The Administrative Court in Zagreb issued a verdict ordering the Ministry of Labour, Pension System, Family and Social Policy to pay the arrears of the inclusive allowance to the heirs of the deceased applicants. This decision represents a potential precedent because it breaks the previous practice according to which procedures were suspended by the death of the user. The central theme of this legal battle is the succesion of inclusive allowance. The court believes that the state must not profit from its own slowness in making decisions. Many citizens have died waiting for bureaucracy, and now hope is opening up for their families. While this sounds like a victory for justice, the path to payout is not easy or quick.
An inclusive allowance is a cash benefit intended for people with disabilities. Its purpose is to compensate for the increased cost of living caused by disability and to enable equal participation in society. The amount ranges from 138 to 720 euros per month, depending on the degree of health impairment. It is not social assistance for the poor, but a right that comes from disability.
Unfortunately, administration is slow. The law has entered into force, but the solutions are months late. Many users, often severe oncology patients, died before they received a solution. The state then suspended the proceedings, claiming that it was a personal right that ended at death. This is where the problem arises, because the inheritance of the inclusive allowance was not envisaged in such cases. Families were left without the means that their loved ones legally belonged to during their lifetime.
Given that the Administrative Court received hundreds of identical lawsuits, it was decided to conduct the so-called sample dispute. A sample dispute is a legal institute used when there are a large number of lawsuits with the same legal issue. Instead of the court dealing with each case separately and wasting resources, one typical case is chosen. The judgment in this “exemplary” case becomes a guide for all other similar cases.
In this particular case, the court chose the case of a widow whose husband died while waiting for a decision. Judge Tomislav Krušlin ruled in her favor. It was concluded that the proceedings must continue despite the death. This approach of the court directly enables the inheritance of the inclusive allowance to those who legally deserved it, but did not live to see it due to the slowness of the system. This is a key change in case law.
The verdict of the Administrative Court in Zagreb is very clear in its message to the Ministry. The court found that the state cannot use its own delay as an excuse for not paying the money. If the person submitted the application on time and met the conditions, the right to compensation arose at that moment. The fact that the administration did not issue a decision on time must not be to the detriment of citizens.
The court considers that medical expertise can also be carried out on the basis of documentation, even if the person has died. Thus, death is not an obstacle to establishing rights. It is hereby confirmed that the right to inherit the inclusive allowance exists for the period from the submission of the application until the death of the beneficiary.
If this verdict upholds, the heirs will be able to claim thousands of euros in arrears. Many families are eagerly awaiting the inheritance of an inclusive allowance to cover the costs incurred during the illness of their loved ones.
This is only a first-instance, non-final verdict. The competent ministry has the legal right to appeal to the High Administrative Court. This means that the legal battle for the inheritance of the inclusive allowance is not over yet. The High Administrative Court may uphold this decision, but it may also reverse or revoke it. Only when, and if, the verdict becomes final, will the obligation to pay for all similar cases be created.
If you need an attorney for an inclusive allowance, please contact us at:
In our law office, we often encounter inquiries from clients who have problems with contractors. The scenario is almost always similar. Contractors do not fulfill their obligations. They don’t answer calls, don’t meet agreed deadlines, and generally don’t stick to agreements. An additional problem is the frequent insistence of contractors on performing works without a contract and without issuing an invoice. Payment is then usually requested in cash, with the argument that this way of working is cheaper for both parties.
Although such an informal agreement may seem tempting due to the lower price, it puts you at an extreme disadvantage as a client. Without clear written traces, proving any irregularities becomes almost impossible. Given that this is a burning problem for many, in this blog we bring key guidelines and instructions on how to legally protect yourself from unscrupulous craftsmen and ensure that your investment is safe.
The most important step in protecting your interests is to formalize the agreement. Describe the subject of the work in writing. The best solution is to conclude a contract for work. It precisely lists all items: a description of the work, the materials that will be used, the deadlines for completion and the price. If the contractor is not willing to sign the contract, insist on a written offer with a detailed job description and prices.
Even if you don’t have a formal contract, written communication via email or apps like WhatsApp can serve as proof. It is important that the correspondence clearly shows what exactly has been agreed. In this way, in the event of a dispute, you will be able to prove beyond doubt which works you have commissioned and under what conditions. Always ask to be issued such a written offer.
Avoid paying in cash. By making such a payment, you put yourself at risk of not being able to prove later that you have fulfilled your obligation. The safest way to pay is to make a payment to the bank account of the master or his company. A bank statement serves as irrefutable proof that you have paid a certain amount of money for specific works or services. This protects you from possible later claims.
If you are nevertheless forced to pay in cash, be sure to draw up a written acknowledgement of receipt of the money. Please specify the exact amount, date and purpose of payment in the receipt. It is crucial that the master signs such a certificate in his own hand. Also, ensure the presence of at least two witnesses who can, if necessary, confirm in court that you have handed over the money. Please note that by paying “illegally” you are potentially committing a misdemeanor or criminal offense, depending on the circumstances, so check the legal consequences of such arrangements.
Never pay 100% of the amount in advance. Such a request is often a sign of unprofessionalism and potential fraud. Agree on the terms of payment in such a way that you pay as little as possible in advance. The advance should serve exclusively to cover the initial costs of material procurement.
The best practice is to agree on payment in phases, according to the progress of the works. Pay most of the amount, especially the final installment, only after the handyman has fully done the work. Before the final payment, inspect the work carried out in detail. Make sure that everything is done according to the agreement and that there are no visible defects. Only then pay the remaining amount.
It is a common scenario that the craftsman simply disappears after making an advance payment. He stops answering calls, and the works are unfinished. If you have followed the instructions above, you have a good chance of getting your money back and even getting compensation. Your written communication and proof of payment are now becoming crucial.
In such a situation, you need to act quickly and decisively. Send a written notice to the master, using the previous communication channels (e-mail, WhatsApp), in which you inform him that you are unilaterally terminating the contract due to the violation of contractual obligations and deadlines. In the same message, request a refund of the entire amount paid. If he does not respond or refuses to return the money, the next step is to file a lawsuit through a lawyer. Court and lawyer costs, along with statutory default interest, are often enough incentive for an unscrupulous contractor to agree to a peaceful resolution of the dispute.
If the contractor “screws up” the works, i.e. performs them unprofessionally and contrary to the rules of the profession, the most important thing is to make quality evidence secured. Your word against him in court will not be enough. The most legally sound way of securing evidence is through court securing evidence or by hiring a notary public to draw up a record of the established facts on the spot.
If you don’t have time for court proceedings, there is an alternative. It is recommended to make a detailed video and photo record of all defects. Capture everything up close and from different angles. Hire a third, impartial expert, such as a certified court expert or supervising engineer, to review the papers and draw up an expert report and opinion. Such a document, together with your recordings, will be strong evidence in a possible court proceeding for damages.
If you need an attorney to deal with your contractor problem, feel free to contact us at:
Defamation on social networks, and online protection of honor and reputation, is becoming an increasing challenge. Social networks often become a breeding ground for defamatory attacks. This blog deals with exactly this issue. Understanding your rights is essential to defend yourself against such attacks. The aim of this text is to provide a clear overview of legal protection mechanisms. We especially focus on defamation on social networks in Croatia. We’ll cover everything from the definition to the possibility of a defamation lawsuit.
1. What is defamation under Croatian law?
Defamation is a crime directed against a person’s honor and reputation. According to the Criminal Code of the Republic of Croatia, specifically Article 149, defamation is defined as the presentation or transmission of an untrue factual statement. This claim refers to another person. It must be such that it can harm its honor or reputation. It is crucial that the perpetrator knows that the claim is untrue. This knowledge of falsity is the basis for any further discussion of the defamation lawsuit.
It is important to emphasize that defamation refers to a false factual statement. It is not a value judgment or a personal opinion. The line between the two can sometimes be thin. However, the law clearly targets false facts.
In order for someone to be convicted of a criminal offense of defamation, several key elements need to be proven:
The definition of defamation in Croatian law, although seemingly clear, sets a high threshold for proof. It is especially challenging to prove the element of “knowledge of falsehood”. Proving one’s inner state, or consciousness, is inherently difficult in legal proceedings. This implies that not every unpleasant or even incorrect statement is automatically defamatory. Such an approach can be frustrating for victims. On the other hand, it protects freedom of expression from light-hearted lawsuits. Victims must gather strong evidence. This evidence relates not only to the falsity of the claim and the damage suffered, but also to the perpetrator’s awareness of the falsity.
Also, there is a certain tension between criminal law protection against defamation and international standards. These standards often favor decriminalization and civil proceedings. Certain organizations are calling on Croatia to decriminalize insult and defamation. They consider that legitimate concerns about defamation should be addressed primarily through measures that exclude criminal liability. This includes the right to rectification and reply, and compensation for damages. Although the Croatian Criminal Code still sanctions defamation, this call points to a broader international trend. It is possible that this will have an impact on future legislative changes. It can also influence case law, for example through lighter punishments.
