Month: June 2026

A customer isn't paying: Is it really worth going to court right away?

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Late payments in business are one of the most common problems faced today by service providers, contractors, manufacturers, and retailers alike. Some customers ask for a week, others for a month, and still others simply stop responding to emails and phone calls. In such situations, businesses often find themselves at a crossroads: should they wait patiently, try to reach an agreement, or go to court immediately?

Eimantas Čepas, an attorney at the AVOCAD law firm, notes that the biggest mistake is usually not taking legal action too quickly. On the contrary—businesses often delay taking any action, hoping that the situation will resolve itself. “It’s understandable that companies don’t want to damage their relationships with clients. However, in practice, we see that the longer a creditor waits, the weaker their negotiating position becomes. If a debtor has been failing to meet their obligations for several months, the likelihood that they will suddenly decide to pay up without any pressure is usually not very high,” says E. Čepas. According to the attorney, it is important to understand that debt collection does not begin in the courtroom, but much earlier—from the first signs that a client is beginning to fall behind on payments.

The first step is to file a clear and professional claim

Quite a few companies still believe that it is sufficient to send a reminder via email with the text “We would like to remind you of an unpaid invoice.” However, from a legal standpoint, such an email is often insufficient. A professionally drafted demand letter clearly states the basis for the debt, specifies the payment deadline, outlines the possible legal consequences, and demonstrates that the creditor is prepared to defend their rights. “A demand letter is not a mere formality. It shows that the situation has reached a stage where the creditor is actively defending their interests. In practice, many debts have been paid precisely after the debtor received a legally substantiated demand letter, because the debtor realized that further delay would only increase their costs,” notes E. Čepas, an attorney at AVOCAD. According to him, the demand letter also serves as important evidence if the dispute ultimately goes to court.

Not every debt is worth taking to court

Although going to court may seem to many like the only way to recover a debt, in practice it is not always the fastest or most cost-effective solution. If the debtor acknowledges the debt, communicates proactively, and presents a realistic repayment plan, it is often worth seeking an amicable settlement. Such a solution saves both time and litigation costs.

However, the situation changes fundamentally when the other party avoids contact, constantly promises to pay “next week” but nothing happens, or begins to dispute circumstances that were not previously disputed. “The most important thing is to assess not only what the client says, but also how they behave. If promises are repeated for several months without any real action, it’s likely that the delay is becoming a deliberate strategy,” says the attorney.

According to E. Čepo, businesses often pay too little attention to gathering evidence. Companies frequently believe that an issued invoice is sufficient. However, in the event of a dispute, all documents confirming that services were provided or goods were delivered become important—contracts, work acceptance certificates, waybills, email correspondence, order confirmations, photos of completed work, or even text message exchanges. “In court, it is not the one who shouts the loudest that they were not paid who wins. The one who can prove it wins. Therefore, every company should think about evidence even before a dispute arises,” emphasizes the AVOCAD attorney.

The delay almost cost us the entire debt

In one case advised by AVOCAD, a company operating in the construction sector performed work under a contract and issued an invoice for more than 80,000 euros. The client acknowledged the debt but kept asking for a little more time, explaining that it was waiting for payment from its partners. In an effort to maintain good business relations, the company took no active steps for nearly nine months. It was only after consulting with lawyers that it became clear that the debtor’s financial situation had already deteriorated significantly, and some of its assets had been transferred. “Fortunately, in this case, we were still able to take action and protect our client’s interests. However, this story clearly illustrates that preserving business relationships should not mean passivity. The sooner you begin to manage the situation, the greater the chances of protecting your money,” comments E. Čepas.

The attorney emphasizes that every situation is unique, but waiting should not become a strategy. Some debts might not arise at all if contracts paid more attention to risk management. According to Eimmantas Čepas, in practice, it is common to encounter contracts that lack clear payment deadlines, late fees, interest rates, payment milestones, or even procedures for resolving disputes.

