Toolkit on European Order for Payment

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1. Source

The information contained in the European Judicial Atlas are currently migrating towards the European e-Justice Portal.

From March 2016, most of the information will be only available on the Europea, e-Justice Portal.

 European Judicial Atlas in Civil matters

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2. Introduction: Creation of a genuine European civil procedure

Recital 6 explains the purposes of the Regulation by stating: “The swift and efficient recovery of outstanding debts over which no legal controversy exists is of paramount importance for economic operators in the European Union, as late payments constitute a major reason for insolvency threatening the survival of businesses, particularly small and medium-sized enterprises, and resulting in numerous job losses.”

As long as the content of domestic laws and their efficiency vary significantly from a Member State to another, there is a need to set up a European law that would guarantee identical conditions to all the debtors and the creditors throughout the European Union.

Complementary and optional nature of the Regulation

Article 1,3 of the Regulation states that “This Regulation shall not prevent a claimant from pursuing a claim within the meaning of Article 4 by making use of another procedure available under the law of a Member State or under Community law.”

The claimant, when he fulfils conditions to obtain a European order for payment can also resort to domestic procedures to recover his debt or resort to domestic order of payment of his own country. In such a case, he will not benefit directly from a European title. He has to claim in the country that issued the decision for a certificate according to the EC Regulation 805/2004 , or according to the EU Regulation 1215/2012 , so called Brussels I a.

Moreover, the claimant still has the possibility according to article 11,3 of the Regulation to apply for a European Order for Payment or to any other procedure of the domestic law of a Member State.

This is explained in Recital 10 of the Regulation that states “The procedure established by this Regulation should serve as an additional and optional means for the claimant, who remains free to resort to a procedure provided for by national law. Accordingly, this Regulation neither replaces nor harmonises the existing mechanisms for the recovery of uncontested claims under national law.”

Cost of the procedure

Article 25 explains in its first paragraph the order of magnitude “The combined court fees of a European order for payment procedure and of the ordinary civil proceedings that ensue in the event of a statement of opposition to a European order for payment in a Member State shall not exceed the court fees of ordinary civil proceedings without a preceding European order for payment procedure in that Member State.”

The Regulation gives an explanation of court fees in its second paragraph: “court fees shall comprise fees and charges to be paid to the court, the amount of which is fixed in accordance with national law.”

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3. Object

To simplify, to speed up, to reduce the cost

These are the goals of the regulation that are mentioned in its first article. The idea is to simplify, to speed up and to reduce the cost of litigations in cross-border disputes concerning uncontested pecuniary claims by creating a European order for payment procedure. The wording of article 4 of the EC regulation 1896/2006 also makes it obvious as it states: “The European order for payment procedure shall be established for the collection of pecuniary claims for a specific amount that have fallen due at the time when the application for a European order for payment is submitted.”

To ensure free movements of orders of payment

The Regulation also aims to ensure free movements of orders of payment among Member States by creating minimum standards. The respect of these standards makes intermediary procedures prior to execution or recognition in the State of execution unnecessary.

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4. Scope

Member States

According to article 69 of the Treaty of the European Union, the Regulation does not apply directly to Denmark, The United Kingdom and Ireland.

However, as stated in Recital 31 of the EC Regulation 1896/2006, The United Kingdom and Ireland expressed their wish to participate in the adoption and application of the Regulation, in accordance with article 3 of the Protocol Annexed to the Treaty on European Union and to the Treaty establishing the European Community.

Denmark is thus the only Member State in which the Regulation is not applicable.

Scope rationae materiae

The subjects dealt with in the EC Regulation 1896/2006 are listed in its article 2.

It states: “This Regulation shall apply to civil and commercial matters in cross-border cases, whatever the nature of the court or tribunal. It shall not extend, in particular, to revenue, customs or administrative matters or the liability of the State for acts and omissions in the exercise of State authority (‘acta iure imperii’).”This article is almost a complete replica of article 2 of the EC regulation 805/2004, which deals with the scope of this text. But, this provision differs from the EU Regulation 1215/2012, which does not exclude acta jure imperii.

Some subjects are explicitly excluded from the scope of the Regulation: rights in property arising out of a matrimonial relationship, wills and succession, bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings. Are also excluded: claims arising from non-contractual obligations, unless they have been the subject of an agreement between the parties or there has been an admission of debt, or they relate to liquidated debts arising from joint ownership of property.

