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Powers of the Private Judicial Officer pursuant to Art. 18 of the Law on Private Judicial Officers

POWERS OF THE PRIVATE JUDICIAL OFFICER UNDER ART. 18 OF THE LAW ON PRIVATE JUDICIAL OFFICERS (LPJO) With the Law on Private Judicial Officers (in force as of 1 September 2005, prom. SG 43/ 20 May 2005, amended SG 39/12 May 2006, amended SG 31/13 April 2007, amended SG 59/20 July 2007, amended SG 64/7 August 2007) the legislator has carried out an important reform in the enforcement process in the Republic of Bulgaria. The LPJO governs the organisation and the legal status of the private judicial officers, as well as the rights and obligations of the private judicial officer as a person to whom the state assigns the function concerning the forced gratification of private law claims. Similar to the Judicial System Act (prom. SG 64/7 August 2007) which governs the legal status and the powers of the judicial authorities, the LPJO is an organisational normative instrument. It should be mentioned that there is a trend towards transferring the legal regulation of the private judicial officer powers to the procedure law - in this connection the new Code of Civil Procedure (prom. SG 59/20 July 2007) in Art. 431 contains more detailed and extensive regulation in comparison to Art. 328 of the CCP. The purpose of this feature is to assist in clarifying the content of the powers of the private judicial officers under Art. 18 of the LPJO. The provision of Art. 18 of the LPJO, entitled “Other Activities of the Private Judicial Officer”, is fascinating, original and most of all quite practical. As a matter of fact, the different paragraphs of this provision stipulate certain powers of the private judicial officer which complement his powers under the Code of Civil Procedure (CCP). Considered in systematic relationship with Art. 6 of the LPJO, which provides for incompatibility between the private judicial officer status and his engaging in other occupational activities, apart from implementing the enforcement methods as regulated in the CCP, Art. 18 of the LPJO thoroughly regulates the cases when the judicial officer may engage in other activities. The speculations of paragraphs 1-4 of Art. 18 of the LPJO envisage an assignment by a claimant, secured creditor or the parties of enforcement proceedings, in order for the private judicial officer to start exercising the respective powers. Without the above-mentioned assignment, the private judicial officer does not have right to engage in the activities stipulated in these provisions. The assignment of the said cases refers to authoritative declaration of intention of certain persons which results in originating powers of the private judicial officer which he does not have ex officio1. The relationships which emerge between the private judicial officer and the person, who assigns him with engaging in certain activities, only resemble mandatory relationship originating from a contract of mandate or agent contract. It should be stressed that the private judicial officer reserves his particular legal status of a person assigned public legal functions by the state. This is why, according to the speculations of Art. 18, para 1 of the LPJO, the private judicial officer does not lose his independence and does not turn into a fiduciary or an agent of the claimant, but continues to be an official performing the functions assigned to him by the state. Even the speculations of para 4, where the secured creditor has assigned the private judicial officer to conduct the sale of specially pledged property pursuant to the Law on Special Pledges, and which comes very close to being a mandatory relationship, even then, the relationship between the claimant and the private judicial officer is not equal. The specifics of the legal status of the judicial officer and the performed by him functions of forced enforcement require that the provisions of the Law on Special Pledges be applied only accordingly and that the special provisions of the LPJO be applied. As regards the form of the assignment, it should be mentioned, that it should not be by all means in the form of a contract. There is no impediment for the claimant (the party, which is usually a contracting authority) to indicate as early as in the application to initiate an enforcement case or in another application later on, that it assigns the judicial officer to engage in certain activities. In this sense, the assignment should be in writing. Even though there is an assignment on the part of the claimant and agreement on the part of the judicial officer to engage in the activities assigned, no contractual relationship arises between them.
