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AVOCAD Becomes the Legal Partner of FK Jonava

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The law firm AVOCAD has become the official legal partner of the FK Jonava soccer club. The goal of the partnership is to strengthen the legal certainty of the club’s operations, contribute to the organization’s growth, and assist in resolving day-to-day legal issues that arise in the sports industry.

Egidijus Langys, managing partner and attorney at AVOCAD, says that this partnership is a natural step that continues the firm’s connection with Jonava and its sports community. “We have felt a close connection with Jonava for many years—it is a modern, growing, and vibrant city where we see a strong community and ambitious businesses. We are delighted to contribute to the city’s sports initiatives: we support basketball, and today we are also becoming the legal partners of FK “Jonava.” We believe that sports, like business, require strategy, discipline, and a strong team both on and off the field,” says E. Langys.

According to him, it is particularly important for the AVOCAD team to be close to regions that are driving change and demonstrating a commitment to growth. “Jonava stands out today for its breakthroughs, modern outlook, and active business community. It is important for us to be part of this growth and to contribute our expertise where value is being created for the city and its people,” says E. Langys.

Andrius Krasinskas, the head of FK Jonava, notes that professional sports today are inseparable from legal proceedings, which is why strong partners are crucial to the club’s day-to-day operations.

“Modern soccer is about more than just the game on the field. Clubs face a variety of legal issues: contracts, partnerships, organizational processes, and sports regulations. Having professional lawyers on hand means greater peace of mind and confidence when making important decisions. We are delighted that AVOCAD is joining our team,” says the head of FK Jonava.

AVOCAD actively collaborates with Lithuanian business and sports organizations and consistently supports initiatives that foster a sense of community, leadership, and professionalism.

The Bentley Case: What to Do When Authorities Are Dealing with a Civil Dispute and Assets Disappear Abroad?

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A luxury Bentley Continental GT, which belonged to a bankrupt Lithuanian company, was supposed to be handed over to the insolvency administrator and used to secure the interests of creditors. However, instead, the car disappeared from Lithuania and was spotted abroad—in France and Monaco.

At first glance, this might seem like just another dispute over company assets. However, according to the lawyers at the AVOCAD law firm, this case highlights a much broader problem: what happens when authorities take a strictly formal view of the situation, while valuable assets may in fact be lost.

Bankruptcy proceedings were initiated against a Vilnius-based company, and an insolvency administrator was appointed. One of the company’s most significant assets—a Bentley Continental GT—was to be transferred to the administrator. The documents indicate that the company owed more than 72,000 euros to the tax administrator—the State Tax Inspectorate—so the return of the car was directly related to the protection of creditors’ interests.

However, the car was not handed over to the administrator. On the contrary, it was determined that its whereabouts were linked to foreign countries. The applicant contacted law enforcement, requesting that a pre-trial investigation be initiated and a national and international search for the car be issued; however, the authorities initially refused to do so, assessing the situation as a civil dispute.

“In such situations, it is crucial not to limit oneself to a formal response. If the assets of a bankrupt company are located abroad, and they are not transferred by a person who does not have the right to dispose of them, leaving the creditors’ interests unprotected, proactive measures are necessary,” said Mantas Baigys, an attorney with AVOCAD who represented the client in the case .

In this situation, complaints were being prepared, additional explanations were being provided, evidence was being gathered, and communications with representatives of the shareholder who actually controlled the vehicle were being analyzed. The written explanations noted that the applicant had been collecting data on the vehicle’s location and its control.

The issue of separating the shareholder’s assets from those of the company also became a key point in the case. The lawyers’ position was clear: a company shareholder is not the owner of the company’s assets and cannot treat the company car as personal property. This is especially true when bankruptcy proceedings have been initiated against the company, and all assets must be managed for the purposes of the insolvency process and to safeguard the interests of creditors. “This case serves as a reminder of a very simple rule that is sometimes overlooked in practice—a company’s assets are not the shareholder’s personal property. In bankruptcy proceedings, every such asset becomes important to creditors, so concealing it, delaying its disclosure, or attempting to sell it independently cannot be considered a mere civil dispute,” notes Egidijus Langys, managing partner and attorney at AVOCAD .

Additional information reinforced suspicions that the car had not only not been handed over to the administrator but may also have been intended for sale to third parties. On April 27, 2025, photographs of the car were received, and the surroundings visible in them, as indicated in the documents, showed that the vehicle is not and cannot be in Lithuania.

This situation serves as an example of why time is of the essence in bankruptcy cases. Valuable assets, especially those located abroad, can quickly be transferred, hidden, or become difficult to access. Therefore, mere promises to “return them later” cannot replace the actual transfer of assets. “A lawyer’s job in such cases is not merely to draft a procedural document. One must see the whole picture and ensure that the process moves forward,” says E. Langys.

According to the lawyer, this “Bentley” story is ultimately not about a luxury car. It is about how important it is to protect creditors’ interests when a bankrupt company’s assets disappear abroad and the authorities initially see no reason to take active measures.

A few days ago, the car was brought back to Lithuania—its transport and return were organized at the initiative of the attorneys. This shows that even in complex situations involving international elements, consistent legal work and proactive action can still yield tangible results.

Domain Names, Trademarks, and Business Reputation: Mistakes You Can Avoid  

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Domain names are often chosen quickly and intuitively—based on how they sound, a marketing concept, or the name of the business. However, according to lawyers, this is precisely the stage where most mistakes are made: no one checks whether that or a similar name is already registered as a trademark, no one assesses whether a similar (identical) name is being used by other market participants, and sometimes a domain is even chosen that has no obvious connection to the company’s business or its name.

