Covid-19 impact on civil and insolvency matters

Portugal
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European Judicial Network
European Judicial Network (in civil and commercial matters)

1 Covid-19 impact on civil proceedings

1.1 Time limits in civil proceedings

The state of emergency was declared between 19.3.2020 and 2.5.2020

The most significant legislation adopted during this period was the following:

  • Decree 14-A/2020
  • Decree 17-A/2020
  • Decree 2-A/20
  • Decree 2-B/20
  • Law 1-A/20, as amended
  • Decree Law 10-A/20, as amended

The state of calamity was subsequently declared between 3.5.2020 and 30.6.2020

The most significant legislation adopted during this period was the following:

  • Resolution 33-A/20
  • Resolution 33-C/20
  • Resolution 38/20
  • Resolution 40-A/20
  • Resolution 43-B/20
  • Resolution 51-A/20
  • Law 1-A/20, as amended
  • Decree Law 10-A/20, as amended

The state of calamity was again declared between 15.10.2020 and 8.11.2020

The most significant legislation adopted during this period was the following:

  • Resolution 88-A/20
  • Resolution 92-A/20
  • Resolution 96-B/20

The state of emergency was subsequently declared between 9.11.2020 and 30.4. 2021

The most significant legislation adopted during this period was the following:

  • Decree 51-U/20
  • Decree 59-A/20
  • Decree 61-A/20
  • Decree 66-A/20
  • Decree 59-A/20
  • Decree 6-A/21
  • Decree 6-B/21
  • Decree 9-A/21
  • Decree 11-A/21
  • Decree 21-A/21
  • Decree 25-A/21
  • Decree 31-A/21
  • Decree 41-A/21

Consequences on the regime of procedural time limits

In accordance with the consolidated version of Article 7 of Law 1-A/20, during both the state of emergency and the state of calamity, the legal regime of judicial terms and time limits was essentially as follows:

  • In judicial proceedings that are not urgent, time limits were suspended for a period that will end on a date to be defined by decree-law;
  • Urgent judicial proceedings run without suspension of time limits or acts;
  • Limitation periods and prescription periods were suspended;
  • Dispossessions and enforcement of mortgages against properties that constitute owner-occupied dwellings were suspended;
  • The time limits for debtors to file applications to open insolvency proceedings were suspended;
  • All actions to be taken in connection with enforcement proceedings, including enforcement measures, were suspended unless this causes irreparable damage or endangers the creditor´s livelihood;
  • Article 15 of Decree Law 10-A/20 provides that in the event the authorities decide to close a court in a certain area due to the pandemic, the procedural time limits are suspended (this happened in a few cases and for a limited period);
  • The suspension of judicial terms and time limits ended on 3 June 2020 (Article 8 of Law 16/2020 that repeals Articles 7 of Law 1-A/2020);
  • Regarding service of documents, the requirement to obtain the addressee´s signature was suspended and replaced by other suitable means of identification and affixing the date on which the service was made (Law 10/2020);
  • The official suspension of judicial terms and time limits ended on 3 June 2020 (Article 8 of Law 16/2020 repealing Articles 7 of Law 1-A/2020).
  • Subsequently, Law No 4-B/2021 established a new period of suspension of judicial time limits with the a legal regime that was identical to the previous one, under Article 6-B, which was added to Law No 1-A/20;
  • The suspension of the judicial time limits ended on 6 April 2021 in accordance with Law No 13-B/2021;
  • At present (May 2021), the exceptional transitional juridical regime as provided for in Article 6-E of Law 1-A/2020 in its most recent version is being maintained, which allows in particular hearings to be held using means of remote communication on the terms laid down in the law.

You can consult Law 1-A/2020 (on the response to the epidemiological situation caused by the coronavirus) in its most recent consolidated version at:

http://www.pgdlisboa.pt/leis/lei_mostra_articulado.php?nid=3268&tabela=leis&so_miolo

1.2 Judicial organization and Judiciary

During the State of emergency

The main mechanisms adopted for the organisation and management of the judicial system were as follows:

  • Contingency plans established by the Presidents of each court;
  • In person duty rotas for urgent proceedings established by the Presidents of each court;
  • Virtual court rooms in all courts (first instance, appellate and Supreme Court of Justice) allowing all hearings to be held using means of remote communication;
  • Digital signature of judgments through the case management system;
  • For judgments by a collegiate court, the signature of other judges may be replaced by a declaration of the Judge-Rapporteur confirming that the other judges concurred (Article 15-A of Decree-Law 10-A/20);
  • Access through VPN (virtual private network) to the case management system;
  • Any procedural acts carried out in tele/video conference;
  • The use of email instead of telephone to obtain information from courts;
  • Teleworking whenever the nature of the work allows it.