The EC Regulation 1896/2006 does not explicitly exclude arbitration from its scope while it is excluded from the scope of the EC Regulation 805/2004. Arbitration can be considered as de facto excluded from the scope of the EC Regulation 1896/2006.

Cross-borders situations

Unlike the EC Regulation 805/2004 concerning European Enforcement Order, the Regulation concerning European order for payment procedure is only applicable to cross-borders disputes.
The Regulation explains in it article 3 that as cross-borders dispute is a dispute “in which at least one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court seised.”

The Regulation does not give any definition of the notion of “habitual residence” which can lead to legal uncertainty.

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5.  Competence

Generalities

Jurisdiction is dealt with in article 6 of the Regulation.

The 1st paragraph specifies that jurisdiction is determined according to the applicable rules of the European Union, especially, the EU Regulation 1215/2012 (so-called Brussels I a).

Specificities for the consumer

According to article 6.2 of the Regulation, when the defendant is a consumer who concluded a contract “for a purpose which can be regarded as being outside his trade or profession”, only the courts of the Member State where he is domiciled according to article 62 of the EU Regulation 1215/2015 have jurisdictions.

The Regulation is stricter than the EU Regulation 1215/2012 that allows minor exemptions to this principle.

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6. Where to find the documents?

The European Commission established the European Judicial Atlas in civil matters which provides to citizen and practitioner an easy access to important practical information for judicial cooperation in civil matters.

The site is accessible in 22 of the 24 official languages of the European Union (Cratian and Danish are missing)

For a direct access to the information on the Regulation:

The left column gives access to the following information:

 The information contained in the European Judicial Atlas are currently migrating towards the European e-Justice Portal.

From March 2016, most of the information will be only available on the e-Justice Portal.

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1. Specificities

Unilateral procedure

The European Order for Payment procedure is a unilateral procedure introduced by a creditor. This one must only give precise information concerning the claim to allow the defendant to decide to file opposition at the claim or not to do so. In fact, the competent court does not proceed to a thorough examination of the request to deliver the order for payment but bases its decision only on the application form.

It is an efficient tool for the claimant in case the defendant does not pay. The Regulation places all the responsibility on the defendant. If he does not react by using the opposition procedure, the claimant will benefit from a decision enforceable in each and every country of the European Union.

The application can be made by the claimant or his representative

Article 7.6 states that “The application shall be signed by the claimant or, where applicable, by his representative.”

The ratio legis of this provision is to organise a simple, quick and efficient procedure based on the use of standard forms concerning the recovery of uncontested debts. Thus, it seems normal to give to the claimant the opportunity to sign the application for a European order for payment on his own.

However, the claimant can face several issues while filling in the forms in an appropriate manner. In such a case, he should contact a professional, for example a judicial officer.

Forms

The Regulation provides standard forms to facilitate the procedure and to allow the use of new technologies.

As the procedure is unilateral and can be used directly by the sole claimant, it was necessary for the legislator to set up a very simple and easily accessible procedure.The legislator created 7 standard forms in 7 Annexes to the Regulation:

Given that, the court must check the application, including jurisdiction and description of the evidence, based on the elements written in the standard form A, the claimant shall not abuse by using such a procedure.

Therefore, Article 7.3 of the Regulation states that “In the application, the claimant shall declare that the information provided is true to the best of his knowledge and belief and shall acknowledge that any deliberate false statement could lead to appropriate penalties under the law of the Member State of origin.”

Evidence

In the application, the claimant must provide specific information to identify and prove the debt so that, if relevant, the defendant can challenge the decision. He must also provide a description of the evidences in support of his claim. However, evidences themselves shall not be attached to the application.

Subsidiary role of the domestic procedural law

Even in the case of a European procedure, the Regulation defines cases in which domestic laws apply concerning specific details. It is the case in the following articles:

 Claims arising before the entry into force of the RegulationAs the Regulation does not limit its scope to claims that aroused after its entry into force, one can assume that a claim that aroused before can be submitted to the European Order for Payment procedure.

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2. Conditions

Pecuniary claims for a specific amount that have fallen due

Article 4 explicitly explains that only pecuniary claims for a specific amount that have fallen due at the time when the application for a European order for payment can submitted.

