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The Epstein case in the public sphere: when can a comment in Lithuania become grounds for legal liability?

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In recent days, there has been much public discussion about the Jeffrey Epstein case and the people associated with it. Social networks have been flooded with comments, emotional reactions, assessments, and interpretations that often go beyond the bounds of ordinary opinion. However, what may seem to many as spontaneous statements on the internet can have very specific and real consequences from a legal point of view.

The wave of discussion was further intensified by the fact that the US Department of Justice, in compliance with a court order, published documents related to the case. Although the disclosure itself was based on legal grounds, this does not automatically mean that all the information contained therein can be freely and irresponsibly used in further public communication. According to lawyers, questions about the alleged anonymization of data are increasingly arising in practice—formally hidden names or surnames do not necessarily mean that a person can no longer be identified when considering the entire context and additional circumstances.

According to Mantas Baigys, a lawyer at the AVOCAD law firm and an expert in personal data protection law, public discussion of high-profile cases reveals that society still does not sufficiently understand where freedom of expression ends and legal responsibility begins.

According to the lawyer, one of the most frequently ignored aspects is comments on social networks. "People driven by emotions often write statements that can be considered not only offensive or humiliating to a person's honor and dignity, but also as having signs of criminal activity. Threats of violence, justification of violence, or incitement to violence, even if expressed figuratively, can become grounds for a pre-trial investigation. It is important to understand that social networks are legally considered a public space, and words written on them are taken as seriously as those spoken in public or published in the media," says the lawyer.

An equally important issue is the protection of personal data. Information that has been made public, even if it has already been published in foreign media or court documents, does not automatically become freely available. Publicly available data continues to be considered personal data. Its collection, systematization, republication, or distribution on social networks must have a clear legal basis. "This applies not only to private individuals, but also to journalists, opinion makers, and content creators," warns M. Baigys.

In practice, we are increasingly encountering what is known as secondary use of information, where publicly disclosed data is transferred to comments, articles, or social media posts, supplemented with personal interpretations or emotional assessments. According to the lawyer, anyone who disseminates such information further assumes independent legal responsibility, regardless of who was the original source of the information. This means that a person may become a defendant in a civil case in a Lithuanian court based on a claim by the injured party and, in certain cases, face sanctions for violations of the General Data Protection Regulation.

The third, often overlooked aspect is the right to privacy. The Epstein case revealed numerous details about specific individuals' personal relationships, lifestyles, and circumstances that are not necessarily directly related to the legal substance of the case. When driven by curiosity to "dig up more" and publish additional details of private life, it is very easy to cross the line. Even a person involved in a high-profile case does not lose their right to privacy, and in certain cases, violating this right may result in criminal liability.

When assessing the legality of such publications, which contain a wealth of information about individuals, such information cannot be disseminated solely to satisfy public curiosity or create a sensation.

According to AVOCAD's lawyer, this obligation applies not only to individual social media users, but also to journalists and media outlets. Professional activities, freedom of the press, or the dissemination of information to the public do not exempt one from the obligation to constantly assess whether the information published actually serves the public interest or whether it violates a person's right to privacy and personal data protection requirements.Case law consistently emphasizes that the publication of information about a person should not serve solely to generate clicks or satisfy the curiosity of the audience.

In summary, Mantas Baigys emphasizes that the internet often creates a false illusion of security and informality. However, in legal terms, it is the same public space where the same laws and principles of responsibility apply as in real life. It is possible to take an interest in current cases and discuss them, but this should be done responsibly, with the understanding that every public statement can have legal consequences. Legal liability on the internet is not theoretical—it is real, tangible, and increasingly applied in practice.

 

The court is not a document repository; there are limits to the scope of evidence 

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Civil procedure is based on clear logic: the court only examines evidence that is relevant to the specific dispute. The Code of Civil Procedure stipulates that only evidence that confirms or refutes circumstances relevant to the case is admissible. At first glance, this seems like a simple and rational rule. However, in practice, the opposite often happens—the essence of the case gets lost in a sea of documents, and the process of proving the case turns into a complex procedural maze. As noted by Dainius Antanaitis, a lawyer with the AVOCAD professional association of lawyers , it is at this stage that the problem of the limits of proof most often becomes apparent.

"Evidence in a civil case is not just any information. It is only data about the circumstances that constitute the subject of proof. The latter includes legal facts with which legislation associates the emergence, change, or termination of the disputed legal relationship, as well as facts on which the parties' claims and counterclaims are based and other circumstances necessary for the application of substantive law," the lawyer notes, citing the practice of the Supreme Court. According to Dainius Antanaitis, proving a case in civil proceedings is not a process of gathering or archiving information. "Its purpose is to help the court establish specific, legally relevant facts on which the correct decision depends," says the AVOCAD lawyer.

