Legal Advice

A few months after buying a car I got into a traffic accident. Unfortunately, I was the one responsible for causing it. At the moment of buying a car the compulsory civil liability insurance was still valid for half a year. Nevertheless, the insurance company is raising claims against me personally in order to collect the funds it paid out to the injured person. Is there a way to protect my rights? 08.06.2011

The object of a compulsory insurance shall be the civil liability of the owner or legal user of a motor vehicle (hereinafter – civil liability of an owner) for losses caused to a third person in a road traffic accident. It is of vital importance to understand that the object of insurance is the liability of the owner of the vehicle. Due to the fact that the vehicle has been reregistered in the name of the buyer, the previous policy will not be valid in respect of the new owner of the vehicle as the person specified in the policy is no longer the owner of the vehicle. Therefore, if the new owner didn’t obtain the insurance of his civil liability at the moment of the purchase, then he will have to compensate all losses caused in the result of a road traffic accident himself. 

 

Pursuant to Section 44, Paragraph 2 of the Road Traffic Law, a vehicle owner or possessor, if he or she fails to prove, that a damage has been caused due to force majeure, by the intention of a victim himself or herself or due to the gross negligence of a victim or due to other reasons, which in accordance with the law release from liability to recover the damage, shall be liable regarding the damage caused as a result of the exploitation of a vehicle.

 

In this regard, the owner is personally liable for the losses that may be caused as the result of a road traffic accident, and if the civil liability of the owner hasn’t been insured, then the compensation may be recovered from the owner. In case the owner of the vehicle changes due to sale of the vehicle the new owner is obliged to insure his civil liability and obtain the new insurance policy.

Jevgenijs Belajevs
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The legal address of a company has been registered at the apartment upon mutual agreement of both owner of the apartment and owner of the company. After that the company has stopped communicating with owner of the apartment, as well as to take out the correspondence. The location of the company’s owner is unknown. The owner of the apartment has submitted an application to the Register of Enterprises, which promised to impose a fine on the company. However nothing changed since then as the correspondence is still being sent to the apartment’s address. How to discharge the registration entry of legal address and what might be the consequences for the owner of the apartment in case of company’s bankruptcy? 08.06.2011

The change of legal address of a company may be carried out as prescribed in Section 10 of the Commercial Law, which says that records in the Commercial Register shall be entered on the basis of an application of an interested person (the company) or a court adjudication. Pursuant to Section 139 of the Commercial Law, the board of directors shall submit an application to the Commercial Register Office in case of change of the legal address for making the relevant record. Therefore, the Register of Enterprises is not entitled to make records regarding the change of the legal address upon application of the owner of the apartment or at its own initiative.

 

Usually the procedure is following:
 

1. any interested person may submit application to Register of Enterprises informing that a company is not located at the legal address;

2. the Register of Enterprises based upon the application shall send a notification to the legal address of the company requesting it to provide explanations in respect of company’s absence at the legal address or submit change of the legal address within the period of 3 months;

3. according to Section 314, Paragraph 3, of the Commercial law, the Register of Enterprises may bring an action in a court if the company has not rectified indicated deficiencies within three months after receiving notification;

4. it may take more than a year for liquidation of the company and until then the legal address will remain the same.

 

Unfortunately, the legislation doesn’t prescribe any requirements to receive consent of the apartment’s owner in order to register the legal address of the company. Moreover pursuant to Section 14, Paragraph 2, of the law on the Enterprise Register of the Republic of Latvia, the competence of the Enterprise Register shall not include examination of the factual circumstances of the decision making of the merchant.

 

Therefore in theory it is possible to choose any address and the Register of Enterprises shall make the relevant record.

 

The record of the company’s legal address in the Register of Enterprises shall cause no problems for the owner of the apartment, except for receiving unfamiliar correspondence. You can try to respond to each letter requesting to stop sending the correspondence due to addressee is unknown, however all correspondence shall be sent to the legal address of the company. Therefore, the only option available is to wait for the court to take a decision regarding expelling of the company from the Register of Enterprises.