At first glance, these may seem like minor details, but they can later turn into real legal disputes—especially in cases where it turns out that an identical or very similar name is being used by a well-known company that holds a registered trademark and prior rights. In such situations, the domain owner may face a demand to transfer the domain, and the dispute is often resolved not in national courts but through a special international procedure. Sandra Mickienė, a senior attorney at the law firm AVOCAD, comments on these risks and their practical assessment.

She notes that disputes over domain names rarely arise immediately after registration—they typically emerge once the domain begins to “operate” in the market or becomes recognizable to third parties. In practice, several typical situations can be identified that most often give rise to claims:

First, the domain is actually put to use in commercial activities and becomes visible to consumers—for example, by creating a website, an online store, or a service platform. If such a domain is identical or confusingly similar to another business entity’s trademark, the trademark owner may take action to prevent consumer confusion;

Second, a dispute may arise even when a domain name is not actively used but is publicly visible—for example, when it redirects to a promotional page. In such cases, the question of whether such use exploits the reputation of third-party trademarks becomes particularly relevant;

Third, a situation of practical significance is the so-called “parked domain” model—where a domain is held without any apparent activity, but its name objectively matches a well-known trademark or is very similar to it. It is precisely these situations that often lead to conflicts, as trademark owners may view the holding of such a domain as a potential obstacle to the exercise of their rights or even as a speculative act.

To protect their interests, trademark owners in such cases typically do not turn to national courts but instead utilize a special international dispute resolution procedure administered by WIPO and based on the Uniform Domain Name Dispute Resolution Policy (UDRP) adopted by ICANN. It is this procedure that determines whether a domain may continue to be used lawfully or must instead be transferred to the holder of legitimate interests.

In UDRP proceedings, disputes are resolved based on a strictly defined evidentiary framework; the complainant must prove all three cumulative conditions, and if even one is not proven, the claim must be dismissed in its entirety. “The first element of the complainant’s case is that the disputed domain name is identical or confusingly similar to the trademark in which the complainant has rights. This assessment is made by comparing the dominant element of the trademark with the domain name. In practice, this means that even minor modifications—such as the addition of generic words, geographical terms, or variations in spelling—are often insufficient to negate similarity if the consumer still associates the domain name with the trademark,” the lawyer states.

The second element, she says, is the absence of the defendant’s rights or legitimate interests. When applying this criterion, a specific burden of proof applies: it is sufficient for the petitioner to present preliminary facts suggesting that there is no legitimate interest, and the defendant must then prove otherwise.

The third element is the bad-faith registration and use of the domain name. This is the most complex element and the one that most often determines the outcome of the dispute. The UDRP provides an illustrative list of situations involving bad faith, including the registration of a domain name with the intent to sell it to the trademark owner, the disruption of a competitor’s business, or the misleading of consumers regarding a connection with the complainant. The respondent’s defense in such cases must be constructed systematically, focusing on refuting at least one of the UDRP criteria; however, in practice, it is the justification of legitimate interests that carries the greatest weight. As provided for in the UDRP rules, when preparing a response to the complaint, the respondent must submit specific evidence confirming their rights or legitimate interests in the domain name.

The UDRP rules set forth a non-exhaustive list of circumstances which, if proven, allow the respondent to establish a legitimate interest. One such situation is where, prior to notification of the dispute, the respondent was already using the domain name or had commenced genuine and reasonable preparatory steps to use it in connection with legitimate business activities. WIPO practice emphasizes that such preparatory actions must be supported by objective evidence, such as business plans, investments, or contracts, rather than mere declarations.

Second, a legitimate interest may be based on the fact that the defendant (as a natural or legal person) is widely known by the same name (as the domain), even if they have not registered a trademark. In such cases, the actual recognition in the market is assessed, rather than merely the formal registration of the domain.

In addition to these criteria, analyzing the timing of the domain registration remains particularly important in practice. If the domain was registered before the applicant acquired rights to the trademark, it is usually difficult to prove that the registration was made in bad faith, which may result in the claim being dismissed. It is also assessed whether the domain has an independent meaning—such as a generic or descriptive one—and whether it was chosen independently of the applicant’s business activities.

However, according to a senior lawyer at AVOCAD, the fundamental practical rule remains the same— mere declarative explanations are not sufficient. The defendant’s position must be supported by consistent, objective, and document-based evidence that allows the panel to assess the actual use of the domain and the defendant’s intentions.

“Although at first glance it may seem that the burden of proof in UDRP proceedings falls more heavily on the complainant—after all, it is the complainant who bears the burden of proving that all three cumulative conditions are met— while the respondent need only refute at least one of them—in practice, the situation is far more complex,” notes S. Mickienė.

In cases where a domain was registered without conducting a preliminary analysis (in particular, without checking for the existence of an identical or confusingly similar registered trademark), and the business is operated without a clear business model, without retaining all documents related to the business, without having achieved significant market recognition, and with low turnover, it may be particularly difficult for the defendant to establish a legitimate interest. Even in the absence of an intentional attempt to exploit the reputation of another entity’s trademark or to mislead consumers, a lack of objective evidence (e.g., regarding actual business operations, investments, or readiness to use the domain) significantly weakens the defendant’s position.