In every civil case, the subject of proof depends on what right or legitimate interest the claimant is defending. In debt cases, the existence of an obligation and its non-fulfillment are proven; in cases of compensation for damages, unlawful actions, the fact of damage, causal link, and fault are proven; in cases of contesting transactions, the grounds for invalidating the transaction are proven, etc. This means that only evidence that can logically confirm or refute these circumstances should be admitted to the case.

According to the lawyer, in practice, lower courts encounter different styles of adjudication. "In most cases, courts comply with the requirements of the Code of Civil Procedure and, already at the stage of admitting evidence, help the parties to the proceedings not to get lost by refusing to accept material unrelated to the dispute. However, there are also cases where documents or other information are accepted into the case that have no logical connection with the subject matter of the evidence, either as a whole or in separate parts," notes the lawyer. In such cases, the case becomes overloaded with a large amount of material that has no added value for the proper resolution of the dispute. As a result, the court, which is already facing a heavy workload, is forced to spend time analyzing documents that are not relevant to the case.

"When the process turns into information storage rather than purposeful evaluation of facts, the efficiency of the process suffers, and as a result, the parties to the case are forced to wait unreasonably long," notes attorney D. Antanaitis.

Additional challenges arise when, at the request of one party, the court requests documents from the other party to the case. This instrument is particularly important in cases where one party is objectively unable to obtain relevant evidence held by the other party. However, practice shows that this procedural measure is sometimes misused.

There are situations where requests to obtain documents are based not on the desire to prove specific circumstances of a dispute, but on the desire to obtain information that could become the basis for a new dispute or allow access to data that could not be obtained by legal means. In such cases, if the court does not critically assess the connection between the request and the subject matter of the evidence, it may indirectly contribute to the unfair use of the process.

"The court should not become a means of intelligence gathering or testing hypothetical assumptions. Civil proceedings are intended to resolve legal disputes that have already arisen, not to create conditions for gathering information for possible future lawsuits," emphasizes D. Antanaitis.

This position is consistently upheld by higher courts. Appeal practice has clearly established that documents are only requested when they are directly related to the subject matter of a particular case. If a lawsuit is filed solely to verify whether rights may have been violated in general, such procedural conduct is considered flawed. The court is not an institution designed to collect data or verify assumptions—its purpose is to restore the violated legal balance and resolve the actual dispute.

This practice reminds us once again that the provisions of the Civil Procedure Code regarding the admissibility of evidence are not a mere formality. They are an essential procedural guarantee that protects the interests of both the court and the parties to the proceedings and ensures that the search for justice does not get lost in the maze of evidence.

 

The participation of the victim in administrative proceedings is a prerequisite for a fair decision. 

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There are things that should be as well known in law as two plus two is in mathematics. One of them is the participation of the victim in administrative proceedings – a necessary condition for a fair decision. In cases of administrative offenses, it is not enough to formally recognize the rights of the victim—they must be effectively enforced. The mere fact that a person is designated as a victim does not mean that they had a real opportunity to exercise their procedural rights. According to Domantas Velykis, a lawyer with the AVOCAD professional association of lawyers, court practice clearly states that if the victim does not have a real opportunity to participate in the proceedings, such a case cannot be considered lawful.

This position is consistently supported not only by the provisions of the Code of Administrative Offenses, but also by the interpretations of the Supreme Court of Lithuania. According to the lawyer, it is first necessary to understand the concept of a victim in administrative proceedings. The Code of Administrative Offenses establishes that a victim in an administrative offense case is a natural person who has suffered physical, material, or non-material damage as a result of an administrative offense, or a legal person who has suffered material or non-material damage as a result of an administrative offense. It should be noted that such a person who has suffered damage acquires the status of a victim during the investigation or examination of an administrative offence, i.e. is recognised as a victim by a protocol or decision of the authority investigating and examining the administrative offence, or by a court ruling.

According to Domantas Velykis, the aforementioned code establishes a very important list of victims' rights in the proceedings, which includes, among other things, the right to participate in the oral proceedings and give evidence, submit documents and items relevant to the case, to file motions and challenges, to appeal procedural decisions in accordance with the established procedure, etc.

It is on the basis of these rights that very important obligations of the court are enshrined in legal regulations. The practice of the Supreme Court of Lithuania has clarified that these norms oblige the court to inform the victim of the time and place of the hearing, as well as of the procedural decision taken, thus ensuring the victim's right to participate in the oral proceedings and to give evidence, to appeal against the decision taken in accordance with the established procedure, and to exercise other rights.

According to an AVOCAD lawyer, the European Court of Human Rights has also ruled on these obligations. Its established practice consistently emphasizes the principle of equality of the parties to the proceedings, which is an integral part of the broader concept of fair trial. This principle requires that each party should have an accessible and real opportunity to present its case in such a way that it is not placed at a significant disadvantage compared to its opponent. The principle of equality of the parties would be meaningless if one of the parties were not informed of the court hearing in such a way as to enable it to participate in the hearing and exercise its rights under national law, while the other party effectively exercises those rights.