Irina Papakule
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I’m a guarantor for the mortgage loan issued by the bank in Latvia. The sum of the loan is 10 000 euros and the loan payment schedule is being duly performed, but the problem is in the following. The banks won’t issue any loans to me due to the fact that I’m a guarantor for that mortgage. The borrower requested the bank to relieve me from the guarantor’s obligations, but he got a refusal. At the moment the borrower can only add more guarantors, but is not entitled to replace a guarantor with another person. Is there a way to solve this problem? 08.06.2011

Unfortunately, this problem may not be solved without bank’s consent. The bank may decide at its sole discretion whether to issue a loan to the person who is a guarantor or not. Accordingly, replacement of a guarantor with another person may also be carried out only upon consent of the bank. 

 

The last year’s amendments to the Consumer Rights Protection Law – the only thing that has recently changed for the benefit of the borrower. According to Section 81 of the Consumer Rights Protection Law, the creditor is not entitled to request from a consumer who has not made any significant violation of the contract:

1) additional security of the granted credit on the basis of reduction of the value of immovable property in the credit security due to the changes in the immovable property market;

2) any costs for revaluation of mortgage credit security during the term of the contract; or

3) the pre-term repayment of the credit granted.

Aleksandrs Koposovs
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Few days ago I found out that the equity capital has been increased in a company (limited liability company) where I used to own 50% of the capital without my participation. As a result my part in that company reduced to 10%. What shall I do in the current situation? Is it possible to appeal against the decision of the Register of Enterprises in respect of increasing equity capital, which I believe is illegal? 08.06.2011

If a person believes that a decision taken by the official of the Register of Enterprises is unfounded, he has the right to appeal the decision within one month from the date of it’s entry into legal force, by submitting an application addressed to the Chief State Notary of the Register of Enterprises. Chief State Notary of the Register of Enterprises shall consider the application and take a relevant decision within one month from the day of submission.

 

A decision taken by the Chief State Notary of the Register of Enterprises may be appealed as well within one month from coming into force of that decision by submitting a relevant application to the Administrative court.

 

When appealing decisions of State notaries and Chief State Notary of the Register of Enterprises, account shall be taken that appealing against such decisions does not cease its execution. 

Aleksandrs Lenkovskis
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I would like to establish a limited liability company and pay-up the equity capital by property contribution. What kind of property can be contributed to the equity capital of LLC and how the valuation of material contribution shall be carried-out, as well as in what cases will I need the help of experts for valuating the material contribution? 08.06.2011

Items of property contributions may be tangible or intangible property valued in terms of money, which may be utilised in the commercial activities of a company, except for property which in accordance with law may not be the subject of collection. 

 

The property contributions shall be valued according to the usual value of the relevant property. An opinion regarding the valuation of a property contribution shall include a description and value of each contribution item, indicate the ownership of the property, and the method used for the valuation of each contribution, and include an opinion regarding the conformity of the items of property contribution with the types of commercial activities of the company. If the valuation is made by the founders or shareholders, the valuation methods for property contributions need not be indicated. 

 

The persons, who performed the valuation, shall be solidarily liable for any losses, which have been incurred with an incorrect valuation of a property contribution. The valuation of property contributions and an opinion thereof shall be made by an expert who is included in the list approved by the Commercial Register Office. If, when founding a limited liability company, the total value of property contributions does not exceed 4000 lats, and the property contributions together are less than one-half of the equity capital of the company, the valuation of the property contributions and the submission of an opinion may be made by the founders.

Aleksandrs Lenkovskis
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A son of majority age has left among heirs after the death of my daughter. The estate she left consists of an apartment mortgaged in the bank and a bank account. Will my grandson have to pay off the mortgage if he accepts the inheritance? 08.06.2011

An estate is the whole, which comprises all immovable and movable property, as well as obligations owned by the deceased at the actual time of death. With the taking of the inheritance, together with the rights of the estate-leaver, also all his or her obligations, other than exclusively personal ones, shall devolve to the heir.

