Following the introduction of the following Orders in the UK earlier this year recovery should be easier and more cost effective.
European Payment Order
The European Payment Order (“EPO”) seeks to provide a quick, standard and cheap method for pursuing an uncontested debt throughout the EU, for both small and high value claims alike.
Standard forms are used for what is generally a written procedure. The costs of the scheme are commensurate with domestic rates.
As soon as a Claimant obtains an EPO in his favour it becomes automatically enforceable in every EU country (apart from Denmark). There is nothing further that you need. However, if the EPO is subsequently challenged by your debtor the debt will move outside the scope of the fast track EPO and into the standard court process in the applicable jurisdiction, usually determined by your Terms and Conditions, or your debtor’s whereabouts.
The EPO is designed to work alongside local debt recovery systems
There is a downside to the use of the EPO as a debtor can frustrate the procedure by denying the claim, in which case the procedure cannot be used.
European Enforcement Order
Whilst the EPO is an option for those wanting to enforce an uncontested debt, its use is not mandatory. Also available to a Claimant is the European Enforcement Order (“EEO”).
Again the EEO is only available for uncontested debts, where a Defendant has either agreed to the debt, or does not appear in court where the claim is heard.
If the matter is subsequently contested it can be brought before the appropriate national court and proceed as a defended action.
Applying for an EEO is a 2 stage process, as opposed to the one stage European Payment Order Procedure.
Once the EEO has been granted, the original national court order is enforceable in any other EC Member State (not Denmark). There is no need to register the order, nor convert it into a domestic order. The balance due under the EEO will be recovered in accordance with the rules of enforcement to the particular member state with jurisdiction.
European Small Claim Procedure
The European Small Claim Procedure (“ESCP”) was introduced to reduce costs and speed up the process for making low value claims. It is an alternative to raising court proceedings against a party in another member state.
The ECSP is only available where the value of the claim does not exceed 2000E (currently £1700), excluding interest, disbursements and outlay.
The ESCP is not available for recovery of a number of different types of payment, such as bankruptcy and winding up, as well as social security and employment matters.
As far as possible the ESCP is a written procedure unless the court orders that an oral hearing will be necessary. Unlike the determination of small claim disputes (under £5,000 (5900 E), under the ESCP the unsuccessful litigant should bear the costs of the proceedings, unless the costs are considered to be unnecessary, or disproportionate.
The ESCP should make life easier for consumers in resolving cross border litigation with a good chance that, if successful, they will also recover their legal costs
Steeles (Law) LLP handles both cross border debt recovery work, as well as UK based debt recovery litigation, together with an efficient bulk debt collection service.
For further information please contact Marcus Chapman, Solicitor in the Disputes Resolution Team by email on
mchapman@steeleslaw.co.uk
, or by telephone on +44 1603 598000.