1. LEGAL SYSTEM

The Croatian legal system is founded on the principle of separation of powers between the legislative, administrative and judicial branches of government. An independent and impartial judiciary exercises the judicial power, bound by the Constitution and the laws passed by the Parliament. International agreements ratified by the Parliament and published in the Official Gazette of Croatia (Narodne novine) form part of the Croatian legal order and take precedence over nationally enacted laws. Croatia is a civil law country where court decisions are generally not considered as precedents, although lower courts tend to follow the opinions and decisions of the higher courts.

In general, a distinction can be made between courts of general jurisdiction and specialized courts which have exclusive jurisdiction over certain subject matters.

During 2015 and 2016, Croatia underwent a reform aimed at rationalization of the court system. As a result, certain courts ceased to exist and certain others were merged, which ultimately led to a reduction of the total number of courts.

The courts of general jurisdiction include the Municipal Courts (24, as opposed to 78 before the reform), the County Courts (15), and the Supreme Court. The specialized courts include Commercial Courts (8, as opposed to 7 before the reform), the High Commercial Court (1), Misdemeanour Courts (22, as opposed to 25 before the reform), the High Misdemeanour Court (1), and the Administrative Court (4, as opposed to 1 before the reform). A High Administrative Court, serving as an appellate court for cases heard by Administrative Courts, was founded during the previous reform in 2012.

In addition, there is the Constitutional Court which is technically not a part of the judiciary but a special body established by the Croatian Constitution that is competent for constitutional review of Acts of Parliament and individual constitutional complaints against public authorities.

Litigation in Croatia follows an adversarial procedure in which the parties must actively participate in establishing the facts of the case. Otherwise, the court may dismiss the claim because the party has not sufficiently met the required burden of proof according to the procedural rules. The only exception where the trial judge establishes facts based on the judge's own motion is when the parties’ dispositions violate the mandatory rules of law or standards of public moral. Nonetheless, judges have a very active role in the litigation process. Thus, lay-witnesses, expert witnesses and the parties are primarily questioned by the judge during the evidence gathering procedure, while attorneys may only pose additional questions and make follow-up remarks. The result is that the emphasis is placed on the procedure and exchange of written briefs between the parties prior to any hearing rather than conducting extensive and time consuming hearings before the court.

The litigation procedure commences when the claimant submits a statement of claim to the court. However, the claim becomes effective only upon effective service of the statement of claim on the defendant. The defendant has a duty to file a statement of defence within the time limit granted by the court which may range from a minimum of 30 (thirty) to a maximum of 45 (forty five) days. In the event the defendant does not file the statement of defence or fails to appear before the court for the first hearing, the court may render a default judgment against the defendant. However, in practice a default judgment is rare because one of the requirements is that the court finds the claimant’s claims are well- founded based on the supporting facts.

All decisions of a court of first instance may be appealed before a court of second instance. Also, the law allows for two extraordinary legal remedies against final decisions: (a) a review of the second instance court decision, which is always available in matters where the amount in dispute exceeds HRK 200,000, approximately EUR 26,700 (in case of a High Commercial Court decision HRK 500,000, approximately EUR 68,495), or in other matters if certain additional requirements are met; and (b) reopening the first instance court proceedings in matters concerning serious violations by the participants, or the discovery of new facts and/or evidence which may lead to a different decision.

Commercial Courts hear the following disputes:

-disputes between companies, sole traders (trgovci pojedinici) and craftsmen (obrtnici), provided that disputes between sole traders and craftsmen relate to the performance of their economic activities;

-corporate disputes arising from the establishment of a company, the company's operations (including the termination of operations), the transfer of shares, shareholder relations, shareholder-management relations, piercing the corporate veil, and liability of a company's managers;

-disputes involving a party involved in bankruptcy proceedings, except for disputes falling within the exclusive jurisdiction of Municipal Courts;

-maritime and air transport disputes;

-intellectual property disputes; and

-unfair competition related disputes.

Although there are eight Commercial Courts in Croatia, in certain specialized situations the competence to hear a particular matter may be restricted to one of the four Commercial Courts located in Osijek, Rijeka, Split and Zagreb. These specialized Commercial Courts possess special competence over disputes involving matters:

-regarding ships and navigation by the sea and/or inland waterways, except for passenger transports;

-regarding aircrafts and air navigation and aviation, except for passenger transports; or

-intellectual property disputes.

Furthermore, the County Court of Zagreb and the Commercial Court of Zagreb have a special compe- tence in matters concerning court assistance for arbitration proceedings or challenges of arbitral awards.

