Author: kancelaria

In the latest edition of the prestigious ranking “The Legal 500 Europe, Middle East & Africa 2023” published on 12 April 2023, JLSW Law Firm has been honoured again.

In 2023, JLSW Law Firm has been recommended as a specialist in construction law for the sixth time. The team has been recognised for its long-standing experience in the public procurement sector, representing clients in court proceedings and providing advice on significant construction projects.

The Legal 500 distinguishes legal service providers from over 80 countries all over the world. The ranking presents an objective and independent opinion on the leading law firms and individual lawyers in the individual geographical areas.

This year’s edition of The Legal 500 constitutes the most comprehensive guide, as more than 15,000 law firms and nearly 40,000 individual legal practitioners participated in it (a 7% growth as compared to 2020).

The listing presents the most up-to-date data on the situation on the legal service market, enabling clients to choose reliable and innovative legal services.

The experience, verified client reviews, progressive solutions and commitment to projects carried out in various areas of law ensure that JLSW is repeatedly ranked as a leading law firm in The Legal 500 international ranking.

For more information on the ranking, please visit the website:

The Legal 500

New Labour Code provisions that will enable employers to check employees’ sobriety at workplaces will come into force as early as 21 February 2023.

The purpose of introducing this long-awaited provisions into the Polish labour law and allowing employers to independently carry out sobriety checks is to increase the safety of employees – to protect their life and health, as well as to protect the employers’ property.

Employers will be entitled to check on compliance with the sobriety obligation or compliance with the prohibition to use any intoxicating substances having similar effect to alcohol. It will be possible to carry out checks in the form of preventive checks (with a set frequency and on agreed, transparent conditions) or intervention checks (carried out whenever there is a justified suspicion that an employee or co-worker has violated the sobriety obligation – coming to work under the influence of alcohol or consuming alcohol or using intoxicating substances during the performance of their duties).

It is of utmost importance that it is the employer who is responsible for not allowing or dismissing from work a person who is under the influence of alcohol or intoxicated (within the meaning of the Act on Upbringing in Sobriety and Counteracting Alcoholism) or under the influence of substances acting similarly to alcohol.

If the employer decides that such checks are to be carried out at the workplace, they will be obliged to implement appropriate internal regulations. In these regulations, the employer must specify, in particular: the manner in which the tests are to be carried out, their frequency, the type of a device used and the groups of employees who may be subject to the examination.

According to the new regulations, the checks will be allowed to be carried out using methods that do not require a laboratory test, with a device certified with a valid calibration or verification document.

In addition, it must also be ensured that appropriate measures and rules for personal data processing are applied during the examination process and that the examinations carried out respect the dignity and personal rights of employees.

The employer will be allowed to carry out the first checks after two weeks from the date of informing the employees about the introduction of this legal institution. Given that this amendment to the Labour Code will enter into force on 21 February this year, on which date employers can start implementing these provisions; thus the first inspections may be carried out no earlier than on 7 March 2023.

Importantly, the solutions and procedures introduced in the Labour Code will also be applicable to persons providing work under civil law contracts, including, inter alia, mandate contracts, service contracts or B2B contracts, as well as subcontractors or suppliers – depending on the policy adopted.

 

 

Recently, the President of the Office of Competition and Consumer Protection (UOKiK) issued nine decisions related to cases of payment gridlock, including fines totalling almost one million zloty imposed on three entrepreneurs. The fines imposed were related to the implementation of the amended provisions of the Act on Counteracting Excessive Delays in Commercial Transactions, in force since 8 December 2022. The amendment introduced a new type of the act of unfair competition in the form of unjustified extending the payment dates for goods delivered or services performed, which may constitute e.g.: violation of the provisions of the Act on Counteracting Excessive Delays in Commercial Transactions. According to the President of the Office of Competition and Consumer Protection, the introduced changes will allow to increase the pressure on timely and fair settlements between large entrepreneurs and their counterparties. The Act grants specific powers to the President of the Office of Competition and Consumer Protection (UOKiK), including, in particular, the ability to impose administrative fines on entrepreneurs who use practices involving excessive delays in the payment of financial considerations. The intervention of the President of UOKiK will be possible in a situation where the value of financial considerations (remuneration for the delivery of goods or the performance of a service in a commercial transaction) not fulfilled and fulfilled after the due date by these entities in a period of three consecutive months amounts to at least PLN 2,000,000 – whereas a threshold of PLN 5,000,000 applies in 2020 and 2021. The fine will be imposed by the President of UOKiK in an amount equal to the sum of individual fines for each unfulfilled and delayed financial consideration that was due in the period covered by the proceedings, excluding financial considerations for which the due date for their fulfilment expired earlier than 2 years prior to the date of initiating the proceedings.