It might be considered whether if there was no assignment, the activities of the private judicial officer could be confirmed by the claimant (e.g. to confirm an imposed attachment on behalf of the private judicial officer). A positive reply could be given if considered from a viewpoint of the procedural economy and speed of the process. Paragraph (1) Upon assignment by the claimant, the private judicial officer may, in connection with the enforcement, investigate the property status of the debtor, make inquiries, gather documents, papers and others, specify the enforcement procedure, as well as be a keeper of the tagged property. This provision is related to Art. 16 of the LPJO which grants the private judicial officer the right to access to court and administrative offices and other persons keeping registries on property and who can provide data concerning the property rights of the debtor. With the coming into force of the new Code of Civil Procedure, these powers of the private judicial officer would be regulated by Art. 431, para 3 of the new CCP. The provision of Art. 18, para 1 of the LPJO has a considerably broader content and significance for the process. This provision allows the private judicial officer to take the initiative to investigate the entire property status of the debtor, to undertake and engage in enforcement activities and to be a keeper of the property which is at the focus of the enforcement.
When filing an application to initiate the enforcement under Art. 323, para 1 of the CCP (Art. 426, para 1 of the new CCP), the claimant is obligated to specify the way of enforcement, i.e. to state the enforcement method (Art. 323, para 3 of the CCP, Art. 426, para 2 of the new CCP). By virtue of Art. 18, para 1 of the LPJO instead of this, the claimant may give the private judicial officer the right to determine the way of enforcement and the property rights of the debtor on which to focus the forced enforcement. Thus the private judicial officer becomes the driving force behind the enforcement proceedings, and at the same time releases the claimant form the burden to track down the property rights of the debtor, choose an enforcement method and request undertaking of enforcement actions. This way, the claimant is spared efforts, time and resources, particularly after he has already made efforts and has invested in procuring enforcement authorisation certifying his enforcing right. At the same tine, the responsibility for an irregular forced enforcement should be taken into account. Principally the claimant is responsible for any material irregularities of the forced enforcement, while the judicial officer is responsible for any procedural irregularities2. The responsibility for the regular undertaking and performing of enforcement activities upon assignment under Art. 18, para 1 of the LPJO lies in the judicial officer as well as in the claimant. The claimant is responsible for the damages of the materially irregular forced enforcement relating to the rules of prohibited harming (Art. 336, para 3 of the CCP, Art. 440, para 3 of the new CCP). In case the private judicial officer has accepted the assignment of performing enforcement activities, he also bears the responsibility for any material irregularities -upon directing the enforcement on somebody else\'s property3. In this connection, the responsibility of the private judicial officer and the claimant may be grounded by analogy with Art. 49 of the Law on Obligations and Contracts (LOC) which stipulates that “one who has assigned a job to a person, is responsible for the damages inflicted by that person during or in connection with this job implementation.” As regards the responsibility pursuant Art. 49 of the LOC, it is of no importance in what way was the job assigned -employment relationship, production contract, administrative instrument or in another way4. This is why, through his activities, the private judicial officer engages the responsibility of the claimant who is responsible according to the rules of prohibited harming as the contracting authority in the job. The responsibility pursuant to Art. 49 of the LOC applies under the conditions of imperfect solidarity.

In view of the responsibility assumed by the private judicial officer and with which he engages the claimant, the officer should be recognised the right (and obligation) to assess the conformity with law of the undertaken and implemented enforcement activities, the qualification and legal relevance of the legal facts that have occurred in the proceedings, as well as the right to suspend enforcement activities or abandon a given way of enforcement when there is a risk of causing harm. In this case, the obligation for enforcement of the private judicial officer provided for in Art. 19 of the LPJO is inapplicable .