An AVOCAD attorney also highlights the practical aspects of this procedure: upon receiving a complaint, the defendant often has to respond immediately within tight deadlines, assess the situation, and prepare a legally sound response. This usually means the need to engage lawyers who would analyze relevant WIPO practice, check trademark and domain databases, gather evidence, and prepare a well-reasoned position. Such actions inevitably entail additional time and financial costs.

“Choosing and registering a domain name should not be viewed as a mere formality or a secondary step. Failure to do the necessary ‘homework’ (i.e., checking trademark registries, assessing the market situation, and evaluating potential conflicts) this may later result not only in the risk of legal disputes but also in real costs associated with defense, potential loss of the domain, or the need to change the trademark and business identity,” warns Sandra Mickienė.

Therefore, according to her, a thorough legal review must be conducted during the domain selection stage: assessing trademark registry data for identical or confusingly similar marks, checking domain availability, as well as evaluating the overall market context and potential associations with existing businesses. Such an analysis should focus not only on formal similarities but also on potential consumer perception.

Furthermore, it is important that the chosen domain name has a clear and logical connection to the planned business activities and does not fall into the so-called “borderline similarity” zone with respect to other trademarks. The actual use of the domain is equally important—the domain should not be held passively. The conduct of actual business activities, a clearly defined business model, and supporting documents (e.g., contracts, investments, evidence of operations) can be of critical importance in assessing the existence of a legitimate interest and the outcome of a dispute.

 

Is an item considered to be of good quality simply because it works? Case law says no 

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In business practice, there are still situations where contractors or suppliers view the outcome of their work in an extremely narrow sense—namely, that if an item functions and fulfills its primary purpose, it is considered to be of good quality. However, according to lawyers, this view is refuted by both the provisions of the Civil Code and consistent court practice.

“Quality is not just about functionality. It is the sum of all the characteristics specified in the contract,” emphasizes Dainius Antanaitis, an attorney at the law firm AVOCAD .

The Civil Code clearly stipulates that the quality of work performed by a contractor must first and foremost comply with the terms of the contract. Only if those terms are not specified do the standard requirements for such work apply.

This means that the result of the work must not only be functional but also meet all the specifications set forth in the contract—technical, functional, and often aesthetic as well. “If the parties have agreed on specific parameters—such as color, texture, or other visual elements—these become no less important than the functionality of the item itself. Deviating from them means that the contract has not been properly fulfilled,” explains D. Antanaitis.

LAT's position: Compliance with all parameters is essential

The Supreme Court of Lithuania has repeatedly noted in its case law that the quality of the work’s result is linked not only to its functionality but also to the fulfillment of all the characteristics specified in the contract. In one case, the court examined a situation where the contractor manufactured equipment that functioned but did not meet the technical parameters specified in the contract. The court held that:

  • The contractor may not choose to fulfill only part of its contractual obligations;
  • The attempt to prioritize certain qualities while ignoring others is not justified;
  • Any deviation from the terms of the contract that has not been agreed upon with the client is considered a breach of contract.

“Even if an item works but does not possess all the characteristics specified in the contract, it cannot be considered of good quality. The contract must be fulfilled in its entirety, not selectively,” the lawyer comments.

A common mistake: “If it works, it must be right”

In practice, AVOCAD’s lawyers encounter cases where businesses tend to ignore contractual requirements regarding aesthetics or specifications, believing them to be non-essential. However, this position is risky. If it can be determined from the contract or its circumstances that certain visual or technical characteristics were important, their non-compliance may be considered a defect, entitling the client to demand:

  • correction of defects,
  • price reduction,
  • or other legal remedies.

This practice sends a clear message: the terms of a contract are not a mere formality—they define the standard of quality. “It is important for businesses to understand that quality is not just about whether an item works or does not work. It is also important whether the result obtained matches what was agreed upon. Any deviation, if not agreed upon, can become the basis for a dispute,” summarizes D. Antanaitis.

 

Trapped in debt: How does personal bankruptcy work in Lithuania?

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When debt begins to dictate the rhythm of life and financial obligations start pushing people to the margins of society, a natural question arises: is there still a way out? Rokas Puodžiūnas, a lawyer with the law firm AVOCAD, comments on one of the realistic solutions—personal bankruptcy .

Today, large debts affect both people with lower incomes and those who are financially better off. A failed business, ill-considered financial decisions, inherited obligations, or unexpected life situations—there can be many reasons. However, the consequence is usually the same: limited opportunities to live with dignity, actively participate in economic life, and plan for the future.

Although bankruptcy is still often associated solely with the end of a business, in reality it is a legal tool available to individuals as well. The personal bankruptcy framework, in effect in Lithuania since 2013, offers the opportunity to get back on one’s feet: to manage debts, return to financial stability, and avoid long-term social decline.

“It’s not an easy or quick path, but if done right, it can be a real opportunity to regain control of your life,” says the lawyer.

Petition for Bankruptcy

According to AVOCAD attorney Rokas Puodžiūnas, before filing for bankruptcy in court, an individual must first notify all of their creditors. This must be done in writing no later than one month before the petition is filed with the court. This is important because the court will later require proof that this obligation was properly fulfilled.

Only after this one-month period following notification of the creditors has elapsed may a petition be filed with the court to initiate bankruptcy proceedings.

Under the Law on Personal Bankruptcy (FABĮ), an individual may initiate bankruptcy proceedings only if they meet all of the following conditions: they are insolvent, their insolvency arose in good faith, and there are no other obstacles provided for by law.