Generally, other than the matters previously discussed, all other disputes fall within the competence of the Municipal Courts. Also, certain disputes are under the exclusive jurisdiction of the Municipal Courts, such as labour disputes, family law disputes, trespass, etc.

Litigation costs mainly include court fees, attorneys' fees and expenses for expert witness and opinions. Normally, costs are awarded against the losing party in accordance with the rules of civil procedure. In some situations, the court may award costs against a party, or a party’s representative, who caused a delay to a hearing. A counsel may also be ordered to bear the costs of a hearing if the proceedings had to be postponed because he or she was not prepared for the hearing.

Court fees are rather moderate, which allows litigation to be accessible to all individuals. Generally, court fees range from HRK 100 (approximately EUR 14) for amounts in dispute up to HRK 3,000 (approximately EUR 411), to the highest fee of HRK 5,000 (approximately EUR 685), for amounts in dispute exceeding HRK 465,000 (approximately EUR 63,700).

Attorneys' fees are prescribed by the Croatian Bar’s Tariff and may range from HRK 250 (approximately EUR 35) for a brief or a hearing in a case with an amount in dispute up to HRK 2,500 (approximately EUR 343), up to the highest fee of HRK 100,000 (approximately EUR 13,700) for a brief or a hearing in a case with an amount in dispute of HRK 22,500,000 (approximately EUR 3,090,200) or more. The fees can be decreased for less demanding briefs or hearings, and can be increased for appeals, extraordinary legal remedies and arbitration proceedings. Although in practice the attorney and the client may agree upon higher fees, only fees that are in accordance with the Bar's Tariff will be recognized by the court for the purpose of reimbursement.

Proceedings related to business crime recently started rising in importance in Croatia, especially in cases in which shareholders attempted to defraud company creditors by hiding company assets.

The purpose of criminal proceedings is usually to put additional pressure on the perpetrators or to gain access to information which only the prosecutor can access and which would otherwise remain unknown to the victim. In addition to this, successful convictions usually open the route to collecting the debt from the perpetrator's private property, which is another reason why victims decide to engage in criminal proceedings.

The first step to initiate criminal proceedings is reporting a potential crime to the competent state prosecutor. The prosecutor has a priority right to decide whether to initiate the proceedings.

The prosecutor usually instructs the police to make preliminary investigations which should help the prosecutor assess whether there are grounds for a criminal conviction. If the prosecutor finds that there could be an arguable case, the prosecutor initiates an official investigation in order to collect relevant evidence.

If the prosecutor makes a prima facie assessment that there are no grounds for criminal liability, the prosecutor grants the victim an opportunity to assume prosecution. The victim has 8 (eight) days to declare whether it assumes prosecution and to propose investigations that the victim deems appropriate for collecting relevant evidence.

Formal accusation can be brought before the court once the prosecutor or the victim assuming prosecution collects sufficient evidence. Depending on the gravity of the alleged crime, criminal cases may be heard by specialized criminal departments of Municipal or County Courts.

Croatia traditionally had for many years an inquisitorial system in which the presiding judge played the main role in conducting the trial and taking evidence. As part of the changes of the criminal procedure in 2011 many adversarial features were introduced into the system. The parties now play a more active role in putting forth their case before the judge who acts as an independent decision maker.

Parties are entitled to appeal against a court decision rendered in a first instance trial. The appeal is heard either by a County Court, if the first instance trial was heard by a Municipality Court, or by a Supreme Court, if the first instance trial was heard by a County Court. The law allows for a second appeal against decisions of the appellate courts if the perpetrator is convicted with a long term jail sentence or if the appellate court overturns an acquitting decision and finds the perpetrator guilty.

There are three extraordinary legal remedies available against appellate decisions: (a) reopening the trial in matters concerning serious violations by the participants, or discovery of new facts and/or evidence which may lead to a different decision; (b) revision of a court decision in case of a breach of fundamental human rights; or (c) revision of the court decision if there is a suspicion that was a serious violation of the rules of due process.

The state prosecution office is generally entitled to initiate proceedings and act as prosecution during the trial for the majority of criminal offenses. In addition to the state prosecution office, there is a special department for fighting corruption and organised crime called "Uskok". This department has competence over cases involving corruption, such as giving and taking a bribe, abuse of power in business or by state officials, human trafficking, certain cases of drug trafficking, and crimes committed by organised groups.

Both organisations have wide authorities in collecting evidence and prosecuting before the court. They can also request the court to allow surveillance measures such as wiretapping or physical surveillance.

