The main changes in the legal framework with respect to civil rights due to the spread of Covid-19 08.04.2020


This summary contains the main changes in the legal framework with respect to civil rights due to the spread of COVID-19:

1. Measures intended to give debtors additional time for the fulfillment of their liabilities, which they are unable to fulfill through no fault of their own due to the spread of Covid-19 (Law on Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19):

1) the 30-day time period referred to in Section 42, Paragraph six of the Commercial Pledge Law for the taking of the decision regarding the exercising of the commercial pledge has been extended to 60 days; in addition, it has been determined that the commercial pledgor and commercial pledgees may contest the notice on exercising of the commercial pledge (Section 42,, Paragraph one of the Commercial Pledge Law) before the court also in case when exceptional circumstances preclude the exercising of the commercial pledge (Section 16, Paragraphs one and two of the Law);

2) the maximum time period for deciding on the term for voluntary enforcement of the judgment in accordance with Section 204.1 of the Civil Procedure Law, with regard to the recovery of amounts of money, the return of property in kind, the eviction of persons and property from premises, and the recovery of court expenses, has been extended from 10 days to up to 60 days, except for the cases when the judgment is to be enforced without delay (Section 16, Paragraph three of the Law);

3) an application for undisputed enforcement of obligations in accordance with the procedures laid down in the Civil Procedure Law may be submitted only if evidence regarding issuance of a warning to a debtor has been issued not later than 60 days prior to submission of the application. (Section 16, Paragraph four of the Law);

4) the time period specified in Section 7, Paragraph one, Clause 8 of the Law On Extrajudicial Recovery of Debt allotted for the expression of the debtor's objections to the creditor or the provider of the debt recovery service regarding the existence of a debt, the amount and payment deadline thereof, has been extended from 21 days to 60 days from the day of receipt of the notification regarding existence of a debt (Section 16, Paragraph five of the Law);

5) the minimum term has been set during which the creditor, in accordance with the procedure laid down in Section 107.4, Paragraph one of the Notariate Law, may submit a notarial deed to a sworn notary for assignment for compulsory enforcement, which is not less than 60 days from the day when the term for execution of the liability became due (Section 16, Paragraph six of the Law).

2. Changes in the area of delays in the enforcement of civil law obligations (Section 30 of the Law on Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19):

During the time period from 1 April 2020 to 1 September 2020, the default interest rate for late execution of a civil law obligation may not exceed the amount of lawful interest specified in Section 1765, Paragraph one or two of the Civil Law.

The objective is to mitigate the impact of additional negative consequences on legal entities who are already unable or will not be able to ensure timely fulfilment of civil law obligations due to the emergency situation declared in the country.

3. Suspension of the limitation period of statutory liabilities (Section 31 of the Law on Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19):

During the time period from 12 March 2020 to 1 July 2020, the limitation period of statutory liabilities shall be suspended, and this time period shall be deducted from the calculation of the limitation period.

The objective of suspending the limitation period for the duration of the emergency situation would lead to less disruption with regard to the matters of the civil law currently affected. The suspension of the limitation period prescribed by law applies only to the substantive statutory limitation periods of civil law, since it shall be possible to request the renewal of overdue civil procedural time periods in accordance with the procedures laid down in the Civil Procedure Law, and it shall not be applicable to the limitation periods for administrative infringement cases and the enforcement of the administrative act, since such matters are governed by the Law on the Functioning of Institutions Due to the Spread of COVID-19.

4. Activities of courts and persons belonging to the judicial system during the emergency situation due to the spread of Covid-19 (Law on Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19):

1) Oral hearings in courts shall be held in cases related to a significant violation of personal rights and objective urgency. The court shall inform the parties involved in the proceedings in due time about the rescheduling of the oral court hearings. The court shall examine civil cases by written procedure if it shall be possible to ensure that the procedural rights of the participants in the case can be observed, and if the court does not find it necessary to adjudicate the case at a court hearing. The court shall inform the participant in the case in writing, specifying the time period for the submission of additional explanations or other procedural requests (Section 4, Paragraphs one and two of the Law);