What constitutes insolvency?

The law defines insolvency as a situation in which a person is no longer able to meet their overdue financial obligations, and the total amount of those obligations exceeds 25 times the minimum monthly wage (MMA). At the time of this article’s publication, the MMA in Lithuania is 1,153 euros, so insolvency is established when debts exceed 28,825 euros.

However, according to an AVOCAD lawyer, the numbers alone are not enough—the courts take a broader view of the situation. Insolvency is not merely a temporary financial hardship, a refusal to pay, or simply the fact that the value of one’s assets is less than the amount of debt.

For insolvency to be recognized, all of the following conditions must be met:

  1. The total amount of debt exceeds 25 times the minimum monthly wage;
  2. The payment deadlines for the debts have passed;
  3. The individual has no realistic means of repaying the debt, either from assets or from income.

According to Rokas Puodžiūnas, it is very important to understand that the assessment is not merely a formality. If a person, despite having significant debts, earns sufficient income and is able to pay them off within a reasonable period of time, they are not considered insolvent. “On the other hand, even a high income does not automatically mean solvency. If it is insufficient to meet obligations, insolvency may be declared. Therefore, in each case, the actual financial situation is assessed: income, obligations, and necessary living expenses,” notes the AVOCAD lawyer.

A person's integrity

The lawyer emphasizes that it is very important to understand that the legal framework in force in Lithuania is designed to help only honest individuals restore their solvency. Therefore, honesty is one of the essential conditions for filing for personal bankruptcy.

This is assessed in two respects: whether the person, when applying to the court, disclosed all information in good faith, and whether the person became insolvent while acting in good faith.

Dishonesty may serve as grounds for refusing to initiate bankruptcy proceedings only if it had a material impact on the onset of insolvency—in other words, a causal link must be established between the dishonest acts and the resulting financial situation.

In practice, dishonesty most often manifests itself when a person:

  • provides inaccurate or misleading information about their financial situation (debts or assets);
  • conceals important facts;
  • does not disclose all of its liabilities or sources of income.

Courts may also deem a person to be acting in bad faith if it is determined that they deliberately allowed their debts to accumulate—for example, by borrowing money in the expectation that their obligations would later be written off, or by acting in a highly irresponsible manner with regard to their finances.

However, each situation is assessed on a case-by-case basis. The assessment takes into account not only the actual financial situation, but also the individual’s behavior and motives—whether they genuinely sought to resolve the issues or, on the contrary, exacerbated them.

For example, the mere fact that a person has entered into numerous consumer credit agreements does not necessarily imply dishonesty. It is important to determine:

  • what the borrowed funds were used for (whether for essential needs or not);
  • whether there were other ways to meet those needs;
  • whether the borrowing was proportionate and justified;
  • what steps the person took to prevent the debt from increasing.

Even a careless assessment of one’s financial circumstances does not in itself imply dishonesty—if there is no evidence that the person acted intentionally or with gross negligence, bankruptcy proceedings may be initiated.

It is also important to note that good faith is generally assessed over a three-year period preceding the filing of the petition. If, during this time, the individual acted in good faith but was unable to restore solvency, they should not be prevented from initiating bankruptcy proceedings.

However, in exceptional cases, the court may consider a longer period—for example, if it is clear that the insolvency was caused by prior dishonest acts.

When does a court refuse to initiate bankruptcy proceedings?

Even in cases of substantial debt, bankruptcy proceedings will not always be initiated. The law specifies clear circumstances under which a court may refuse to do so.

First of all, according to the lawyer, bankruptcy will not be permitted if a person’s insolvency was caused by their harmful habits—such as alcohol abuse, drug abuse, or compulsive gambling.

The court may also refuse to hear the case if the person has been convicted of certain financial crimes and that conviction has not yet been expunged, and if those specific acts contributed to the person’s insolvency.

Bankruptcy proceedings cannot be repeated too frequently—if less than 10 years have passed since the conclusion or termination of the previous bankruptcy, a new case will not be filed.

Finally, an obstacle may arise if a person is associated with a company (a legal entity with unlimited civil liability) against which bankruptcy proceedings have already been initiated.

In other words, according to an AVOCAD lawyer, bankruptcy is an option, but not in all cases—the court always considers not only the debts but also the circumstances surrounding their origin.

What happens after bankruptcy proceedings are initiated?

If a court declares a person insolvent and finds no obstacles, bankruptcy proceedings are initiated against them. A bankruptcy administrator is then appointed to oversee the entire process and ensure that it proceeds smoothly and fairly.

Next, a solvency restoration plan is drawn up—a clear agreement on how and over what period of time creditors will be repaid. This plan must be approved by the creditors and subsequently confirmed by the court. The plan is implemented over a period of 3 years. Once all payments specified in the plan have been made, the process is concluded with an official act.

Important considerations before deciding to file for bankruptcy

Lawyer Rokas Puodžiūnas warns that personal bankruptcy is not an “easy way” to get rid of debts. It is a mechanism designed to help honest people return to a normal financial life while also protecting the interests of creditors. Once a solvency restoration plan is implemented, any remaining unpaid debts may be discharged. However, he notes that it is important to understand that not all debts are eliminated. Debts are not written off if they result from criminal activity, child support, fines imposed by the state for violations, or debts secured by a pledge or mortgage, provided an agreement is reached to retain the property.

Furthermore, these debts are not even taken into account when determining whether a person meets the criteria for bankruptcy.

