“This case raised a much broader question – who protects a person conducting individual activity in Lithuania if they paid in advance but never received the service?” says A. Sabaitė.
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Received not what was expected
During the case examined at the Telšiai District Court, it was revealed that A. Sabaitė and UAB “Capital Centras” signed a cooperation agreement in the spring of 2023. According to it, the new broker was to receive training in two stages – introductory and three months of continuous training. The total value of these was stated in the contract as 1600 euros, applying a 1100 euro discount. According to A. Sabaitė, an invoice was issued for the amount of 500 euros, in which the discount was not separately indicated.
This price difference, according to the interviewee, later became important when a dispute arose, because the contract stipulated that if the broker terminated cooperation and did not create at least 10,000 euros in turnover for the company, the granted discount had to be returned.
According to A. Sabaitė, this condition raised doubts for her even before signing the contract. She provided the journalist with correspondence with UAB “Capital Centras,” in which, she claims, she was assured that the 1100 euros would not be demanded from her even if cooperation was terminated without achieving the results specified in the contract.
“Moreover – after the cooperation ended, the company’s director also confirmed that he had no claims against me. However, after some time, the situation changed,” says A. Sabaitė.
According to her, when the company found out that the broker continued her activity independently, she was demanded to pay 1100 euros – the amount stated in the contract as a discount applied to the training.
The most important question was not money
“I received an advance invoice for allegedly conducted training. This confused me because one of the reasons for terminating cooperation with the agency was that they did not fulfill their promises. Moreover, I lacked information, did not like the attitude towards clients, and the unilateral decision to change the contract terms,” says A. Sabaitė.
The interviewee asked UAB “Capital Centras” to provide the training content, dates, approval act, and invoice. However, according to her, she did not receive the requested documents – instead, she received a demand from a debt collection company to pay 1100 euros.
A. Sabaitė states that another important aspect of her case is not the disputed debt itself, but how its collection was initiated.
On November 1, 2024, amendments to the Consumer Rights Protection Law came into effect, setting requirements for the out-of-court collection of consumer debts. A. Sabaitė bases her position also on Article 61 of this law, according to paragraph 1 of which, before transferring a consumer’s debt for out-of-court collection, the service provider must first contact the consumer at least once regarding the full debt payment, and at least 30 days must have passed since such contact.
A. Sabaitė recounts that on November 27, 2024, she was issued an advance payment invoice, which was sent by email the next day.
Requested information about the debt
A. Sabaitė also raises the question regarding information about the claim made against her. According to her, neither the creditor nor the debt collection company provided the requested explanations about the basis, amount, and formation of the debt.
“I myself repeatedly asked to explain what my alleged debt consists of, on what basis it was calculated, and when it became overdue. My requests remained unanswered,” she says.
Instead of explanations, A. Sabaitė says she received a payment demand and later a lawsuit in court.
“According to my calculations, the debt collection procedure started on December 15, 2024, when only 18 days had passed since the invoice was sent,” she states.
“If I had received the training that was promised, this dispute would not have arisen at all. However, to this day I do not know their program, schedule, or what specific training was supposed to take place or actually took place,” adds the interviewee.
According to her, in court the company described the training as daily conversations with colleagues, joint meetings, and other communication.
“The court did not ask the plaintiffs to provide the training program, training plan, specific dates, training materials, or training delivery-acceptance documents. Instead, it relied on explanations from company directors and testimonies from some witnesses. Meanwhile, another group of witnesses claimed the opposite – that the promised continuous training did not actually occur. Why then was only the interested party believed?” wonders A. Sabaitė.
According to the interviewee, who is engaged in independent brokerage activity, an advance invoice alone does not prove that the service was provided. In her opinion, if such a document were sufficient to justify a claim without providing other evidence of service delivery, the client would effectively have to prove that they did not receive the service. She believes that in such a case, unscrupulous businessmen could theoretically issue advance invoices for disputed or even unprovided services and, relying solely on this document, demand payment from clients.