2. Defamation on social networks
Defamation on social networks can take many forms. Often it is about publishing false accusations. These can be statuses, comments, or reviews on platforms such as Facebook, Instagram, Twitter/X, or LinkedIn. Creating fake profiles is equally dangerous. The goal of such profiles is to spread untruths about a particular person. Sharing edited photos or videos that show a person in a false and harmful context is also defamatory. Even sending defamatory messages in groups or privately can be punishable. That is the case if those messages are then further disseminated and made available to third parties.
It is especially important to point out that defamation committed through a computer system or network is a more serious form of this crime. The reason for this is that such posts become accessible to a significantly larger number of people. This multiplies the potential damage to the reputation and honor of the victim.
The spread of defamation in the online environment has its own specifics. They make it especially dangerous.
The technological nature of social networks significantly multiplies the harmful potential of defamation. This is especially evident when compared to traditional forms of defamation. Traditional defamation, such as oral or printed defamation with a limited circulation, had inherent limitations in terms of speed and reach of dissemination. Online defamation, on the other hand, does not have these limitations. The damage can be immediate, massive and long-lasting. The legal system must therefore adapt to these specificities. This is partly reflected in the tougher penalties for defamation committed through computer systems. However, challenges in proving and removing such content remain.
The anonymity provided by social networks often creates a false sense of impunity for perpetrators. The ability to create fake profiles or use pseudonyms reduces the perceived risk of liability. People who would not dare to say defamation face to face or under their real name feel freer to do so in the online space. This, unfortunately, leads to an increase in online toxicity and defamatory behavior. Consequently, the need for effective methods of identifying offenders becomes essential for the pursuit of justice.
3. Proving the identity of the perpetrator of online defamation
Finding out who is behind a defamatory post online can be challenging. Still, there are ways. Direct confession of the perpetrator is rare, but possible. It relies much more often on digital traces. Every online activity, including a post on a social network, leaves a mark. This includes IP addresses, information about the device from which access was made, e-mail addresses used to register the profile, and the like.
Information from the platforms themselves (social networks) and Internet Service Providers (ISPs) can be crucial. They possess data that can help identify the user. However, this information is most often obtained on the basis of a court order. Platforms like Facebook and Instagram sometimes ask for an ID when reporting a fake profile. This indicates that they have internal identification mechanisms, but primarily for their own content moderation needs.
Technical methods used in identity detection include:
The role of the police and the State Attorney’s Office (DORH) is primarily evident in criminal offenses that are prosecuted ex officio. Defamation, as a rule, is prosecuted by a private lawsuit. However, if there are elements of another criminal offence in addition to defamation that is prosecuted ex officio (e.g. serious threats), the police may intervene. The police can also provide assistance in gathering evidence based on a court order, even in the context of a private defamation lawsuit.
Although there are technical methods for detecting identity, the process is often legally and technically complex. It requires collaboration with platforms. They may be slow or reluctant to provide information without a valid court order. Success also depends on the quality of the digital traces left by the perpetrator. Obtaining an IP address is often only the first step. The IP address itself usually only leads to the ISP and not directly to the individual. ISPs and platforms protect the privacy of their users. They will not disclose data without a legal basis. An additional complication is the identity obfuscation tools (VPNs, proxy servers) that perpetrators can use. Therefore, victims of defamation should be aware that identification can be a time-consuming and potentially costly process. Success is not always guaranteed.
There is growing pressure on online platforms. In part, this pressure comes through new regulations, such as the Digital Services Act (DSA) of the European Union. The aim is for platforms to take greater responsibility in identifying and combating illegal activities. The Digital Services Act aims to prevent illegal activities and create a safer online environment. The DSA, for example, imposes traceability obligations on traders on online marketplaces. While this does not apply directly to all defamation cases, the general spirit of the DSA is moving towards greater transparency and accountability to the platform. This could facilitate the process of identifying the perpetrator of defamation in the future.
4. Keeping evidence of defamation on social networks
If you are a victim of defamation on social media, it is crucial to preserve evidence quickly and correctly. Digital content can be easily modified or deleted. Therefore, your quick reaction is crucial. Here are some practical tips:
The importance of recording the exact time of publication cannot be emphasized enough. The evidence must be time-relevant. Recording the date and time helps establish a chronology of events. It is also crucial to prove when exactly the defamation was published. This is also important to comply with the legal deadline for filing a private defamation lawsuit. This time limit begins to run from the moment of knowledge of the criminal offence and the perpetrator.
Proactive and methodical evidence gathering is crucial. Perpetrators, aware of the possible consequences, often delete controversial posts. The platforms themselves can also remove content based on their internal policies, regardless of any legal process. If the evidence is not preserved in time and in a proper way, it is impossible or very difficult to reconstruct it later. Unsecured evidence is practically lost evidence. This may make legal protection impossible or significantly more difficult. Therefore, securing evidence is one of the first steps that the victim must take. It is advisable to do this even before formally contacting a lawyer.
While screenshots are extremely useful and often a first step, it’s important to know that their evidentiary force can be challenged. This can happen if they are not properly contextualized (e.g., the URL or information about who else has seen the post is missing). Also, there is a technical possibility of manipulating screenshots. Therefore, a combination of different methods of preserving evidence is the best strategy. For example, a combination of a screenshot, a saved URL, witness data and, if possible, an archived page or time-stamped evidence provides a much stronger evidentiary basis. In some more complex cases, it may be necessary to have an IT expertise to confirm the authenticity of digital evidence.
5. Initiation of proceedings: Private action for defamation
To initiate criminal proceedings for defamation, the injured party must file a private lawsuit. It is extremely important to take into account the legal deadline. A private defamation lawsuit must be filed within three months. This year is preclusive. This means that by failing to do so, the injured party loses the right to prosecute the perpetrator.
The three-month period begins to run from the day on which the injured party (private prosecutor) became aware of the commission of the crime. More precisely, from the knowledge of the publication of the defamatory claim. Also, the deadline runs from the knowledge of the identity of the perpetrator. This is the so-called subjective term. It is important to note that the Law on Protection against Defamation of Republika Srpska also mentions an absolute period of one year from the date on which the expression was presented to a third party. The Croatian Criminal Procedure Code does not specify such an absolute limitation period for filing a private lawsuit in this way. The general rules on the statute of limitations for criminal prosecution apply.
A private action is brought before the competent criminal court. According to the Criminal Procedure Code (CPC), as a rule, the court in whose territory the crime was committed or attempted has jurisdiction. With online defamation, determining where it is committed can be complex. This can be the place where the content in question is uploaded to the internet (e.g. server location). It can also be the place where the content became available and where the adverse consequences for the victim occurred (e.g. their place of residence). The law also allows for a private action to be brought before the court in whose jurisdiction the defendant is domiciled or domiciled.
The short limitation period of three months for filing a private lawsuit puts significant pressure on the victim of defamation. The victim must act quickly. He has to collect evidence and, which is often the most difficult in an online environment, identify the perpetrator. The process of identifying the perpetrator, as described earlier, can take time. If the victim misses this deadline, he or she loses the right to prosecute the offender through a private defamation lawsuit. Therefore, urgency is key. Victims are advised to contact a lawyer as soon as possible. A lawyer can help ensure that deadlines are met and evidence is collected properly.
Determining the territorial jurisdiction of a court for defamation committed online can be challenging. This is due to the transnational nature of the internet. A slander posted online can be available virtually anywhere in the world. The question arises as to where the crime was “committed”. The Code of Criminal Procedure offers a certain flexibility that works in favor of the injured party. As stated, the court in whose territory the act was committed OR in whose territory the defendant resides has jurisdiction. Case law often interprets the place of the commission as the place where the harmful consequences occurred. This is usually the place of residence of the victim, where his reputation is damaged. This makes it easier for the victim to initiate the procedure. He can sue in “his” court, instead of having to look for a court in the place of residence of the (perhaps unknown) offender or the place where the server is located.
6. Criminal proceedings for defamation: Course and possible sanctions
Criminal proceedings for defamation are initiated by a private action. This means that the injured party, as a private prosecutor, takes on the role of a persecutor. The court first examines the regularity of the private lawsuit. If the claim is valid, it is delivered to the defendant for a response. After that, the main hearing is scheduled. At the main hearing, the evidence proposed by the parties is presented. This includes the hearing of the private prosecutor and the defendant, the questioning of witnesses, and the reading of documents. In the case of social media defamation, the evidence will often include screenshots, URLs, and other digital clues. At the end of the evidentiary procedure, the court issues a verdict. The verdict can be convicting, acquittal or dismissive. The parties have the right to appeal against the first-instance verdict to a higher court. A detailed description of the course of the proceedings, including the rights of the civil claimant and costs, can be found in the relevant legal sources.
Possible penalties for defamation are prescribed by the Criminal Code. The basic form of defamation, described in Article 149(1) of the CC, is punishable by a fine. It can be up to three hundred and sixty daily amounts. Earlier sources mention a penalty of up to one hundred and fifty daily incomes or a prison sentence of up to six months. However, the current Criminal Code, referred to by a more recent source, specifies the fine. International sources also confirm that defamation in Croatia is punishable by a fine.1
For a more serious, qualified form of defamation, a more severe penalty is prescribed. This refers to defamation committed through the press, radio, television, computer system or network (which undoubtedly includes social networks). It also includes defamation made at a public meeting or in any other way that makes it accessible to a larger number of people. In these cases, a fine of up to five hundred daily amounts is prescribed. The amount of one daily amount is determined depending on the financial circumstances of the defendant. It is important to note that if the convict fails to pay the fine imposed, it may be replaced by imprisonment.
