Ukraine: Attorneys' Monopoly. Practical Issues – The Experience Of The First Years

Last Updated: 14 June 2019
Article by Yan Akhramovych and Andriy Hradov
Most Read Contributor in Ukraine, July 2019

Starting from January 1, 2019, the "attorneys' monopoly", i.e. the exclusive right of attorneys to represent interests of individuals and legal entities in courts, was extended to cover the courts of all instances and jurisdictions. By this time, judicial practice managed to identify and resolve many issues that had not been taken into account by the legislator when adopting respective amendments to the Constitution of Ukraine and procedural codes. Following findings are the most noteworthy: powers of an attorney can be confirmed both by a power of attorney (it is not mandatory to specify the status of attorney here) or a warrant (can be in e–form); an extract from the agreement in respect of provision of legal assistance is no longer required to be attached to the warrant; if reimbursement can cover only expenses on legal assistance provided by a qualified attorney; cases may be determined as insignificant given their nature and not based on a court ruling. What was the reason for the development of such judicial practice?

To confirm powers

Most of the issues arising from the "attorneys' monopoly" relate to relevance and admissibility of evidence that confirm attorneys' powers. Procedural codes of Ukraine envisage that the powers of an attorney shall be confirmed by a power of attorney or a warrant regarding provision of legal assistance.

Determining of an attorney's status in a power of attorney was one of the major issues affecting execution thereof. The courts repeatedly referred to mandatory indication of the status of an authorized attorney in the text, as well as of the details of the respective professional admission. Generally, judges of the Supreme Court stood by the position that the power of attorney should have necessarily determined professional status of an attorney being a representative. Otherwise, the court would have had limited possibilities to consider the nature of legal relations between the grantor and the representative and decide on the status of an authorized person, i.e. attorney or just an individual.

Moreover, paragraph 4 clause 26 of the "Procedure for Certification of Wills and Powers of Attorney That Shall Be Treated as Notarized" provide that the power of attorney must contain the full name of the attorney, the number and date of the professional admission to practice, as well as data on the form of attorney's activity. Specified provision of the Procedure are still valid.

Thus, Ukrainian courts of cassation were able to develop uniform position in this regard for a quite some time. However, the situation changed with the decision of the Economic Court of Cassation of the Supreme Court in case No. 908/1101/17 whereby the court found that the Law of Ukraine "On the Bar and Legal Practice", as well as procedural codes did not require that the power of attorney drawn in the name of an attorney-individual should have necessarily indicated the status of a representative as an attorney. The Supreme Court noted that the person acting as a representative under a power of attorney should have had an admission to practice (the only important thing), while the power of attorney should have determined only the authorities of the attorney, the scope of rights granted to the representative and list of actions aimed at fulfillment of the assignment.

We support the position in case No. 908/1101/17, since the secondary legislation in the area of notarial activities (given its legal nature) cannot contradict provisions of the laws.

Self-sufficient warrant

Status of the warrant for the provision of legal assistance as an independent document that confirms powers of an attorney also raised a number of concerns.

Provisions of the procedural codes of Ukraine in iteration before December 15, 2017, indeed envisaged that the powers of an attorney as a representative could have been proven by a warrant. In such case, however, an extract from the agreement regarding provision of legal assistance had to be attached to the warrant; such extract had to provide the powers of an attorney as a representative or to specify any restrictions to perform certain procedural actions.

Currently, effective procedural codes establish that a warrant of attorney is a self-standing document and does not require an attached extract from the agreement. Therefore, the Grand Chamber of the Supreme Court in case No. P/9901/736/18 noted that the warrant issued pursuant to the requirements of the Law of Ukraine "On the Bar and Legal Practice" was a self-standing document that confirmed the powers of an attorney, hence, effective law did not require to attach thereto the agreement for the provision of legal assistance (copy or extract); moreover, such requirement was incompliant with the effective law.

We believe that a possibility to obtain a warrant of attorney through online account in the Unified Register of Attorneys of Ukraine (ERAU) is the most promising novelty. This novelty was introduced by the decision of RAU No. 41 dated April 12, 2019, which revisited the "Regulation on the warrant for legal assistance". Due to this decision, the attorneys no longer need to contact bar self-government bodies to get warrant books. Moreover, an electronic warrant is generated and entered into the register automatically, which significantly improves and simplifies the reporting related to legal practice, as well as execution of authorities for representation. Also, the aforementioned RAU decision establishes a three-year transition period, during which attorneys will be able to confirm their powers based on earlier samples of warrants.

Unfortunately, the amendments related to regulation of warrants are quite "fresh", therefore, there is no relevant judicial practice on the matter. However, we expect that online warrants should not create any problems, since each warrant will contain a QR code with reference to an attorney's profile in ERAU, which will enable the courts to independently verify the validity of a warrant.

Disputes around significance

Institute of insignificant disputes was yet another novelty introduced into procedural codes along with the "attorney's monopoly". The biggest issue here related to reimbursement of expenses on legal assistance. Pursuant to the effective Ukrainian law, the "attorneys' monopoly" does not apply to insignificant and labor disputes.

However, reimbursement of legal fees may be possible only when an attorney is engaged as a representative of a party to the case. It means that a person, who, by virtue of the law, has the right to appoint any legally capable individual to represent his/her interests, including representation by lawyers-non-attorneys, shall not be entitled to reimbursement of this type of legal expenses.

In this regard, the Civil Court of Cassation of the Supreme Court of Ukraine in case No. 759/5037/17 ruled that an applicant shall independently decide on his/her representative in a court, however, the state shall ensure the right of such person to receive reimbursement of legal expenses spent on attorney only.

Change of the type of proceedings from simplified to regular is yet another issue arising in connection with insignificant disputes. Pursuant to the effective procedural codes, insignificant disputes are subject to review in a simplified proceedings, however, the court, at its own discretion or following a motion filed by a party, may decide to consider the case in regular proceedings. Here the question arises – whether the case is no longer deemed insignificant, and, therefore, whether the representation in this case is possible not only by an attorney but by any legally capable individual as envisaged for such disputes?

There is no uniform position of the courts on the moment a case shall no longer be considered insignificant. In case No. 623/1083/16, the Supreme Court ruled that the case was insignificant due to its peculiar nature, based on the value of the dispute under consideration and its subject matter; there was no need for a separate decision regarding allocation of the case to a certain category. At the same time, in the case No. 522/8386/17, the Supreme Court ruled differently and noted that is was a responsibility of the court to decide whether a particular case could be deemed insignificant and thus reviewed under simplified proceedings.

We support the position whereby a case shall be deemed insignificant based on its peculiar nature and shall not depend on the court's position given that respective regulation is envisaged by the General Provisions of the procedural codes. The Supreme Court supported this opinion in case No. 761/23962/17.

Amendments go in parallel

We should note that interim results prove that the legal community and state authorities were not ready for the introduction of the "attorney's monopoly of attorneys". Unfortunately, many issues were detected only after introduction of amendments into the legislation. Due to proactivity of the new Supreme Court, many of these issued have been duly resolved. At the same time, not all legislative acts comply with the provisions of the Constitution of Ukraine and procedural codes, hence require improvement and update.

Yan Akhramovych, senior associate, and Andriy Hradov, junior associate, exclusively for Yurydychna Praktyka

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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