Compensation for debt recovery costs versus the value of the subject matter in dispute

In business transactions, the collection of overdue monetary obligations from debtors generates additional costs for creditors. With this in mind, the legislator has introduced mechanisms aimed at reimbursing the legal fees that creditors have paid in connection with debt recovery. One such mechanism is compensation for debt recovery costs. However, claiming the recovery of costs in court proceedings gives rise to certain complications. These complications involve including this claim in the value of the subject matter of the dispute; this causes certain discrepancies in case law and has significant consequences for the course of court proceedings.

Compensation for debt recovery costs

Compensation for debt recovery costs is a fixed sum that a creditor may claim from a debtor in the event of a delay in payment for goods delivered or services provided. Its purpose is to cover the minimum administration fees and collection costs that the creditor needed to pay in order to recover the debts. Importantly, recovery is possible only in relations between businesses and only when it relates to a commercial transaction, i.e. a contract for the supply of goods or services for consideration, which has been concluded in connection with their business activities.

The amount of compensation is expressed as a fixed amount depending on the value of the overdue monetary claim:

1. EUR 40 – where the value of a monetary claim is up to PLN 5,000;
2. EUR 70 – where the value of a monetary claim is more than PLN 5,000 but less than PLN 50,000; and
3. EUR 100 – where the value of a monetary claim is PLN 50,000 or more.

The PLN equivalent is determined using the average EUR exchange rate announced by the National Bank of Poland on the last working day of the month preceding the month in which the monetary claim became due. It should be noted that the creditor may benefit from this entitlement without having to prove that it actually incurred the costs of recovering the debt in that amount.

Value of the subject matter of the dispute

One of the formal requirements for claiming the recovery of costs is indicating the value of the subject matter of the dispute. This is of fundamental importance for other procedural steps. It is worth noting here that the value of the dispute affects: (1) the jurisdiction of the court, i.e. whether the case will be heard by a district court or a regional court; (2) the amount of court fees to be paid by the claimant; (3) the amount of the costs of the proceedings after the court proceedings are concluded, in particular the amount of the attorneys’ fees; and (4) the possibility of lodging a cassation appeal.

Pursuant to Article 19 § 1 of the Code of Civil Procedure, the value of the subject matter of the dispute is, as a rule, a specified amount. At the same time, Article 20 of the Code of Civil Procedure adds that interest, benefits and costs claimed in addition to the principal claim are not included in the value of the subject matter of the dispute. In the context of the wording of these two articles, there are some doubts as to whether compensation for the recovery of costs should be included in the value of the subject matter of the dispute.

Arguments against including compensation in the value of the subject matter of the dispute

Some courts and legal scholars take the view that compensation for debt recovery costs, like interest and litigation costs, is ancillary (incidental) to the principal claim for payment. This means that it is not part of the principal debt itself, but is claimed by the claimant “in addition” to the principal claim. Furthermore, its nature is also evidenced by the fact that, like other ancillary claims, it may be claimed independently, even in separate proceedings, in which case it loses its status as an ancillary claim within the meaning of Article 20 of the Code of Civil Procedure. Therefore, in such a situation, it should not be included in the value of the subject matter of the dispute.

However, it may also be the case that the compensation becomes part of the principal claim because the claimant requests that interest be awarded on it. Applying interest to the claim in this way will lead to a situation where the compensation will no longer be claimed “in addition to” the principal claim, but together with it as an independent principal claim on which interest is claimed. In that case, its value will be added to the value of the subject matter of the dispute, but this will be due to the appropriate formulation of the claim by the claimant.

Arguments for including compensation in the value of the subject matter of the dispute

However, in case law and legal doctrine, there is a view that, regardless of how the claimant formulates the claim, compensation for debt recovery costs cannot be treated as a cost under Article 20 of the Code of Civil Procedure and should always be added to the value of the subject matter of the dispute. Proponents of this view argue that compensation is quasi-damages, which constitute a separate claim. Therefore, its value should be, under Article 21 of the Code of Civil Procedure, added to the principal amount. In this context, it is irrelevant whether the claimant demands interest on it or how the claim is formulated.

Summary

The issue of including compensation for debt recovery costs in the value of the subject matter of the dispute is therefore not clearly resolved in the case law of Polish courts. There are arguments both for and against including this amount. This discrepancy generates practical problems and legal uncertainty for the parties to civil proceedings, in particular the claimant, who, at the initial stage, must take into account the possible delay in the examination of their case and the need to pay a slightly higher court fee.

Therefore, at the stage of filing a lawsuit, it is worth specifying precisely whether the compensation sought for debt recovery costs is treated as a separate claim or as part of the main claim. In the former case, it should be listed in a separate section of the statement of claim and its separate nature should be briefly justified, emphasising that it should not affect the value of the subject matter of the dispute. Although this will not always protect the claimant from a possible summons from the court and the need to pay additional court fees, it will increase the chances of convincing the court of the validity of the legal stance.