Although defamation is a criminal offense, the prescribed sanctions are primarily financial. This reflects a certain trend that this type of crime is not treated with the strictest criminal law measures. The focus is more on achieving a certain satisfaction for the victim and on general prevention. It is less focused on long-term repression against the perpetrator. A fine aims to punish the offender. Also, it should provide some moral satisfaction to the victim and discourage others from similar behavior. Victims seeking primarily financial compensation for the damage suffered will have to consider taking civil action. The fine imposed in criminal proceedings is paid to the state budget and not directly to the victim.
A private prosecutor in criminal proceedings for defamation bears a significant burden. This also includes the costs of conducting the proceedings. These costs include court fees and lawyers’ fees. If the private plaintiff loses the dispute, or if the proceedings are discontinued under certain circumstances (e.g. withdrawal of the lawsuit), he or she is generally obliged to reimburse the defendant as well. This creates a certain financial risk for the victim. Therefore, before initiating a private defamation lawsuit , a careful assessment of the odds of success, as well as the potential costs, is required. The prospect of ultimately paying both one’s own and the opponent’s costs may deter some victims from seeking justice this way.
7. Damages: Civil proceedings with criminal
In addition to initiating criminal proceedings, the injured party who has suffered defamation is also entitled to compensation. This right is exercised in civil civil proceedings. This procedure may be conducted independently of the criminal proceedings, or in parallel with them. An action for damages is filed with the competent municipal court. The basis for the lawsuit is the violation of personality rights, specifically honor and reputation.
The Code of Criminal Procedure provides for the possibility of filing a civil claim (claim for damages) within the criminal proceedings themselves. However, the criminal court will decide on this request only if this would not significantly delay the criminal proceedings. In practice, criminal courts often, even if they establish the guilt of the defendant, refer the injured party with a civil claim in whole or in part to litigation. Civil (civil) proceedings for damages are conducted in accordance with the rules of the Civil Procedure Act and the Civil Obligations Act (ZOO).
Due to the violation of personality rights, such as honour and reputation, the injured party is entitled to fair monetary compensation. This compensation is awarded for the mental anguish suffered. Infringement of personality rights is the legal basis for compensation for non-material damage. The amount of the fee depends on a number of circumstances. The severity and duration of the mental anguish caused by the injury and possible fear are taken into account. The purpose of this compensation, which is to provide satisfaction to the injured party, is also appreciated. The court will take into account all the circumstances of the individual case when making its decision. This includes the intensity and type of defamatory statements, how they are made, reach (the number of people who have heard or seen them), and the impact of the defamation on the victim’s personal and professional life. The Civil Obligations Act gives the court the power to determine the amount of compensation at its own discretion. This is possible if the amount of damage cannot be determined, or could only be determined with disproportionate difficulty.
Examples from case law can illustrate how courts approach these issues. The case of an Austrian politician against Facebook before the Court of Justice of the European Union, although not directly Croatian case law for damages, is relevant. The Court of Justice of the European Union has ruled that Facebook can be ordered to remove defamatory content globally, indicating the growing responsibility of platforms. There are also domestic examples where defamation on Facebook was punishable by fines or damages. Of course, there are also cases where defamation charges have been dropped. Each case is specific and depends on the evidence.
Civil proceedings for damages are often a more effective way to obtain real material and moral satisfaction from the victim of defamation. This is because it is primarily aimed at compensating for the damage suffered, and not only at punishing the offender, as is the case in criminal proceedings. Although it is possible to make a civil claim in criminal proceedings, courts often refer to litigation in order to determine the amount of damage in detail. Therefore, victims should be advised to consider filing a civil lawsuit. They can do so even if the criminal proceedings are ongoing or have already been completed, in order to obtain full compensation.
Determining the amount of fair monetary compensation for injury to honor and reputation is a very subtle process. It depends largely on the case law and the specific circumstances of each individual case. There is no fixed “tariff” for mental anguish caused by defamation. The court assesses each case on a case-by-case basis. Factors such as the victim’s reputation before committing defamation, the reach of defamatory statements, and the specific consequences on the victim’s personal and professional life play a major role. This makes it difficult to predict in advance with great certainty the exact amount of compensation that could be awarded.
8. Reporting defamation to social networks and their obligations
In addition to judicial mechanisms, defamatory content can also be reported directly through social networks. Most popular platforms have built-in mechanisms for reporting inappropriate content.
Generally, when signing up, platforms will ask the user to specify the reason for signing up. It is often necessary to provide additional information or clarifications. It is advisable to attach a screenshot of the disputed content as evidence with the report.
The European Union has adopted the Digital Services Act (DSA). This act imposes new, stricter obligations on online platforms operating in the EU. The main objective of DSA is to prevent illegal and harmful activities on the internet. This includes the spread of disinformation. The aim is also to ensure greater security for users and the protection of their fundamental rights.
The platforms’ key obligations under the DSA, relevant to defamation cases, include:
The Digital Services Act (DSA) represents a significant step forward. It leads to greater accountability of online platforms for the content they host. For victims of defamation, this potentially means easier and faster removal of the material in question. It can also make it easier to sanction offenders at the level of the platform itself, regardless of lengthy court proceedings. Prior to the DSA, platforms often invoked “neutral broker” status. By doing so, they limited their liability for user-generated content. The DSA is changing that paradigm. It imposes specific due diligence and action obligations. For victims of defamation, this means that platforms now have a stronger incentive and a clearer legal obligation to react to notices of illegal content. Reporting defamation directly to the platform, invoking the provisions of the DSA, can become a faster and more effective first step to remove content. This, of course, does not replace the possibility of filing a defamation action for damages or prosecution through a court.
Despite the new obligations imposed by the DSA, the effectiveness of reporting to platforms will still depend on several factors. The quality of the application itself is extremely important. Notices must be clear, supported by evidence and with a precise explanation of why certain content is considered defamatory or otherwise illegal. The internal processes of application processing platforms also play a role, as does their actual willingness to collaborate, which can vary. The platforms receive a huge number of applications every day. Their automated systems and human moderators can go wrong or be overloaded. It is important to know that the DSA also provides mechanisms to challenge the decisions that platforms make on content moderation. This provides an additional level of protection for users.
Conclusion
Defamation, especially that spread through social media, can have devastating consequences for an individual’s honor and reputation. It is important to remember that you are not helpless. Croatian legislation provides protection mechanisms. It is crucial to understand the legal definition of defamation and the elements that need to be proven. There is a possibility of filing a private action for defamation in criminal proceedings. It is also possible to initiate a civil lawsuit for compensation for the damage suffered.
Do not forget the importance of respecting the legal deadlines for filing a lawsuit. Gathering evidence quickly and correctly is crucial in the online environment. Defamation on social media is not a trivial matter. It constitutes a serious violation of your rights. New tools, such as the EU’s Digital Services Act, further strengthen platforms’ obligations to tackle illegal content.
We encourage you not to ignore defamatory attacks. Actively seek protection of your rights. This blog is for informational purposes only and does not constitute legal advice. Each defamation case is unique and requires individual analysis. Therefore, it is crucial to seek the help of a qualified lawyer for specific situations. A lawyer can assess your case, advise you on the best legal steps, and represent you in the process.
In case you need a defamation lawyer, please contact us at:
Contracts in Croatia are primarily regulated by the Civil Obligations Act. This is the basic regulation for all contractual relationships. It is important to point out: only lawyers are authorised to provide legal services. These services include contract review, for which a contract review lawyer specializes. In this blog we will explain what exactly such an overview is. We will also explain how it is done. Learn more about protecting your interests before signing.
The process begins with a thorough reading of the entire contract. Each item is carefully analyzed. In doing so, the lawyer marks all potential deficiencies. Ambiguities in the text are also identified. Particular attention is paid to contentious legal issues. The goal is to create a clear picture of all risks. This initial review of the contract is the basis for further steps. Your contract review lawyer will ensure that nothing is overlooked.
The initial analysis is followed by communication with the client. The lawyer presents in detail all the problems observed. All marked topics and ambiguities are openly discussed. The client then presents his priorities and business goals. Through this conversation, the lawyer and the client jointly determine the strategy. Key elements for the follow-up are defined. Effective communication is crucial here. A thorough review of the contract also includes an understanding of the client’s needs.
All identified contentious legal issues require a deeper analysis. The lawyer checks them through the available case law. The relevant laws and regulations are also studied in detail. Professional legal literature is also used. This is important for the interpretation of complex provisions. The aim is to ensure that the review of the contract is based on sound legal arguments. Hiring a contract lawyer ensures access to these resources and expertise. This step is crucial for a quality review of the contract.
After a comprehensive examination and consultation, the final report is made. This document summarizes all the important items. In it, the contract review lawyer gives clear recommendations. If necessary, specific proposals for amendments to the contract shall be attached. Once the contract has been reviewed , the client often signs the contract immediately. He feels safer. In other situations, the client asks the lawyer to get in touch with the opposing party. Then the lawyer negotiates the controversial points. The goal is to achieve the best possible conditions.