In the decisions referred to above, the President of the UOKiK ascertained excessive delays in the fulfilment of financial considerations by entrepreneurs. Each of the entrepreneurs on whom the fine was imposed had delayed payments to their counterparties in the amount exceeding PLN 5 million during the three months under investigation:

The first decision was issued to Agata company. In the course of the proceedings, it was established that the entrepreneur had been late with payment for more than 15,000 invoices to 797 counterparties. The largest sum of delayed payments to one of the entities amounted to almost PLN 5 million on account of 223 invoices. The President of UOKiK imposed a fine of over PLN 476,000 on that company.

The second fine of over PLN 280 000 was imposed on Bricoman Polska company. In the course of the proceedings, it was established that the entrepreneur had paid almost 14,000 financial considerations to counterparties past the due date. The largest amount of delays to one contractor exceeded PLN 1.2 million for 260 invoices paid after the due date.

The third fine of over PLN 200,000 was imposed on Silvan Transport & Logistics. The company failed to timely meet its financial obligations to more than 3,000 counterparties, with the largest delayed sum to a single entity amounting to more than PLN 1.2 million for 62 invoices paid late.

In the remaining six decisions, the President of the Office for Competition and Consumer Protection (UOKiK) refrained from imposing a fine, as the Act provides that a fine should be waived if the entrepreneur in breach of the Act was itself a victim of payment gridlock in the period under investigation. Such situations occurred in case of the other six entrepreneurs, including IKEA. Therefore, although the entrepreneurs had also been creating payment gridlocks, no fine was imposed on them. Moreover, in the course of the proceedings concerning these entities, it was established that in the period under examination the sum of financial considerations these companies had received late was higher than the payment gridlock they generated.

Under the new powers, the President of the Office for Competition and Consumer Protection may also undertake so-called soft actions, addressing requests to entrepreneurs to change their payment practices. As a result, an entrepreneur receiving such a request will have the opportunity to immediately improve its payment practice towards its counterparties, thus avoiding proceedings and financial sanctions for generating payment gridlock.

Since 1 January 2023, sellers operating both online and in store have been struggling with introducing the changes adopted as a result of the implementation of the Omnibus Directive, whose aim is to strengthen consumer protection. In connection with these changes, the Trading Standards Authority has begun inspections at retail chains to check whether and how traders communicate price reductions. In addition, the Office of Competition and Consumer Protection (UOKiK) has checked almost 40 websites of e-commerce entrepreneurs in various sectors (clothing, cosmetics, footwear, sports equipment, electronic equipment, online platforms).

The most important changes resulting from the implementation of the Omnibus Directive aimed at strengthening consumer protection include: the requirement for transparent information about price reductions, clear rules for offer placement in search results, a ban on implying that published consumer reviews are true if a trader has not implemented mechanisms to secure their reliability. At the same time, the amendment to the consumer law regulations has also introduced new information obligations, such as: providing the telephone number, informing whether and how the trader verifies the reviews provided and, in case of trading platforms, indicating whether an offer comes from a trader or a private person.

NEW OBLIGATIONS RELATED TO PRICE REDUCTIONS

A trader who advertises a promotion or sale must indicate, in a prominent place next to the goods, not only the current price, but also the lowest price of the last 30 days preceding the reduction. The information must be presented in an unambiguous and incontestable manner and allow for comparing the prices. This obligation applies to traders selling in brick-and-mortar stores and to those selling online, as well as to TV and radio advertisements for goods.

