What constitutes an abuse of procedural rights under Polish law?
Article 4¹ of the Polish Code of Civil Procedure provides that:
“Parties and participants in proceedings may not exercise a procedural right in a manner contrary to the purpose for which that right was established (abuse of procedural rights).”
In judicial practice, this means that not every procedural step which is formally permitted under the Polish Code of Civil Procedure constitutes a legitimate way of defending a party’s position. A developer may formally be entitled to submit a particular evidentiary motion, file a pleading or pursue a remedy against a court decision, but the manner in which that right is exercised may, in certain circumstances, be regarded by the court as an abuse.
The Polish Supreme Court has indicated in a number of judgments that the concept of abuse of procedural rights applies where a particular action formally falls within the scope of a procedural entitlement but is undertaken for a purpose other than obtaining legal protection, and its effect is inconsistent with the purpose of procedural rules and procedural economy.
Two fundamental features of an abuse of procedural rights can therefore be identified:
- a party uses an instrument which is, in itself, provided for by procedural law, but
- uses it for a purpose other than that for which the instrument was established, for example primarily to obstruct or prolong the proceedings.
Can a developer’s defence against a contractual penalty claim constitute an abuse of procedural rights?
As a general rule, a developer, like any defendant in Polish civil proceedings, has the right to file a statement of defence and challenge a purchaser’s claim for payment of a contractual penalty. As part of its defence, the developer may also argue that the delay resulted from circumstances for which it was not responsible.
This does not mean, however, that every argument advanced by the developer must be treated by the court as a genuine and substantive defence.
If a developer repeatedly relies on circumstances unrelated to the performance of the development agreement and submits numerous items of evidence concerning matters which are irrelevant to the determination of the case, the question may arise whether the true purpose of those actions is to defend the claim or rather to postpone the court’s decision.
What actions by a developer may constitute an abuse of procedural rights?
Based on our experience in handling numerous court proceedings against developers, the issue of abuse of procedural rights arises particularly where a developer, in an attempt to avoid liability for delay, relies on a number of circumstances which have no genuine connection with the specific period of delay or, simply due to the chronology of events, could not have caused it.
Argument 1: the COVID-19 pandemic caused the developer’s delay
The developer relied on the COVID-19 pandemic, disruption of supply chains and increases in the prices of steel and other construction materials.
In the case in question, however, the inadequacy of this argument was particularly apparent from the chronology of events relating to the development.
The agreement with the purchaser was concluded on 1 February 2024, while the deadline for transferring ownership was set for 30 July 2024. The COVID-19 pandemic had begun approximately four years earlier. Consequently, by the time the agreement was concluded, the developer had long been aware of the situation in the construction market, prevailing material prices and the consequences of previous economic disruptions. It could not therefore present those circumstances as a sudden and unforeseeable obstacle arising only after the agreement had been concluded and capable of justifying the delay.
This example illustrates what an inadequate procedural argument may look like. Instead of identifying a specific circumstance which arose after the agreement was concluded and prevented its timely performance, the developer relied on a phenomenon which had already existed for several years before it assumed the contractual obligation.
Argument 2: the war in Ukraine caused the developer’s delay
The developer’s second argument concerned the economic consequences of the Russian invasion of Ukraine, including increased inflation, rising material prices and broader economic disruption.
Here too, the chronology of events was crucial. Russia’s full-scale invasion of Ukraine began on 24 February 2022, while the agreement with the purchaser was not concluded until 1 February 2024. As with the first argument, the war had therefore already been ongoing for almost two years when the developer voluntarily entered into a new agreement and itself specified the deadline by which ownership of the property was to be transferred.
The court found that a developer could not, while already operating in the conditions created by an ongoing war and being fully aware of its economic consequences, voluntarily assume an obligation towards a purchaser with a specific deadline for performance and subsequently rely on the same circumstances, which had already existed for two years, as grounds for avoiding liability for failure to meet that deadline.
The point was therefore not merely that the argument concerning the war was considered insufficient. Its inadequacy followed directly from the basic chronology of events.