In conclusion, reviewing the contract by a lawyer is not a cost, but an investment. This is a crucial step for legal certainty. Only a qualified contract review lawyer can guarantee that the contract is complete. It also ensures that the contract is accurate and complies with applicable laws. Do not sign anything before the professional check. Your rights are important. Protect your interests in time.
1. What is a partnership agreement according to the Croatian Civil Obligations Act?
A partnership agreement, according to the Civil Obligations Act, is defined as an agreement by which two or more persons (partners) undertake to act jointly in order to achieve a certain economic goal, and each of them contributes with a role, work or otherwise, and shares profits and losses (Civil Obligations Act, Article 698). A partnership agreement does not create legal personality, but it is a contractual relationship between partners. Partnerships are often used in construction projects when multiple partners want to develop and build a property together, and each of them contributes different resources or knowledge.
2. Construction contract – basic definition
A construction contract, according to the Civil Obligations Act, Article 606, is a contract by which the contractor undertakes to perform certain construction works on the land or building for the client, and the client undertakes to pay the agreed price. In the context of a partnership agreement, a construction contract can be one of the fundamental contracts that governs the relations between partners, especially when one of the partners takes on the role of contractor.
3. The five most important clauses in a construction partnership agreement
a) Defining the roles of the partnersThe key clause of any partnership agreement is the precise definition of the roles of each partner. For example, one partner can bring in the land, another can provide financing, and a third can take over the execution of construction work. According to Article 699. of the Civil Obligations Act, each partner must clearly know his contribution and rights. This clause prevents misunderstandings and makes it easier to resolve any disputes.
b) Share in profit and lossThe partnership agreement must contain provisions on the distribution of profit and loss. According to Article 701. Unless otherwise agreed, the shares are determined according to the value of the stakes. A clear definition of these shares is crucial for the transparency and fairness of the relationship between partners.
c) Management and decision-makingIn the partnership agreement, it is necessary to regulate in detail the manner of project management and decision-making. It is recommended to define who has the right to represent the partnership, how key decisions are made (e.g. by majority vote or unanimity) and how disagreements are resolved. This clause protects the project from downtime and ensures efficient management.
d) Exit of partners and transfer of sharesIt is important to provide for the possibility of a partner leaving the partnership, as well as the conditions under which the share can be transferred to third parties. According to Article 703. of the Civil Obligations Act, the transfer of shares is possible only with the consent of the other partners, unless otherwise agreed. This clause protects other partners from unwanted partners.
e) Dispute resolutionA partnership agreement should contain a clause on how disputes are to be resolved, for example by arbitration or court. It is also recommended to define the competent court or arbitration body, as well as the applicable law. This clause speeds up the resolution of potential disputes and reduces the cost of litigation.
4. The special importance of defining the roles of the partners
The role of each partner must be clearly defined in the partnership agreement. For example, if one partner gives land, it is necessary to precisely describe the property, the method of transfer of rights and possible conditions. If the other partner finances the project, the contract must contain details of the amounts, deadlines and method of reimbursement. The third partner, who performs the work, must have clearly defined obligations, quality standards and deadlines. A clear division of roles reduces the risk of misunderstandings and ensures the success of the project.
5. Tax Implications of a Partnership Agreement in Construction
A partnership agreement in construction has significant tax implications. According to the Income Tax Act and the Corporate Income Tax Act, each partner taxes his share of the profit according to his or her own tax status. If the partnership makes a profit from the sale of real estate, each partner declares his share. Also, the transfer of land or other rights may be subject to real estate transfer tax or VAT, depending on the status of the partners and the type of real estate. It is recommended to consult a tax advisor before concluding a partnership agreement in order to avoid undesirable tax consequences.
Conclusion
A partnership agreement is the foundation of successful cooperation in construction projects. A properly drafted partnership agreement, with clearly defined roles, shares, management and dispute resolution, is crucial for the safety of all partners. Special attention should be paid to the tax aspects of the partnership agreement, in order to avoid unforeseen obligations.
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A personal data breach happens every day. In today’s digital age, personal data has become an extremely valuable asset, but at the same time the target of numerous threats. From financial information to private communications, our data is constantly collected, processed and stored. The European Union’s General Data Protection Regulation (GDPR) lays the foundation for protecting this data, but understanding the risks and protection mechanisms is crucial for every individual and organization. This blog aims to shed light on how the security of personal data can be compromised, what the methods of the breach are, how we can protect ourselves and who is responsible and what remedies are available in the event that a breach does occur.
I. Introduction: Risks lurk – How is the security of personal data compromised and what are the methods of breach?
The security of personal data is constantly being tested in the digital environment. Understanding how data can be compromised and the methods used by attackers is the first step towards effective protection.
A. Ways of compromising the security of personal data
Personal information can be compromised in a variety of ways, reaching far beyond sophisticated hacking attacks. Often these are the consequences of human errors, technical defects or even natural events. Data security can be compromised through hardware, software, communication channels, or even physical documents.
Specific examples of threats include:
The General Data Protection Regulation (GDPR) requires controllers and processors to assess the risks associated with processing, such as accidental or unlawful destruction, loss, alteration, and unauthorized disclosure of or access to personal data. It is important to understand that threats can be both intentional, such as targeted attacks, and accidental, resulting from day-to-day operations or the human factor within the organization. Therefore, the security of personal data is not compromised solely by external malicious actors; Internal omissions, coincidences, or inadequate handling of data pose an equally significant risk. It follows from this that a comprehensive data protection strategy must address multiple threat vectors, including technical, physical and human aspects, as data resides on different media and is processed through different channels.
B. Methods of personal data breach
Attackers use a variety of methods to get their hands on personal information. These methods are becoming more sophisticated and often target the human factor as the weakest link in the security chain.
Given the increasingly sophisticated methods of attack that often target human inattention or ignorance, it is becoming clear that technical measures alone are not enough. Continuous education and awareness raising of all users is needed. GDPR principles such as “integrity and confidentiality” and the requirement to implement “appropriate technical and organizational measures” are not static obligations. They imply the need for a dynamic response to constantly evolving threats. Organizations must continuously assess new attack methods and adapt their defense strategies, taking into account the “latest developments” in data protection technology and practices. GDPR compliance is therefore not a one-time project, but an ongoing process of vigilance and adaptation.
II. Shield in the Digital Arena: Personal Data Protection Measures from the Individual to the Corporation
The protection of personal data requires a multi-layered approach that includes compliance with the basic principles of the GDPR and the application of specific measures tailored to different entities – from individuals to large corporations.
A. General measures and basic principles of data protection under the GDPR
The GDPR sets out seven key principles that must guide any processing of personal data:
In addition to these principles, the GDPR emphasizes the importance of technical data protection and privacy by design and by default. This means that safeguards, such as reducing the amount of data processed, pseudonymisation (processing data in such a way that it can no longer be attributed to a specific data subject without using additional information) or encryption (data encryption), should be built into systems and processes from the outset, rather than added afterwards.
It is important to note that the GDPR does not prescribe an exact list of technical measures that must be applied. Instead, the Regulation sets out a risk-based framework, requiring organizations to assess and implement “appropriate” safeguards themselves. This flexibility allows for adaptation to specific circumstances, but at the same time places a greater burden of responsibility on controllers to make informed decisions about what is “appropriate” for their situation, taking into account the nature of the data, the scope of the processing, the potential risks and the costs of enforcement. The principle of “data minimization” is not just a technical recommendation, but a strategic approach that fundamentally reduces the potential “attack surface” and potential damage in the event of a breach. Simply put, less data collected and stored means less risk.
B. How an individual should protect their data (Practical tips)
While the GDPR imposes obligations on organizations, individuals also have a key role to play in protecting their own data. Active and informed participation in one’s own digital security is crucial. Here are some practical tips:
All these tips indicate that the protection of personal data is not a passive expectation that others will take care of our security. Citizens must be aware of their rights and be vigilant to prevent their data from being misused. In this context, digital literacy, which involves understanding online risks and applying safeguards, is becoming a fundamental skill of the modern age, just as important as traditional literacy. The GDPR empowers individuals with rights, but effective self-protection depends on their ability to understand and navigate the digital environment.
C. How a small business should protect the data it processes (Key Strategies)
Small and medium-sized enterprises (SMEs) often have limited resources, but this does not diminish their obligation to protect the personal data they process. The key to success lies in a pragmatic approach that combines basic but consistently applied technical measures with strong employee awareness and responsibility.
The GDPR’s scalability in terms of “appropriate measures” means that small businesses are not expected to have the same level of sophistication as large corporations. Measures should be proportionate to the risk, the nature of the data and the resources available. The focus is on the application of the basic principles of protection and responsibility, and not on blindly copying the practices of large systems. Often, employee motivation, good planning and consistency in the application of basic measures are more crucial than expensive technical solutions.
D. How a Large Corporation Should Protect Data (Comprehensive Approach)
Large corporations, given the amount and sensitivity of the data they process, as well as the number of employees, must implement a comprehensive and formalized personal data protection management system. This goes beyond the mere implementation of technical measures and includes management processes, the assignment of specific responsibilities and proactive risk assessment.