Consequences of the state of emergency on judicial activity and the assignment of cases

The judges continue to carry out their work remotely, where they have access to the case management system, remaining available to go to the courts whenever the nature of the service so requires.

The assignment of urgent and non-urgent proceedings in the courts of first instance was never interrupted.

In appellate courts and in the Supreme Court of Justice, until 15 April 2020, only urgent proceedings were assigned. From 16 April 2020 all proceedings, urgent and non-urgent, have been assigned.

Urgent acts and procedures in which fundamental rights are at stake may be carried out in person (urgent protection of children, procedural acts and trials of accused persons held in custody) or remotely in virtual court rooms.

Trials and procedural acts that are not urgent have been adjourned during the state of emergency except when judges deem it necessary to hold hearings, namely to avoid irreparable harm or in cases where all the parties agree on using tele/video conference/virtual court rooms.

Judgments in non-urgent cases can be delivered if all the parties agree that further enquiry by the Court is unnecessary.

Acts and procedures carried out in person must take place in adequate rooms that were made available in each district Court, with protection and disinfection material. The number of persons present must be set by the Judge in line with the limits recommended by the health authorities.

Attending court is discouraged except for those who are summoned to appear. In that case, in accordance with Article 14 of Law 10-A/20, presentation of a medical certificate attesting to quarantine is considered a case of force majeure

The Supreme Council of the Judiciary stressed that during the state of emergency courts must remain the ultimate guarantor of fundamental rights.

During the state of calamity:

The main tools of judicial organization adopted were:

  • Gradual termination of confinement in line with the Resolution of the Council of Ministers 33-C/20.
  • Adoption of 'Measures to reduce the risk of viral transmission in courts' – a joint document prepared by the High Judicial Council, the Directorate-General for the Administration of Justice, the Attorney General's Office, the Supreme Council of the Administrative and Tax Courts and the Directorate-General for Health, available at:
  • Each first instance and appellate court, the Supreme Court of Justice and the Supreme Council of the Judiciary adopted work rotas providing for alternating physical-presence working and teleworking, without prejudice to the family support measures for certain workers and the mandatory teleworking for judges and judicial staff in high-risk groups.

The Supreme Council of the Judiciary adopted the following resolutions to ensure the stability of human resources in first instance courts and tackle the increased workload following the end of the suspension of time limits in non-urgent proceedings:

  • Terms of office of the Presidents of the courts of first instance extended until 31 December 2020;
  • The annual judicial recruitment/promotion/transfer exercise (movimentação) temporarily limited/suspended to stabilise human resources and management bodies in the courts of first instance (Resolutions of 28 April 2020 and 5 May 2020).

Practical information on the functioning of national courts during the emergency and calamity periods is available on the website of the Supreme Council of the Judiciary.

1.3 EU Judicial Cooperation

During the state of emergency:

  • EJN Civil Contact Point´s team works from home, processing all the requests for cooperation and information as swiftly as possible notwithstanding the suspension of time limits and procedural time limits applied in Courts.
  • The team has remote access to the files through VPN (virtual private network).
  • Any member of the team is available to go to the workplace whenever it is needed and in urgent cases.
  • In matters of judicial cooperation, preference should be given to communication by email to correio@redecivil.mj.pt

During the state of calamity and in the current phasing-out period of containment:

  • The Contact Point’s team is working in a rota system based on teleworking and physical-presence working, ensuring that at least one member of the team is physically in the workplace.
  • The Contact Point covered by the Supreme Council of the Judiciary’s duty rotas and it follows the 'Measures to reduce the risk of viral transmission in courts' that were adopted to bring a gradual end to confinement.

Effects of the pandemic on the volume of cooperation and information requests handled by the Contact Point

  • In 2020, the overall number of requests for assistance sent to the Contact Point by courts and other authorities remained relatively constant compared to 2019; despite the pandemic; in 2020 the Contact Point received in total only nine requests more than in 2019. However, taking each of the cooperation networks of which Portugal is a member separately, there was a slight decrease in the number of requests for the Civil ENJ, a more marked decrease in the number of requests for IberRede and an increase in the number of requests for the Judicial Network of Portuguese speaking countries (CPLP).
  • During the emergency, calamity and containment phasing-out periods, the Contact Point responded to all cooperation and information requests with no change or suspension of the regular response time limits.

