Clarifications of the Constitutional Court on the participation of representatives without law degree in commercial procedure

24 July 2020
Nikita Ballo
Junior Associate
Vladislav Korneychuk
The Constitutional Court and Supreme court continue to clarify the novels in procedural codes on professional judicial representatives. Recall that earlier, in June, the Supreme Court in the Review of Judicial Practice No. 1 dated 06/10/20201 indicated that the law degree requirements do not relate to representatives in bankruptcy cases. Recently, the Constitutional Court in its decision2 ruled that the interests of legal entities can be represented by employees, founders (shareholders) and other persons without a law degree.
In this case the executive director of the LLC (not CEO) was not allowed to participate in the hearing. The commercial court explained its refusal by the fact that the executive director is not a sole executive body, and also does not have a law degree or an academic degree in law, consequently, he does not have the authority to be representative of LLC.
The refusal of the commercial court served as the ground for consideration of this case in the Constitutional Court, which have evaluated the constitutionality of part 3 of art. 59, part 4 art. 61 and part 4 art. 63 Commercial Procedure Code (“CPC”).
The Constitutional Court ruled that part 3 of article 59, part 4 of article 61 and part 4 of article 63 CPC do not contradict the Russian Constitution and do not imply restrictions on the right of companies to authorize persons associated with it (in particular its founders (shareholders) or employees) who does not have a law degree or an academic degree in a legal specialty, but has the necessary knowledge and competence in a certain area (accounting, customs, finance, etc.). At the same time, the Constitutional Court made a very important conclusion that persons without legal education can only represent a company in conjunction with professional lawyers.
Important conclusions from the Constitutional Court’s decision:
1. It is not allowed to restrict the participating in the commercial procedure of persons without law degree and who are not authorized by the law, but have the empowerment from company and special knowledge in the relevant field, which is important for case (taxes, accounting, customs, etc.);
2. Such persons may participate in court hearings if legal entity is represented by professional lawyers in this case;
3. Participation of such persons who are employees or shareholders in a different procedural status (witness, specialist, expert) can violate the principal of independence and impartiality of such subjects.
The above conclusions are crucial, since there are quite many situations in legal practice where a person, who has an interest in the outcome of the case and who has necessary knowledge or information regarding the case, does not have a legal education.
2Decision No. 37-P of July 16, 2020