Summarizing these legal provisions and court practice, lawyer Domantas Velykis reminds us that a necessary condition for examining an administrative offense case is the participation of the victim (if there is one in the case) in the court hearing, or at least that person's knowledge of the time and place of the court hearing.

"If the court violates these obligations and fails to notify the victim about the hearing of the case, i.e., if the case is heard without the victim's participation because he or she was not properly informed about the time and place of the hearing, there are significant legal consequences, which are clearly stated in the practice of the Supreme Court of Lithuania," notes the AVOCAD lawyer.

As an example, he cites a case in which a car driver who violated a "give way" road sign collided with a cyclist and caused minor injuries. The administrative offense investigation authority ruled that the cyclist was the victim, but the district court, when examining the driver's appeal, did not inform the victim about the hearing and examined the case without him being present. The Supreme Court found a fundamental violation of the Code of Administrative Offenses, which restricted the victim's right to be heard, and overturned the district court's decision, referring the case back for retrial.

A similar position was taken in another case where a driver hit a pedestrian and fled the scene of the accident. Although the pedestrian was recognized as the victim, the district court did not inform him of the hearing and terminated the administrative proceedings. In this case, the Supreme Court of Lithuania also found that the proper court proceedings had not been ensured, the victim's rights had been restricted, and the decision was unlawful, and therefore the case was remanded for retrial.

Thus, according to AVOCAD's lawyer, this practice clearly shows that in cases of administrative offenses, it is not enough to formally recognize a person as a victim. What is essential is the real opportunity to participate in the process, to be informed, to be heard, and to exercise the rights granted by law. Otherwise, the court decision risks being overturned as having been made in violation of fundamental principles of due process.

Terminated the preliminary contract and sold at a higher price? The court ruled that penalties alone are not sufficient. 

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Let's imagine a situation that is very common in today's real estate market. A buyer finds a home, agrees on a price, signs a preliminary purchase agreement, pays a deposit, and waits for the documents for the main contract to be prepared. The parties communicate, agree on terms, sometimes even extend agreements or make additional payments. However, the market changes—prices rise, another buyer appears who is willing to pay more. Then one party terminates the pre-contractual relationship, returns the advance payment, pays the contractual penalties, and considers the matter resolved. But is it really?

This seemingly mundane situation was recently assessed in detail by the Supreme Court of Lithuania, which clearly stated that once pre-contractual relations have been terminated, the issue of compensation for losses cannot be resolved formally. It must be assessed according to specific and clear criteria, and the mere payment of penalties does not necessarily mean the end of liability.

Viktorija Dubovskienė, a lawyer at the AVOCAD law firm, notes that this ruling is significant in that the court very clearly distinguished between two situations – when the termination of pre-contractual relations only has contractual consequences and when it results in an obligation to compensate for additional losses.

"The LAT essentially said that the termination of pre-contractual relations does not in itself mean an automatic right to compensation for any losses. However, if the termination is unfair and the other party suffers real losses as a result, they must be compensated," says the lawyer.

In the case under consideration, the court assessed a situation where the seller, having concluded a preliminary contract for the sale of property for EUR 124,000, failed to perform it and subsequently sold the same property to a third party for EUR 190,000. The key issue was not the fact of the termination of the agreement itself, but why it happened and what consequences it had for the other party. The Supreme Court of Lithuania found that the main contract was not concluded due to objective obstacles, but because of the seller's decision to take advantage of the changed market situation and obtain greater economic benefits.

"The criteria highlighted by the court are particularly important in this case: whether the party acted in good faith, whether the pre-contractual relationship actually continued, whether the other party had a reasonable expectation of concluding the main contract, and whether it suffered actual losses as a result of the termination," emphasizes Viktorija Dubovskienė.

The Supreme Court also clearly stated its position on the nature of the losses. Acting in good faith and having a valid agreement, the buyer had a real opportunity to purchase the property at the agreed price. Upon termination of the preliminary agreement and increase in market prices, he lost this opportunity. The court recognized that this loss was not hypothetical—it was a real pre-contractual loss that had to be compensated if it was a direct consequence of unfair conduct.

"This ruling is also important because it clearly shows that losses in pre-contractual relations are not assessed automatically, but rather through the criteria of causality, good faith, and actual consequences. If one party terminates the agreement solely in order to obtain a higher price, and the other party objectively loses the opportunity to acquire the property as a result, such benefit may become compensable damages," emphasizes the AVOCAD lawyer.

This ruling by the Supreme Court of Lithuania sends a clear signal to the market that preliminary agreements are not "temporary" or "without consequences." They create legitimate expectations, and their termination must be considered responsibly. Price changes or more favorable market conditions do not in themselves justify unilateral withdrawal from the agreement, and the issue of compensation for losses will be decided not formally, but according to the actual behavior of the parties and the consequences thereof.

The Supreme Court of Lithuania has clarified that termination of a service contract in an administrative building is not a decision of a single owner. 