 

The creditors of the estate-leaver, i.e. the bank in this particular case, shall address its claims to the heir, who shall pay the debts from his own property in case the estate does not suffice. Therefore, prior to expressing intent to accept an inheritance it is advisable to check carefully what really comprises the entirety of the property of the estate.

 

It is to be mentioned that an heir may avoid the duties of being liable with his or her own property for the debts of the estate-leaver, if an heir makes use of the inventory right, i.e., makes an inventory of the whole inheritance within the time specified by law. Pursuant to Section 709 of the Civil law, an heir who intends to make use of the inventory right must apply to a notary, not later than two months from receipt of notice regarding the opening of succession, with a petition to charge a bailiff with the preparation of an inventory. An heir who has taken an inheritance with the right of inventory shall be liable for the debts of the estate-leaver and other claims against him or her only in the amount of such estate.

Dmitrijs Shustovs
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I took out a loan from a company for a term of 10 years. I received a letter of claim from the administrator requesting to return the loan in full. Is it lawful for administrator to request the pre-term loan repayment? 08.06.2011

According to Section 1828 of Civil law, if the time of performance has been specified, then the debtor must observe it without waiting for a special reminder from the creditor, but nevertheless the debtor also need not perform the obligation earlier than the expiration of the specified term.

 

However, the creditor in this particular case has become insolvent and therefore it is subject to the Law on insolvency. According to Section 97, Paragraph 1, of the Law on insolvency, if the contract concluded by the debtor is not fulfilled on the date when insolvency proceedings are initiated or it is fulfilled partly, the administrator is entitled to unilaterally withdraw from the contract or request the opposing party to fulfill the contract.

 

In this case the provision of the Civil law is considered general in relation to the provision of the Law on insolvency, which is considered special. General provision shall apply only insofar as it is not provided otherwise by a special provision. 

 

Administrator has decided to exercise his rights, therefore, his actions may be considered legal. In case if the request won’t be fulfilled voluntarily, the administrator is entitled to bring action in the court in order to recover the loan.

Dmitrijs Shustovs
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Where in Latvia it is possible to carry out the DNA analysis for the determination of paternity? Will it be considered in the process of paternity dispute? 08.06.2011

According to Section 2491 of the Civil procedure law, the court on the basis of a petition from a participant in the matter shall determine expert-examination for the specification of the child’s biological descent. If one of the participants in the matter evades the expert-examination, the court shall take a decision regarding the forced conveyance of such person for the conduct of the expert-examination.

 

Important! The costs of the expert-examination shall be covered by the plaintiff, but it may be recovered from the defendant in case of a positive result. The costs of the expert-examination may vary depending on the place where it is carried out.

 

Medical institutions that can carry out the analysis for determination of paternity are following:

- Latvia State Centre for Forensic Medical Examination (Valsts Tiesu medicīnas ekspertīzes centrs);  

- State owned company “Children clinical university hospital”, Medical genetics clinic (Valsts SIA „Bernu klīniska universitātes slimnīca”, Medicīniskas genetikas klīnika); 

- State police Biological expertise unit of the Forensic Department (Valsts policijas Kriminālistikas pārvaldes Bioloģisko ekspertīžu nodala); 

- “Genera” Ltd.

Karina Kac
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I’ve been involved in a road traffic accident which wasn’t my fault. My car was crashed so I turned to the insurance company of the driver who caused the accident. The insurance company had paid out insurance indemnity only after 4 months. The problem is that I’m a taxi driver and was deprived of my earnings due to the fault of the insurer. May I receive compensation for lost profits from the insurance company? 08.06.2011

According to Section 39, Paragraph 1, of the Compulsory Civil Liability Insurance of Owners of Motor Vehicles Law, an insurer shall take a decision regarding the payment of an insurance indemnity within a period of one month after all of the necessary documents have been received. If all necessary documents were submitted, but the insurer had still exceeded the term of insurance indemnity payment, then there’s a reason to request recovery of losses caused by the insurer’s failure to act.
 

