we have set ourselves the goal of issuing a judgment within 3 weeks from the day the lawsuit is filed. We assume that defendants will file responses only in cases where they genuinely believe in the strength of their arguments. If they win, they will receive a refund of all incurred costs. However, if they were to defend in cases clearly lost in advance just to gain time, the necessity of paying a fee for such a defence will effectively discourage them. As far back as Ancient Rome, both parties in a civil process were required to deposit appropriate sums of money in the temple (the so-called "sacramentum") for the court to consider their dispute. Nowadays, this rule is quite commonly accepted in global arbitration.

Why? Well, in countries with an established arbitration culture, many entrepreneurs have had bad experiences with arbitration courts where the entire remuneration of all arbitrators is covered by the fee paid by their opponent.
Such a situation will not occur at Ultima Ratio. The arbitrator is drawn, not chosen, and the costs of the proceedings – relatively low in amount – are shared by both parties to the dispute. Therefore, there is no reason for either side to feel uncomfortable or uneasy with us. After all, it is their proceedings, their case.

The judgment is issued by a notary, hence a representative of the profession enjoying the highest degree of public trust among legal professions for years.

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