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When a business operating in an administrative building wants to terminate a contract for the maintenance of common areas, it often seems that one decision is enough – the contract is open-ended, notice of termination has been given, and an alternative service provider has already been selected. However, in practice, such a decision often comes up against the will of other owners of premises in the building: services are provided for the entire building, common property is indivisible, and there is no joint decision. It was precisely this situation that the Supreme Court of Lithuania assessed and concluded that the right to terminate such a contract is not absolute.

The Supreme Court of Lithuania (hereinafter referred to as the SC) issued a new important ruling in a civil case and stated that a co-owner of an administrative building does not have the right to unilaterally terminate a contract for the maintenance of common use objects without the unanimous decision of all co-owners.

According to Mantas Baigys, a lawyer from the AVOCAD law firm representing the party in the case, this decision highlights a very important rule: the right to terminate a service contract is not absolute in all cases, especially when the contract relates to the maintenance of common property and affects the interests of all co-owners.

"The newly formulated rule of the Supreme Court shows that a person's right to terminate a service contract cannot be exercised under any circumstances," says lawyer M. Baigys.

The case dealt with whether the owner of premises in an administrative building could unilaterally terminate individually concluded open-ended maintenance service contracts if there was no joint decision by all owners (co-owners) of the premises to change the administrator and terminate the contractual relationship.

The Supreme Court upheld the findings of the lower courts and emphasized that in relationships of this nature, the specifics of joint partial ownership and the decision-making procedure of co-owners in administrative buildings are of decisive importance. The ruling highlights several important points:

  • In administrative buildings (where most of the space is non-residential), decisions on the management of common property are essentially linked to the agreement between the co-owners.
  • Although the Civil Code allows for the termination of an indefinite contract, this rule must be applied after assessing whether the law or contract imposes any restrictions. The Supreme Court emphasized that restrictions in the administration and supervision of joint property are determined precisely by the co-owners acting "as a single owner" in relations with third parties.
  • When the subject matter of the contract covers the maintenance of all common areas (rather than a separate part thereof) and all co-owners have concluded a similar contract, such agreements may be regarded, in terms of their content, as a single joint agreement, which may only be amended or terminated by a joint decision.

According to AVOCAD lawyer Kamilė Šemeklytė, who represented one of the parties in the lower courts in this case, this court ruling is particularly important for owners and administrators of commercial and administrative buildings. This is especially true when some owners want to change service providers but there is no consensus, when services are actually provided to the entire building, so "disconnection" may have consequences for others; when questions arise as to whether a unilateral notice is sufficient to terminate the contract.

"The Lithuanian Supreme Court's ruling in this situation is focused on balancing interests and ensuring the continuity of joint property management until the co-owners reach a joint decision or establish rules for use," the lawyer emphasises in her commentary on the ruling. This decision of the Supreme Court of Lithuania is final and not subject to appeal.

Lithuanian lawyer to head international CICERO lawyers' league

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Attorney Jonas Zaronskis, founder and partner of the AVOCAD law firm, has been serving as presidentof the Cicero League of International Lawyers since the beginning of this year. This is a significant international recognition for both the attorney himself and the Lithuanian legal community.

AVOCAD became a member of this international organization back in 2014. From the very beginning of his membership, J. Zaronskis' involvement in the organization's activities has been consistent, active, and purposeful, going well beyond the limits of formal participation. Over the course of nearly a decade, he has contributed significantly to the growth of the league, the strengthening of relationships between members, joint professional initiatives, and the creation of an international community culture. In 2023, J. Zaronskis was elected to the CICERO board, where he continues to work and will continue in his new position as president.

One of the most important stages in the relationship between AVOCAD and CICERO was the selection process to become the sole representatives of Lithuania in the league. This process was distinguished by exceptionally high quality standards: the firm's activities were personally evaluated during a two-day audit by the then CICERO president Peter Munday, who observed internal work processes, team performance, and the quality of legal services provided. This experience clearly confirmed that quality is not just a declarative value in the CICERO league – it is a standard applied in everyday activities.

Today, this organization brings together more than 45 internationally recognized independent law firms, and its community of members is based on trust, professionalism, and personal connections. J. Zaronskis knows many of the league's members not only professionally, but also personally, which ensures fast, direct, and extremely high-quality legal assistance to clients around the world.

As president of CICERO, Jonas Zaronskis is responsible for the strategic direction of the league, coordinating the work of the board, strengthening cooperation among members, overseeing the selection process for new members, ensuring the highest professional and ethical standards, and representing the league in international professional forums. The president also plays an important role in strengthening the organization's visibility, reputation, and long-term value for its members.

“Being the sole representatives of CICERO in Lithuania and, after almost 10 years of membership and strong, consistently nurtured relations, accepting the position of president is a great honor and responsibility not only for me, but for our entire team,” notes the lawyer.