According to Section 1779 of the Civil Law, everyone has a duty to compensate for losses they have caused through their acts or failure to act. However it is of high importance to prove the amount of lost profits, as well as the fault of the insurer and connection between the losses and unlawful actions of the insurer. The difference between profits and income shall be also kept in mind.
 

In this particular case, assuming that all necessary documentation was submitted to the insurer, the insurer had violated the Compulsory Civil Liability Insurance of Owners of Motor Vehicles Law. Therefore the driver couldn’t timely fix his vehicle due to the fault of the insurer, which means there are reasons to demand loss recovery from the insurer.

Jevgenijs Belajevs
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I want to divorce my husband as fast as possible, but heard that divorce can take a lot of time. Is there a way to make it faster? 08.06.2011

 

According to law the adjudication of the matter may be adjourned for a period of up to six months, if the spouses have lived separately for less than three years. There were precedents when court had postponed the adjudication of the matter for 5-6 times. The only chance to get a quick divorce is to submit a mutually signed application of both spouses. Prior to that the spouses shall agree on all terms regarding the division of common property, custody of children born in the marriage, maintenance for the children, etc. The spouses shall specify in the application that they don’t wish to reconcile and request the court not to postpone the adjudication of the matter for the purpose of reconciliation. In this case, according to the Civil procedure law, the court may take a decision not to postpone the court sittings. 

Andrejs Sviksh

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A bailiff came to my flat in order to attach movable property. Some of the things collected by the bailiff were the jewels that belong to my mother. I tried to explain that those were not mine, but still the bailiff refused to exclude them from attachment. What can be done in such situation? 08.06.2011

According to Section 633, Paragraph 1, of the Civil Procedure Law of the Republic of Latvia, a person who considers that  he or she has any right to the inventorized movable property or immovable property against which recovery is directed or a part thereof, shall bring an action in court in accordance with general jurisdiction over matters. The claim shall be submitted against the debtor and the creditor, but the bailiff can be mentioned as a third person. If the property has already been sold, a claim shall also be submitted against the persons to which the property was handed over. 
 

Within the frame of such claim the plaintiff shal present evidence to the court proving that the ownership rights of the property belong to him, instead of the debtor.  

In order to prevent the sale of the property in the course of the court proceedings, a petition shall be submitted regarding securing of a claim. According to Section 138, Paragraph 1, Clause 7, the mean by which claims may be secured is postponement of execution activities (also enjoining bailiffs from thansferring money or property to a judgement creditor or debtor, or suspending of sale of property).
 

A decision regarding an application for securing a claim shall be taken by a court or a judge not later than the day following receipt thereof. In the event of a positive decision, it shall be submitted to the bailiff immediately. The decision of the court regarding securing of a claim may not be appealed and shall be immediately executed.

Dmitrijs Shustovs
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A web-site is using my name in its banner ad without my permission. I would like to know whether the web-site is violating my rights or any law. May I request the web-site to at least stop the advertisement? 08.06.2011

The actions of the web-site violate the law and you have the rights to request cancellation of such advertisement. According to Section 4 of the Advertising Law, it is prohibited to depict, use or in any other way mention either a natural person (as a private person or as an official) or his or her property without the consent of this person in advertising, as well as to exploit the name, surname of another person without its permission.

 

The violation of the provisions of the Advertising Law is considered an administrative violation. According to Section 16613 of Latvian Administrative Violation Code, in the event of the provision or distribution of an advertisement not conforming to the requirements of regulatory enactments a fine shall be imposed on natural persons in an amount up to LVL 50, but for legal persons – up to LVL 10000.

 

In case if your request concerning cancellation of the advertisement won’t be fulfilled by the web-site, you have the right to submit a relevant application to the Consumer Rights Protection Centre and Radio and Television Council.