As already described above, victims may assume the prosecution role if the state prosecution office declines to prosecute. In such cases, private prosecutors have wide competencies to propose the collection of evidence to investigation judges, but private prosecutors may lack the professional support enjoyed by the state prosecution.

Crime victims may participate in criminal proceedings either as aggrieved parties on the same side as the state prosecution or as private prosecutors.

In both roles victims may propose the taking of evidence, cross examining the defendant and the witnesses or filing appeals against court decisions. They can also request the criminal court to order the defendant to compensate them for financial losses or other damages that the victims suffered as a consequence of the crime. Filing such a request prevents the limitation period otherwise applicable to the damages claim from expiring. If such a claim is rejected by the criminal court, the victim is not prevented from filing a damage claim before a civil court.

Criminal courts may issue preliminary injunctions against defendants. Documents and evidence collected during criminal proceedings may generally be used in civil proceedings as well.

The duration of investigations and trial procedures largely depends on the nature of the criminal offense and the availability of evidence. State prosecution and criminal courts are generally very fast in conducting investigations, so investigations usually do not last for more than 1 (one) year. Trial proceedings usually last between 6 (six) months and 2 (two) years.

There are no court fees for reporting criminal offenses or initiating criminal proceedings.

Victim’s counsel costs are prescribed by the Croatian Bar’s Tariff and they may range between HRK 1,000 (EUR 133) for a hearing in proceedings for an offense with the maximum sentence up to 3 (three) years, HRK 4,000 (EUR 533) for a hearing in proceedings for an offense with a maximum sentence of more than 10 (ten) years. Brief costs usually vary between HRK 250 and HRK 4,000 (EUR 33 – EUR 533).

Counsel costs are recognized by the courts and, in the case of a conviction, the defendant may be ordered to pay the costs of the proceedings together with the victim’s counsel costs.

Croatian bankruptcy law mirrors the German insolvency law (Insolvenzordnung). According to Croatian law, bankruptcy proceedings can be administered over legal entities and private individuals that are under an obligation to pay income tax or profit tax.

Generally, bankruptcy proceedings must be initiated in the event of (a) insolvency; or (b) over- indebtedness. In the event the bankruptcy involves a legal entity, such as a corporation, the management is obliged to apply for the initiation of bankruptcy proceedings within 21 (twenty one) days of the occurrence of a bankruptcy reason. A debtor may initiate bankruptcy proceedings in the event of imminent insolvency, when the debtor is able to prove it will most likely not be able to fulfil its current financial obligations.

A debtor is deemed to be insolvent if it cannot fulfil its due financial obligations on a continuous basis. A debtor is always presumed insolvent if (a) there are one or more enforcement orders pending against it for more than 60 (sixty) days; or (b) it was not able to pay three consecutive salaries to the employee(s).

A debtor is considered over-indebted if the debtor's liabilities exceed its assets, unless (a) there are circumstances or options available, such as reorganization plans or other available financial resources that clearly indicate that the debtor will be able to fulfil its financial obligations to creditors; or (b) the debtor's obligations are backed up by a private individual's personal property (usually that of a shareholder), provided that such property is not a part of a bankruptcy procedure.

Bankruptcy proceedings are conducted exclusively by the Croatian Commercial Courts. For companies registered in Croatia, the competence of an individual Commercial Court is determined according to the location of the company’s registered seat.

With respect to bankruptcies involving an international element, the law prescribes the exclusive competence of the Croatian Commercial Courts for all debtors having their principal place of business (središte poslovnog djelovanja) in Croatia, which may differ from their registered seat. Thus, a foreign court may be competent for bankruptcy proceedings of a company registered with the Croatian register of companies if the company has its principal place of business outside Croatia and vice versa, unless the law of the state where the company has its principal place of business does not apply the principal place of business concept (i.e., there is no reciprocity).

Upon receiving an application for bankruptcy, the court sets a date for a hearing. The court may also appoint a temporary receiver, order an expert opinion or impose preliminary measures of protection or injunctions as the court deems necessary. At the hearing, the court will determine whether one of the two reasons for opening bankruptcy proceedings exists, and if so, grant the application, commence main bankruptcy proceedings, and appoint a permanent receiver. The decision may be appealed before the High Commercial Court; however, other than an appeal to the High Commercial Court, there are no other extraordinary legal remedies available against the final decision on whether or not to institute bankruptcy proceedings.