Therefore, before deciding to file for bankruptcy, it is important to realistically assess your situation: where the debts came from, whether they can be repaid within a reasonable time frame, and whether the court will consider you to be a person of good faith. You also need to understand that your debts will not be eliminated immediately—you will have to live under financial restrictions for some time. For these reasons, it is always worth consulting with lawyers before going to court.

 

An important court ruling for apartment building managers and homeowners’ associations: liability cannot be based solely on the fact of an accident

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After every accident in an apartment building, the situation often plays out according to the same scenario: the insurer compensates the resident for the damage and then looks for someone to pass the cost on to. In practice, the building manager or homeowners’ association often becomes the target—as if the mere fact of the flooding were in itself proof of their fault. However, according to lawyers, the courts are drawing a clearer line: the mere fact that an accident occurred is not enough.

This was once again confirmed by the most recent ruling of the Vilnius Regional Court, which upheld the decision of the court of first instance to dismiss the claim filed by AB “Lietuvos draudimas” against UAB “Mano Būstas Sostinė”. In this case, the defendant was represented by Egidijus Langys, managing partner of the law firm AVOCAD.

The dispute arose over flooding in an apartment caused by a leak in the common-use sewer pipe. The insurer, having paid the insurance claim to the apartment owner, sought to recover this amount from the building manager, arguing that it was the manager’s responsibility to ensure proper maintenance of the common areas and prevent damage.

However, both the trial court and the appellate court held that the mere fact that the accident occurred in a common-use facility is not sufficient to establish the administrator’s civil liability. The courts did not assess the fact of the incident itself, but rather whether the administrator had actually performed the functions assigned to him by law: whether inspections were conducted, how the condition of the piping was recorded, whether there was objective data regarding the emergency condition, and whether there was, in general, a basis for taking immediate action without the owners’ decision.

The court found that the administrator had systematically conducted inspections of the building and its engineering systems, during which the condition of the piping was assessed as satisfactory, and no conclusions were presented by competent specialists stating that the piping in question was in a state of disrepair prior to the incident. The court also noted that wear and tear on the pipes alone does not constitute an emergency condition, and in the absence of data indicating a real threat, the administrator is not obligated to initiate repair or replacement work at his own discretion without the residents’ consent.

The court clearly emphasized that, in determining the administrator’s liability, it is necessary to assess not only the consequences of the accident, but all relevant circumstances—whether specific defects were identified, their extent and significance, whether they were such that the work should already be considered mandatory, and whether the administrator had an objective basis to act immediately. Otherwise, liability would be unjustifiably shifted to the administrator simply because an incident occurred.

According to Egidijus Langis, an attorney at AVOCAD, this ruling is significant for the entire apartment building management sector: “In this case, we succeeded in getting the courts to rule very clearly on a line of reasoning that is common in practice but legally unfounded—namely, that if an accident occurs, then the administrator is responsible. In our view, an important and fundamentally correct precedent is being established: when asserting a subrogation claim, the insurer must prove specific unlawful acts or omissions by the administrator, rather than relying solely on the fact of the flooding itself,” notes E. Langys.

According to the lawyer, it is also commendable that the courts assessed this situation objectively and consistently, which helps put an end to a practice that all too often served as a source of profit for insurers at the expense of administrators and communities.

This ruling sends a clear message to homeowners’ associations and property managers: proper technical maintenance, periodic inspections, documented assessments of the property’s condition, and compliance with the law are of paramount importance in disputes with insurers. However, according to an AVOCAD attorney, it is equally important that liability cannot be presumed solely on the basis of an accident—all conditions for civil liability must be established.

 

The car sold did not belong to the seller: the court declared the contract invalid and ordered the seller to refund the purchase price and compensate for the losses

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Is it still possible in Lithuania to sell a car that doesn’t belong to you? It turns out—yes. However, such stories rarely have a happy ending. “It came as a complete surprise to the customer—the car was purchased, registered in Lithuania, and there were no obstacles. However, later, during an inspection, the vehicle was impounded because it was discovered in Belgium that it was linked to a bankruptcy proceeding and claims by the rightful owner,” explains Mantas Baigys, an attorney at AVOCAD.

This situation was recently examined by the Utena District Court, which declared the contract for the sale of an Audi vehicle invalid. The court found that the seller did not have ownership rights to the vehicle sold—the car was the subject of an international search and was to be returned to its rightful owner.

As a result, the buyer was left without a car and faced additional expenses.

The dispute arose after a car purchased in Lithuania and registered in the buyer’s name without any issues was impounded in Latvia a few months later. During a border check, it was discovered that the vehicle had been entered into the Schengen Information System as wanted at the request of Belgium, and that the car was to be confiscated and returned to its rightful owner.

As noted by Mantas Baigys, the attorney who represented the client in the case, this case may seem paradoxical at first glance: the buyer purchased the car through the usual channels, and the car was registered in Lithuania, but it later turned out that the legal situation was entirely different.

According to the case file, the plaintiff purchased the vehicle from a Lithuanian company, which had in turn bought the car in Germany from a private individual. Although the seller claimed to have acted in good faith and relied on the registration documents provided to her, the court thoroughly assessed the circumstances regarding the car’s origin and documentation. Of particular significance was the fact that the Belgian registration certificate clearly stated: this document does not confirm ownership, and the vehicle’s owner listed therein was not the individual who sold the car, but a legitimate Belgian company.