If a trader sells goods both in physical stores and online, then, when informing about price reductions, they must indicate the lowest price in force during the 30-day period prior to the introduction of the reduction in the particular means of sale, i.e. the physical or online store.

The obligation imposed on traders is aimed at enabling the consumers to verify the actual price reductions and preventing unfair practices pursued by traders so far – apparent promotions that mislead the consumers.

Consumers can be informed of a price reduction in various ways – by stating the percentage reduction, the discount by a specific amount or a reduction by the VAT amount, by crossing out the old price and stating the new price, or by including the ‘sale’ sign. However, regardless of the form of communication chosen, the lowest price for the goods or services over the last 30 days prior to the reduction must be indicated.

An exception is made for perishable products, in which case traders are obliged to display the current price and the price before the discount was first applied. In case of products which have been on offer for less than 30 days, the lowest price from the launch until the price reduction must be displayed. Traders do not have to display the lowest price before the reduction, if they choose not to announce a promotion or sale when lowering the regular price. Slogans promoting sale offers by comparisons being general marketing statements (e.g. best, lowest prices) and bundles (e.g. multibuys) are also exempt from the new regulations.

In the event of confirming a violation of the collective interests of consumers, the President of UOKiK may impose a penalty of up to 10 per cent of the turnover for an enterprise and up to PLN 2 mln for the person managing thate enterprise.

RESERVATIONS OF THE PRESIDENT OF UOKiK

In connection with the inspections carried out by the Trade Standards Authority and the UOKiK’s verification of the practices applied by entrepreneurs in their online stores, UOKiK has published some practical guidelines on its website on communicating price reductions and listed its observations made as a result of the inspection: ”retailers should indicate the lowest price from the 30-day period preceding the introduction of the reduction in a clear and unambiguous manner. The lowest price may be crossed out (as long as it is still legible). Next to the price displayed as the reference price, traders should indicate that this is the lowest price in the last 30 days preceding the reduction. Presenting this message after the link has been expanded or in a much smaller font than the reduced price, or using illegible colour or low contrast, are examples of bad practice. The information about the lowest price should be presented right next to the current price. If traders lower the price more than once in 30 days, they may additionally inform the consumers about the previous prices. However, this should not mislead the consumers and distract from the lowest price in the 30 days preceding the introduction of the reduction. 

Example: A correct communication of additional prices could be: “PLN 80 instead of PLN 100 (the lowest price in the 30 days preceding the introduction of the reduction). Excluding promotional periods, our regular price in the last X days was PLN 120” (in the same font)”.

Example: if the slogan reads ‘50% less’ and the lowest price in the last 30 days preceding the information about the reduction was PLN 100, the seller will have to present PLN 100 as the reference price from which the 50% reduction is calculated, even though the last sale price was different”.

The information made available on UOKiK’s website shows that the reservations of the President of UOKiK were raised by the following practices:

• stating the current selling price and the crossed-out price without informing what the crossed-out price is,
• stating the current sale price and the crossed-out price, where the message explaining that the crossed-out price is the lowest price of the product in force in the last 30 days before the discount was introduced is available only after expanding it,
• using other reference values than the lowest price in 30 days before the reduction to present discounts (crossed-out prices),
• calculating the amount of discount (e.g. 20%, PLN 150) with reference to the last or standard price of the goods, not the lowest price in the last 30 days,
• using words other than ‘the lowest price in 30 days before the introduction of the discount’, for example: ‘reference price’, ‘previous/last lowest price’, ‘price from 30 days before the promotion’,
• presenting information about the lowest price in force in 30 days before the introduction of the discount in an illegible way: font, colours, contrast.

Loyalty programmes (i.e.: discount cards, coupons entitling to price discounts) are, in principle, exempt from the duty to provide information about the lowest price in 30 days preceding the reduction, if they actually refer to custom price reductions. However, if the price reduction applies to all or part of the customers, then the lowest price in the 30 days preceding the reduction must be indicated.

