Private Law in an Era of Global Challenges

The leitmotif of the discussion during the session ‘Private Law in an Era of Global Challenges’, which was held on 10 May during the International Legal Youth Forum, was the doctrine of visibility as one of the key institutions of private law.

The current domestic state of the doctrine in its various interpretations (proprietary rights and encumbrances) has not been fully formalized within domestic dogmatics, so the discussion among participants was very emotional and sometimes turned into an argument.

The discussion moderator, Andrey Pavlov, an associate professor of the Department of Civil Law at the Faculty of Law of St. Petersburg State University, suggested considering individual institutions where the doctrine of visibility is applied or could be applied and be beneficial.

Radislav Repin, a lecturer in the Department of Civil Law and Procedure at the National Research University Higher School of Economics and an adviser at Versus.legal, kicked off the session with a discussion about the realm of property law, where the doctrine of visibility has long and firmly been present at a number of institutions: visibility when acquiring property rights by a bona fide purchaser and visibility with respect to the pledge and encumbrances of items (rent or a loan). Repin noted that this institution exists in most, if not all, legal orders of the world and naturally gives preference to the owner.

“Indeed,” he continued, “it’s correct when the owner of an item should be able to return it. In actuality, though, the purchaser is not forgotten either, but under certain conditions. There are three such conditions: first, [the purchaser] must be conscientious, i.e., it must rely on this visibility; second, it must pay the price right down to the last penny; and third, and probably the main thing here, the item was taken out of the owner’s possession by his will. If these three factors are present, we have a bona fide purchaser, and he becomes the owner.”

Repin said this mechanism is very controversial from the standpoint of private law because, on the one hand, we are endangering the owners, while, on the other hand, this institution does not provide full protection to bona fide purchasers.

The discussion also focused on how to ensure protection in the event of the bona fide acquisition of pledge or lease rights.

Denuo Senior Associate (formerly DLA Piper) Renata Polyakova spoke about specific aspects of the visibility of law in the context of intangible intellectual property (e.g., a trademark). She said this issue has emerged from practice. She stressed that when people “try to transfer the institution of protection for a bona fide purchaser to the grounds of intellectual property rights, one of the arguments sounds like this – since it is an intangible object, we do not have the ability to establish ownership over it, which prevents us from creating visibility. And since we don’t have this visibility, that means there shouldn’t be any talk about any type of protection.” Polyakova noted that studies have been conducted on what makes things similar, what distinguishes property and intellectual property rights, and what institutions of property law can work in intellectual property law.

The discussion participants believe that the doctrine of the visibility of law could also be useful for solving problems in remote banking services when issuing a loan remotely.

Sergey Karpushkin, director of the Legal and Corporate Affairs Directorate of Sovcombank Factoring, cited statistics showing that the total amount of funds stolen from bank customers in 2021 amounted to more than RUB 14 billion. Of this amount, RUB 9 billion were stolen in the remote banking segment. In most cases (99%), these were individuals. The share of funds returned amounted to no more than 4%. However, judicial practice does not often interpret so-called banking operations “without the client’s consent” in favour of citizens. Many experts believe that the client should not bear all the risk. A fair balance of interests is needed, and the doctrine of the visibility of rights in the remote banking services segment should be applied if three elements exist: good faith, objective visibility, and the creation of visibility conditions.

Wrapping up the session, the speakers noted that the doctrine of visibility is universal, but its criteria are unique.

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