A properly drafted contract should provide for: clear payment terms, late payment penalties and other penalties, the right to suspend the provision of services or the supply of goods if the client fails to fulfill their obligations, the application of advance payments or other measures to secure obligations, and a clear dispute resolution procedure.

“A good contract isn’t necessary when both parties are working together smoothly. Its true value becomes apparent when a conflict arises. The clearer the terms agreed upon in advance, the less room there is for interpretation and disputes in the future,” says the attorney.

In summary, E. Čepas identifies the five most common mistakes made by companies:

  • waits too long and fails to take active steps;
  • does not submit a properly prepared claim;
  • does not collect sufficient evidence of services rendered or goods delivered;
  • enter into contracts that are not sufficiently clear;
  • People turn to lawyers only when the situation has already become critical.

Although every situation is different, there is no one-size-fits-all solution. Sometimes the most effective solution is constructive negotiation; in other cases, it is necessary to take immediate legal action. The most important thing is not to ignore the early warning signs and not to let the debt “resolve itself.” “Businesses often think that lawyers are only needed once a case has already reached court. In reality, we can add the most value much earlier—by helping to assess risks, choose the most appropriate course of action, and avoid situations where debt collection becomes significantly more complicated or even impossible,” summarizes Eimantas Čepas, an attorney at AVOCAD.

 

Court: One Cannot Benefit from Repairs to Joint Property and Refuse to Pay for the Work Performed

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Disputes over the costs of repairing common areas in apartment buildings often go beyond the mere issue of debt. Arguments frequently raised in court concern procurement procedures, the organization of tenders, the contractors selected by the homeowners’ association or the building manager, the reasonableness of work prices, or even payments to the companies that performed the work. However, a recent ruling by the Vilnius Regional Court shows that in such cases, it is important not to lose sight of the fundamental question: whether the work was actually performed and whether the unit owners who benefited from it can refuse to pay for it.

Karolina Laura Briliūtė, a senior attorney at the AVOCAD law firm, notes that in practice, debtors’ arguments often stray from the substance of the dispute itself. “In cases involving debts for repairs to common-use areas, we often see arguments that no competitive bidding process was organized, that procurement rules may have been violated, that there is insufficient data on the association’s or administrator’s payments to the contractor, or that payment documents have not been provided. Sometimes it is precisely these circumstances that form the basis for dismissing claims, even though they are not directly related to the main issue of the case—whether the work was performed and whether the owners are obligated to contribute to its financing,” says K. L. Briliūtė.

In the case at hand, the court of first instance had dismissed the claims, emphasizing, among other things, circumstances related to the procedures for organizing the work, the justification of the cost of the work, and payments to the contractor. However, the appellate court reached a different conclusion. The court noted that the evidence in the case suggests that the repair work was in fact performed and that the condition of the common-use facilities was improved. In the court’s view, a situation in which the direct beneficiaries of the work performed fail to pay for the work at all is inconsistent with the principles of justice, reasonableness, and good faith.

According to K. L. Briliūtė, it is precisely this point emphasized by the court that is particularly significant. “The court stated very clearly that one cannot ignore the fact that the work was performed and that all co-owners benefit from the results. If a common-use property has been repaired, procedural issues alone do not mean that the owners can be completely exempted from the obligation to cover their share of the costs,” the lawyer notes.

More importantly, the appellate court directly addressed the arguments that are raised particularly frequently in cases of this nature. The ruling states that the circumstances regarding compliance or non-compliance with procurement rules, as well as questions regarding the extent to which the homeowners’ association or the administrator has settled accounts with the selected contractor, are not of material significance in this case when determining the owners’ debt. In the court’s view, the case did not concern the issue of mutual settlements between the homeowners’ association or the administrator and the contractor, but rather whether the owners are obligated to pay for the repair work actually performed and to what extent these expenses are justified.

This position may be significant for many homeowners’ associations and property managers who face situations where some owners refuse to pay their share of repair costs, citing circumstances unrelated to the performance of the work itself. “It is important to understand that the maintenance and repair of common areas are the responsibility of all co-owners. Therefore, when evaluating such disputes, the focus should be on whether the work was necessary, whether it was actually performed, and whether the expenses are reasonable. Otherwise, a paradoxical situation arises in which common-use areas are repaired, all owners benefit from them, yet some of them refuse to contribute to covering the costs,” says K. L. Briliūtė.

