In Poland the General Counsel to the Republic of Poland (Prokuratoria Generalna Rzeczypospolitej Polskiej) is responsible for representing the interests of the State Treasury before the courts. Until recently, the General Counsel was only obliged to represent central authorities of the State Treasury in disputes exceeding the value of PLN 1,000,000 (approx. EUR 250,000).
By way of provisions in the new Act on the General Counsel to the Republic of Poland, which came into force on 1 July 2017, the General Counsel has been given a broader mandate to represent all entities within the State Treasury, as well as commercial entities where the State Treasury is a shareholder.
The new law broadened not only the competences of the General Counsel but also extended the obligation to represent the State Treasury to every organizational unit of the State Treasury as well as various government administration bodies (around 600 new entities, such as e.g. Polish National Television or various Universities) in all cases under the jurisdiction of the District Courts.
It is highly criticized that the General Counsel can act also on behalf of commercial companies partially owned by the State Treasury selected at the discretion of the Government. The Government selected 24 such companies, many of them being the largest companies on the Polish market, including firms listed on the stock exchange and within the energy, fuel, mining, insurance and banking sectors. The list can be updated any time by way of an amendment to the relevant governmental regulation.
One of the most controversial issues regulated by the new Act is the new arbitration court created at the General Counsel's office which deals with disputes involving units of the State Treasury, including those where the State Treasury is a shareholder. Some have voiced concerns that entities with State Treasury interest will force their counterparties to agree to the arbitration clause and that they will be treated more favorably by the newly established arbitration court.
The criticism of lawyers in Poland is twofold. Firstly, many
cases will no longer be handled by law firms. Secondly, it is
alleged that the State Treasury is attempting to create a monopoly
and centralize the legal services of its units. It has been pointed
out that the State Treasury may influence litigation involving
entities in which it holds shares. Further, the interests of the
State Treasury may not be in line with the interests of the company
itself or its remaining shareholders. There is also concern that
these companies will gain a competitive advantage over their
potential trial opponents since the service of the General Counsel
is provided for a relatively small fee. Such companies shall pay an
annual general subscription fee (up to approx. EUR 50,000) plus a
fixed fee for each case handled, which is significantly lower than
market standard fees.
The actual impact of this new regulation on the market remains still unclear and will be evaluated by participants in the near future.
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