Following the court's decision to initiate bankruptcy proceedings, the time limit for creditors to make claims over the debtor’s property begins to run. The creditors are allowed to make claims within 60 (sixty) days beginning on the 9th (ninth) day following the publication of the decision on the E–notice board of the Croatian Ministry of Justice. This requirement also applies to property owners whose property has been included in the debtor’s non-exempt assets by mistake, or creditors with claims secured by a mortgage or similar lien over the debtor’s property (razlučni i izlučni vjerovnici).

After the expiry of the time limit for notification of a creditor’s claims, the court holds a hearing to determine the validity of each claim. If a claim is contested by the receiver, the creditor may only file a lawsuit against the debtor. If a claim is confirmed by the receiver and is contested by another creditor, the other creditor may file a lawsuit against the creditor that brought the initial contested claim.

Following the hearing, the court holds a subsequent hearing where the creditors determine the method of any further proceedings.

Under Croatian law, there are three types of bankruptcy proceedings: (a) bankruptcy leading to liquidation; (b) reorganization through a bankruptcy plan; and, (c) personal administration. The method of mandatory settlement (prisilna nagodba) was abandoned following the introduction of the new bankruptcy law in 1997.

In the first type of bankruptcy proceeding, the debtor’s non-exempt assets are collected and sold and the proceeds are distributed amongst creditors. Once the process is completed, a notification is delivered to the corresponding commercial registrar in order to remove the debtor from the register. Consequently, by removing the debtor from the register, a legal entity will cease to exist, whereas an individual simply loses the capacity of a sole trader or a craftsman.

The second type of proceeding is a reorganization bankruptcy where a debtor reorganizes/restructures its assets and debts through a bankruptcy plan. The plan must be approved by the creditors and the bankruptcy judge. Also, the plan may involve the liquidation of some or all of the debtor’s assets.

The third type of bankruptcy is a personal administration proceeding where the debtor continues to administer and dispose of its assets under the supervision of a court-appointed commissioner.

Arbitration in Croatia is governed by the Croatian Arbitration Act of 2001. The purpose of the act was to create a modern law based on the UNCITRAL Model Law and to incorporate features of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Croatian law distinguishes between domestic arbitration and international arbitration, depending upon the seat of arbitration. For a dispute to be classified as international, at least one of the parties must be an individual with his or her domicile or habitual residence outside of Croatia, or be a legal entity established under foreign law. The parties may choose international arbitration, i.e., arbitration proceedings having its seat outside Croatia, only in a dispute which is classified as an international dispute.

There is only one major arbitration institution in Croatia, the Permanent Arbitration Court of the Croatian Chamber of Commerce (PAC-CCC), which was established in 1853. The Permanent Arbitration Court of the Croatian Chamber of Commerce has established Rules of International Arbitration (Zagreb Rules), which adhere largely to the provisions of the UNCITRAL Arbitration Rules.

The parties may generally submit to arbitration all disputes involving rights which the party may freely dispose of. This excludes certain family law disputes, criminal law matters, administrative law matters, and certain competition law issues. In addition, in arbitration proceedings having its seat outside Croatia, apart from the disposability of rights requirement above, the parties may not submit disputes that fall within the exclusive competence of Croatian courts, such as disputes involving real estate located within the territorial limits of Croatia.

Under Croatian law, an arbitration agreement may be contained in a separate document or in the form of an arbitration clause included in the underlying contract between the parties, but in both cases it must be in written form. The written form requirement may be satisfied by exchanging letters, faxes, telegrams or other means of communication providing for a written record of the agreement. Most importantly, there is no requirement that the writing contains the parties’ signatures. In addition, the law provides that the written form requirement of the arbitration agreement is satisfied if an offer to enter into an arbitration agreement is made in writing or a written confirmation of an orally made arbitration agreement is sent to the other party and is not objected to. This would apply only if the offer or written confirmation would otherwise be deemed accepted under the usual trade customs. Furthermore, the written form requirement would be satisfied if there is a reference in a bill of lading to a shipping contract that contains an arbitration clause. Finally, if the respondent in arbitration proceedings does not challenge the jurisdiction of the arbitral tribunal at least in its reply to the statement of claim, the arbitration agreement will be deemed validly executed.

The parties may freely designate the law applicable to the subject-matter of their dispute(s) and other procedural rules such as the language of arbitration, the number of arbitrators and the method of selecting these. In international arbitration proceedings the parties are also free to designate the seat of arbitration. However, in domestic arbitration, i.e. in which only Croatian parties are involved, the seat of arbitration must be in Croatia.

