site.btaRepresentatives of Bulgarian Chamber of Private Enforcement Agents, Greek Federation of Bailiffs Hold Meeting

Representatives of the Bulgarian Chamber of the Private Enforcement Agents (BCPEA) and the Greek Federation of Bailiffs debate on Saturday the difficulties surrounding cross-border enforcement of court acts. 

BCPEA Chair Georgi Dichev presented an analysis of the Chamber, which says that the private enforcement system in Bulgaria is experiencing huge difficulties for the fifth year in a row. This is having an extremely negative impact not only on private bailiffs and their employees, but also on the claimants in the cases and on the justice system as a whole, he noted

All this has its expression in the business environment and the budget revenues, the analysis claims.

The report concludes that immediate and comprehensive measures are needed to financially stabilize the system, including updating the simple fees in the Schedule of Fees and Costs to the Private Enforcement Act, which has been the same since 2006. In addition, a change in the taxation regime and the assignment of new activities to private enforcement agents (PEAs) is also needed.

The analysis points out that there is a clear trend of leaving the profession - 16 PEAs have voluntarily terminated their activity, half of them after 2018. There has been a strong decline in the number of employees with a wide range of negative consequences - on average, the staff of all offices of PEAs has decreased by 30%, assistant PEAs have decreased by 13% between 2018 and 2023; the total number of employees has decreased by 15% from 2018 to 2023 with 282 people being dismissed, as the trend continues to be negative.

According to the report, small and some medium-sized law firms are critically at risk of going out of business. The statistics indicate that 30 law firms have less than 300 cases opened in 2023, 54 law firms have less than 500 cases opened in 2023, 48 law firms have up to 5 staff with an average staff reduction of 67%.

The number of new cases is decreasing strongly, with 21 out of 28 regions experiencing a significant drop of up to 300%, most evidently in Shumen.

The average substantive interest in newly created cases has fallen dramatically, which directly affects the proceeds for the maintenance of law firms, according to the analysis.

According to the statistics, the amounts collected have been declining significantly in recent years, with a 25% negative gap between 2018 and 2023. On the other hand, in 30% of cases, PEAs finance the execution, since claims for alimony, employment, surrender of children, and public state and municipal claims are exempt from advance fees.

At the same time, there has been a huge increase in costs, which, combined with the drastic reduction in revenues, threatens the very existence of the system.

Currently, PEAs' actual law firm expenses are much greater than the statutorily recognized 25% and PEAs pay taxes not on the income but also on the expense.

The document has been sent to the previous caretaker justice minister Atanas Slavov, as well as to caretaker Minister Maria Pavlova, with a request for urgent action and the formation of a working group. Two more letters have been sent to the Minister of Justice, and not only no action is being taken, but there is not even a response, BCPEA members pointed out.

This attitude is exacerbating tensions in the system, as are calls for extreme action by PEAs, such as closing law firms. The BCPEA has also informed all bar associations in the country, banks, insurance companies, collection companies and public service providers about the extremely dire state of the system, Dichev said.

At this rate, he said, the country will end up with only state enforcement agents.

The number of PEAs has been steadily declining, from 202 in 2017 to 180 currently. The negative trend of PEAs from different regions in the country leaving the profession due to inability to sustain their law firms continues.