Argument 3: difficulties in financing the development
Another line of defence concerned difficulties in obtaining further financing for the development and refusals by banks to provide financing. Importantly, in its statement of defence, the developer itself indicated that these problems had occurred between February 2022 and March 2023, that is, before the agreement in question had even been concluded.
This argument was problematic for two independent reasons.
First, securing adequate financing is part of the organisation of a professional property development business and falls within the developer’s commercial risk. A purchaser has no influence over the financing structure of the project, the developer’s creditworthiness or the decisions of banks financing the development. It is therefore difficult to accept that the economic consequences of inadequate or insufficient financing should be transferred to the consumer.
Second, the developer was fully aware of its financing difficulties before entering into the development agreement. Despite that knowledge, it nevertheless decided to conclude the agreement and specify a particular deadline for the transfer of ownership.
The developer’s final principal line of defence was based on alleged “delays by administrative authorities”. The developer linked this argument primarily to delays in the completion of water and sewage connections. We discuss the developer’s liability for this type of delay in greater detail in our article on developer liability for delays in completing utility connections.
The court correctly pointed out that merely making a general reference to administrative delays does not establish that the developer is not responsible for the delay. It is necessary to identify the specific authority responsible, the particular act or decision affected by the delay, the actual duration of that delay and, above all, whether there was a causal connection between that delay and the failure to transfer ownership of the particular property on time.
A general assertion that “the authorities acted slowly” is therefore insufficient to release the developer from liability. Moreover, a professional developer should take the ordinary duration of administrative proceedings into account when preparing the timetable for the development.
Consequently, arguments of this general nature were also found to constitute an abuse of procedural rights.
Argument 5: calling numerous witnesses
In court proceedings, applications to hear witnesses can also have significant practical consequences. As a general rule, the greater the number of witnesses to be examined, the longer the proceedings are likely to take.
In contractual penalty cases, developers sometimes request the examination of numerous employees, representatives of the general contractor, estate agents, subcontractors or other persons involved in the development process.
The number of witnesses alone does not, of course, establish an abuse of procedural rights. If each witness has information relevant to the determination of the case, taking such evidence may be justified.
The position is different where successive witnesses are expected to testify essentially about the same circumstances or matters which, even if proven, would not establish the cause of the specific period of delay.
In such circumstances, the purchaser should not merely respond to the developer’s allegations but should also explain to the court why particular evidence is irrelevant or serves primarily to prolong the proceedings.
Other potential abuses of procedural rights by developers
Other forms of abuse of procedural rights identified in Polish case law may include, in particular:
- repeated applications to adjourn hearings, where the circumstances indicate that the true purpose is to prevent the hearing from taking place and thereby prolong the proceedings. For example, in its judgment of 27 March 2026, case no. VII AGa 868/24, the Warsaw Court of Appeal held that repeated applications for adjournment on health grounds which prevented a remote hearing from being conducted with the participation of a party could constitute an abuse of procedural rights;
- raising significant objections only at a late stage of the proceedings, despite having been able to raise them earlier. In its judgment of 16 October 2024, case no. II PSKP 16/23, the Polish Supreme Court regarded the raising of an objection only at the cassation stage, despite the party having been able to rely on it earlier, as an abuse of procedural rights;
- submitting new evidence only at the appeal stage, where the party could and should have submitted it before the court of first instance. In its judgment of 18 February 2021, case no. I AGa 85/20, the Kraków Court of Appeal indicated that evidence not submitted at first instance may be assessed not only as late evidence under Article 381 of the Polish Code of Civil Procedure but also as conduct amounting to an abuse of procedural rights;
- unnecessarily multiplying and excessively expanding grounds of appeal, particularly in appellate proceedings. In its judgment of 29 December 2022, case no. I ACa 1218/22, the Szczecin Court of Appeal held that the unnecessary multiplication and excessive expansion of grounds of appeal may amount to using the right to have a case heard at two instances contrary to its intended purpose;
- filing clearly excessive or repeated applications for the recusal of judges, where their true purpose is not to protect the right to an impartial court but to disrupt or delay the proceedings. In its decision of 28 December 2022, case no. I NWW 90/22, the Polish Supreme Court treated as an abuse of procedural rights an application seeking independence and impartiality tests in relation to several dozen individually named Supreme Court judges;
- relying during the proceedings on circumstances inconsistent with the party’s previous conduct or pre-litigation statements. In its judgment of 27 April 2017, case no. VIII GC 72/16, the Szczecin Regional Court referred to the principle venire contra factum proprium nemini licet, indicating that conduct inconsistent with a party’s previous behaviour may amount to an abuse of procedural rights;
- attempting to secure adjournments under the pretext of circumstances allegedly preventing participation in a hearing. In its judgment of 8 June 2022, case no. I ACa 231/21, the Kraków Court of Appeal indicated that reliance on illness without submitting a certificate from a court-appointed physician, either before or after the hearing, may exhibit features of an abuse of procedural rights.