As a private speculation, it could be useful to recognise the right of the private judicial officer (after the assignment under Art. 18) to appeal against the refusal of the registration judge to register foreclosure on immovable property -of the opposite opinion is the District Court, town of X in Definition relating to private civil case appeal No. 497/2007, where as part of its motives the court acknowledges that the private judicial officer does not belong to the circle of people who are legitimised to appeal against the decreed definition and that there is no legal interest of appealing in contract to the parties. Paragraph (2) Upon assignment by the debtor and/or the creditor, the private judicial officer may, in connection with the enforcement proceedings, act as a keeper of collateral property. This provision creates a legal opportunity for the private judicial officer to be assigned the functions of a keeper of collateral property – for instance, the speculations of Art. 250 of the CCP (Art. 414, in connection with 420 of the new CCP) provide for (upon making objections by the debtor of the writ of execution, issued based on non-judicial enforcement grounds) the court to enact closing of the enforcement upon submitting a due security for the creditor pursuant to Art. 180-181 of the LOC. A necessary prerequisite for the exercising of this power of the private judicial officer is for an inventory to be taken of the collateral assets - regardless of whether the inventory has been taken only for security or in case of forced enforcement. What is required is an assignment that could be done both by the claimant and the debtor. Paragraph (3) Upon assignment by the parties, the private judicial officer may, in connection with the enforcement proceedings, mediate to reach a settlement between them. This power of the private judicial officer is exercised in connection with the enforcement proceedings. Even in the last phase of the civil process - initiated forced gratification of the claim, the chance of reaching a settlement should not be excluded, all the more that the parties have an extra stimulus to voluntarily settle their relations - the debtor stands right in front of the "blade" of the enforcement process and the related to it power, while the creditor has an interest to avoid any more expenses as regards his pretentions, and in most cases applies the bankers\' rule that the money today cost more than the money tomorrow. This power is explicitly stipulated by the legislator to evade the doubt that the private judicial officer may serve as a mediator between the parties for a voluntary settlement of there legal relationships, keeping in mind the very nature of the officer\'s function - forced gratification of claims. The legal status of the private judicial officer as a person with public law functions and the requirement for independence when performing his functions turn him into an appropriate figure for mediation in the voluntary settlement of legal disputes. It is necessary is for the debtor and the claimant to have reached an agreement so that the judicial officer may mediate between them - in this case it is necessary assignment by all the parties in the enforcement case and not only by one of them (the debtor or the claimant). It should be taken into account that the assignment (the consent for mediation) may be assumed after the parties have entered into a written agreement, and it is not obligatory for there to be any preceeding formal instruments. This is assumed even if there is the slightest of chances for the agreement to be sealed right away and to prevent wasting unnecessary time. Furthermore, it should be mentioned that the very work of the private judicial officer contains elements of mediation - for instance to explain to the debtor how to pay and not accrue liabilities. Paragraph (4) Upon assignment by the secured creditor who has commenced a foreclosure, the private judicial officer may transfer the pledged property pursuant to Art. 521 of the Code of Civil Procedure, as well as sell the pledged property pursuant to the Law on Special Pledges or the Code of Civil Procedure. When conducting the sale pursuant to the Law on Special Pledges, the private judicial officer has the rights and obligations of a depository, and the distribution is claimed and is subject to appeal pursuant to Art. 462 and 463 of the Code of Civil Procedure. (The references are according to the provisions of the new Code of Civil Procedure - author\'s note) This is maybe the most fascinating and original provision of the commented Art. 18 of the LPJO. The powers given to the private judicial officer through paragraph 4, are connected to the legal regime of the special pledge (the pledge without submitting the pledged property) under the Law on Special Pledges (LSP). The LSP entitles the secured creditor to be satisfied out-of-court as regards the pledged property in case of a breach of the secured claim. Article 35 of the LSP provides for an opportunity to exercise force on the debtor in case he puts up a resistance and does not assist the creditor who has initiated enforcement. The excerpt from the Central Register of the Special Pledges under Art. 35, para 1 of the LSP concerning the registered pledge and registered commencement of enforcement represents an enforcement authorisation (the