This appointment marks an important milestone not only in J. Zaronskis' professional career, but also in the development of AVOCAD as a whole. It reaffirms AVOCAD's consistent commitment to building sustainable international relationships, operating in the global legal market, and adhering to the highest professional standards.

The Cicero League of International Lawyers was established in 2013 in the United Kingdom as a network of independent international law firms, aiming to bring together high-quality legal service providers and promote their cooperation around the world.

 

Who is responsible for snow removal in apartment buildings?

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With the weather turning colder in Lithuania, the long-awaited snow has finally returned. Unfortunately, along with the opportunity to enjoy winter scenes outside the window, large amounts of snow also cause practical problems – from clearing snow from the roofs of houses to slippery sidewalks and courtyards. The question of who is responsible for clearing snow from apartment buildings and who is liable for any incidents that may occur is becoming particularly relevant.

Rokas Puodžiūnas, a lawyer at the AVOCAD professional association of lawyers , comments on such situations , pointing out that responsibility for snow removal and territory maintenance arises not "from habit" but directly from legislation.

The Civil Code stipulates that owners (users) of apartments and other premises must manage, properly maintain, repair, or otherwise take care of common use objects. This means that apartment owners are only responsible for those objects that belong to them under common partial ownership.

In this case, apartment owners are responsible for taking care of the land plot that is assigned to the multi-apartment residential building in accordance with the procedure established by law, i.e., when the land plot is formed and transferred to the owners of the building for management.

To manage the common areas of an apartment building, the owners of apartments and other premises establish an association, enter into a joint activity agreement, or select an administrator for the common areas. However, as the lawyer points out, regardless of the form of management chosen, the obligation to take care of and maintain the allocated land plot, including snow removal, remains:

  • The chairperson of the community is responsible for the use and management of the common land plot in accordance with the requirements of laws and other legal acts.
  • the administrator of common use objects, in accordance with the laws and regulations governing the use and maintenance of buildings, their engineering systems, and potentially dangerous equipment, maintenance of land plots, organizes technical maintenance of the building, maintenance of land plots used and managed by the owners of premises on the basis of common partial ownership or other grounds established by law;
  • The joint activity agreement aims to establish the common rights, obligations, and interests of the owners of premises in a multi-apartment building in relation to the management, use, and maintenance of the building's common areas and the land plot assigned to the building in accordance with the procedure established by law.

Therefore, the fundamental rule is as follows: the owner of the land plot is responsible for keeping the courtyard of an apartment building clean and tidy. Accordingly, the manager of the common areas of the apartment building (the community, owners operating under a joint activity agreement, or the administrator) is only responsible for the land plot that has been assigned to them and transferred to their management. This obligation is established not only by the Civil Code, but also by subordinate legislation. If the land plot is not assigned to the apartment building or has not been transferred to the apartment owners for management, the municipality is responsible for its maintenance. In such a case, it is the municipality that is responsible for organizing snow removal, reducing slipperiness, and other maintenance work in the area.

When it comes to the maintenance of apartment building roofs, the situation is even clearer. If snow accumulates on the roof or icicles form that could pose a threat to the health or property of passers-by, the building owner or owners are responsible for taking care of this. This is considered one of the essential duties for the safe operation of a building.

Building maintenance requirements are detailed in the technical construction regulation STR 1.07.03:2017 and other legal acts. For example, this regulation clearly states that snow and ice must not accumulate on the walls, skylights, windows, and other vertical surfaces of buildings. If snow or ice does accumulate, it must be removed from the surface of the building at a distance of at least 2 meters.

In addition, the regulation requires the periodic removal of snow, water, dust, and other debris accumulated on the building and its structures. It also establishes an obligation to regularly clean dust, grease, and other contaminants from heating, ventilation, water supply, sewage, and other engineering systems and equipment in order to ensure the safe and proper operation of the building. Failure to maintain the roof during the winter period and ensure a safe environment may result in civil liability if damage is caused to another person or property as a result.

The Civil Code stipulates that damage caused by defects or collapse of buildings, structures, or other constructions must be compensated by the owner or manager of these objects, unless it is proven that the damage was caused by force majeure or the victim's own intent or gross negligence. The manager is considered to be the person who has the object in their possession and who is entrusted with its operation, maintenance, or management, regardless of whether they are formally considered the owner.

Case law consistently confirms that one of the essential objectives of building maintenance is the obligation to ensure that snow and ice do not accumulate on the walls, windows, skylights, and other vertical surfaces of buildings, and that any accumulation is removed in a timely manner to avoid danger to people and property. In its systematic assessment of the applicable legal regulations, the court recognized that the administration of a residential building includes not only the removal of icicles, but also the removal of snow from the roof, even if this obligation is not directly specified in separate provisions, as it arises from the general obligation to ensure the safe use of the building and its structures, and therefore the building administrator is considered to be the manager of the residential building.