Example: on a retailer’s website, a consumer sees sees a notice available to the general public that when a particular code is entered, the price will be reduced. In this situation, the retailer must ensure that the ‘earlier’ of all goods subject to the reduction is the lowest publicly available price in the last 30 days preceding the introduction of the reduction.

FURTHER ACTIONS OF UOKiK

In a communication posted on its website, UOKiK informed in the near future it would be checking:

• whether and how online traders who publish consumer reviews inform about the manner of verifying their reliability (if they do not carry out such verification, they should also directly inform consumers about it),
• whether and how trading platforms inform about the main parameters determining the order in which products appear in search results, and whether and how they disclose which offers are paid advertising or get a higher placement as a result of a payment,
• whether and how platforms inform about the status of persons offering goods or services – whether they are entrepreneurs or private persons (in the latter case, they are also obliged to inform about the non-application of consumer protection legislation),
• whether online traders provide telephone numbers allowing for effective contact with them.

The act on family foundations – the stage of legislative work

The bill is currently awaiting another reading in the Sejm, after the Senate submitted its amendments on 13 January this year. The bill was submitted by the Minister of Development, Labour and Technology.

Grounds for the novum

The legislator justified the introduction of the institution of a family foundation with the need to provide entrepreneurs being natural persons with the possibility to carry out an effective succession, which will give protection against the fragmentation of property created in connection with the conducted business activity and will enable its further use in the perspective of more than two generations.

It is crucial for the legislator to secure the continuity of private enterprises, in particular for the purpose of safeguarding families.

Although the institution of a family foundation is dedicated to the above-mentioned purposes, the founder does not have to be an entrepreneur and the foundation beneficiaries do not have to be in a family relationship with the founder.

General characteristics

A family foundation is to be a legal person created by the founder to accumulate property, manage the property in the interest of the beneficiaries and provide benefits to the beneficiaries. The benefit to the beneficiaries may consist of transferring to them, or giving them the use of, money, property or rights, this in particular may include the payment of their living expenses or education.

A foundation may only be established by a natural person, while the beneficiary may be either a natural person or a non-governmental organisation involved in public benefit activities. A foundation will be established either by making a declaration in a foundation deed (in which case there may be several founders) or in a will (with only one founder). The rights and obligations of the founder and the beneficiary will be non-transferable, unlike the beneficiary’s liabilities.

Organisational structure

The most important internal document of the foundation will be its articles of association to be determined by the founder. The articles of association will contain the essential regulations concerning the foundation’s organisation and manner of operation, inter alia, its specific purpose of operation, identification of the beneficiary and the scope of his/her powers, the duration of the foundation, if specified, and the rules for the appointment, scope of duties and the manner of operation of the foundation’s bodies. Optional elements of the articles of association will include, inter alia, guidelines for investing the family foundation’s assets.

A foundation will acquire legal personality upon registration in the registry of family foundations kept by the District Court in Piotrków Trybunalski. The regulations concerning the register are largely modelled on the solutions adopted for the National Court Register.

The governing body of a family foundation will be the management board, which may be composed of one or more persons. The management board’s tasks will include, inter alia, taking actions related to ensuring the foundation’s liquidity and solvency.

The articles of association will be able to provide for the establishment of a supervisory body – the supervisory board. If the number of beneficiaries exceeds 25, the establishment of the supervisory board will be mandatory.

Another necessary body of a family foundation, besides the board, will be the beneficiaries’ assembly formed by the beneficiaries whom the articles of association grant the right to participate in it.

Under the provisions of the articles of association, individual members of a foundation’s bodies, in particular members of the beneficiaries’ assembly, may be granted more than one vote.

The rules for the internal organisation of foundations and their bodies are largely based on the solutions adopted for commercial companies, with the majority of these regulations being of a dispositive nature – they will apply unless the founder decides otherwise in the articles of association. Also the mechanisms for the termination of a foundation’s activity and its liquidation are similar to the solutions known in the company law.

Property of a foundation

The founder will be obliged to endow the foundation with property whose value is at least PLN 100,000 (the founding capital). A foundation will also be able to receive donations and inheritances. As a rule, a foundation will not be allowed to carry out business activity, with the exception of activities specified in the act, which mostly boil down to property management and making capital investments.