The principle of “accountability” for large corporations means not only achieving compliance with the GDPR, but also the ability to continuously prove this compliance through comprehensive documentation, clearly defined policies and procedures, and regular audits. This implies the establishment of a permanent cycle of planning, implementation, verification and action (PDCA) in the field of personal data protection.
III. Who bears responsibility? Clarification of roles in the event of a personal data breach
When a personal data breach occurs, it is crucial to determine who is liable. The GDPR sets out a clear framework of responsibility for the various actors involved in data processing.
A. General responsibility of the controller and processor under the GDPR
The GDPR distinguishes between two key roles in the processing of personal data: the controller and the processor.
The primary responsibility for compliance with the GDPR and for damages resulting from a violation of the Regulation lies with the controller. It must ensure and be able to demonstrate that the processing is carried out in accordance with the Regulation. A processor is only liable for damage caused by processing if it has not complied with the obligations of the GDPR that are specifically addressed to processors or if it has acted outside or contrary to the lawful instructions of the controller. If more than one controller or processor, or both the controller and the processor, are involved in the same processing and are liable for the damage, each of them shall be considered jointly and severally liable for the entire damage in order to ensure effective compensation to the data subject.
This clear chain of responsibility, with the primary burden on the controller, encourages organizations to choose their processors very carefully and to clearly define data protection obligations in contracts. The controller’s omissions can ultimately be attributed to the controller.
In the context of accountability, the role of the Data Protection Officer (DPO) is also important. The DPO, if appointed, reports directly to the organisation’s top management level and must not receive any instructions from the controller or processor regarding the performance of his tasks. This independence and direct line of responsibility signals that the GDPR treats data protection as a strategic management issue and not solely as an operational IT task, giving the DPO the authority needed for effective oversight and advice.
B. Example: What if a large enterprise experiences a data leak or uses it without authorization?
Data leakage or unauthorized use by a large enterprise can have far-reaching consequences. For affected individuals, this can mean material damage (e.g. financial loss) and non-material damage (e.g. identity theft, discrimination, reputational damage, loss of confidentiality of personal data protected by trade secrets).
Large businesses that violate the GDPR can face extremely high fines. Examples include a €22 million fine imposed on British Airways for leaking the data of more than 400,000 customers, or a €1.24 million fine on the German health insurance company AOK for failing to take appropriate technical and organizational measures.
In the event of a personal data breach, the controller is obliged to notify the competent supervisory authority (in Croatia, the Personal Data Protection Agency – AZOP) without undue delay, and preferably no later than 72 hours after becoming aware of the breach. If the infringement is likely to cause a high risk to the rights and freedoms of individuals, the controller must also inform those individuals without undue delay.
A data leak in a large enterprise is not just a technical incident; It is a cascading crisis involving legal, financial, reputational and operational consequences. Therefore, it is crucial to have a predefined plan for action in case of violations and to continuously educate employees about their roles and responsibilities. While supervisors may take into account mitigating circumstances when determining the level of the fine (e.g. the economic impact of the COVID-19 pandemic on the reduction of fines for British Airways and Marriott), fundamental failures in the application of appropriate technical and organisational measures remain a key factor for sanctioning.
C. Example: What if the government does not ensure the security of personal data?
The state and public authorities are also subject to the provisions of the GDPR when processing personal data of citizens. This includes the obligation to appoint a DPO for most public authorities. Member States have the possibility to introduce additional conditions and restrictions within national law for the processing of special categories of personal data, such as genetic, biometric or health data, but always within the framework of the GDPR.
When state authorities keep personal data, they must respect the principle of storage limitation, even when there are legal regulations on the preservation of archival records. This means that the data may not be kept longer than necessary for the purpose for which they were collected, unless otherwise prescribed by a special law for archival purposes.
The state has a dual role: as a controller for the data it collects and processes itself (e.g. in the systems of tax administration, healthcare, justice) and as a legislator who can further specify data protection rules at the national level, always respecting the primacy of the GDPR. Furthermore, the state’s obligation to ensure the security of personal data extends to protection against requests from third countries for access to data that are not in accordance with EU law. Judgments of courts or decisions of administrative authorities of third countries ordering the transfer or disclosure of personal data are not enforceable within the EU, unless they are based on international agreements, such as mutual legal assistance treaties. This underlines the principle of data sovereignty within the European legal space.
D. Example: What if an individual breaches someone else’s personal information?
The GDPR primarily regulates controllers and processors, but it also protects individuals from malicious actions by other individuals. The misuse of other people’s personal data may occur for the purpose of causing damage (e.g. injury to reputation and honor, violation of privacy), committing fraud or obtaining an unlawful benefit, for example by concluding false contracts in someone else’s name.
Identity theft is one of the most serious forms of such abuse and is a criminal offense. Examples include opening fake social media profiles with other people’s information and posting inappropriate content, or using other people’s information to enter into contracts with teleoperators. An individual who commits such an act may also be liable for civil liability for damages to the injured person, as well as criminal liability.
Persons whose data has been misused have rights under the GDPR, such as the right to delete or rectify the data they can obtain against organizations that may have enabled this misuse (e.g. failed to adequately protect the data stored on their servers). Digital violence involving the misuse of personal data, such as the creation of fake profiles, is a modern form of violation of privacy and honour with potentially severe psychological and social consequences for victims. This emphasizes the importance of education about responsible behavior in the digital world and the consequences of misuse of other people’s data.
IV. Your rights and legal protection: Steps after a personal data breach
If you suspect that your personal data has been breached or that your data is being processed unlawfully, the GDPR provides you with a number of rights and redress mechanisms.
A. Application to the Personal Data Protection Agency (AZOP)
As mentioned earlier, controllers are obliged to notify the AZOP of a personal data breach within 72 hours of becoming aware of it, unless the breach is likely to cause a risk to the rights and freedoms of individuals. The notification to the AZOP should contain a description of the nature of the breach, the categories and approximate number of affected data subjects and data records, contact details of the data protection officer, a description of the likely consequences of the breach, and a description of the measures taken or proposed to address the breach.
Individuals who believe that their rights to the protection of personal data have been violated may submit a request for a determination of the violation of rights to the AZOP. The request can be submitted in person (orally on the record), in writing to the address of the Agency, via the online form on the AZOP website, by e-mail or fax. The request must be comprehensible and complete and contain the applicant’s personal data (name, surname, OIB, address), a detailed description of the violation, evidence supporting the allegations (e.g. copies of documents, correspondence) and information on whether the controller has been previously contacted.30 The AZOP advises that before submitting a request to the Agency, an attempt should be made to exercise the right by contacting the controller directly.
The AZOP has broad powers, which include:
The AZOP acts as a key mechanism for the implementation of the GDPR in Croatia, not only by reactively resolving reports, but also proactively through supervision and consulting. The short deadline of 72 hours for reporting a breach by a controller puts significant pressure on organizations to have in place fast and effective internal procedures for detection, risk assessment and incident reporting, thereby underscoring the critical importance of continuous preparedness.
B. Possibility of court actions
According to Article 82 of the GDPR, any person who has suffered material or non-material damage as a result of an infringement of this Regulation is entitled to compensation from the controller or processor for the damage suffered.
Examples of non-material harm may include fear of possible future misuse of personal data, loss of control over the data, or emotional harm suffered, provided that such harm is real and provable. The case law of the Court of Justice of the European Union (CJEU), for example in Case C-340/21, confirmed that fear of future misuse of personal data may constitute non-material damage giving rise to a right to compensation, provided that the data subject proves that this fear is well-founded in the light of the circumstances of the case and that he or she has suffered real and certain emotional damage. It is important to note that the GDPR does not set a threshold for the seriousness of the damage that would have to be reached in order to exercise the right to compensation, but proving the existence of actual harm is crucial for the success of the claim.
Court proceedings for the exercise of the right to compensation are conducted before the courts having jurisdiction under the law of a Member State. No appeal is allowed against the decision of the AZOP, but the lawsuit may initiate an administrative dispute before the competent administrative court. This possibility of judicial review of AZOP decisions provides an additional level of legal control and protection of rights for both data subjects and controllers, thus strengthening the rule of law in the field of data protection.
Data subjects shall also have the right to object to the taking of decisions based solely on automated processing, including profiling, where such decisions produce legal effects concerning them or similarly significantly affect them, unless the decision is necessary for the conclusion or performance of a contract, permitted by Union or Member State law, or is based on the data subject’s explicit consent. In these cases, the data subject has the right to request human intervention, express his/her point of view and contest the decision.
The right to compensation for non-pecuniary damage, which also includes the “fear of possible future misuse” of personal data, significantly expands the scope of liability of the controller and processor. This can potentially lead to an increase in the number and value of claims, making the prevention of personal data breaches an even more critical component of business and risk management.
V. Conclusion
The protection of personal data in an increasingly complex digital world is a continuous challenge, but also an imperative for all stakeholders – individuals, companies and state bodies. As this review has shown, the risks of personal data breaches are many and varied, and attack methods are becoming increasingly sophisticated, often targeting the human factor as the weakest link.
The General Data Protection Regulation (GDPR) provides a strong legal framework and sets clear principles for data processing and protection. However, the Regulation alone is not sufficient if it is not implemented consistently and if there is not a high level of awareness of the importance of privacy. The responsibility lies with everyone:
Legal protection mechanisms, from reporting to a supervisory authority such as the AZOP to the possibility of lawsuits for damages, ensure that the rights of data subjects can be exercised and those responsible for violations can be sanctioned.
