Settlement between creditors and debtors can take various forms. The most common way to enforce a claim against a debtor is to initiate civil court proceedings for payment and, after obtaining an enforceable title, to enforce the claim through enforcement proceedings with the participation of a bailiff. Sometimes, however, the debtor’s behaviour towards the creditor fulfils the elements of a prohibited act and may also be qualified as a crime under the Criminal Code. The initiation of criminal proceedings, the filing of charges against the perpetrator of the offence and, consequently, the vision of the threat of a severe punishment often constitute a motivating factor for the debtor to reconcile with the wronged party and to repair the damage caused by the offence even before the trial is initiated.
In the case before us, the client granted a loan for certain investment purposes. The total amount of the loan included several hundred thousand zlotys as well as the due capital interest. The debtor took a number of steps to reassure the Client that the loan amount and interest would be repaid in due time. After the client had transferred the funds, the perpetrator evaded the conclusion of a written loan agreement and, as the victim found out after the fact, allocated the funds for purposes inconsistent with those specified in the agreement. Despite numerous calls for repayment of the loan plus interest, there was no indication that the debtor intended to meet his obligation.
Stojąc przed groźbą poważniejszych konsekwencji
In the present situation, the circumstances of the case indicated that the perpetrator had misled the client about his intention to repay the loan in order to obtain a financial benefit for himself. The debtor himself did not have any financial means to satisfy the creditor even to the slightest extent. Significantly, civil and enforcement proceedings did not allow any funds to be enforced to this extent, due to the fact that all assets of the perpetrator were transferred to third parties. The analysis of the facts of the case, including the evidence, allowed the perpetrator to be held criminally liable (in this case, the perpetrator’s action was classified as a fraudulent offence in relation to property of significant value)
At the initial stage of the case, the perpetrator of the crime avoided contact with law enforcement authorities for a long time, and finally, during questioning, he did not admit to the alleged act. Nevertheless, the evidence gathered allowed him to be charged and indicted in court. Once the court date was set, the debtor’s strategy changed dramatically. The offender became active and – through his defence counsel – entered into discussions with the victim’s attorneys, which he had hitherto avoided.
As a result of the intensified efforts of the attorneys, even before the first court date, a settlement was reached, whereby the offender paid as much as ¾ of the outstanding amount in a single payment and also undertook to settle the remaining amount, which will additionally be enforceable in the course of further enforcement proceedings. As a result of the parties' reconciliation and reparation, the court, in the absence of objections from the prosecutor and the victim, agreed to impose the punishment agreed between the offender and the victim.
The motivational role of criminal proceedings - towards reconciliatio
It should be noted that the Criminal Code contains a whole catalogue of offences against property and creditors, which provide an instrument for them to fight dishonest debtors and establish their liability by criminal means. In addition to the repressive function of a criminal conviction, one can also point to another effect of criminal debt recovery – the special motivation of the offender to settle the victim’s claim even before the court proceedings begin. Reconciliation with the victim, concluding a settlement with him or her, as well as apologising to him or her, is often the basis for avoiding a lengthy trial and for reducing the penal inconvenience threatening the offender for committing the act in question. This allows the entire process to be expedited so that the victim has a chance of recovering his or her debts quickly.
In conclusion, it should be borne in mind that any behaviour of the debtor towards the creditor in terms of non-performance of contractual obligations may not only be subject to recognition within the framework of a claim brought by way of civil proceedings, but may also be subject to criminal law assessment within the framework of criminal proceedings, which of course depends on the specific case. One of the basic functions of criminal proceedings is the compensatory function, which is realised by compensating the damage caused to the creditor within the framework of the obligation to compensate for the damage ordered by the criminal court. This undoubtedly influences the motivation of the offender who, in an attempt to avoid a high penalty for the committed act, may seek reconciliation with the wronged party. The realisation of the motivational function on the grounds of the case in question shows that, in many cases, the perpetrator, who potentially appears to be an insolvent debtor and deprived of any assets, nevertheless, at the moment of a real threat of a criminal sanction, finds money to pay the wronged creditor.
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BARTŁOMIEJ PIETRUSZKA
Partner, Attorney-at-Law, Head of White Collar Crime Department
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