An inventory of property will be kept at a foundation, including a list of the property rights contributed to the foundation by the founder or persons other than the founder, indicating the person contributing the property and specifying the type and value of each of the contributed items of property, in an amount determined according to the state and prices at the time of their contribution and their tax value. The founder will be obliged to keep the inventory of the property contributed to the foundation to cover the founding capital. The management board will be responsible for keeping the inventory up to date.

At least once every four years, an audit firm or a team of auditors appointed by the beneficiaries’ assembly should audit the management of the family foundation’s assets, the incurring and fulfilment of obligations and public law liabilities, in terms of correctness, fairness and compliance with the law, the purpose and the documents of the family foundation.

Liability of a foundation

A family foundation will be jointly and severally liable with the founder for its obligations incurred prior to its establishment, including maintenance obligations. This liability will not be able to be excluded or limited without the consent of the creditor. A family foundation will also be liable for the fulfilment of the maintenance obligation incurred by the founder after its establishment.

A foundation’s liability described above will be limited to the value of the property contributed by the founder as at the time of acquisition and according to the prices at the time of satisfying the creditor.

Tax issues

A family foundation will not benefit from any extraordinary tax preferences. The income tax rate for the foundation and its beneficiaries in respect of benefits received from the foundation is to be 15%.

IMPLEMENTATION OF EU REGULATIONS

EU directives concerning consumer rights and governing certain aspects of contracts for the provision of digital content and services as well as contracts for the sale of goods have been implemented into the Polish legal order with a significant delay. The law implementing the EU regulations, i.e. the Act of 4 November 2022 amending the Consumer Rights Act, the Civil Code and the Private International Law Act, enters into force on 1 January 2023.  Therefore, from the New Year onwards, entrepreneurs providing digital content and digital services will be bound by new regulations, which will require them to adapt their business to the new provisions.

 

WHOM THE AMENDMENT APPLIES TO?

As already mentioned, the amendment applies to digital content providers and digital service providers. The existing Consumer Rights Act of 30 May 2014 (“Consumer Rights Act“) defines digital content as data produced and delivered in digital form. For example, it can be pointed out that digital content includes computer software, various applications, games, music and audio-visual files or e-books.

What is new, however, is the introduction into the Consumer Rights Act of a definition of digital services, which are defined as services that allow the consumer to:

• produce, process, store or access data in digital form,
• share data in digital form, which has been transmitted or produced by the consumer or other users of that service,
• other forms of interaction by using data in digital form.

Examples of the provision of digital services include sharing of video or audio content, hosting of files, broadly understood social media or data clouds. Digital services are provided via the internet, mobile devices or digital or satellite television.

 

CHANGES INTRODUCED BY THE AMENDMENT

The Act of 4 November 2022 amending the Consumer Rights Act, the Civil Code Act and the Private International Law Act introduces a number of changes to the existing legislation.

Among other things, it introduces modifications to the statutory warranty regulations. Moreover, the new provisions abandon the concept of defect in an object and introduce a new term – conformity of goods with the contract. At the same time, they define in detail the cases in which goods are to be considered to be in conformity with the contract.  The purpose of this regulation is to avoid some of the disputes concerning the scope of obligations imposed on entrepreneurs.

Definitely new are provisions introducing a hierarchy of consumer protection measures. Under the new regulations, a consumer will first have the right to demand that the goods are restored to conformity with the contract, either by repair or replacement. Only afterwards, if the repair or replacement turns out to be, for example, uneconomical, the consumer will be able to exercise further rights, i.e. demand a price reduction or withdraw from the contract. As before, a consumer will not be able to withdraw from the contract if the non-conformity of the goods with the contract is insignificant; however, there has been introduced an assumption, beneficial for a consumer, that the non-conformity of the goods with the contract is significant.

Furthermore, the time limit for the entrepreneur to handle complaints has been modified. Until now, the entrepreneur had 14 days to respond to complaints regarding sales contracts concluded with consumers, while in the case of other contracts (e.g. service contracts), the deadline was 30 days.  As a result of the changes, the deadline for responding to a complaint made by a consumer has been shortened to 14 days in any case, regardless of the type of contract concluded.