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“In my opinion, this would fundamentally shift the burden of proof and create insecurity for every service recipient,” says A. Sabaitė.
Why didn’t she go to court herself?
A. Sabaitė explains that, having not received continuous training, she did not go to court, but this does not mean she had no claims regarding the service. The interviewee states that she discussed the problems with company representatives and also contacted them in writing regarding the changing cooperation terms, although some conversations about the training took place verbally.
“When terminating cooperation, the company’s director assured me that I did not owe the company anything and that no financial claims would be made against me, so I saw no point in starting a legal process myself just to recover 300 euros that I had paid for, in my opinion, unreceived continuous training. The court would have required more money, time, and other resources than the disputed amount itself. This was my choice not to litigate, not a confirmation that I received the training,” explains A. Sabaitė.
This experience prompted her to raise a broader question – where can a person conducting individual activity defend their rights out of court?
Institutions have no single answer
The State Tax Inspectorate (VMI) clearly states that a person conducting individual activity is a natural person, and the concept of a legal entity does not apply to them.
However, the State Consumer Rights Protection Authority (VVTAT) views the situation differently. It emphasizes that only a natural person who purchases goods or services for personal needs is considered a consumer, but if a contract is concluded for professional or economic activity, the dispute is not considered a consumer dispute, and therefore the authority does not examine it.
To clarify whether the legal status of persons conducting individual activity is left in a gray area, the editorial office contacted the Seimas and responsible ministries.
However, a clear answer from a single institution was not obtained. The Seimas Committee on Law and Legal Affairs stated that it cannot assess a specific case and referred to the ministries. The Ministry of Social Security and Labour assigned the question to the competence of other institutions, and the Ministry of Justice (TM) redirected some questions to the Ministry of Economy and Innovation (EIMIN).
The latter explained that a person conducting individual activity, when concluding a contract for their economic activity, is considered a business entity, so such disputes are not considered consumer disputes and are not examined by VVTAT.
Waiting for initiative
EIMIN also explained that disputes between business entities are usually resolved by agreement between the parties, mediation, arbitration, or court, and the mere fact that one party to the contract is economically weaker than the other does not automatically mean that consumer legal relations arise.
Asked whether it is considering creating a separate out-of-court dispute resolution mechanism for persons conducting individual activity – similar to the Labour Disputes Commission or VVTAT – the ministry did not provide a specific answer. According to it, first the scale of the problem, the sufficiency of existing legal measures, possible administrative burden, and compatibility of such a model with civil law principles should be assessed.
There are ways to resolve disputes
TM pointed out that parties to civil disputes can agree on mediation. In certain areas, special out-of-court dispute resolution mechanisms operate – for administrative, tax, or labor disputes. For example, the Lithuanian Administrative Disputes Commission, Tax Disputes Commission, Small and Medium Business Ombudsman, and in the field of labor law – Labour Disputes Commissions.
In A. Sabaitė’s opinion, in her case the company chose a different path – instead of seeking a dispute resolution acceptable to both parties, it handed over the claim to debt collectors.
“Instead of trying to clarify the dispute, providing the documents I requested, or offering mediation, the company very quickly transferred the alleged debt for collection and later went to court. I got the impression that this was intended not to resolve the dispute but to psychologically pressure and intimidate a person who had just started independent activity and did not have the financial resources of a large company or a team of lawyers,” she says.
A. Sabaitė sums up her whole story with one paradox.
“In tax law, I am a natural person. But as soon as a dispute arises over the quality of service, I become a business entity to whom consumer protection no longer applies. This means lawyer fees, long cases, and a huge financial burden for a person who often is just starting their activity and does not have such resources as large companies,” says Asta Sabaitė.
The editorial office also contacted Gediminas Jankauskas, director of UAB “Capital Centras,” both by email and phone, but he did not want to comment. If a comment is provided, the article will be updated.
The ministry also indicated that it is open to proposals from interested parties. Having received data on systemic practical law application problems, it would be ready to assess whether the current regulation is sufficient and whether changes are needed.