Aleksandrs Koposovs
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A company that I work for doesn’t pay salaries for a few months. According to unofficial information, the owner of the company plans to submit application for initiation of the insolvency proceedings. What are the chances to receive unpaid salary, if the company will be declared bankrupt? 08.06.2011

After declaring insolvency proceedings, the company is managed by an administrator appointed by the court. If the company didn’t pay out the salary to its employee, then he or she shall submit a relevant creditor claim to administrator. A creditor claim shall contain grounds for the request of salary payments, information regarding amount of unpaid salary, and other necessary information. All documents proving the claim of the employee shall be attached thereto. 

 

If the claim of the employee is founded and documents submitted comply to the law, administrator shall satisfy the request of the employee. In such case the salary will be paid to the employee from the funds of the insolvent company (if there are any), or from the guarantee fund, hereinafter referred to as the Fund.

 

Administrator shall submit an application in respect of satisfying the claims of the employees to the government agency “Insolvency administration”. Insolvency administration examines whether the claims of the employees are founded and takes a decision for granting the money for the needs of satisfying the claims of employees in respect to the unpaid salaries and other sums due to employees in accordance with the law.

 

An employee has the right to receive the money from the Fund in conformity with the order mentioned in the Law On Protection of Employees in the Case of Insolvency of the Employer. According to Section 4 of the Law, an employee is entitled to receive money from the Fund regarding work remuneration, reimbursement for annual paid leave, reimbursement for other types of paid leave, severance pay in connection with the termination of an employment legal relationship, reimbursement for injury in connection with an accident at work or an occupational disease.

 

In accordance with clause 7 of the Transitional Provisions of the Law On Protection of Employees in the Case of Insolvency of the Employer, the overall sum due to employee from the Fund shall not exceed the amount of 4 minimal monthly salaries for one employee, if the application for satisfying the claim of an employee has been submitted to Insolvency Administration in the period from the 10th of July 2009 till 21st of December 2011.

Jevgenijs Belajevs
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I want to buy a garage for my son. He’s married. How to make an entry in the Land Register so that the garage is deemed his own private property. I don’t want to execute this transaction in two stages, i.e. to register myself as the owner and then make the property over to my son by means of the gift. Is there a way to make this transaction in one go? I don’t want to ask the wife of my son to sign any documents. 08.06.2011

According to Section 91 of Civil Law of the Republic of Latvia, the separate property of each spouse is property, which was acquired gratis during the marriage by one of the spouses, as well as the property that replaces such property.

 

The gift of funds may be executed in your case. The funds will be deemed as a gift given to your son without remuneration. With this in mind, your son will be able to buy the garage using the gifted funds and register it in the Land Register as his separate property. In this case his wife won’t have the right to claim interest in this property.

 

You may, of course, at first register yourself as the owner of the property and only after that give it as a gift to your son. However, in this case the transaction will have to be made in two stages, which will incur additional expenses for services of the notary and ownership rights registration.

 

We also would like to inform that in case of a dispute it will be your son who will have to prove that the property is his own separate property. Therefore, the acquiring of the property during marriage shall be carried out carefully with due respect to the provisions of gift contract, property purchase contract and corroboration request for registration of the ownership rights in the Land Register, as the entry in the Land Register shall state that the property is a separate property of your son.  

Santa Garshniece
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A friend of mine asked me to lend him some money. Though I know that person for a long time, I want him to issue a relevant promissory note. Therefore I would like to know whether it is necessary to notarize the promissory note or not? 08.06.2011

In order to reduce any risks the promissory note shall be drawn up in the form of a notarial deed. The difference is that if your friend will sign a promissory note in a private procedure or even if the notary public will simply certify his signature on the promissory note, then (if the debt won’t be returned in due time) the procedure of recovering the money through court may be complicated. In this case you will have to go through long court proceedings, including all court instances in accordance with general provisions (considering all possible judicial proceedings it may take up to 5 years). 

 

However, if the promissory note will be drawn up in the form of a notarial deed, then the procedure for obtaining a relevant decision of the court (i.e. the procedure for undisputed compulsory execution of obligations) won’t take more than a month. 

Aleksandrs Lenkovskis
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