Contributed by Gugushev & Partners.
1. General Trends
1.1. What is the current state of litigation in your jurisdiction, and what recent trends or developments have been observed?
According to Article 119 of the Constitution of the Republic of Bulgaria, the administration of justice is carried out by the Supreme Court of Cassation, the Supreme Administrative Court, courts of appeal, district, military and regional courts, and specialized courts may also be established by law.
The organization and activities of the Bulgarian courts are governed by the Judicial System Act, which lays down the structure and operating principles of the judicial bodies and governs their interaction with each other and with the legislative and executive bodies.
In recent years, the main trends in the judicial system have been concentrated on improving its efficiency, ensuring easy access to justice, and its overall digitalization. In particular, work is being done on improving the already implemented information and communication technologies – the so-called ICT systems, whose full potential for case management is yet to be realized. This includes ensuring real-time case management, standardized statistics on the activities of the courts, management of the accumulated backlog of delayed cases, and automated early warning systems. Currently, such types of implemented and operating systems are the SEC (Secure Electronic Service System), the Unified Court Information System (UCIS), and the Unified Portal for Electronic Justice (UPJ).
Another significant trend is the more active promotion of alternative dispute resolution options such as mediation, which aims to resolve the dispute faster and more cost-effectively without going to court. In connection with the overall policy regarding the judicial system in Bulgaria, a judicial reform has been actively prepared in recent years. The goals of this reform are generally aimed at ensuring the independence of the judiciary through the separation of powers, effective and transparent exercise of judicial power, as well as greater accountability and mechanisms for engaging responsibility.
1.2. What are the key legal frameworks that regulate litigation?
There are two main codes regulating civil litigation and criminal litigation. The rules for the initiation, conduct, and conclusion of civil proceedings are set out in the Civil Procedure Code, while the rules for criminal proceedings are set out in the Criminal Procedure Code.
Administrative litigation is conducted in accordance with the rules set out in the Administrative Procedure Code.
Apart from the general rules laid down by the codes, there are also specific court procedures in special laws – for example, bankruptcy proceedings, regulated by the Commercial Law.
2. Jurisdiction and Competence
2.1. How is the court system structured in your jurisdiction?
The Supreme Judicial Council, as the highest administrative authority responsible for managing the judiciary, determines the number of judicial districts and the seats of the regional, disctrict, and administrative courts and courts of appeal based on a proposal by the Minister of Justice and – as regards military courts – in coordination with the Minister of Defence. Judicial authority in Bulgaria is exercised by courts, which includes:
• Common courts (exercise jurisdiction in civil and criminal matters)
• Administrative courts (exercise jurisdiction in administrative matters)
The Supreme Court of Cassation and The Supreme Administrative Court (both exercise supreme judicial review over the proper and uniform application of laws) Depending on the type of civil cases, proceedings may be in two or three instances. For example, civil cases with a value claim up to BGN 5000 for cases, and up to BGN 20 000, for commercial cases (excluding claims for ownership of immovable property), take place before two court instances. The common courts are the following:
• Regional courts
• District courts
• Courts of appeal
The territorial jurisdictions of the regional, district, administrative, military, and appeal courts do not necessarily coincide with the administrative division of the country.
Regional courts are the first instance in cases of ‘small’ material interest. For example, claims up to BGN 25,000 and claims for ownership of immovable property valued at up to BGN 50,000. There are 113 regional courts, located in every Bulgarian town or city. District courts can act as first-instance or second-instance courts depending on the type of proceedings. As courts of first instance, they examine a precisely defined category of cases involving significant sums. When acting as a second (appellate) instance, they re-examine decisions taken by the district courts. There are 28 district courts. Courts of appeal are second-instance courts that hear appeals against decisions of the regional and district courts. There are six courts of appeal.
The Supreme Court of Cassation is the supreme judicial instance in criminal and civil cases. Its jurisdiction covers the entire territory of the Republic of Bulgaria. It exercises supreme judicial review over the proper and uniform application of laws by all courts.
2.2. Are there specialized courts for specific types of litigation?
Litigation against administrative acts:
All individuals and legal entities have the right to appeal against actions and acts of administrative authorities that affect their rights and interests. Administrative courts have jurisdiction over those claims and appeals against the acts.