The court held that the mere transfer of the registration certificate is not sufficient evidence that the seller had ownership of the vehicle or the right to transfer it. Furthermore, a higher standard of care and diligence applies to a businessperson engaged in the professional sale of automobiles. In the court’s view, by failing to request additional documents confirming ownership or authorization, the seller assumed the risk that she would later be unable to substantiate her right to dispose of the car. “One of the key points in this case was that the seller cannot rely solely on the formal possession of documents. If the document itself clearly states that it does not confirm ownership, the seller must take additional steps to verify who the actual owner is and on what basis the car is being sold,” comments the AVOCAD attorney.

The court emphasized that, under the Civil Code, the seller has a mandatory obligation to confirm that the item being sold is owned by him and that no third parties have any rights or claims to it. This obligation is not merely a formality—a breach of it may render the transaction void. In the case at hand, the court found that the defendant was not the owner of the car and had no right to sell it; therefore, the contract was declared null and void from the moment of its conclusion.

Another key aspect of the case was the issue of restitution. Since the car had already been impounded in Latvia and was being held there pending transfer to its rightful owner, its return to the seller was objectively no longer possible. Therefore, the court ordered unilateral restitution—requiring the seller to refund the buyer the full purchase price paid for the car.

In addition, the court awarded the buyer compensation for a portion of the losses incurred. These included expenses for legal assistance in Latvia, registration and pollution taxes, a certificate from Regitra, and a portion of the insurance costs following the impoundment of the vehicle. In total, the buyer was awarded €2,122.87 in compensation for losses. The court also awarded more than €9,600 in litigation costs.

“The man was effectively left without a car and with additional expenses incurred while defending his rights. The court clearly stated: if the seller did not have the right to sell the item, the buyer cannot be made to bear the risk of being left without a car,” says attorney M. Baigys.

This decision is significant not only for the parties to this specific case, but also for the broader used car market. It serves as a reminder that the registration of a vehicle or its formal entry in the registry does not in itself create a right of ownership and does not eliminate risk if the chain of title itself is flawed. The court rejected the argument that the mere fact that the car could be registered in Lithuania implies a lawful transfer of ownership. On the contrary, it was clearly emphasized that “Regitra” does not assess the legality of the grounds for vehicle ownership, and registration is merely one piece of evidence that may be rebutted by other data.

According to Mantas Baigys, the practical lesson from this case is very clear: vehicle sellers must carefully verify not only the vehicle’s technical and registration history, but also the basis for the transfer of ownership itself. “This is a clear signal to the market: in the used car trade, it is not enough to rely on the fact that the documents appear to be in order or that the car has been successfully registered. You need to verify whether the seller actually has the right to transfer ownership. Otherwise, the seller may bear all the risk,” he notes.

 

Repairing Goods Instead of Replacing Them: New Obligations for Sellers and Consumer Rights 

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A new trend in consumer protection is emerging in the European Union—the so-called“right to repair,” which encourages the repair of goods rather than their replacement or disposal. Lithuanian law is also adopting this trend: amendments to the Civil Code impose additional obligations on sellers and give consumers more opportunities to demand repairs. According to Eimantas Čepas, an attorney at the law firm AVOCAD, the new provisions change not only the scope of consumer rights but also the duration of sellers’ liability, their duty to inform, and warranty service practices. This means that businesses will have to reassess how repair processes are organized, what information is provided to consumers, and how warranty service is documented.

A broader concept of product quality

The amendment to the Civil Code stipulates that a product must possess not only its standard characteristics, but also characteristics related to durability, repairability, functionality, compatibility, and safety.

In addition, public statements made by the seller or manufacturer in advertising or labeling are also important when assessing the quality of a product. This means that consumers’ expectations regarding a product’s characteristics may be shaped not only by the contract or technical specifications, but also by marketing communications.

As Eimantas Čepas points out, this amendment broadens the concept of product quality assessment. “This amendment means that product quality will be assessed more broadly than before. If an advertisement or the manufacturer’s communications emphasize the product’s durability or longevity, the consumer can reasonably expect the product to possess these characteristics—otherwise, this may be considered a failure to conform,” says the attorney.

According to him, a new focus is also emerging on repairability—it will become increasingly common to assess whether a product can reasonably be repaired at all. “If a manufacturer or seller communicates the possibility of repairing a product, replacing its parts, or extending its useful life, the consumer can expect that such a possibility actually exists. This may entail higher requirements for both product design and the availability of spare parts or service,” the lawyer emphasizes.

If the product is being repaired, the seller's warranty is extended

One of the most significant changes is the extension of the seller’s liability period. If a product is repaired to remedy a defect, the seller’s liability period is extended by another year. This means that repairs can have long-term legal consequences for the seller, as their liability for the quality of the product is effectively extended.

“This is a significant change for businesses—repairs not only fix the defect but also extend the seller’s liability period. Therefore, sellers will have to pay even closer attention to warranty service processes and documentation,” notes attorney E. Čepas.

New obligation to inform the consumer

Before addressing a consumer’s claim regarding product defects, the seller must clearly inform the consumer of their right to choose between having the product repaired or replaced with a new one. In addition, the consumer must be informed that, if they choose to have the product repaired, the seller’s liability period may be extended.

“In practice, this means that sellers will have to clearly inform consumers about their options and the possible consequences. If this duty to inform is not properly fulfilled, it could lead to additional disputes,” says E. Čepas.

The new provisions also provide for the possibility of providing the consumer with a replacement product while their product is being repaired. Depending on the product category and the consumer’s need for continuous use, the seller may temporarily provide another product for use. This may also be a refurbished product, provided it meets the requirements of the category.