2) At the end of the emergency situation, the court shall ensure an extraordinary adjudication of the cases in which the adjudication of the case was postponed or where a break in the adjudication was announced due to the emergency situation (Section 4, Paragraph five of the Law);

3) The Latvian Council of Sworn Bailiffs and the Latvian Council of Sworn Notaries may set restrictions on the reception of visitors in person, or decide on the termination thereof at the places of the practice of sworn bailiffs and sworn notaries. The Latvian Council of Sworn Bailiffs and the Latvian Council of Sworn Notaries may determine the conditions under which a sworn bailiff and a sworn notary may decide to postpone the execution of their professional duties if the execution thereof is not related to a significant violation of rights or objective urgency, and the execution thereof may be associated with an increased risk for the persons involved to become infected with Covid-19. (Section 7 of the Law).

5. Remote participation and voting at the meeting of members and shareholders (Section 214.1 and 277.1 of the Commercial Law), at the general meeting of members of associations and co-operative societies (Section 32 of the Law on Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19):

The Law on the “Amendments to the Commercial Law”, which entered into force on 22 March of this year, provides the members of limited liability companies and shareholders of joint stock companies with the right to participate in meetings remotely, i.e. either by voting before the meeting or by joining the meeting by electronic means. The aforementioned law also provides for a third form of remote participation – a fully virtual meeting of members, but the meeting of members may be held in such a way only if it is provided for in the articles of association of the capital company.

In line with the amendments to the Law On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19, which entered into force on 5 April of this year, members of associations and cooperative societies have also been granted the right to participate in the general meeting of members remotely, i.e. by voting before the meeting or by means of electronic communication.

6. Issues relating to the legal protection process and insolvency proceedings (Law on Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19):

1) until 1 September 2020, creditors are barred from submitting an application for initiating insolvency proceedings against a legal person if any of the features of insolvency proceedings of a legal person referred to in Section 57, Paragraph one, Clause 1, 2, 3, or 4 of the Law on Insolvency (Section 17 of the Law) exist;

2) upon receiving a substantiated application from the debtor during the insolvency proceedings of a physical person due to the emergency situation and six months after the end thereof, the court shall be able to decide on the postponing of the time of making payments to the creditor included in the plan of extinguishing liabilities, extending the term of the procedure for extinguishing the liabilities (Section 33 of the Law);

3) provisions have been made for the right to participate and vote in meetings of creditors remotely using electronic means of communication, as well as to vote in writing (Section 34; Section 35, Paragraph three of the Law);

4) the time periods for the implementation of the legal protection process have been extended - when submitting an application regarding approval or amendment of the plan of measures of the legal protection process, the time period for the implementation of the legal protection process shall be determined to last no longer than four years from the date on which the court ruling regarding the implementation of the legal protection process has entered into force (Section 35, Paragraph one of the Law).

On the other hand, in cases where the time period for the implementation of the legal protection process has already been extended and the adverse effects of the spread of Covid-19 prevent the debtor from fulfilling the measures determined in the plan for legal protection, the time period for the implementation of the legal protection process may be extended by one year during the period of the emergency situation, provided that the majority of creditors referred to in Section 42, Paragraph three of the Insolvency Law agree to it. (Section 35, Paragraph two of the Law);

5) it has been made possible to submit an application for legal protection procedure, insolvency proceedings of a legal person and insolvency proceedings of a natural person electronically (Section 36 of the Law).

 

 

7. Provisional protection against violence:

Section 25 of the Law on the Activities of State Institutions During the Emergency Situation Due to the Spread of Covid-19 stipulates that if a police decision has been rendered in regard to the separation, or if a court decision has been taken regarding provisional protection against violence in relation to a person who needs to take special epidemiological security measures during the emergency situation declared in the country, and if the person is not capable of ensuring self-isolation by himself or herself, then the local municipality shall, as far as possible, provide the person with a place of self-isolation. The person (except for a person with disabilities and a person who has been recognised as poor or disadvantaged) shall bear the costs related to the provision of a place of self-isolation.

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