Unless otherwise agreed by the parties, an arbitral tribunal may, upon a request by a party, order such interim or protective measures (against the other party(ies) to the arbitration agreement) as the arbitral tribunal may consider necessary in respect of the subject matter of the proceedings. The party that has requested such measures may also apply to the competent national court for the enforcement of such measures. It is not incompatible with an arbitration agreement for a party to apply to the state courts before or during arbitration proceedings for an interim measure of protection or for a court to grant such a request.

Croatian arbitral awards have the same legal effect as final judgments, unless the parties have expressly agreed that the award may be contested before an arbitral tribunal of a higher instance.

There are only limited grounds for challenging an award:

-no arbitration agreement has been concluded, or the agreement is invalid;

-the parties to the arbitration agreement were under some incapacity, or were not adequately represented;

-a party was not given proper notice of the commencement of the arbitration proceedings, or was unable to present its case due to reasons beyond its control;

-the award concerns a dispute not contemplated by, or not falling within the terms of the arbitration agreement, or contains issues beyond the scope of the arbitration agreement;

-the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the law, or the agreement of the parties;

-the award does not adequately or appropriately state the reasoning (unless this has been waived by the parties), or the award is not signed;

-the subject-matter of the dispute is not arbitrable under the laws of the Republic of Croatia; or,

-the award violates the public order of the Republic of Croatia.

Croatia is a party to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards (by succession of ex-Yugoslavia, as of 8 October 1991), with the reservations that the Convention will only apply to the recognition and enforcement of awards made in the territory of another contracting state, differences arising out of legal relationships, whether contractual or not, that are considered commercial under the national law, and to those arbitral awards which were rendered after the effective date of the Convention. In addition, Croatia is a party to the 1961 European Convention on International Commercial Arbitration (by succession of ex-Yugoslavia, as of 8 October 1991), and the Washington Convention of 1966 on the Settlement of Investment Disputes between States and Nationals of other States (in force as of 22 October 1998).

Foreign state court judgments are subject to different provisions and must satisfy more stringent requirements as opposed to arbitral awards. The recognition and enforcement of foreign judgments may be refused if:

-the judgment is not accompanied by a valid confirmation of the judgment’s finality and legal enforceability issued by the issuing court or other competent foreign body;

-the subject-matter of the foreign judgment falls within the exclusive competence of Croatian courts or other Croatian public authority;

-the same subject-matter has previously been decided upon by a Croatian Court or other Croatian public authority, or another foreign judgment involving the same subject-matter has previously been recognized in Croatia;

-the judgment is contrary to the Croatian Constitution;

-there is no reciprocity between Croatia and the foreign state issuing the judgment; reciprocity is presumed unless the opposing party claims the contrary, in which case the Court must seek an official notice from the Croatian Ministry of Justice regarding the existence of reciprocity; or

-the party against whom the judgment is being enforced proves that it was unable to present its case due to a procedural irregularity, such as improper service of documents, summons, etc.

The proceedings for the recognition and enforcement of foreign judgments are conducted by the Municipal and Commercial Courts, depending on the subject-matter of the judgment.

Currently, there are 16 bilateral agreements regulating and simplifying the recognition and enforcement of foreign judgments, with Algeria, Bosnia and Herzegovina, Bulgaria, Cyprus, Czech Republic, France, Greece, Hungary, Iraq, Macedonia, Mongolia, Poland, Romania, Russia, Slovenia and Turkey, and one bilateral agreement regulating and simplifying the recognition and enforcement of foreign arbitral awards with Austria.

2. LITIGATION

3. BUSINESS CRIME

4. INSOLVENCY

5. ARBITRATION

6. ENFORCEMENT OF FOREIGN JUDGMENTS AND ARBITRAL AWARDS

7. PRACTICE TIPS

TYPE OF PROCEEDINGS

PROCEDURE AND ASSUMPTIONS

PRACTICE TIPS

Document Production

Generally no. Apart from some exceptions, counsel presentation is only mandatory in the proceedings before the Supreme Court of Croatia.

Pro Bono System

class actions

STANDARD CIVIL PROCEEDINGS

Yes.

Simple cases: first instance: within 18 months; second instance: 1 to 2 years; third instance:

2 to 3 years

Complex cases: first instance: 2 to 5 years; second instance: 2 years; third instance:

2 to 3 years

There are no civil jury trials in Croatia

Limited.

-Only legal entities, which are entitled to protect certain collective interests and rights by virtue of law (e.g. consumer protection associations), may file a class action.

-A class action may be filed in cases of grave breaches or denial of legally protected collective interests such as environmental rights, living conditions, ethical interests, consumer rights, or non-discrimination rights.