“This provision is particularly relevant for goods such as phones, computers, or household appliances, which consumers often cannot do without for a short period of time. For businesses, this could mean an additional logistical and financial burden,” the lawyer comments.

If the consumer expressly agrees, the seller will be able to provide a refurbished product instead of a new one. This provision is linked to the broader objectives of the European Union—to promote the circular economy and reducewasteby extending the useful life of products.

“There is now a legal basis for using refurbished goods more frequently as an alternative to new ones. This can be beneficial from both an environmental and a business perspective, but the most important thing is the consumer’s explicit consent,” notes attorney Eimantas Čepas.

According to an AVOCAD attorney, the new amendments to the Civil Code mean that sellers should review their warranty service procedures, consumer information policies, repair documentation, and replacement goods policies.

“The legislative changes essentially encourage a shift from the‘replace the product’model to the‘repair it first’ model. Therefore, businesses should prepare in advance for the new practices and assess how these changes will affect their warranty service processes,” summarizes attorney Eimantas Čepas.

A few centimeters from the property line: when is a building code violation considered minor?

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Does every deviation—even by a few centimeters—from the minimum distance specified in legislation automatically constitute illegal construction? In its latest ruling, the Supreme Court of Lithuania sent a clear message: not always.  Commenting on the latest case law, AVOCAD attorney Kamilė Šemeklytė notes that a mere formal non-compliance does not necessarily mean that the structure or utility networks will have to be removed. 

 

In this case, the court examined a dispute between the owners of neighboring plots regarding sewage networks installed too close to the plot boundary and a possible failure to maintain the required distance from a manhole. The plaintiff sought to have the defendants remove part of the sewage and water supply networks at their own expense, as, according to him, they had been installed less than 1 meter from the boundary of his plot, and the sewage networks—less than 10 meters from the manhole located on his plot. However, the courts at all levels dismissed the claim, and the Supreme Court of Lithuania upheld these decisions. 

 

The crux of this case is the court’s answer to the question of whether every instance of failure to comply with the minimum distance requirement must be formally regarded as automatically giving rise to an obligation to remedy the consequences of the construction. The Supreme Court of Lithuania clearly emphasized that the Civil Code cannot be applied mechanically. The court recalled previous case law, according to which very minor deviations from the distances established by law may be considered insignificant if they do not actually violate either public objectives or the rights of the owner of the neighboring plot. 

 

According to an AVOCAD attorney, this ruling is significant in that it demonstrates once again that disputes regarding construction and utility networks cannot be resolved solely on the basis of a ruler. “The Supreme Court clearly stated in this case that a mere formal discrepancy of a few centimeters does not automatically mean that the construction is unlawful. It is not only the deviation itself that is assessed, but also its significance—whether it actually infringes on a neighbor’s rights or undermines the objectives protected by law,” says K. Šemeklytė. 

 

What mattered was not the current data, but the data available at the time of completion of construction 

 

A key issue in the case was which distances should be taken into account—the current ones or those that existed at the time of completion of construction. 

The plaintiff relied on subsequent measurements, according to which the distance from the sewer lines to the boundary of his plot was even smaller in some places. However, the courts determined that, when deciding on the legality of the construction, the most important factor is the situation at the time of completion of the construction. And at that time, the distances measured were 1.04 m, 0.98 m, and 0.92 m. 

This meant that the deviations from the required 1-meter distance were only 2 and 8 centimeters. The Supreme Court of Lithuania acknowledged that such deviations are insignificant and do not in themselves constitute grounds for declaring the construction unlawful. “In practice, this is very important. The court emphasized that one cannot automatically rely on measurements taken several years later and conclude from them that the construction was unlawful from the very beginning. The actual situation at the time when the structure or networks were installed and construction was completed must be assessed,” the lawyer emphasizes. 

 

The court did not limit itself to formal logic, but considered the actual impact 

 

It is also important to note that the courts considered not only the specific measurements but also the broader context: the networks were installed in an area where other utilities were already present, and the plaintiff failed to propose any realistic alternatives for relocating such a network without infringing on the interests of others. This demonstrates a consistent approach by the courts—even when a certain deviation formally exists, the court still assesses proportionality, the actual consequences, and whether the most stringent measure is indeed justified. According to Kamilė Šemeklytė, this ruling sends an important message to both owners of neighboring plots and builders: it is not enough for the court to simply show that a figure does not meet the standard. “It is necessary to justify why the violation is significant, what actual consequences it causes, and why the removal of the construction’s effects is a proportionate measure,” she states.  

Another part of the case concerned the plaintiff’s claim that the sewer lines had been installed too close to a manhole located on his property. However, the courts found that there was insufficient evidence in the case to prove that this manhole actually existed at the time the disputed sewer lines were being designed and installed. 

The plaintiff argued that this was obvious, but the Supreme Court of Lithuania emphasized a fundamental principle of civil procedure: each party must prove the facts on which it bases its claims. If a claim is based on the fact that a certain object already existed during the period relevant to the dispute, it is precisely that fact that must be proven. 

 

The court also rejected the argument that a so-called surprise decision had been rendered in this part of the case. The Supreme Court explained that the existence of the shaft well had been one of the key facts of the case from the very beginning, and therefore the plaintiff should have understood that it was necessary to substantiate this claim with evidence. 