creditor does not necessarily have to have a writ of execution). Article 18, para 4 of the LPJO expands the competence of the private judicial officer which entitles him, upon being assigned by the creditor, to engage in all activities of enforcement under the LSP, including to conduct the sale of the pledged property. The selling pursuant to the LSP is not a public sale but an out-of-court means to cash down property, at which the secured creditor exercises his subjective potestative right to sell the pledged asset on behalf of himself and on account of the debtor5. Upon assignment by the secured creditor, the private judicial officer has the rights of the secured creditor and what is more he is not obligated to follow the rules of Art. 367-372 of the CCP (Art. 473-482 of the new CCP) for the sale of movable assets6. However, the private judicial officer does not exercise someone else\'s subjective right but his own power, be it in a special, out-of-court system. That\'s why, he does not turn into a fiduciary or an agent of the secured creditor or the debtor. In view of the above-said, when conducting the sale under Art.  18, para 4 of the LPJO, the private judicial officer is not territorially confined by the location of the pledged assets he sells. He can sell pledged assets to be found on the territory of the whole country and even abroad (e.g. pledged TIR trucks). In this sense, the rules on local competence under Art. 324 of the CCP (Art. 427 of the new CCP) do not apply in this case. The forced submission of the sold pledged property by the private judicial officer pursuant to Art. 414 of the CCP (Art. 521 of the new CCP), however, presupposes following the local competence, and in the cases when the sold by the private judicial officer property is in a different judicial region, the submission should be made by the locally competent judicial officer. The above measure of the legislator towards granting full rights of acting to the private judicial officers on the territory of the entire country is also developed in para 6 of Art. 18 of the LPJO, as will be mentioned below. The judiciary practice under the LSP in the spirit of the law is also directed towards speed and practicality relating to the evaluation and the value at which the pledged property could be sold. It is assumed that one can sell even without preparing a special evaluation before the sale, at a price for which there is a buyer (again in contrast with the regulation of the CCP). This right should be acknowledged to the private judicial officer, too, when he conducts sales. It is entirely up to him whether to use a special evaluator and do an evaluation or whether to take it into consideration at all after evaluation has been done. After the private judicial officer has been assigned the sale under the LSP (it is advisable that this is done through assignment contract) he should agree on the price of the sale with the claimant. Together with the right to conduct the sale under the LSP, the private judicial officer has also the rights and obligations of a depository under Art. 39 of the LSP - to prepare a list of persons who have right on the pledged property, to announce the list to and hear the opinions of the pledger, debtor and the persons on this list, to prepare the final list, to announce it to the parties, to prepare the distribution and make the relevant sale transactions to the rightful claimants.
The provisions for the rights and obligations of the depository under the LSP are correspondingly applied to the private judicial officer who has been assigned to conduct a sale under the LSP. The relevant application of the regulation under the LSP leads to the conclusion that the private judicial officer does not lose his legal status of a person with public law functions and does not affect his independence. Thus for instance the distribution is prepared, claimed and appealed against not pursuant to Art. 41 of the LSP, but in the order of Art. 462 and 463 of the new CCP to which provisions refers Art. 18, para 4 of the LSP. As a special  law, the LPJO derogates the application of the LSP. Furthermore, the private judicial officer is to apply Art. 24 of the LPJO for his activities as a depository in connection to the management and disposition of funds - proceeds from the sale, expenses and due remuneration. He should open in a bank a separate special account in his name. The account of the private judicial officer, acting as a depository, cannot be garnished or attached (Art. 24, para 3 of the LPJO). In practice when conducting an enforcement pursuant to the Law on Special Pledges prevails the model of opening a separate account for every single enforcement, which account is closed after it has served its purpose and after the end of the enforcement. The same could be also recommended for the practice of private judicial officers. Paragraph (5) Upon assignment by the court, the private judicial officer may serve notifications and subpoenas in civil cases. (The provision has been amended by the new CCP - author\'s note) The new CCP provides for the possibility to assign to the private judicial officer to serve notifications and subpoenas in civil cases. It might be expected that the new legal regulation will allow for many court sessions to be held on time. The regime of passing subpoenas and notifications from the