-An individual who seeks protection of its individual interests or rights may rely on a final and binding court decision rendered in the proceedings initiated by class action because the court deciding on the individual claim is bound by the previous decision on class action.

-Litigation costs include court fees, attorney fees and expenses (e.g. for expert opinions, travel expenses for witnesses, etc.).

-Court fees generally include fees for the statement of claim and fees for the court decision.

-Court fees for the statement of claim have to be paid upon filing the claim, while court fees for the court decision are payable after a court decision has been rendered.

-Court fees in the first and second instances are to be paid by the party filing the statement of claim or the appeal.

-If a claim is filed by a foreign party and enforcement of a decision on reimbursement of litigation costs is not safeguarded, the foreign party can be ordered to pay a security deposit.

-Litigation costs are awarded against the losing party who must reimburse the winning party.

-If a claimant has been partially successful, the costs of both sides are divided on a pro-rata basis.

-Attorneys' fees are determined on the basis of the Attorneys' Tariff and depend on the amount in dispute. Attorneys' fees may be agreed differently than as provided in the Tariff. However, a court will only award fees calculated on the basis of the Tariff. The actual attorneys' fees of a party (depending on the fee agreement between attorney and client) may thus be substantially higher, but are of no relevance to the opposing party.

-Agreements on contingency fees are allowed, but the fee is capped at 30% of the awarded amount.

-There is no formal discovery in Croatia.

-Documents are subject to disclosure if the party itself referred to the document in the course of the proceedings, the party is obliged to hand the document over by substantive law, or the document is qualified as a "joint deed" between the parties.

-A court order to produce such documents is not enforceable. Failure to comply with the order can only be considered by the court in its evaluation of the case.

Yes. There is legal aid for people not able to afford litigation costs.

Approximate Duration

Simple cases: first instance: within 18 months; second instance: 1 to 2 years; third instance:

2 to 3 years.

Complex cases: first instance: 2 to 5 years; second instance: 2 years; third instance:

2 to 3 years.

Approximate Costs

COURT FEES

ATTORNEYS’

FEES (NET)

Simple case

Complex case

jury trials

The duration of court proceedings usually depends on which court hears the case. For example, courts in Zagreb and Split are heavily overloaded with cases, which may cause the proceedings to last longer than they would in other courts.

Court fees are based on the Court Fees Act and depend on the amount in dispute. Examples:

-Amount in dispute HRK 100,000 (approx. EUR 13,700): court fees: HRK 2,700 (approx. EUR 370) in the first instance;

-Amount in dispute HRK 465,000 (approx. EUR 63,700) and higher: court fees are fixed at HRK 10,000 (approx. EUR 1,370) in the first instance.

Court fees for appellate proceedings are increased by 100%.

Assumptions based on an amount in dispute of EUR 1,000,000: first instance: preparation of two briefs, four hearings of 1h, 2h, 4h and 6h, respectively, preparation of hearings/meetings with client, witnesses, correspondence with client: In total EUR 18,000 to EUR 35,000; second instance: one brief, no hearing: EUR 5,000 to EUR 18,000; third instance: one brief, no hearing: EUR 5,000 to EUR 18,000.

Assumptions based on an amount in dispute of EUR 10,000,000: first instance: preparation of 4 comprehensive briefs, six hearings with duration of 2h, 4h, and 4 x 8h; preparation

of hearings/meetings with client, witnesses, correspondence with client: In total EUR 50,000 to EUR 180,000; second instance: one brief,

no hearing: EUR 15,000 to EUR 30,000; third instance: one brief, no hearing: EUR 15,000 to EUR 30,000.

Mandatory Representation

by Counsel

In general, there are no court fees for initiating or conducting criminal proceedings that are prosecuted by the State Prosecutor.

Assumptions based on a charge with the maximum penalty of 5 years of imprisonment: first instance: preparation of 4 comprehensive briefs, four hearings of 1h, 2h, 4h and 6h, respectively, preparation of hearings/meetings with client, witnesses, correspondence with client: EUR 3,000 to EUR 5,000; second instance: one brief, one hearing: EUR 700 to EUR 1,300; third instance:

one brief, one hearing: EUR 1,000 to EUR 2,000.