“This is a very clear reminder that in civil cases, a logical narrative or a belief in one’s own righteousness is not enough. If a claim is based on a specific factual circumstance—for example, that the well was already there before the pipes were installed—that circumstance must be proven. In other words, the procedural obligation to prove a fact does not disappear even when a party believes the fact is self-evident,” notes the AVOCAD attorney. 

 

This ruling by the Supreme Court of Lithuania is relevant to anyone dealing with property boundaries, the installation of utilities, renovations, or disputes regarding the legality of construction. On the one hand, it confirms that the courts uphold property rights and the distances established by law. On the other hand, this protection is not strictly formal—very minor deviations that do not cause actual harm may be considered insignificant.  The success of a dispute depends not only on whether a formal non-compliance can be demonstrated, but also on whether the party can precisely substantiate when the violation occurred, its extent, which rights it actually infringes, and what legal consequences should apply.  “From a practical standpoint, this is a very useful case. It demonstrates that in disputes over minimum distances, it is not only the text of the regulation that matters, but also the evidence, the timing, and the assessment of proportionality. This means that, whether planning construction or preparing for a dispute, it is essential to very carefully assess the factual circumstances and the evidence,” summarizes K. Šemeklytė. 

Will Europe finally simplify the process of starting a business—and will that be enough?

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The European Commission recently unveiled a proposal that could significantly change the rules for starting a business in Europe—the so-called “EU-Inc.” initiative. Its goal is to create a single legal form for companies across the European Union, which would allow businesses to operate across national borders more easily and quickly than ever before.

Today, business expansion in Europe often faces a paradox: although we have a single market, setting up and operating a business in different countries still means dealing with 27 different legal systems, different legal forms, and complex administrative procedures. As a result, even a simple step toward expanding into another EU country can take weeks or even months. The EU–Inc. system proposed by the European Commission aims to simplify this situation.

What does EU–Inc. offer? 

Under the proposal, a single European company form would be established, characterized by several key elements:

  • a company could be registered within 48 hours for less than 100 euros;
  • there would be no requirement for a minimum authorized capital;
  • the company could operate in all 27 EU member states under a single legal framework;
  • the information would be submitted once, and the data would automatically be transmitted to registries, tax authorities, and VAT systems across the EU;
  • provide for the possibility of implementing harmonized employee stock option plans (ESOPs) across the EU.

If the European Parliament and the Council approve this proposal, the initiative could become operational by the end of 2026.

The launch of such an initiative sends an important signal. For some time now, Europe has been looking for ways to help startups and fast-growing companies expand more easily within the single market and compete with technology ecosystems in the U.S. and Asia.

This is a welcome step, as it finally acknowledges a problem that the business community has been discussing for many years—the European single market remains highly fragmented from a legal standpoint.

However, the question arises: will simplifying the registration process alone really address the main obstacles to business growth in Europe?

The problem lies not only in registration 

The procedures for establishing a company are often seen as the main challenge, but in practice they are usually just the first—and often the shortest—stage of a business’s journey. Far more complex obstacles arise later on, as the company grows and expands into different jurisdictions.

The biggest obstacles in Europe are usually not related to company registration. They stem from differing tax systems, labor law regulations, inconsistent application of the law, and often rather slow dispute resolution in the courts.

Even if a company could be established within 48 hours, as the business expands, it would still have to deal with:

  • different labor law regimes in each country;
  • inconsistent taxation of employee stock options;
  • under different tax regimes;
  • inconsistent administrative and regulatory practices.

In practice, businesses often face another problem—one that may seem technical at first glance but is very real—namely, opening a bank account. Even today, when it is possible to establish a company relatively quickly in most EU countries, banks often take a very cautious approach to clients whose founders are not residents of that country. In such cases, opening an account can become a lengthy and complicated process requiring additional checks and documentation. Therefore, the question remains open as to whether the new EU–Inc. form will truly facilitate relations with banks, or whether this practical obstacle for businesses will persist.

Therefore, the question of whether EU–Inc. will actually operate under a unified system will essentially depend on the extent to which genuine harmonization is achieved in other areas.

ESOP – an important but insufficient step 

The unified ESOP model set out in the proposal is one of the strengths of this initiative. Employee stock options are an important incentive tool for startups, particularly in the technology sector.

However, if these options continue to be taxed differently in different countries, their practical application may remain limited.

If taxation remains a national matter, the system will still not be as simple and clear as the one we see today in the United States, for example. And capital and talent often flow to places where the regulatory environment is clearer and more predictable.

Is Europe truly ready for a unified business area? 

The EU–Inc. initiative undoubtedly reflects a political ambition to strengthen Europe’s business environment. It could also serve as an important symbolic step—demonstrating that Europe aims to be a place where global businesses can be established and grown without leaving the continent.

However, simplifying the procedures for setting up a business can only be the first step.

If Europe truly wants to create a level playing field for business, a single corporate form will not be enough. Much deeper harmonization will be needed—particularly in the areas of taxation, labor law, and regulatory practices.

Nevertheless, it must be acknowledged that the EU-Inc. initiative sends an important signal that European institutions are beginning to address the problem of single market fragmentation in a more systematic manner. If the proposal is adopted and consistently developed further, it could become the first concrete step toward a truly unified business space in Europe.

However, the true impact of this initiative will depend on whether Europe is willing to address the deeper structural issues that often lead ambitious companies to plan their global expansion outside of Europe.

AVOCAD Partner, Corporate Law Expert, Attorney Jonas Zaronskis