The Administrative courts act as first-instance, while the Supreme Administrative Court exercises supreme judicial review over the proper application of laws by the administrative courts.
Note: Only people with expert knowledge of law, such as jurists and attorneys can represent the parties in litigation before the Supreme Administrative Court.
Until 2022, Bulgaria also had a system of specialized criminal courts, which were closed and their judges were reassigned to positions in the corresponding court.
At present, the system of military courts still exists, consisting of three military courts for the whole country, one military court of appeal, and the Supreme Court of Cassation, acting as the supreme court.
2.3. How is jurisdiction determined in cross-border litigation, especially in cases involving foreign parties or multiple jurisdictions?
As Bulgaria is a member of the EU, EU law and regulations regarding cross-border litigation are directly applied. In cross-border litigation, determining jurisdiction hinges on factors such as the parties’ agreements and the connection between the dispute and potential competent courts. A choice of court clause in a contract can designate a specific court to handle the disputes. The location of harm is key in tort cases, allowing jurisdictions where the primary impact occurs. Civil law countries often rely on codified rules, like the Brussels Regulation in the EU, which prioritizes the defendant’s domicile but includes exceptions. International treaties, such as the Hague Convention, help standardize jurisdiction and procedures in cross-border cases. Certain cases, like those involving intellectual property or antitrust issues, may have specialized jurisdiction rules. The general rule when determining the jurisdiction authorized to consider a legal dispute in the presence of a third party or other circumstance suggesting such a possibility is to first assess whether the dispute falls within the scope of European law. Next, the existence of an international treaty regulating the specific legal relationship that determines the competent court is assessed. As a final option for determining jurisdiction, domestic law, objectified in the Private International Law Act, is used. Ultimately, courts balance contractual agreements, national standards, and practicalities like enforceability to determine the best jurisdiction.
3. Initiating Litigation
3.1. What are the primary steps required to initiate litigation in your jurisdiction?
The litigation process begins with filling a statement of claim at the competent court. The statement must contain a description of the factual and legal grounds of the claim, the legal consequences, and supporting evidence. The claimant shall submit with the statement all the evidence he has in support of the claim and may also make requests for additional evidence.
3.2. Are there any specific requirements for parties regarding pre-litigation procedures?
N/A
4. Timelines
4.1. What are the typical timelines for different stages of litigation, from initiation to resolution?
After the submission of the claim, the competent court will consider whether the statement complies with the necessary requirements, such as: it must be in written form in Bulgarian, it must contain information about the claimant and the factual circumstances on which the claim is based, it must be signed by the claimant or his representative, proof of court fee payment, etc. If the claim complies with the requirements, the court will serve it on the defendant.
The defendant has the right to submit a reply within one month from the day they receive the claim. Whether or not the defendant has submitted a reply, after the expiry of the one-month period, the court shall schedule a court hearing. During the hearing, the parties shall have the right to present evidence and to make requests for evidence. If necessary, the court schedules new hearings for gathering evidence (admission of expert reports, hearing of witnesses, etc.). After all the evidence has been taken and the factual situation has been clarified, the court issues a judgment.
According to the Civil Procedure Code, the court should issue a judgment within one month of the last hearing, but this time limit is only instructive. On average a straightforward case before the first instance court will take 12 months from serving the statement of claim until a judgment is issued. In more complicated cases which require a number of witnesses and/or expert hearing the judgment can be delivered up to two or three years from the submission of the claim.
4.2. Are there specific time limits for filing claims, and do these vary depending on the type of dispute?
According to the Bulgarian Obligations and Contracts Act, there is a five-year limitation period for all claims. As an exception, the following claims are extinguished after a three-year limitation period: labor remuneration claims; claims for damages and liquidated damages resulting from non-performance of contracts; and claims for rent, interest, and other scheduled payments.
The limitation period runs from the day the claim becomes actionable. If it is agreed that the claim becomes actionable following an invitation, the limitation period begins to run from the day the obligation arose.
5. Interim Measures
5.1. What interim remedies are available in your jurisdiction?
Interim relief can be granted to preserve the claimant’s rights or prevent irreparable damage until a final decision is reached.