In this particular case, it was established that the administrator had failed to properly perform his administrative duties, had not ensured the safe use of the common structures of the apartment building, and had not cleared snow and ice in a timely manner. As a result, snow and ice falling from the roof of the building damaged the resident's car. Since all elements of civil liability were proven and the defendant failed to prove circumstances that would exempt him from liability, the court awarded damages to the victim. It should be noted that the car was parked in a prohibited or obviously dangerous place, and the amount of damage was not disputed in the case. For these reasons, the decision on compensation for damages was considered justified.

Therefore, residents should contact the entity responsible for the maintenance of specific objects in cases of unplowed roads or unbroken icicles. The municipality is responsible for the courtyards of apartment buildings where no land plots have been formed and their management has not been transferred to the owners of the apartment building. If a land plot has been formed and transferred to the management of the building owners, it must be maintained by the entity through which the apartment owners exercise their rights – the building community, the owners operating under a joint activity agreement, or the building administrator. In all cases, the building owner should be contacted regarding the maintenance of the building's roofs.

 

Business with friends: invisible risks that cost friendships

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Starting a business with friends or close associates often seems like a natural and safe choice. There is trust, shared enthusiasm, belief in the idea, and a feeling that "we will work everything out among ourselves." However, according to lawyers, this is where one of the biggest risks lies—the lack of formal agreements. Practice shows that when starting a business without clearly defined rules, friendships often do not withstand the realities of business.

The first serious challenges usually arise not immediately, but when the company begins to grow, when income is generated and it is time to calculate the results for the year. Then, naturally, questions arise: who contributed how much, whose contribution was greater—capital, ideas, connections, or daily work. What seemed self-evident at the beginning turns into disputes over workload, responsibility, and the fair distribution of profits. And when these issues are not discussed in advance, emotions take over.

Eimantas Čepas, a lawyer at the AVOCAD law firm, discusses why a shareholder agreement is necessary even when you are setting up a business with your closest friends and family.

A shareholders' agreement is a private agreement between the shareholders of a company that supplements the company's articles of association but is not publicly registered. Unlike the articles of association, it focuses not on the formal structure of the company but on the actual relationships between the partners and day-to-day decisions.

"A shareholders' agreement allows for more flexible regulation of relations between shareholders – determining how decisions are made, how profits are distributed, and what the conditions are for withdrawal or transfer of shares. It helps to avoid situations where decisions have to be made spontaneously or on the basis of emotions," explains E. Čepas.

Emotions are often the main catalyst for conflict. When there is no clear agreement on who is responsible for what and how each person's contribution is evaluated, even a successful business can become a field of disagreement. From a legal point of view, a shareholders' agreement is a civil contract with all the consequences of a normal contract, so its provisions are binding on all parties to the agreement.

"The shareholders' agreement acts as a safeguard, ensuring that the business partnership is managed transparently and that disputes are resolved according to predefined rules," emphasizes the lawyer.

It is important to understand that such an agreement is not only relevant for large companies. On the contrary, it is often even more important for small and growing businesses. When a business is created by friends, colleagues, or family members, trust often replaces formal agreements, but as the company grows, this becomes a weak link.

"Even in a small company, disagreements about money, decisions, or workload can become a serious source of conflict. A legal document helps to separate personal and business relationships, maintaining a clear line of responsibility," says E. Čepas.

A well-drafted shareholders' agreement covers decision-making procedures, profit distribution principles, conditions for transfer of shares and withdrawal, non-competition and confidentiality obligations, as well as dispute resolution mechanisms. If these issues are not addressed, disputes later become more complex, longer, and more expensive.

It is also important that shareholder agreements have full legal force. Although they are not registered in public registers, courts consider them to be valid and enforceable agreements between shareholders, provided that they do not violate mandatory legal provisions.

"This is one of those cases where good legal form means real content and legal certainty," emphasizes the lawyer.

The most common mistake in practice is not concluding a shareholders' agreement at all or concluding it too late, when the conflict has already begun. Another mistake is to rely on abstract, universal templates that do not reflect real relationships and the specific activities of the company.

"It is often believed that an agreement is unnecessary if the shareholders are friends or family members. In practice, however, it is precisely these relationships that most often turn into the most complex disputes," notes AVOCAD attorney Eimantas Čepas.

A shareholder agreement is not a sign of mistrust. It is proof of a mature partnership and an investment in long-term stability. According to the lawyer, it is better to agree clearly today than to argue in court tomorrow. "Clear rules help protect not only the business, but also what is often most important – the human relationships that started it all," notes Eimantas Čepas.

 

AVOCAD continues its Christmas tradition – instead of business gifts for customers, it supports SOS Children's Villages Lithuania

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The biggest changes often start with a small push. Sometimes it's the belief that you can do it. This first push may be a conversation with a psychologist who helps you understand your feelings. Sometimes it's a cozy family dinner where you feel safe and cared for for the first time. And sometimes it can be a club where you finally discover yourself: music, sports, creativity. Such things, which may seem small at first glance, can become a cornerstone of change in the life of a child or teenager from a difficult environment.