court to the law office of the private judicial officer, and vice versa, should not be different from the existing one now between the private judicial officers from different regions. We consider that de lege ferenda the private judicial officers should be also assigned to serve out-of-court subpoenas and papers, which lies within the competence of notaries in the normative regulation in force (Art. 488 of the CCP, Art. 592 of the new CCP). The private judicial officers dispose of the necessary organisation and experience in serving subpoenas and notifications to persons who stand to gain from concealing (debtors in enforcement cases), due to which the assignment of this competence will raise the efficiency of serving out-of-court documents. This is especially important in the cases when the law associates the addressing of certain declarations of intentions between the parties in a material relationship with repayment or precluding of rights, due to which the parties have interest to certify the fact of receiving the declaration of intention and the date on which it is made. The practice shows that in many cases the serving of notary invitations is ineffective and the normative regulation of serving subpoenas and papers is not applied correctly. In the cases of wrong application of the rules for serving invitations, the notary certification of serving the invitation is invalid, whereby the targeted legal security is not achieved. It is also quite often when the notaries are not interested in engaging in this activity. Paragraph (6) The private judicial officer may assign to a private judicial officer from another region the performance of activities under paragraphs 1, 2, 4 and 5 under the same conditions. In this case what is alluded to is a delegation, similar to the court orders for collection of evidence in the region of another court (Art. 112 of the CCP, Art. 25 of the new CCP). The private judicial officer may delegate to a colleague from another judicial region to engage in procedural and other activities, such as: serving of subpoenas or papers, collection of information about the property of the debtor, appointing a keeper to collateral property, etc. The provision of Art. 324, para 1 of the CCP (Art. 427, para 1 of the new CCP) determines the local competence of the judicial officer in compliance with the location of the property rights to which the enforcement is directed -the so called territorial principle in enforcement proceedings. In view of the presence of territorial delimitation of the private judicial officer competence, delegation of powers to a judicial officer from another judicial region is necessary with a view of observing the local competence rules. It is yet to create a practice concerning the application of this regulation of the LPJO, but we consider undeniable the possibility to assign the performance of activities to a private judicial officer from another region in all cases when the aim is to secure the enforcement (imposing a foreclosure, attachment, inventory, evaluation and submitting assets of the debtor for keeping). Milen BAZINSKI, private judicial officer
Alexander TONEV, lawyer*________________________
1 For the difference between authorisation and empowerment -Vasilev, L. Civil Law -General part, S., 2000, p. 392.
2 Our attention was drawn to this difference by Borislav Belazelkov, for which the authors are grateful to him.
3 As far the private judicial officer can choose a property to which to direct enforcement upon assignment under Art. 18 of the LPJO -something like “negligence in selecting agent” (culpa in eligendo).
4 In this sense -Goleva, P. Delict Law. S., 2007, p. 101.
5 In agent contracts, the commissioner is obligated to perform on his behalf and at his expense certain activities for remuneration and by order of the client - thus Gerdzhikov, О. Commercial Deals - A Book on Part Three of the Commercial Law. S., 2000, p. 108. The situation of the creditor in sales pursuant to the LSP is similar - he has the right to sell on his behalf and at the expense of the debtor, but here, what is different is that it is a matter of out-of-court means for gratifying claims.
6 The comparison with conducting sales of movable assets under the CCP via a shop or an exchange is interesting. Even though it is not always the debtor the one to choose the shop where the sale is to take place, there are created legal relations between the merchant and the debtor that are similar to commission relations. The merchant conducts the sale on his behalf and receives the established by the law commission from the sale price. The commission relation under Art. 367, para 2 of the CCP differs from the one in Chapter 24 of the CL in its source as well as in its content. It serves as a forced gratification of the claimant and is adjusted to him. The merchant who has given his consent for the sale to be conducted in his shop is not obliged to take orders from or to give accounts to the debtor but to the judicial officer (thus Stalev, Zh. Bulgarian Civil Procedure Law. 8th Edition, S, 2004, p 790).
* The authors express their special gratitude and thankfulness to Borislav Belazelkov - Judge in the Supreme Court of Cassation of the Republic of Bulgaria for the help in preparing this feature and for his precious notes and commentaries on the interpretation of legal provisions