Those readers not from Latvia may be unfamiliar with the term "patvara" in the law. It means culpable self help. And it is particularly in difficult economic times (although certainly not only under such circumstances) that some parties are tempted to forego lengthy and expensive trials over a debt repayment or dispute of some other kind in favor of self-help remedies.
Self-help is not always illegal. But culpable self-help is. What is culpable self-help? It is unilateral conduct that conflicts with state or municipal normative act provisions, if the state, municipality or a third party challenges the legality of the unilateral conduct and such conduct causes damages. There is a materiality threshold for the damages. They must exceed five minimum monthly wages, ie, 180 x 5, that is 900 lats (1,285 euros), in order to qualify as culpable self-help damages.
Section 1 of the Civil Process Law provides that every person or legal entity has recourse to the court system to seek their remedy for violation of their rights. Courts (or arbitration panels) are generally the prescribed arbiters of whether lawful rights have been violated. Exceptions exist where the law governing specific rights confers rights in the person or entity to protect their interests through some kind of self-help mechanism. An example is the civil law provisions containing the right to take possession and the right of hypothecation. Even where such rights to take possession or hypothecate are conferred, care must be taken to ensure that legal norms are observed in the process. Such remedies are also generally temporary measures, or what is known as interim relief.
What are examples of non-culpable self-help? One example is where a tenant is in debt to the landlord for arrears of rent, and the landlord bars the tenant from removing its property from the leased premises until such time as the arrears in rent are paid. In general, in such case the landlord is not committing culpable self-help, because the remedy it is utilizing is contemplated under the law without the necessary intervention of a court proceeding.
Alternatively, if a lender has not received the debt owed to it by a borrower within the term limits set out in the applicable loan agreement, and such lender shows up at the door of the borrower and seizes the property of the borrower and converts or sells such property, the conduct of the lender is generally within the parameters of what constitutes culpable self-help, unless otherwise provided in the loan agreement.
Another example of culpable self-help may be where a supplier of goods has not been paid by the retailer, and the supplier decides to show up at the premises of the retailer and take back the goods sold to the retailer for failure to make payment on same.
Situations where self-help is contemplated call for another look at the agreement in existence between the parties, and more precisely, the dispute resolution clause contained therein. Using self-help, at variance with such a written dispute resolution clause may result in civil damages or even criminal proceedings under certain conditions. If there is no written agreement in existence, a party contemplating self-help is advised to first contact their legal counsel to determine whether the self-help is culpable self-help, having regard for the applicable law and any other evidence of the terms of the agreement between the parties.
Martins Mezinskis is a litigation lawyer at Kronbergs & Cukste. Kronbergs & Cukste is a founding member of Baltic Legal Solutions, dedicated to quality pan-Baltic legal services. Baltic Legal Solutions includes Jurevicius Bartkus & Partners in Lithuania and Glikman and Partnerid in Estonia.