Assumptions based on a charge with the maximum penalty of more than 10 years of imprisonment: first instance: preparation of 15 comprehensive briefs, 12 hearings with a duration of 6 x 2h and 6 x 4h; preparation of hearings/meetings with client, witnesses, correspondence with client: In total EUR 24,000 to EUR 40,000; second instance: two briefs, one hearing: EUR 3,000 to EUR 4,000; third instance: one brief, one hearing: EUR 3,000 to EUR 5,000.

class actions

Mandatory representation is required if the accused is a foreigner and does not understand the Croatian language,or if the accused is not capable of defending him/herself due to health reasons.

Mandatory representation is also required if the statutory prescribed penalty consists of more than 10 years of imprisonment.

Document Production

jury trials

Simple cases: first instance: within 18 months; second instance: within 12 months; third

instance: within 12 months.

Complex cases: first instance: 1 to 3 years; second instance: 12 months; third instance:

within 12 months.

Business Crime

There are no criminal jury trials in Croatia.

APPROXIMATE COSTS

COURT FEES

ATTORNEYS’

FEES (NET)

Simple case (investigation proceedings not included)

Complex case (investigation proceedings not included)

Approximate Duration

Pro Bono System

There are no criminal class actions in Croatia.

Mandatory Representation

by Counsel

Yes. There is legal aid available to individuals who cannot afford a defence attorney.

Limited. There is no formal discovery procedure in Croatia.

The police may, upon a court order, perform a search of premises and seize any document that is important for the case.

The duration of court proceedings usually depends on which court hears the case. Similar to civil proceedings, trials may last longer in courts which are overloaded with cases.

-Convicted persons may be ordered to pay the costs of criminal proceedings.

-The court has a discretionary power to decide whether the procedural costs will be borne by the convicted person.

-All the expenses are advanced from the court's budget (e.g. for expert opinions, travel expenses for witnesses, etc.).

-The court may also bear the defence costs if the defence counsel has been appointed by the court.

-If there are more convicted persons, the costs will be divided among the convicted persons.

-Attorneys' fees are determined on the basis of the Attorneys' Tariff or on the basis of the regulation issued by the Ministry of Justice (in case of ex officio defence) and depend on the penalty for the crime with which the accused has been charged.

-Attorneys' fees may be agreed differently than as provided in the Tariff. However,

a court will only award fees calculated on

the basis of the Tariff.

First instance: a decision on a request for a preliminary injunction is usually rendered within 2 weeks to 2 months; second instance: 2 to 6 months; third instance: 4 months to 1 year.

-A preliminary injunction may be requested before, during and after the court proceedings, but not after the claim has been collected.

-With the request for a preliminary injunction the applicant must provide available evidence, e.g., documentary evidence and affidavits that can be examined by the court right away.

-Documents in foreign languages should be presented together with Croatian translations.

-In order to protect the opponent against losses incurred by a preliminary injunction, the court may order the applicant to pay a security deposit.

-An applicant may also offer to grant a security deposit in order to expedite proceedings if the case may seem to be difficult.

-Attorneys' fees are determined on the basis of the Attorneys' Tariff and depend on the amount in dispute. Attorneys' fees may be agreed differently than as provided in the Tariff. However, a court will only award fees calculated on the basis of the Tariff.

APPROXIMATE COSTS

COURT FEES

ATTORNEYS’

FEES (NET)

Simple Case


Complex Case


The court fees for filing preliminary injunctions

are reduced by half in the first instance in

relation to standard civil proceeding fees.

Assumptions: only the request for a preliminary injunction is filed, the court renders its decision without hearing the opponent: EUR 2,500 to EUR 6,000 in the first instance; second instance: one brief, no hearing: EUR 4,000 to EUR 8,000; third instance: one brief, no hearing: EUR 4,000 to EUR 8,000.

Assumptions: apart from filing the request for

a preliminary injunction, two comprehensive counter statements are filed in reply to two statements from the opponent; witnesses are heard: Total costs (including meetings with client/witnesses) in the first instance: EUR 18,000 to EUR 35,000; second instance: one brief,

no hearing: EUR 5,000 to EUR 18,000; third instance: one brief, no hearing: EUR 5,000

to EUR 18,000.

Preliminary Injunction Proceedings

Approximate Duration

-In practice, courts generally avoid issuing preliminary injunctions without hearing the opponent, which consequently extends the duration of the proceedings.

-Under the Enforcement Act, the appellate court is obliged to pass the appellate decision within 30 days upon the receipt of the appeal. However, in practice courts pass their decisions within 2 to 6 months.

The following two estimates are based on the procedural costs of the Rules of Arbitration of the Permanent Court of Arbitration of the Croatian Chamber of Commerce (Zagreb Rules).