The court also took into account the broader context of such disputes. The ruling emphasized that the opposite situation would negate the obligation of the owners of the premises themselves to maintain the common areas and would not ensure a final resolution of the dispute. In other words, the legal system cannot encourage a model in which co-owners benefit from the results of repairs but avoid covering their costs.

According to a senior attorney at AVOCAD, this ruling contributes to the development of a more consistent body of case law and may serve as an important guide in future cases. “The appellate court reiterated a fundamental rule: when evaluating such disputes, the most important thing is to determine whether repair work on common-use areas was actually performed and whether the co-owners benefited from it. It is precisely these circumstances that must be at the center of the dispute, rather than secondary issues that do not necessarily determine the existence of the obligation to pay itself,” summarizes K. L. Briliūtė. The ruling of the Vilnius Regional Court once again confirms that in cases initiated by homeowners’ associations and property managers regarding the recovery of repair costs, the most important factors remain the actual performance of the work, its results, and the co-owners’ obligation to contribute to the maintenance and upkeep of the common property.

Access to the courts should not be a privilege: what you need to know about reimbursement of attorney's fees

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The right to access the courts is one of the most important guarantees of the rule of law. However, this right is not merely the opportunity to file a complaint or respond to one. It is inseparable from the parties’ ability to seek professional legal assistance from an attorney or legal assistant and to recover reasonable litigation costs incurred in doing so.

This is precisely why the new case law being established by the Supreme Court of Lithuania regarding the reimbursement of legal fees is significant for anyone defending their rights in court. Until now, when a party was unable—even for objective reasons—to fully settle the bill with the attorney and submit supporting documents by the end of the trial, even though it was evident that legal services had been provided and the obligation to pay for them existed, the courts would rule that such costs did not meet the criterion of reality and therefore would not award them against the losing party.

According to Julius Sakalauskas, an attorney with AVOCAD, a law firm specializing in litigation, this approach did not always ensure an effective right to judicial protection. “The right to access the courts cannot be viewed in isolation. It is directly linked to a person’s ability to have professional representation and, upon winning the case, to recover reasonably incurred litigation costs. If this possibility becomes too formalistic, the right to a fair trial may remain merely theoretical for some people,” says the AVOCAD attorney.

Recent case law of the Supreme Court of Lithuania has noted that the approach under which reimbursement of litigation costs cannot be awarded solely because a document confirming payment of the invoice was not submitted before the conclusion of the proceedings, and that the party must therefore reapply to the court for an additional decision, does not always comply with the essence of the right to an effective judicial remedy.

The court noted that such a formal application of the requirements is not entirely consistent with the principles of justice and reasonableness, the principles of procedural concentration and economy, and the purpose of civil procedure—to effectively protect individuals’ violated or disputed rights and legitimate interests. Therefore, the Supreme Court decided to revise the existing practice regarding the reimbursement of attorneys’ fees, clarifying that the mere fact that a party to the case failed to submit documents confirming payment of attorneys’ fees by the end of the proceedings cannot be interpreted as precluding the parties from agreeing to defer payment of legal fees, nor as preventing the court from ruling on the award of such deferred fees against the opposing party.

“Thus, based on the latest interpretation of the provision of the Code of Civil Procedure establishing a party’s right to reimbursement of attorney’s fees, a party seeking to recover these costs must submit to the court a request for reimbursement of litigation costs, along with documents allowing the court to determine what specific legal services were provided and what their cost is. If these services have not yet been paid for by the end of the proceedings, it is sufficient to submit an agreement with the attorney confirming the party’s obligation to pay these costs in the future. It is also important that the individual no longer needs to provide additional justification for the reason why the representation costs have not been paid by the end of the proceedings,” notes J. Sakalauskas.