Total number of cooperation and information requests in 2020: 356

Broken down as follows:

  • Civil ENJ, 287
  • IberRede, 4
  • CPLP Judicial Network, 65

Total number of cooperation and information requests in 2019: 365

Broken down as follows:

  • Civil ENJ, 328
  • IberRede, 19
  • CPLP Judicial Network, 17

The statistical information on the activity of the Contact Point is available at https://www.redecivil.csm.org.pt/relatorios-anuais/

2 Insolvency related measures adopted or planned for adoption in member states as communicated until 16 April 2020

2.1 Substantive insolvency measures and related contracts affecting measure

See below the combined reply to questions under 2.1 to 2.2

2.1.1 Insolvency suspension

2.1.1.1 Suspension of duty to file for insolvency (debtors)
2.1.1.2 Protection of debtors about insolvency filing from creditors

2.1.2 Claim enforcement suspension and contract termination suspension

2.1.2.1 General / specific moratoria on claims enforcement / certain types of claims enforcement
2.1.2.2 Suspension of contract termination (general / specific contracts)

2.2 Civil, including insolvency courts suspension and procedural suspensions

Combined reply to questions under 2.1 to 2.2.

In accordance with Article 6-E of Law 1/A/2020 (which can be found here in its 12th and most recent version following Law 13-B/2021), the transitional exceptional procedural regime is maintained. Under the regime the following time limits are suspended:

  • The time limit for submitting the debtor to insolvency laid down in Article 18(1) of the Código da Insolvência e da Recuperação de Empresas (Insolvency and Corporate Recovery Code), as approved in an annex to Decree-Law 53/2004.
  • The acts to be carried out in the context of the enforcement or insolvency proceedings in connection with the carrying out of the judicial return of the family house;
  • The prescription period and the time limits relating to the abovementioned enforcement or insolvency proceedings:
  • In cases where the acts to be carried in the course of enforcement of insolvency proceedings relating to the judicial sale and return of immovable property are liable to harm the livelihood of the party against whom enforcement is sought or of the person declared insolvent, the latter may request the suspension of the case provided that this does not cause serious damage to the livelihood of the party seeking enforcement or of the insolvent person’s creditors or irreparable damage and the court must, after hearing the other party, decide on the case within ten days;
  • The suspension of the prescription and limitation periods prevails over any rules setting mandatory prescription or limitation time limits, which are extended by the period corresponding to the suspension.

2.3 Other insolvency measures (those relating to avoidance actions, reorganization plans, informal agreements, and others if appropriate)

See below the combined reply to questions 2.3 and 2.4

2.4 Related non-insolvency measures (payment deferrals, bank loans, social security, health insurance, business subsidies)

Combined reply to questions 2.3 and 2.4.

A new extraordinary business viability case (PEVE) was launched - see Law 75/2020 and Resolution 41/2020 of the Council of Ministers, available at the following links:

https://dre.pt/pesquisa/-/search/149861977/details/maximized

https://dre.pt/pesquisa/-/search/135391594/details/maximized

Law 75/2020

  • It establishes an exceptional transitional regime to extend the time limit for the conclusion of the negotiations initiated for the approval of the recovery plan or payment agreement as well as for granting time to adapt the proposed insolvency plan in the context of the COVID-19 pandemic;
  • It extends the privilege provided for in Article 17-H(2) of the Insolvency and Corporate Recovery Code (CIRE), as approved in an annex to Decree-Law 53/2004, to the shareholders or any other persons having a special relationship with the company who finance its activity during the Special Revitalisation Process (PER);
  • It provides for the application of the Extrajudicial Business Recovery Scheme (RERE), as approved by Law 8/2018, to companies currently insolvent owing to the COVID-19 pandemic;
  • It creates a new extraordinary company viability process for businesses hit by the economic crisis caused by the COVID-19 pandemic;
  • It establishes mandatory partial apportionments in all pending insolvency proceedings where the proceeds of the liquidation deposited exceed €10,000;
  • It provides for priority to be given in the processing of applications for the release of securities or guarantees offered in the context of insolvency proceedings, special revitalisation proceedings or special payment agreement proceedings.

Final remark:

Although this information was carefully collected, it does not dispense with the need to consult the applicable legal texts and their amendments. In light of Article 5(2)(c) of Decision 2001/470/EC, this information is not binding on the Supreme Council of the Judiciary, national courts or the Contact Point.

Last update: 23/06/2021

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