The purpose of interim measures is to secure the enforcement of the claim. There are three options for the claimant: they may seek protection from the court under the order of interim proceedings before the legal proceedings are commenced when they file the statement of claim and the last possible moment to request the imposition of interim measures is when the main proceeding is already underway – until the conclusion of the judicial search in the appellate instance. There are different types of measures that can be taken: freezing bank accounts, establishing a mortgage over real estate, seizing movable property, etc. These measures remain active until the final judgment of the last instance court.
5.2. Under what circumstances can a party obtain an interim injunction, and how quickly can such relief be granted?
For the measures needed before proceedings commence, the application must be filed before the competent court, describing the claim and the legal interest of obtaining security. The claimant must provide evidence of the claim’s merits. The court must examine applications for granting interim relief immediately and not later than one day after the day they were filed.
There are three options for the court after filing the application:
1. To honor the application – to grant interim relief and issue an interim order.
2. To not honor the request.
3. To honor the application and grant interim relief, but to set bail and issue an interim order after the payment of the bail.
The common practice of the Bulgarian courts is that they will honor the applications but set bail at 10% of the claim.
A defendant may appeal within one week of receiving the order, but this does not suspend its effects.
6. Discovery
6.1. What are the rules governing the discovery process in your jurisdiction?
The rules governing the discovery process in civil law are regulated by the Bulgarian Civil Procedure Code. Generally, parties determine what evidence to rely on – as the types of evidence and the procedure for presenting them are regulated by law. Exceptionally, the court may unilaterally appoint an expert if special knowledge and skills are necessary to clarify important facts and circumstances. In view of the evidentiary requests made by the parties, the court shall consider whether to admit them. For this purpose, the court assesses their admissibility in the light of the limitations of the law and necessity.
6.2. What types of evidence can be requested, and how are discovery disputes resolved?
Written evidence, oral evidence and expert reports are admissible in the proceedings.
The written evidence can be all types of documents issued by the parties, by government authorities, and by third parties. Generally, oral evidence is witness testimony. If it is found that special knowledge and skills are required to clarify important facts and circumstances relevant to the case either party has the right to request the preparation of an expert report.
If the party wishes to obtain specific documents from a third party, it must submit a written request to the court identifying the specific document along with the facts and the circumstances which it proves. If the court grants the request the third party will be obliged to provide the requested document or information.
Either party may challenge document authenticity. The court then verifies by comparison with undisputed documents, witness examinations, or expert reports. Inauthentic documents are excluded as evidence.
6.3. How is evidence presented and evaluated during litigation?
Pursuant to the law, the plaintiff shall submit with the claim the relevant evidence in his possession and shall have the opportunity to request additional evidence. After being served with the statement of claim, the defendant shall be entitled to file a reply and to adduce any evidence he considers relevant in support of his objections. The defendant also has the right to request additional evidence.
During the first hearing, the parties may make new evidentiary requests in relation to received evidence. The court prepares a report in which it shall determine which evidence is admissible and which is not, and shall also determine which requests for evidence are granted.
7. Enforcement of Judgments
7.1. What types of judgments can be issued in civil litigation, and how are they enforced?
In civil litigation, there are three types of judgments depending on the nature of the dispute and the type of claim at issue:
1. Condemnatory – The court orders the defendant to pay a sum or perform a specific act.
2. Declaratory – These confirm the existence or absence of a right or obligation but do not directly enforce it.
3. Constitutional – These directly create, modify, or terminate legal relations between the parties, such as divorce or a court declaring a pre-nuptial agreement final.
Condemnatory judgments have enforceable grounds for the issue by the court of a writ of execution by which the bailiff may seize property, bank accounts or foreclose on immovable property. If the defendant fails to comply with a judgment for an act of omission, the court may impose a fine or other penalties. The enforcement process in Bulgaria is carried out by private or public bailiffs who oversee the enforcement judgments.