AVOCAD believes that every person, even if they are just starting to climb the ladder today, deserves support and a chance. That is why we choose to support not only those who have already reached the top, but also those who are still climbing—children and teenagers who most need to believe that they can do it," says Egidijus Langys, managing partner of the AVOCAD law firm.

According to him, this initiative has already become a beautiful Christmas tradition. "For many years, we have been allocating funds intended for business gifts to support those who need it most today. Every year, we see that this idea inspires other businesses to do the same. Sharing light is the best gift we can give," says the lawyer.

This year's gift budget is allocated to SOS Children's Villages Lithuania's "Gerumo krautuvėlė" (Kindness Store) – an initiative that allows everyone to contribute to the well-being of children and adolescents by giving them not a gift, but an opportunity.

According to Rasa Zaidovaitė, program manager at SOS Children's Villages Lithuania, every year this initiative gives teenagers the opportunity to attend clubs of their choice, receive psychological help, or experience their first lessons in independence. "Even insignificant support becomes a springboard that leads to big changes," says the representative.

Rasa Zaidovaitė cites the story of a girl named Ilona as an example. "She came to the day center when she was ten—calm, but full of anxiety. Having grown up in a violent environment, she had nothing she could call security. The day center became her haven—a place where she could bathe without fear for the first time, ask for help, and hear that she was worth more. Today, Ilona is 20, working and living independently. As she herself says, the opportunity to escape was her second birth," says the program manager of SOS Children's Villages Lithuania.

Another story is that of Jonas. "When he first appeared at the window of our center, he was six years old. He knocked on the glass and looked inside—curious, but quiet. His father had died, and his mother was raising three children on her own. They lacked everything—food, warmth, attention. Today, Jonas is fourteen. He attends clubs, works hard at school, and looks forward to Fridays, when he can choose a gift for his family at the children's day center "store" for doing good deeds. He says that this is his home. Here, people listen to him and believe in him. That belief is the essence of our mission," says Rasa.

According to her, it is precisely such stories that remind us why support is more than just financial assistance. It becomes an opportunity—a new starting point from which a life without fear begins.

The AVOCAD professional association of lawyers invites other businesses and individuals to join this initiative and visit the Kindness Store and together give someone a chance for a new start in life.

The AVOCAD law firm not only provides a wide range of legal services to businesses, but also actively supports social initiatives that promote education, the inclusion of children and young people, and conscious business responsibility.

We are attaching a video clip of this social campaign.

Social initiatives – video.

Five most common mistakes in construction disputes that cause both clients and contractors to lose cases

Posted on by avocad_bxgv12hf

The construction sector in Lithuania is one of the most complex and controversial. Contractors meet in court, disagreeing on constantly changing work volumes, strict deadlines, technical requirements, and changes in legal regulations. However, legal practice shows a clear trend that most disputes arise from much simpler issues – disorderly documents, verbal agreements, incompletely filled out acts, and unproven facts. As AVOCAD lawyer Kamilė Šemeklytė notes, in construction disputes, it is not the party that has done the most that wins, but the party that can prove what it has done, when it has done it, and under what conditions.

The work will "speak for itself" – the biggest myth in construction

First of all, according to the lawyer, people in construction often trust each other and rely on intuition or verbal agreements. As a result, certain tasks are assigned simply on the belief that the result will be good.

Although legislation does not prohibit the conclusion of verbal contracts, in practice this poses a significant risk. Regardless of the relationship between the client and the contractor, the scope of work, or the price, it is always recommended to conclude a written contract and to formalize all additions, changes, work schedules, and other agreements in writing.

Civil procedure provides for a clear rule: each party must prove the circumstances on which it bases its position. This means that both the contractor and the customer will have to provide evidence in the dispute, rather than just abstract arguments.

In the absence of written contracts, schedules, or agreements, verbal agreements become mere interpretations of the parties when a dispute reaches court, which are usually favorable only to the party presenting them. As a result, the parties' positions diverge, and the court cannot confirm or refute such verbal statements because they do not have sufficient probative value. This can be critical when making a final decision in a case.

In such situations, the court relies solely on objective, written evidence, and verbal agreements are therefore irrelevant. "The court has no way of determining the actual situation when agreements were verbal. It cannot confirm the scope of work, price changes, or deadline extensions if there is no written evidence. Therefore, a party that relies solely on a verbal agreement is considered to have failed to prove its position," notes the AVOCAD lawyer.

This can have serious consequences: for example, the entity may be obliged to perform certain works, even though it was agreed verbally that they would no longer be performed. This is why verbal agreements in construction are one of the biggest risks.

Additional work – only with a written order

Secondly, written documents are very important throughout the entire duration of the contract. Although the contract usually specifies a specific price for the work, calculated by the contractor after evaluating all the project documentation, in practice there is often a need to change solutions or perform additional work.