Assumption: sole arbitrator appointed and an amount in dispute of EUR 1,000,000: Registration fee of EUR 200, administrative fees of EUR 2,140 and fees for a sole arbitrator of EUR 10,700.

Assumption: sole arbitrator and an amount in dispute of EUR 10,000,000: Registration fee of EUR 200; administrative fees of EUR 6,340 and fees for a sole arbitrator of EUR 31,700.

In case there is an arbitral tribunal with three arbitrators, it may be that the fees for the arbitrators triple.

Assumptions based on an amount in dispute of EUR 1,000,000: Review of 100 pages of documents; no challenge to the jurisdiction of the arbitral tribunal; two exchanges of submissions; review of correspondence with arbitral tribunal; assistance with the preparation of 4 witnesses; review of 4 written witness statements; no experts; preparation of oral hearing and participation in an oral hearing; preparation and review of one post hearing brief. Total approximate cost: EUR 35,000 to EUR 70,000.

Assumptions based on an amount in dispute of EUR 10,000,000: Review of 1000 pages of documents; no challenge to the jurisdiction of the arbitral tribunal; two exchanges of submissions; review of correspondence with arbitral tribunal; assistance with the preparation of 8 witnesses; review of 8 written witness statements; document production up to 500 pages; preparation and review of expert opinions; preparation of oral hearing and participation in an oral hearing; preparation and review of one post hearing brief. Total approximate cost: EUR 130,000 to EUR 200,000.

APPROXIMATE COSTS

Procedural Costs

ATTORNEYS’

FEES (NET)

Simple Case

Complex Case

Arbitration Proceedings

The usual duration of arbitration proceedings is between 1 to 3 years.

Document Production

Limited. Usually the International Bar Association Rules on the Taking of Evidence are applied which provide for a narrow document production.

-The procedural costs depend on whether a sole arbitrator or an arbitral tribunal of three members is appointed, the complexity of the case and the administrative charges.

-The costs of arbitration to a large extent depend on the arbitration agreement and the amount in dispute, the amount of documents, number of witnesses and whether expert opinions are required. The costs of arbitration also include the arbitrators' fees and the administrative charges.

-The arbitrators usually have large discretion regarding the award of costs. However, in practice the award on costs often depends on the outcome of the case. The award of legal fees is usually not determined by reference to a statutory tariff.

Approximate Duration

-A party seeking recognition/enforcement must submit a copy of the judgment and a certificate confirming that the judgment became final and binding/enforceable under the law of the country in which it was rendered.

-For non-EU countries, if there is no treaty on recognition and enforcement of foreign court judgments between Croatia and the state in which the judgment was rendered, the recognition of such judgment would, generally, be subject to reciprocity requirements.

-For the enforcement of awards under the New York Convention, the creditor must provide the court with the authenticated original award or a duly certified copy thereof and the original of the arbitration agreement or a duly certified copy thereof.

1 to 6 months until a decision on recognition and enforcement is rendered in the first instance; 4 months to 1 year if the decision is appealed.

The duration of execution proceedings depends mainly on whether the debtor has executable assets and whether execution measures are opposed by the debtor.

Enforcement of Foreign Judgments and Arbitral Awards

APPROXIMATE COSTS

COURT FEES

ATTORNEYS’

FEES (NET)

Approximate Duration

A court fee of HRK 250 (approx. EUR 35) is payable for the recognition of a foreign court judgment. For enforcement actions, court fees are determined by the Court Fees Act and depend on the

amount of a claim.

Application for recognition/enforcement:

Simple case: EUR 400 to EUR 600.

Complex case: EUR 2,000 to EUR 5,000.

Court fees depend on the amount of the claim, but are capped at HRK 500 (approx. EUR 70).

Filing of insolvency claim:

Simple case: Approx. EUR 400 to EUR 600.

Complex case: Approx. EUR 2,000 to EUR 5,000.

Approximate Duration

-A court's decision on the commencement of insolvency proceedings is published in the Official Gazette.

-The time period for filing the claims is set out in the published decision and may not be shorter than 15 days or longer than one month.

1 year to several years. In very complex cases, duration of more than 10 years is possible.

Creditors file their claims directly with the receiver.

Insolvency Proceedings

Filing of Insolvency Claims by Creditors

APPROXIMATE COSTS

COURT FEES

ATTORNEYS’

FEES (NET)

CONTACT

OFFICE

Ivana Lučića 2a/19

HR-10 000 Zagreb

+385 1 4925 400

zagreb@wolftheiss.com

www.wolftheiss.com/offices/croatia