Ultimately, the protection of personal data is not a one-time task, but a continuous process that requires cooperation, accountability, constant learning and adaptation to new threats and technologies. Only through joint engagement and respect for fundamental privacy principles can we hope for a safer digital environment for all. Continuous education and caution remain the best prevention in a world where our personal data is constantly exposed.
In case you need a personal data protection lawyer, please contact us at: info@odvjetnik-bistrovic.hr
Bankruptcy proceedings are often seen as complex and lengthy. Their main goal is the collective debt collection for all creditors of the bankrupt debtor. However, not all creditors are in the same position within this system. Some have special rights giving them priority in collection. Among these, secured creditors with a right of separate debt collection particularly stand out. But what makes this specific entitlement so important in the storm of bankruptcy? Understanding this concept is crucial for all participants.
The right of separate debt collection is defined as a creditor’s right to separate settlement. This settlement arises from the value of a specific asset of the bankrupt debtor. Their specific right exists on this asset. This right gives the creditor a significantly stronger position in bankruptcy proceedings. A secured creditor with this right is a person with a lien or similar settlement right. This right must be registered in a public register, such as a land register or ship register.
The term also includes creditors whose liens are not registered, but under certain conditions. This includes fiduciary creditors and those with a right of retention. An asset subject to a right of separate debt collection is formally part of the bankruptcy estate. However, this asset is encumbered by the right of a third party, the secured creditor. This means the asset is not freely available to collect debts for all creditors equally. This specific right ensures the creditor’s claim is settled before others. Settlement is made from the value of the specific collateral.
This position of secured creditors creates a certain hierarchy within bankruptcy proceedings. Although bankruptcy aims for collective settlement, the right of separate debt collection deviates from equal treatment for all creditors. The law thereby recognizes and protects stronger rights acquired before bankruptcy. This is crucial for the credit market and legal certainty. Furthermore, transparency and enforceability of many forms of this right are linked to public registers. Registration is fundamental to protecting these rights. Losing this settlement advantage is possible. This occurs if it’s unregistered and the trustee didn’t know, or shouldn’t have known, about it.
The primary regulation governing the right of separate debt collection in Croatia is the Bankruptcy Act (SZ). This act details the rights and obligations of secured creditors. It also defines the procedure for liquidating assets encumbered by these rights. Several key articles of the SZ are fundamental to understanding this concept. Article 149 of the SZ defines secured creditors whose rights are registered in public books. Article 150 of the SZ regulates the position of fiduciary secured creditors. They also have this status.
Other lienholders, whose rights may not be registered, are covered in Article 151 of the SZ. Article 152 of the SZ equates certain creditors, like those with a right of retention, with secured creditors. Articles 247 to 256 of the SZ are particularly important. They detail the procedure for liquidating assets subject to such a right. This detailed regulation indicates the legislator’s awareness of the need to balance interests. The interests of secured creditors and the general bankruptcy estate are balanced.
In practice, we encounter various examples of such secured rights. The best-known example is a mortgage. This is a lien on real estate. A bank that granted a housing loan secured by a mortgage is a typical secured creditor. Liens can also exist on movable property. Examples include machinery or vehicles, if the right is registered or the item is delivered to the creditor. Fiduciary transfer of ownership for security is another form. The creditor formally becomes the owner, but only to secure the claim. Rights to settlement can also exist on other rights registered in public books. This includes ships, aircraft, or intellectual property. Judicial and notarial security for claims can also create a right of separate debt collection. The wide range of securities leading to this status shows system flexibility.
The key right arising from this institute is the right to separate (distinct) settlement. A secured creditor’s debt is collected from the value of the asset on which they have their specific secured claim. This occurs before other bankruptcy creditors’ debts are collected. This right includes settlement of the principal, accrued interest, and procedural costs. The secured creditor also has the right to demand liquidation of the asset serving as security for their claim.
The Bankruptcy Act also protects secured creditors in other ways. The bankruptcy trustee must provide information upon the secured creditor’s request. This information concerns the condition of movable property or claims the creditor can liquidate. Before the trustee disposes of an asset subject to this right, they must notify the secured creditor. The creditor can then suggest a more favorable liquidation method. If the trustee unduly delays liquidation, the secured creditor may be entitled to interest. This interest is paid from the bankruptcy estate under certain conditions.
Secured creditors also have certain obligations. They must inform the bankruptcy trustee about their specific entitlement. They must state the legal basis and the part of the assets the right pertains to. To collect an unsecured portion from the general estate, they must file a claim. This is like other bankruptcy creditors. It is important to note that secured creditors’ rights are not absolute. They can be limited by a restructuring plan. However, creditors must not be placed in a worse position than if there were no plan. Their rights are not merely passive. They include active elements like demanding liquidation.
The settlement procedure for secured creditors is specific and follows established rules. The bankruptcy trustee is primarily responsible for liquidating assets encumbered by a right of separate debt collection. An exception exists if the secured creditor initiated enforcement proceedings before bankruptcy. Liquidation methods depend on the asset type. Real estate, ships, and aircraft are sold via electronic public auction. The Financial Agency (FINA) conducts the auction. Enforcement procedure rules apply, with certain specifics. An example is minimum auction prices.
Movable property and rights can be liquidated in various ways. This includes electronic public auction, public tender, or direct agreement. The bankruptcy trustee decides, sometimes with court approval. Upon opening bankruptcy proceedings, enforcement actions initiated by secured creditors are generally suspended. The bankruptcy court then takes over the sale. If real estate enforcement has already begun, it may continue in that proceeding. A centralized liquidation process aims for efficiency but carries risks, like lower prices.
The order of settlement from the realized amount (proceeds) is strictly defined. First, costs of identifying the asset subject to the secured right are covered. Then, its liquidation costs are paid. A lump sum is often charged for these costs. This might be 10% of proceeds, or actual costs per Article 254 SZ. Only then is the secured creditor’s claim settled, including principal, interest, and costs. If multiple secured creditors exist on the same asset, they are settled by priority. Any surplus funds enter the general bankruptcy estate.
What if the sale price doesn’t cover the entire claim? If the debtor is personally liable, the secured creditor becomes an ordinary creditor for the unsecured part. Their debt is then collected from the general bankruptcy estate, proportionally with other bankruptcy creditors. This is an important “safety net,” but it depends on the debtor’s personal liability.
Assets encumbered by such a right are formally considered part of the debtor’s bankruptcy estate. However, the key difference is that these assets are not fully available to collect debts for all bankruptcy creditors equally. This specific entitlement directly reduces the bankruptcy estate available for creditors of lower priority. The amount paid to the secured creditor leaves the asset pool. This pool would otherwise be shared among all creditors.
Only surplus after full settlement of the secured creditor, including costs, enters the general estate. If no surplus exists, or it’s negligible, other unsecured creditors get nothing from that asset’s value. This has significant implications for all participants in the bankruptcy proceedings. For the debtor, significant secured rights reduce assets. These assets could be for a plan or settling unsecured debts. For other, unsecured creditors, any such right on the debtor’s assets reduces their chances of settlement. It practically “reserves” part of the assets exclusively for secured creditors. Thus, unsecured creditors also want encumbered assets liquidated at the best price. The bankruptcy trustee, on the other hand, must carefully consider all existing secured entitlements. Their duty is to correctly conduct liquidation and subsequent distribution of funds to avoid personal liability. This specific right of separate debt collection is thus a legal mechanism. It balances protecting secured claims (vital for credit markets) with equal creditor treatment in bankruptcy. Proper understanding of this concept and its consequences is essential for navigating complex bankruptcy proceedings. Transparency about these rights (e.g., via a public table) is crucial for all creditors.
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In today’s digital age, online shopping has become an indispensable part of our daily lives. This modern way of buying brings numerous advantages. However, it simultaneously opens up space for potential risks and unfair practices. Therefore, it is of utmost importance that consumers are aware of their rights. They should also know the legal mechanisms available to them in case of fraud or abuse in the online environment. This professional legal article aims to provide a comprehensive overview of consumer protection in online shopping in the Republic of Croatia. Consumer protection in online shopping is crucial for trust in the digital marketplace.
According to Croatian legislation, primarily the Consumer Protection Act, a consumer is defined as any natural person who enters into a legal transaction on the market for purposes that are not intended for their business activity or the pursuit of a liberal profession. This definition emphasizes several key elements. First, to be considered a consumer, it must be a natural person. This excludes legal entities such as commercial companies and associations when acting within their business activities. Second, the legal transaction or activity on the market must be outside the scope of that person as a trader, craftsman, or professional. Thus, the purpose of the purchase or action is what determines consumer status. Consumer protection in online shopping ensures that this definition applies to the digital environment as well.
Consumers in Croatia are protected by a series of laws. These laws regulate various aspects of trade, including online commerce. The fundamental law in this area is certainly the Consumer Protection Act. In addition to it, the Electronic Commerce Act plays a significant role. This act regulates the provision of information society services and rules related to concluding contracts in electronic form. The Obligations Act is also important. It regulates contractual relations and liability for material defects. Furthermore, consumers are protected by the General Product Safety Act, the Unfair Advertising Act, the Consumer Credit Act, and the Credit Institutions Act. Croatian legislation in the field of consumer protection is fully harmonized with the acquis communautaire of the European Union. This means that Croatian consumers enjoy standards of protection that are in force throughout the European Union. Consumer protection in online shopping in Croatia is at a high level thanks to this harmonization.