7.2. Are there specific provisions for cross-border litigation or enforcement of foreign judgments?
Bulgarian legislation has special provisions for cross-border litigation and enforcement of foreign judgments. The basic legal framework is defined by the Bulgarian Civil Procedure Code, which contains rules on the recognition and enforcement of foreign judgments, as well as by the Private International Law Act (PILA). Additionally, Bulgaria applies European Union law, particularly the Brussels I and Brussels IIa Regulations, which govern jurisdiction, recognition, and enforcement of judgments in civil and commercial matters within the EU.
As far as a court decision is concerned, issued by a competent authority of a Member State, the rule is that there is no need for special proceedings for its enforcement and recognition. For the recognition of a foreign judgment from outside the EU, the Bulgarian court examines whether the judgment is contrary to Bulgarian public policy, whether the parties have had the opportunity to participate in the proceedings, and whether the jurisdiction of the foreign court has been respected.
Once recognized, the judgment can be enforced in Bulgaria by issuing a writ of execution. This procedure ensures that judgments given in non-EU countries are recognized and enforced in the EU only when the fundamental principles of EU law are respected.
8. Appeal
8.1. What is the appeals process, and what are the grounds for appeal in your jurisdiction?
The main characteristics of the appeal process under the current Bulgarian legislation are its limitations, known as “limited appeal”. As a general rule, no new requests for evidence may be introduced before the Court of Appeal in the event of the occurrence of a limitation period, except in certain statutory exceptions.
Key features of the appeals process:
• The court of appeal examines the validity and admissibility of the first instance judgment.
• It examines the substantive dispute only on the grounds stated in the appeal.
• The court of appeal does not repeat the actions of the court of first instance but continues its actions under the operation of limitations and restrictions.
• The purpose is to rectify defects in the formation of the court’s will.
The grounds on which an appeal may be brought against the judgment of first-instance are nullity, inadmissibility, and irregularity, which may be expressed as an infringement of the rules of procedure, an infringement of the substantive law, and unreasonableness.
9. Costs and Funding
9.1. How are legal costs determined, and what are the common practices regarding funding litigation?
The Bulgarian Civil Procedure Code provides a system of cost reimbursement where the unsuccessful party is required to reimburse the costs of the prevailing party. The procedural costs are divided into court fees (which include the fees and expenses of witnesses, court-appointed experts, and court interpreters), legal fees (e.g., fees of legal representation), and party expenses (which predominantly consist of travel expenses and loss of earnings due to attendance in court).
The court taxes for the proceedings are 4% of the value of the claim but not less than BGN 50.
The expenses for court-appointed experts are determined by the complexity of the expertise and typically range between BGN 300 to BGN 800.
Attorneys’ fees are agreed in a contract for legal defense and assistance between the attorney and the client, as they are also regulated in the Bulgarian Regulation on Attorneys’ Fees. This regulation establishes fee guidelines for attorney work in the absence of a contract with the client for certain cases.
The fees according to the law are:
• For claims up to BGN 1,000 the fee is BGN 400
• For claims up to BGN 10,000, the fee is BGN 400 plus 10% for the above BGN 1,000;
• For claims up to BGN 25,000, the is BGN 1,300 plus 9% for the above BGN 10,000;
• For claims up to BGN 100,000, the fee is BGN 2,650 plus 8% for the above BGN 25,000;
• For claims up to BGN 500,000, the fee is BGN 8,650 plus 4% for the above BGN 100,000;
• For claims up to BGN 1 million, the fee is BGN 24,650 plus 3% for the above BGN 500,000;
9.2. Are there alternative funding options available for parties involved in litigation?
N/A
10. International Treaties
10.1. How do international treaties or regional agreements impact litigation in your jurisdiction?
The main international treaties that influence the jurisdiction of Bulgarian courts are those on judicial cooperation.
In this regard, the most important are the treaties on legal assistance, which may contain norms determining the competent jurisdiction between the states, and parties to the treaty, in the event of a dispute between their citizens or legal entities. An important place is also occupied by multilateral international treaties – conventions, e.g., in the field of human rights, which often set out specific principles and guarantees that should be observed in the administration of justice. In relation to international civil proceedings, three Hague Conventions and conventions in the field of international commercial arbitration are applicable.
These treaties and agreements ensure standardized approaches to cross-border legal issues, the protection of human rights in judicial processes.