As a side note, it should be mentioned that the terminology used in the Consumer Rights Act has changed – the previously used term – ‘object’, has been replaced by a new term – ‘goods’.

 

 RESULTS OF THE AMENDMENT

The discussed amendment is important insofar as it implies the need for the entities offering digital content or providing digital services to introduce changes in their IT systems, documents and procedures concerning basically all stages of the entrepreneur-consumer relationship, starting with advertising and presentation of an offer, through performance of information obligations, contracting, contract performance and ending with after-sales service.

 

THE ORIGIN OF CHANGES

The Medical Devices Act of 7 April 2022 has been in force since 26 May 2022. It adapts the Polish legislation to the new EU requirements and introduces provisions to enforce and apply the obligations under Regulation 2017/745 on medical devices (“MDR”) and Regulation 2017/746 on in vitro medical devices (“IVDR”). Additionally, apart from setting out sanction provisions for violations of the EU MDR and IVDR provisions, the legislator has also introduced significant changes to the medical device advertising rules, which will be effective from 1 January 2023.

INTRODUCTION OF A PROHIBITION OF ADVERTISING OF AESTHETIC MEDICINE

In the Medical Devices Act of 7 April 2022, Articles 54 to 61 govern the advertising of medical devices. The new legislation provides for a total ban on advertising of specialised equipment targeted at the public from 1 January 2023. The entire sector of aesthetic medicine services will have to adapt to the new regulations, as advertising in this area most often refers to various types of implants, laser- and hyaluronic acid-based cosmetic medicine treatments.

The amendment to the Medical Devices Act also clarifies the rules for the advertising of medical devices. Such advertising, if addressed to the general public, must be expressed in a way that can be understood by a layperson, i.e. an individual who has no formal education in the relevant field of health care or medicine. This requirement also applies to the medical and scientific phrases referred to in the advertisement.

The legislator further details that an advertisement of a medical device may not use the image of persons practising or claiming to practise a medical profession, or depict persons presenting the device in a manner suggesting that they practise such a profession.

Furthermore, the advertisement must not contain a direct invitation, addressed to children, to purchase the advertised products. It must not urge parents or other adults to buy the advertised medical devices for their children. Nor may the medical device advertisement apply to devices intended for use by professional users.

AESTHETIC MEDICINE ON THE INTERNET

When browsing social media, we often see advertisements of the aesthetic medicine sector. This advertising is done both by beauty influencers, who promote particular medical services and products as their users, and by professionals (cosmetologists, aesthetic medicine practitioners) who, in order to promote their services, often publish the effect of the treatment performed by posting a ‘before and after’ photo on their social media profiles. Therefore, as a result of the new regulations, people operating on the internet, beauty parlours and aesthetic medicine clinics will have to pay particular attention to ensure that products that are intended to be used by a doctor only do not become the subject of advertising communication targeted at observers and patients.

NEW LEGAL REQUIREMENTS FOR AESTHETIC MEDICINE ADVERTISEMENTS

The Act of 7 April 2022 on medical devices also introduces fines set out in Article 103 for the use of misleading language and signs and for violating the principle of advertising medical devices. According to clause 2 of this article, anyone who advertises medical devices in a manner contrary to Article 7 of Regulation 2017/745, Article 7 of Regulation 2017/746 or Articles 54-60 shall be subject to a fine of up to PLN 2,000,000.

The so-called transition period allows advertisers who have started broadcasting advertisements that do not comply with the requirements of the Act before 1 January 2023 to have six months to bring them in line with the new regulations (until 30 June 2023).

Where the Office President ascertains violations of Article 7 of Regulation 2017/745 or Article 7 of Regulation 2017/746 with respect to advertising or Article 55 or Article 56, the following shall be ordered by way of an administrative decision:

• removal of the violations found, or
• cessation of the publication, broadcasting or performance of the advertising concerned, or
• publication of the issued decision in the places or mass media in which the specific advertisement has been published.