To protect consumers from fraud and abuse in online shopping, several legal mechanisms are available to them. One of the fundamental mechanisms is the right to information. Before concluding a distance contract, traders are obliged to provide clear and easily understandable information. This includes the main characteristics of the products, their name and registered office, the total price including taxes and delivery costs, payment and delivery conditions, as well as the right to unilateral termination of the contract. The consumer has the right to unilaterally terminate the contract concluded at a distance within 14 days without stating a reason. This period begins to run from the day the product is delivered to the consumer. If the trader has not properly informed the consumer about this right, the period is extended to 12 months. The trader is liable for material defects of the product that appear within two years from the date of delivery. In case of a defect, the consumer has the right to repair, replacement, price reduction, or termination of the contract. The law prohibits unfair business practices, protecting consumers from misleading and aggressive actions by traders. Consumer protection in online shopping ensures transparency and fairness in digital business.
If the goods ordered online are not delivered, the consumer has the right to a refund. If the trader does not deliver the goods within 30 days or within the agreed period, the consumer must remind them and give them an additional reasonable period for delivery. If delivery still does not occur, the consumer has the right to terminate the contract and demand a full refund of the paid amount. Banks usually resolve consumer complaints positively in cases of non-delivery of goods when a refund is requested via chargeback.
When goods with defects are delivered, the consumer has the right to complain about the product and demand repair, replacement, price reduction, or refund. If repair or replacement is not possible or not carried out within a reasonable time, the consumer can demand a refund. The trader is obliged to make a refund without delay, and no later than 14 days from the receipt of the notice of termination of the contract. Liability for material defects is also regulated by the Obligations Act. This act details the rights and obligations of the contracting parties in such situations. Consumer protection in online shopping guarantees a refund in justified cases.
When a consumer buys from an online store based abroad, their rights depend on whether the store is located within or outside the European Union. For purchases within the EU, EU consumer protection rules apply. This means that Croatian consumers have the same rights as when buying from domestic traders.
If the online trader is based outside the EU but targets consumers in the EU, EU rules should also apply. However, exercising these rights can be more complex. In such situations, the European Consumer Centre Croatia (ECC Croatia) can be very helpful. It provides free assistance and information to consumers for cross-border purchases within the EU, Norway, Iceland, and the United Kingdom. For resolving disputes with online traders within the EU, Norway, Iceland, Liechtenstein, or the United Kingdom, consumers can use the Online Dispute Resolution (ODR) platform. Consumer protection in online shopping also covers cross-border transactions.
Mechanisms exist to prevent unfair online traders from operating in Croatia. The State Inspectorate plays the main role in supervising the implementation of consumer protection laws, including in online commerce. The Inspectorate conducts inspections of web stores to determine whether traders comply with their obligations, such as providing pre-contractual information. Consumers can submit complaints to the State Inspectorate if they believe their rights have been violated. In addition, consumers have the option of initiating court proceedings against unfair traders. The Electronic Commerce Act allows the court to order temporary measures. These measures can include prohibiting actions that could lead to a violation of rights or restricting the provision of information society services, such as removing or disabling access to data. Although there is no direct mechanism for a complete ban on operations, continuous violations of the law and court proceedings can lead to such outcomes. Consumer protection in online shopping is actively enforced by the competent authorities.
In conclusion, consumer protection in online shopping is of utmost importance in today’s digital age. The Croatian legislative framework, harmonized with European directives, provides consumers with significant rights and protection mechanisms against fraud and abuse. It is important for consumers to be aware of their rights. They should also be informed before making a purchase. Consumers should not hesitate to use the available legal tools if problems arise. Only an informed and active consumer can contribute to creating a safe and reliable online marketplace.
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In the dynamic world of corporate business, company takeovers represent a significant aspect of growth strategies, market consolidation, and business restructuring in the Republic of Croatia. There are several ways in which a takeover can be achieved, and one of the more complex but often effective approaches is a takeover through recapitalization. This blog aims to provide a comprehensive understanding of company takeovers by recapitalization, explaining the key aspects and relevant legal guidelines within Croatian legislation.
Definition of Company Takeover in Croatia:
In the broadest sense, a company takeover signifies the acquisition of another company or a significant share in its capital, regardless of whether it is achieved by purchasing assets or equity. In a narrower sense, a takeover implies gaining control over a company by purchasing all of its assets or acquiring a majority stake in its capital. If all assets are purchased, the acquired company usually ceases operations and is legally liquidated.
When we talk about joint-stock companies, the key legal framework in Croatia is the Law on Takeovers of Joint Stock Companies. This law defines a “takeover bid” as a publicly announced offer, mandatory or voluntary, addressed to all shareholders of the target company for the acquisition of all their voting shares. The offer may also relate to preferred shares without voting rights.
The target company is defined as a joint-stock company with its registered office in the Republic of Croatia whose voting shares are listed on a regulated market in Croatia or in another member state of the European Economic Area (EEA), and are not listed in Croatia. Also, the target company can be a joint-stock company with its registered office in another EEA state whose voting shares are listed on a regulated market.
The purpose of a takeover is often to acquire a majority stake and control over the management of the target company. According to the Law on Takeovers of Joint Stock Companies, a mandatory takeover bid arises when a natural or legal person, independently or together with others, acquires voting shares of the target company and exceeds the threshold of 25% of the voting shares.
The takeover process involves an offer made by the bidder to the shareholders of the target company to purchase their shares. The offer must be clear and specify the consideration offered by the bidder in exchange for the shares. The consideration may be in cash, exchange shares, or a combination of both. It is important to note that mergers and acquisitions (M&A) are considered high-risk transactions, but with the potential for high returns. Unlike mergers, where one or more companies merge with another and no liquidation is carried out because the business continues to exist within the acquirer, a takeover may or may not lead to the cessation of the acquired company as a separate legal entity.
The legal framework specifically protects minority shareholders in takeover situations. The legal obligation to publish an offer to all shareholders when the 25% ownership threshold is crossed ensures that all shareholders have the opportunity to sell their shares at a fair price when a significant change in the control of the company occurs. This provision prevents so-called “creeping takeovers” and ensures transparency of the process. Furthermore, the definition of a target company that also includes those listed on stock exchanges of other EEA member states shows that Croatian takeover legislation has a cross-border reach, reflecting the interconnectedness of European capital markets and protecting domestic investors who hold shares in such companies.
Concept of Acquiring Control over the Target Company:
Acquiring control over the target company implies the ability to exert a decisive influence on the company’s decisions, which is most often achieved by holding the majority of voting rights (more than 50% of voting shares). However, the legislator has recognized that significant influence, which requires the protection of minority shareholders, is acquired by crossing the threshold of 25% of voting shares. Control can be exercised directly, by holding shares, or indirectly, through related companies or agreements with other shareholders. The law also takes into account situations where several persons act jointly in acquiring shares, in order to prevent the avoidance of the obligation to publish a takeover bid through coordinated action by several parties.
Company takeovers can be classified according to different criteria:
Definition of Recapitalization and Increase of Share Capital according to Croatian Legislation:
Recapitalization represents the process of increasing a company’s capital. This is often achieved by investing new funds or assets into the company. Legally speaking, this process is called an increase in the company’s share capital (dionički kapital or upisani kapital) .
The share capital of a joint-stock company must be expressed in the currency of the Republic of Croatia (currently EUR) and must not be less than the prescribed minimum amount. For example, the minimum share capital for a joint-stock company (d.d.) is EUR 25,000, and the nominal value of a share must not be less than EUR 1. For a limited liability company (d.o.o.), the minimum share capital is EUR 2,500, and the minimum nominal value of a business share is EUR 10.
An increase in share capital can be carried out in various ways, including new cash payments, the contribution of assets or rights, the conversion of debt into equity, or the capitalization of reserves .
The recent legal obligation to state share capital in EUR due to the introduction of the euro in Croatia requires all Croatian companies to align their registered capital, which potentially includes adjusting the nominal value of shares or business shares.
Purpose and Reasons for Conducting Recapitalization:
The primary purpose of recapitalization is to strengthen the financial base of the company . Common reasons for recapitalization include:
Definition and Explanation of Takeover by Recapitalization as a Combined Process:
A takeover by recapitalization is a process in which the acquirer increases its ownership stake and potentially gains control over the target company by subscribing for new shares in the target company. Instead of exclusively purchasing existing shares from existing shareholders, the acquirer invests new capital directly into the target company in exchange for newly created shares. This process simultaneously provides fresh capital for the target company and changes its ownership structure. This method can be particularly attractive when the target company needs capital for restructuring, growth, or overcoming financial difficulties .
This takeover method uniquely combines the transfer of ownership with an immediate strengthening of the target company’s financial position . It represents a strategic move by the acquirer not only to gain control but also to ensure that the target company has the resources needed for future success . Unlike a traditional takeover where funds primarily go to existing shareholders, a takeover by recapitalization directs capital directly into the target company’s treasury. This can be crucial for companies needing investment in operations, technology, or debt reduction. The acquirer’s investment provides the target company with the financial stability needed to implement strategic initiatives and potentially increase its value post-acquisition.
