GERB MP Calls for Capping Fees of Bulgarian Private Enforcement Agents

According to statistics cited by GERB, 200 private enforcement agents collected BGN 81 M in fees for 2010. Photo by Sofia Photo Agency

Emil Radev, MP of center-right ruling party GERB and a member of the Parliamentary Legal Affairs Committee, has drawn attention to the fact that private enforcement agents in Bulgaria collected around BGN 81 M in fees for 2010.

In a Monday interview for Darik radio, Radev said that the statistics for 2011 had not been prepared yet.

Radev and his colleague Ivaylo Toshev suggested amendments to the Civil Procedure Code that would introduce a ceiling on fess collected by PEAs.

The GERB MPs explained that there were about 200 PEAs in Bulgaria.

To illustrate his point, Radev informed about a Sofia-based private enforcement agent who had charged BGN 800 000 for his services.

"When there is no ceiling, we face very brutal cases. For instance, in a case involving a debt of BGN 500 to a heating utility or a mobile operator, a PEA has the right to evaluate property of a debtor worth BGN 1 M and claim a fee of 1.5% of its value, or BGN 15 000," the GERB MP said.

Radev insisted that such practices were unacceptable because "since the introduction of private enforcement agents, a total of over 610 000 cases have been reviewed, which means 610 000 fates."

Radev insisted on greater transparency in sales of pledged property, saying that the property put up for sale ought to be announced on the websites of regional courts one month before the auction so that everybody would have the chance to check the information at any time and free of charge.

"At present, PEAs have to stick a notice in their offices and place another one at the municipality or the regional court. Experience shows that the notices go missing within an hour in cases concerning attractive pieces of property," Radev declared.

He insisted that greater publicity would entail the achievement of the real market value of the real estate.

"There are cases in which the price of the property that is being auctioned off drops to half of its real value. In such cases, the profit goes companies close to the PEAs. Apart from that, the situation injures the debtor because the property is sold twice cheaper, and the creditor because the money he gets from the sale do not suffice to satisfy his claim," Radev noted.

The GERB MP expressed optimism that the proposed changes would be approved at first reading in Parliament this week.

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