This means that the cost of the work also increases, but although it seems that the contractor automatically acquires the right to remuneration, since this is additional work, nevertheless, the specifics of the legal relationship between the parties may mean that, in the absence of a written agreement between the parties on the additional work, the contractor will have performed the additional work at its own risk and expense and will not be entitled to payment for this additional work.

The lawyer points out that if the client and contractor sign a written contract for work, the client, as an experienced professional, usually ensures that the contractor has been provided with all project documentation and a clear, unambiguous task. In such a case, the contract price is considered final and unchangeable, and includes all work necessary to complete the project fully and properly in accordance with the documents provided by the client.

Therefore, if the parties do not agree in writing on additional work, the contractor may lose the right to remuneration for the work performed, as the customer may point to the provision of the contract stipulating the contractor's obligation to assess the entire task and project documentation, its solutions and to assert that this should not be considered additional work and that this work was included in the contract price, and therefore the customer is not obliged to pay for the work performed.

Inaccurate or unchangeable work schedules

Thirdly, another acute problem in construction is delays in the performance of construction works, which are associated with significant losses. In order to ensure the shortest possible delays and the least possible losses due to the contractor's delays, when concluding a contract for work, the parties to the contract should not forget to record the schedule for the performance of the work in writing. "A written schedule will not only allow the client to control the construction process, but will also allow the client to take all measures to minimize potential losses," says Kamilė Šemeklytė.

A written schedule for the performance of contract works approved by both parties will facilitate the burden of proof in legal proceedings, which will not only allow the customer to prove that the contractor failed to comply with the schedule for the performance of works (if such a delay on the part of the contractor occurred), but will also facilitate the progress of the work for the contractor itself.

Often, more than one contractor works on a construction site. In such cases, it is important not only to know the completion date of the work, but also when the work will be handed over to the next contractor. If one subcontractor is late, the next contractor cannot start their work on time. This means that the second contractor is not to blame for the delay in the overall project and cannot be held liable for any related losses.

Therefore, according to the lawyer, the work schedule approved by both parties becomes very important—it allows to clearly determine which contractor violated the deadlines. This helps both in assessing losses due to delays and in resolving disputes in court, as proving the case becomes simpler and clearer.

Admission acts – an important legal moment

Fourth, according to AVOCAD's lawyer, it is very important to emphasize that the parties must not only agree in writing on the scope of work, price, deadlines, and other conditions, but also formalize the work performed in writing—its quantity, value, and the fact of its transfer. This is done by signing certificates of completion, which are signed by both the contractor and the client. These certificates confirm that the work has been delivered and accepted.

The Supreme Court of Lithuania has clarified that the acceptance certificate for completed works is a document confirming the performance of a contract for work, which records the results of the work performed by the contractor and the customer's willingness to accept it, with or without comments. In other words, this certificate confirms the fact that the work has been handed over and determines the rights and obligations of both parties after the handover.

First of all, the signed certificate gives the contractor the right to issue a VAT invoice and demand payment. However, it is important to understand that the certificate of completion is not a document that can be used to change the terms of the contract, including the contract price (unless the parties have agreed otherwise in the contract).

Secondly, the certificate of completion is also extremely important for the client. Legal regulations stipulate that the client has the right to refuse to accept the work, but such a refusal must be justified by clear reasons. Only a justified refusal means that the contractor does not acquire the right to demand payment.

Finally, the work acceptance procedure is closely related to the assessment of work quality. The Supreme Court has ruled that the compliance of work with requirements must be assessed at the time of acceptance. Therefore, the customer must act with due care and inspect the results of the work to check for obvious defects. The customer is not required to use special measures – a normal, reasonable inspection is sufficient.

Signing the certificate of completion is one of the most important stages of the construction process. Even if the relationship between the parties is based on trust, all work transfer and acceptance actions must be formalized in writing. Practice shows that relations remain smooth until disagreements or shortcomings arise – and that is when written documents become essential evidence," notes Kamilė Šemeklytė.

Even minor agreements on the construction site must be recorded.

Fifth, although it is recommended that both the contract and any amendments, additions, and transfers of work be formalized in writing, this is not always the case. Construction is a very dynamic process, and the need to refine solutions, give instructions, or clarify project details is a constant process. Therefore, verbal agreements on the construction site are convenient and often used, but they have no probative value.

According to AVOCAD's lawyer, in order to avoid disputes in the future, even verbal agreements that do not change the essential terms of the contract should at least be confirmed in writing. The simplest way is for the responsible persons of the client and the contractor to correspond by e-mail. This does not require official documents, but creates clear written evidence. Another very effective method is weekly production meetings between the client and the contractor, which should be minuted. Such minutes are extremely useful in the construction process. If the dispute does go to court, these documents would become important evidence, as they would clearly show what decisions were made, what work was agreed upon, and what the actual intentions of the parties were.