Purpose of Such a Takeover:
The main purpose of a takeover by recapitalization is to acquire a significant or majority ownership stake while simultaneously strengthening the financial position of the target company. The acquirer achieves its ownership goals, while the target company benefits from the inflow of capital.
Additional purposes include:
The use of recapitalization as a takeover mechanism in financially distressed companies highlights its importance in corporate restructuring and rescue scenarios, where the acquirer’s capital inflow is crucial for the survival and potential recovery of the target company. When a company faces insolvency or serious financial difficulties, a traditional acquisition may not be feasible or attractive due to the target company’s liabilities . Recapitalization offers a viable alternative by injecting fresh capital to improve the target company’s balance sheet and operational capabilities. This can be a mutually beneficial solution, allowing the struggling company to continue operating and providing the acquirer with an opportunity to gain a stake in a potentially undervalued asset with turnaround potential. Furthermore, the potential of recapitalization in strategic alliances suggests its role in fostering closer collaboration and long-term partnerships between companies, where capital investment signifies a deeper commitment and alignment of interests . When companies aim to establish a strong strategic alliance, investing capital through recapitalization can solidify the partnership. This not only provides the target company with financial resources but also aligns the economic interests of both parties, encouraging greater cooperation and potentially leading to synergies and mutual success.
Situations in which a Company Takeover by Recapitalization is Performed
A company takeover by recapitalization is usually carried out in the following situations:
The prevalence of recapitalization in financial restructurings underscores its role as a crucial tool for companies seeking to overcome financial distress and achieve long-term sustainability . When a company is burdened by debt or facing operational losses, recapitalization can provide the necessary capital to stabilize finances, repay creditors, and invest in future growth . This often involves negotiations with existing creditors and investors to agree on a restructuring plan that includes capital infusion .
Legal Framework Governing Takeovers of Joint Stock Companies:
The primary legal framework is the Law on Takeovers of Joint Stock Companies . This law regulates the conditions for making a takeover bid, the takeover procedure, the rights and obligations of participants in the takeover procedure, and the supervision of the takeover procedure by the Croatian Financial Services Supervisory Agency (HANFA) . Key provisions include the obligation to publicly announce a takeover bid when the acquirer reaches or exceeds 25% of the voting rights in the target joint-stock company . The law also prescribes the mandatory content of the takeover bid, the duration of the offer, the obligations of the target company’s management, and the protection of minority shareholders’ rights . It is important to note that there are certain exceptions to the obligation to publish a takeover bid under special conditions prescribed by law.
The detailed provisions within the Law on Takeovers of Joint Stock Companies demonstrate a strong commitment to ensuring fairness and transparency in the Croatian market for corporate control, particularly regarding the rights of minority shareholders . The comprehensive legal framework aims to prevent opportunistic behavior by acquirers and ensure that all shareholders are treated equally during the takeover process . The mandatory bid rule, disclosure requirements, and HANFA’s oversight are key elements in maintaining market integrity and investor confidence .
Legal Aspects of Increasing Share Capital:
The increase of share capital (recapitalization) is primarily regulated by the Law on Commercial Companies . This law prescribes various ways in which a company can increase its share capital, including new cash or non-cash contributions, capitalization of reserves, or debt conversion . The procedure usually requires a decision by the shareholders’ assembly (general meeting) defining the amount of the increase, the method of payment, and any amendments to the articles of association or the memorandum of association . In the case of joint-stock companies, the issuance of new shares as part of the recapitalization process is subject to special regulations, including the potential pre-emptive right of existing shareholders to subscribe for new shares . This right can be excluded under certain conditions with the approval of the shareholders’ assembly . Non-cash contributions (contribution of assets and rights) may require valuation by an independent appraiser, although there are exceptions under certain conditions . The decision to increase share capital must be registered in the court register to be legally valid.
The detailed procedures for increasing share capital outlined in the Law on Commercial Companies ensure a level of corporate governance and shareholder protection during capital raising activities, even when these activities are part of a takeover process . The legal requirements for shareholder approval, potential valuation of non-cash contributions, and registration with the commercial court are designed to ensure that decisions about increasing share capital are made transparently and with due regard to the interests of all stakeholders . These procedures help prevent the dilution of the value of existing shares without proper authorization and disclosure .
Obligations of the Bidder and the Target Company in the Takeover by Recapitalization Procedure:
The acquirer (bidder) must fulfill all obligations prescribed by the Law on Takeovers of Joint Stock Companies, including the potential obligation to launch a takeover bid if its stake exceeds the 25% threshold as a result of the recapitalization . It must also comply with the rules on disclosure of ownership and intentions.
The target company must follow the procedures for increasing share capital prescribed by the Law on Commercial Companies . This includes convening a shareholders’ assembly to approve the capital increase, issuing new shares to the acquirer, and registering the change with the commercial court.
The management of the target company has a fiduciary duty to act in the best interest of the company and all its shareholders throughout the takeover process, including assessing the terms of the recapitalization and its potential impact on the future of the company.
A takeover achieved through recapitalization requires a coordinated effort by the acquirer and the target company to comply with the requirements of both the Law on Takeovers of Joint Stock Companies and the Law on Commercial Companies, highlighting the complexity and the need for careful legal and strategic planning . The acquirer must ensure compliance with takeover regulations regarding thresholds and bid obligations, while the target company must adhere to the legal procedures for issuing new shares and increasing capital . This dual compliance requirement necessitates careful synchronization of actions and documentation to ensure a legally sound and successful transaction .
Protection of Shareholders’ Rights:
Minority shareholders in the target company are protected by the provisions of the Law on Takeovers of Joint Stock Companies, which may require the acquirer to make a takeover bid for their shares if the recapitalization results in the acquirer’s stake exceeding the 25% threshold . Shareholders have the right to receive sufficient information about the proposed recapitalization and its implications for the ownership structure and future prospects of the company in order to make informed decisions about voting at the shareholders’ assembly. The Law on Commercial Companies also provides for the protection of shareholders’ rights during capital increases, such as the potential pre-emptive right to subscribe for new shares (unless this right is legally waived) and the right to challenge decisions of the shareholders’ assembly under certain circumstances .
The legal framework in Croatia provides several layers of protection for minority shareholders in the context of a takeover by recapitalization, ensuring that they are not unfairly disadvantaged by the transaction . The mandatory bid rule ensures an exit opportunity for minority shareholders when a new controlling shareholder emerges . Disclosure requirements ensure transparency of the terms and implications of the transaction . Shareholders’ voting rights on the capital increase decision and potential pre-emptive rights offer additional ways for minority shareholders to protect their interests .
A takeover by recapitalization is a complex but sometimes necessary process in the corporate world. In the Republic of Croatia, this process is subject to strict legal frameworks encompassing both the Law on Takeovers of Joint Stock Companies and the Law on Commercial Companies. Understanding the key aspects of these laws, as well as the purpose and situations in which a takeover by recapitalization is carried out, is crucial for all participants in such transactions. This approach to takeovers can be particularly useful in restructuring financially distressed companies or establishing strategic partnerships, but it requires careful planning and compliance with all relevant legal regulations. Given the complexity of these transactions, it is recommended to seek professional legal and financial advice when considering or implementing a company takeover by recapitalization in Croatia.
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According to Croatian legislation, the blocking of the bank account of citizens or legal entities is carried out through the Financial Agency (FINA). Account blockades are provided on the basis of enforcement or other enforceable documents. There are several ways and procedures for deleting an account blockade through FINA, depending on the cause of the blocking and the type of claim. Below I list in detail all relevant laws, articles and procedures:
When the debt is paid in full (either by payment to Fina’s account, directly to the bailiff or from other sources), FINA must delete the account blockade. If FINA has not automatically recorded the payment, the debtor must submit a written proof of payment.
The bailiff may withdraw the proposal for enforcement. In this case, FINA must delete the account blockade ex officio.
The debtor has the right to file an objection or appeal against the decision on enforcement or against the out-of-court blocking of the account. If the court or a notary public revokes the writ of execution, FINA will lift the blockade ex officio.
In the event of the opening of bankruptcy, the blockade can be lifted according to special rules from the Bankruptcy Act and the Consumer Bankruptcy Act.
According to the Act on the Implementation of Enforcement of Funds, Articles 212-217, natural persons can open a protected account to receive income exempt from enforcement (e.g. social assistance, child allowance, scholarships). Fina then allows the withdrawal of these funds even though the account is blocked.
Case law
Courts regularly confirm that FINA must lift the blockade as soon as the legal conditions are met (e.g. Decision of the High Commercial Court Pž-1234/2018: “FINA is obliged to lift the blockade of the account immediately upon receipt of proof of debt settlement or decision on the cancellation of enforcement.”).
Conclusion
Deleting an account block through FINA can be done in the following ways:
– full settlement of the debt,
– by withdrawing the proposal for enforcement by the bailiff,
– a successful objection or appeal to enforcement,
– by opening bankruptcy,
– using a protected account for exempt income.
In case you need to delete an account blockade, please contact us at: