Bill of exchange is no longer a reliable security
Amendments to the law on bills of exchange and to civil procedure, which come into force as of this Friday 24 September 2021, will limit the role of the bill of exchange as a form of debt security in consumer trading.
The amendment introduces instruments for the protection of consumers in rigorous proceedings for a payment order on a bill of exchange, viz:
1) to statement of claim for a payment order against a consumer who is obliged under a bill of exchange, the plaintiff shall attach, under pain of return, in addition to the original bill of exchange as at present, the agreement from which the claim secured by the bill of exchange arises, as well as a bill of exchange declaration with annexes;
2) the agreement and the bill of exchange declaration and annexes so attached to the statement of claim shall be examined by the court ex officio in extent of existence of prohibited clauses, which will significantly weaken the guarantee value of the bill of exchange obligation;
3) the time limit for lodging objections against an order for payment will be extended to one month (to date it was 2 weeks) from the date the order is served (or three months if is to be served outside the territory of the European Union);
4) if charges are brought against a payment order, the consumer defendant will be charged three-quarters of the court fee, but no more than 750 PLN.
At the same time, the changes introduced in the bills of exchange law restrict the freedom of creditors to trade bills of exchange securing claims under an agreement concluded with a consumer. The amendments provide that such a bill of exchange shall contain the clause "not to order", and in this case, the transfer of rights from the bill of exchange will only be possible in the form and effect of an assignment.
Author: Bartosz Nowicki - attorney at law, restructuring advisor at LSW Lesnodorski Slusarek and Partners.