According to the attorney, this interpretation has significant practical implications for both individuals and businesses. “In litigation practice, I have repeatedly encountered situations where people hesitate to go to court not because they doubt the validity of their position, but because they fear they cannot afford the costs of the proceedings, especially when the dispute involves a financially much stronger opponent. A clear understanding that reasonable legal fees may be reimbursed even if they have not yet been paid—with payment scheduled in installments and even in the future—strengthens confidence in the legal system and the effective exercise of the right to a defense,” he states.

According to an AVOCAD attorney, today, as legal proceedings become increasingly complex and professional legal assistance is, in many cases, a prerequisite for effectively defending one’s rights, the emerging case law underscores a fundamental principle: the right to a fair trial must not be theoretical or illusory, but real and effective. This means that the possibility of recovering reasonably incurred litigation costs must be assessed not merely formally, but in light of the true purpose of civil proceedings—to ensure the effective protection of violated rights and the fair resolution of disputes.

 

An organized tour didn't meet expectations: what rights do travelers have? 

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Vacations are usually associated with relaxation, new experiences, and a carefully planned itinerary. Advertisements for organized tours also often promise a clear package of services—a specific hotel, excursions, guide services, places of interest, or additional entertainment. However, in practice, it is not uncommon for the actual trip to fall short of what was promised: some excursions are canceled, planned activities are replaced with inferior alternatives or not replaced at all, services are of poor quality, and the overall travel experience fails to meet the traveler’s reasonable expectations.

In such cases, the question naturally arises: is it possible to defend one’s rights and receive compensation for a ruined vacation? Karolina Laura Briliūtė, a lawyer at the law firm AVOCAD, notes that the traveler’s expectations in such situations are, after all, legally significant. “The traveler’s legitimate expectations are shaped by the travel advertisement, itinerary, information provided by the organizer, and promises made. Therefore, a package tour contract is evaluated not only formally but also based on the content and quality of services the consumer reasonably expected,” she explains.

The organizer is responsible for the entire trip

According to Karolina Briliūtė, a tour operator must ensure the proper provision of all services specified in the package tour contract, regardless of whether they are actually provided by the operator itself or by third parties—such as hotels, tour guides, transportation companies, or local partners.

This means that the traveler is not required to determine which specific service provider is at fault for the inadequate services provided—the tour operator bears full responsibility.

Case law emphasizes that tourists have a legitimate expectation of receiving services of adequate quality, accurate and comprehensive information, and smooth travel arrangements. As a professional service provider, the organizer is required to carefully select its partners, monitor their activities, and assume the risk of improper performance of the contract.

When can you claim compensation?

An AVOCAD lawyer notes that, according to case law, in cases where an organized tour does not meet expectations, the consumer may claim compensation for both pecuniary and non-pecuniary damages or a reduction in the price of the tour.

According to K. L. Briliūtė, determining the amount of damages is not difficult in simpler cases—for example, when a specific tour does not take place or a flight is canceled. However, more complex situations arise when the entire trip is organized in a chaotic manner, the itinerary is only partially carried out, and the quality of the vacation is clearly compromised.

In such cases, the traveler may request:

  • a reduction in the cost of the trip;
  • compensation for property damage;
  • compensation for non-pecuniary damages for disruption of vacation plans, inconvenience, or loss of travel value.

According to the lawyer, when determining the amount of compensation, the following factors are taken into account: what portion of the services was not provided at all, how many were provided in a substandard manner, how significant the deviations from the promised quality were, and what proportion of the total trip cost was accounted for by the services that were not provided or were of poor quality.

In practice, significant violations may include failure to visit the sites specified in the itinerary, long waits due to organizational issues, inadequate transportation conditions, malfunctioning air conditioning or heating systems, vehicle breakdowns, or negligent service.

What is important for travelers to do themselves?

Although consumers enjoy enhanced protection in such situations, the burden of proving the violations and the damages incurred falls on the traveler. For this reason, it is particularly important to properly document all deficiencies.