In proceedings against a developer, these examples may be particularly relevant where the defendant successively introduces new alleged causes of delay, submits evidence at later stages which could have been presented in the statement of defence, multiplies arguments that have no genuine connection with the subject matter of the dispute or takes procedural steps whose primary effect is to postpone the judgment.
In practice, such situations do occur. One of the objectives of a developer pursuing this type of litigation strategy may be to delay the delivery of a final and binding judgment for as long as possible.
What are the consequences of an abuse of procedural rights by a developer?
The sanctions for abuse of procedural rights are set out in Article 226² of the Polish Code of Civil Procedure.
The court may, in particular:
- impose a fine on the party abusing its procedural rights;
- irrespective of the outcome of the proceedings, order that party to bear a greater proportion of the litigation costs than would follow from the ordinary rules governing costs; or
- even order that party to bear all litigation costs.
At the request of the opposing party, the court may also:
- increase the amount of recoverable litigation costs, up to twice the ordinary amount, or
- increase, also by up to two times, the rate of interest awarded against the party whose abuse caused a delay in the determination of the case, for the period corresponding to that delay.
Why should the purchaser expressly request increased litigation costs?
From the purchaser’s perspective, Article 226² § 2(3) of the Polish Code of Civil Procedure is particularly important. An increase in litigation costs and an increase in the applicable interest rate may be ordered at the request of the opposing party, that is, the purchaser acting as claimant.
This means that the purchaser should not merely state in successive pleadings that the developer’s actions are unnecessary or cause the proceedings to be prolonged. Where there are sufficient grounds, it may be appropriate to expressly invoke Article 4¹ in conjunction with Article 226² of the Polish Code of Civil Procedure and submit the relevant application to the court.
This may be particularly important where the defendant’s conduct has resulted in the need to prepare additional extensive pleadings, attend further hearings or has materially delayed the delivery of judgment.
Increased interest may be particularly important in claims against developers
The sanction allowing the court to increase the applicable rate of interest may be particularly significant in monetary claims brought against developers.
Where proceedings have lasted longer as a result of an abuse of procedural rights, the purchaser has, throughout that period, been deprived of funds to which they were entitled. Article 226² of the Polish Code of Civil Procedure makes it possible to take this into account when determining the amount of interest due.
Importantly, in such a case, the statutory limitations on the maximum rate of default interest do not apply. However, the interest rate awarded by the court may not be increased under this provision by more than two times.
How can a purchaser demonstrate an abuse of procedural rights?
For an application to be effective, the purchaser should identify specific procedural actions, explain why they did not contribute to the substantive determination of the case and demonstrate their impact on the duration and costs of the proceedings.
For example, where a developer simultaneously relies on the pandemic, the war in Ukraine, problems with contractors and delays by administrative authorities, each of those arguments should be analysed separately to determine whether it has a causal connection with the specific period of delay. The relevant argument should then be presented to the court.
Only the overall pattern of such conduct may justify a finding that the proceedings are not being used solely to present a genuine defence against the claim, but also as an instrument for postponing the determination of the case.
It is therefore insufficient for the claimant simply to state that the developer is “delaying the case”.
Summary
Article 4¹ of the Polish Code of Civil Procedure may constitute an important instrument for protecting purchasers, but it should not be treated as an automatic response to every extensive defence advanced by a developer.
The key issue is to distinguish between a genuine exercise of procedural defence rights and the use of procedural instruments primarily to obstruct or prolong the proceedings.
In cases concerning developer delays, this distinction may be particularly important. A developer is entitled to demonstrate that a particular event genuinely prevented the timely completion of the development or transfer of ownership. It should not, however, use general economic events, war, the pandemic or problems with contractors as a pretext for extensive evidentiary proceedings where those circumstances have no genuine connection with the purchaser’s claim.
In such cases, the purchaser may not only seek payment of the contractual penalty due but may also request the court to apply the consequences provided for in Article 226² of the Polish Code of Civil Procedure. Based on our experience, in justified cases Polish courts do grant applications made by claimants in this respect.
How we can help?
We represent property purchasers in court proceedings concerning contractual penalties for developer delays, including cases in which the developer argues that the delay resulted from circumstances beyond its control.
Depending on the circumstances of the case, we can:
- review the development agreement and determine whether the purchaser has a claim for payment of a contractual penalty;
- calculate the contractual penalty and applicable interest;
- analyse the causes of delay relied upon by the developer and whether they genuinely relate to the late performance of the agreement;
- assess whether reliance on the COVID-19 pandemic, the war in Ukraine, financing difficulties, contractors or administrative authorities may actually affect the developer’s liability;
- prepare and file a claim against the developer, as well as subsequent court pleadings;
- represent the purchaser throughout the court proceedings and respond to the developer’s arguments and evidentiary applications;
- where justified, raise the issue of abuse of procedural rights and request the application of measures available under Article 226² of the Polish Code of Civil Procedure.
Each case requires an individual assessment. The mere fact that proceedings are lengthy or that a developer presents an extensive defence does not, by itself, mean that there has been an abuse of procedural rights. The key question is whether the procedural actions genuinely serve the substantive defence of the claim.
FAQ
A developer may raise such an argument, but the mere fact of the COVID-19 pandemic does not automatically release it from liability, particularly where the agreement was concluded several years after the pandemic began. The developer should demonstrate that specific consequences of the pandemic had a genuine causal connection with the particular period of delay. The chronology is therefore crucial, including whether the agreement was concluded before the relevant obstacle arose or at a time when its consequences were already known to the developer.
Not automatically. Based on our experience, arguments relating to the war in Ukraine have been raised repeatedly by developers. However, the developer must demonstrate a specific impact of the war or its economic consequences on the particular development.
Where the developer concluded the agreement while the war was already ongoing, knew of its consequences and nevertheless specified a particular deadline for performance, subsequent reliance on the same pre-existing circumstances may be particularly difficult to justify.
Generally, no. Financing a development forms part of the developer’s professional business organisation and commercial risk. This is particularly clear where the developer was already aware of financing difficulties before entering into the agreement with the purchaser but nevertheless committed itself to transferring ownership by a specific deadline.
Not by themselves. The developer should establish which specific authority was responsible for the delay, what proceedings or decision were affected, how long the delay lasted and how it actually prevented timely performance of the agreement.
A general statement that “the authorities were slow” is not sufficient to establish that the developer is not liable.
This depends on the circumstances of the individual case. An abuse may arise where the developer uses formally permissible procedural instruments for a purpose inconsistent with their proper function, for example by relying on numerous irrelevant circumstances or submitting evidence primarily intended to cause unjustified delay.
Article 226² of the Polish Code of Civil Procedure provides for a number of possible sanctions.
Depending on the circumstances, these may include a fine, an adverse decision concerning litigation costs and, at the request of the opposing party, increased recoverable litigation costs or an increased rate of interest, within the limits provided by law.
Where there are sufficient grounds, the purchaser should present the court with specific arguments rather than merely state that the developer is “delaying the proceedings”.The purchaser should identify the relevant procedural actions, explain why they do not contribute to the substantive determination of the case and, where possible, demonstrate their impact on the duration or costs of the proceedings.