An AVOCAD lawyer recommends:

  • immediately notify the tour guide or tour operator of any violations;
  • photograph and film defects;
  • save the correspondence;
  • have promotional materials and an itinerary;
  • collect documents supporting the additional expenses.

Upon returning from the trip, it is recommended that you submit a written complaint to the tour operator, clearly stating the violations that occurred, your claims, and the amount of compensation you are seeking.

If the tour operator refuses to meet the claims or offers inadequate compensation, the traveler may contact the State Consumer Rights Protection Service and, subsequently, take the matter to court.

“Case law shows that travelers’ rights are defended quite vigorously in such cases, especially when the consumer can provide clear evidence that the trip did not meet the promised conditions. Even established but unmet expectations of the traveler can be a significant criterion when deciding on compensation,” notes AVOCAD attorney Karolina Briliūtė.

An insurance payout cannot be reduced on the basis of “implied” obligations

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Many people choose insurance hoping for one very simple thing—that in the event of a disaster, they won’t have to fight for basic fairness. In practice, however, even after paying substantial premiums, consumers often find themselves in situations where the insurer refuses to pay the full claim based on rules or obligations about which the policyholder was not actually clearly informed.

This is precisely the situation that the Supreme Court of Lithuania recently examined in a case involving a reduced comprehensive auto insurance payout.

In this case, the insurer had reduced the payout by 50 percent, arguing that the car owner had lost the car key prior to the theft but had not taken additional security measures or notified the insurer of this. However, the courts found that such obligations had not been clearly specified in the individual terms of the insurance contract, and the insurance policy terms had not even been properly provided to the consumer.

Commenting on the latest case law of the Supreme Court of Lithuania, Mantas Baigys, an attorney with a law firm, says that this ruling is particularly important in the context of consumer protection. “An insurer cannot rely on obligations about which the consumer was not clearly informed when the contract was concluded. If certain circumstances under which the payout could be reduced are not clearly discussed, the consumer is not required to anticipate them,” the attorney notes.

In its ruling, the Supreme Court of Lithuania very clearly distinguished between two situations: the general duty to act with due care and the insurer’s right to reduce the insurance payout. The court noted that the mere abstract argument that a person “should have acted more cautiously” is insufficient. If an insurer wishes to limit its liability or reduce the payout due to certain circumstances, such cases must be clearly and individually addressed in the insurance contract.

The court also clarified that the provision of the Civil Code regarding the duty to mitigate damages had been incorrectly applied in this case. The Supreme Court emphasized that this rule applies when the insured event has already occurred or is occurring, i.e., when the insured fails to take action to mitigate the damage after the event. In the case at hand, however, the insurer attempted to apply this provision to the situation prior to the theft—when the person had lost the key.

According to Mantas Baigys, what is even more important is that the Court clearly emphasized that if an insurer seeks to rely on gross negligence on the part of the insured as a basis for reducing the payout, such cases must be specifically provided for in the insurance contract itself. “This is required by the Insurance Law. The Court found that in this case, specific obligations—such as replacing the car’s locks or parking the car in a secure lot—had not been individually discussed with the consumer,” the lawyer comments.

The ruling also reiterates a very important rule: insurance terms and conditions that have not been properly disclosed to the consumer do not become part of the contract and cannot be enforced against the consumer.

The court also paid particular attention to the principles of consumer protection. The ruling drew on the case law of the Court of Justice of the European Union, emphasizing that consumer contracts must not only be formally clear but also genuinely understandable to the consumer. A person must be able to understand in advance what circumstances may lead to a limitation of insurance coverage and what economic consequences a particular contractual term will have for them.

According to Mantas Baigys, an attorney at AVOCAD, this case sends a very clear message to the entire insurance market. “Insurance contracts cannot be interpreted in such a way that the consumer only learns of additional requirements or consequences after an incident has occurred. If an insurer wishes to limit its liability, such conditions must be clear, understandable, and individually negotiated,” he states.

In its final ruling, the court awarded the policyholder the entire remaining portion of the insurance proceeds as well as the costs of the proceedings.