The regulation is not applicable for obligation to do or not to do something.

In the form, there is a line for the main amount (point 6), a line for the interests (point 7), a line for contractual penalties (point 8) and a line for the fees (point 9). Therefore, the amounts claimed must be determinable when a European order for payment is introduced.

Uncontested claim

Article 1.1 states that: “The purpose of this Regulation is to simplify, speed up and reduce the costs of litigation in cross-border cases concerning uncontested pecuniary claims by creating a European order for payment procedure”.

The contested or uncontested nature of the claims depends on the behaviour of the defendant. If he does not object to the European order for payment, the claim can be considered uncontested. On the contrary, if the defendant opposes the order, the uncontested nature of the claim disappears.

The contested or uncontested nature of the claim is not definitely determined at the time of the application but during the European Order for Payment procedure, which is an important difference compared to the Regulation concerning the European Enforcement Order.

No limitation of the amount

The Regulation does not set any debt ceiling to introduce an application of order for payment.

Therefore, the claimant can introduce an application of order for payment for small amount but also for significant debts.

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3. Application for a European Order for Payment (Article 7)

Mandatory information that should be included in the application

The application has to be made by using Standard Form A, set out in Annex 1.

The application shall state:

Opposition to the transfer to ordinary civil proceedings according to Article 17In an appendix attached to the claim, the claimant is entitled to inform the court that he refuses the transfer to ordinary civil procedure as organised by Article 17 of the Regulation if the defendant decides to lodge a statement of opposition.

The claimant keeps this option throughout the process until the delivery of the order for payment.Signature of the application

According to Article 7.6, the application shall be signed by the claimant or, where applicable, by his representative.
If the application is introduced by electronic means, it should be signed in accordance with article 2 paragraph 2 of the Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures. This signature is recognised in the Member State of origin, which cannot ask for supplementary conditions.

Submission of the application

According to Article 7.5 of the Regulation, the application shall be submitted in paper form or by any other means of communication, including electronic, accepted by the Member State of origin and available to the court of origin.

According to Article 29 of the Regulation, Member States shall communicate to the Commission which courts have jurisdiction to issue a European Order for Payment.

These communications are available on the website of the European Judicial Atlas in civil matters, which is regularly updated.

Competent court to deliver a European Order for Payment

According to the Brussels I Regulation and now Brussels I Recast Regulation, the court where the defendant is domiciled has jurisdiction.

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4. Examination of the application

Article 8 of the Regulation explains that “The court seised of an application for a European order for payment shall examine, as soon as possible and on the basis of the application form, whether the requirements set out in Articles 2, 3, 4, 6 and 7 are met and whether the claim appears to be founded. This examination may take the form of an automated procedure.”

It means that the court must check if the application falls under the scope of the Regulation (Article 2), if it is a transborder case (Article 3), which concerned a pecuniary claim for a specific amount that have fallen due (Article 4) and if it has jurisdiction according to international rules (Article 6). Finally, the court must check if the claimant accurately filled in the Standard Form A set out in Annex I (Article 7).

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5. Completion and rectification

Article 9 of the Regulation offers to the claimant, the possibility to complete or rectify the application when the conditions of Article 7 are not met.

In such a case, the court will use Standard Form B set out in Annex II.

The claimant will have to complete or rectify his application within a time determined by the court.

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6.  Modification of the application

Article 10 of the Regulation states that if the requirements referred to in Article 8 are met for only part of the claim, the court shall inform the claimant to that effect, using Standard Form C as set out in Annex III.

In such a case, the claimant can accept or refuse the proposal for a European order for payment made by the court. According to Article 9.2, the claimant has to use Standard Form C as set out in Annex III in a period determined by the court.

If the claimant accepts the proposal, the judge will issue an order for payment. Domestic laws deal with the consequences for the rest of the amount.

In case the claimant does not reply in the fixed period or if he refuses the offer made by the court, this one rejects the application for a European order for payment in its entirety.

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7. Rejection of the application

Article 11 of the Regulation lists the cases when courts reject the application for a European Order for Payment:

The claimant is informed of the reasons of rejection by means of Standard Form D set out in Annex IV.The decision of rejection cannot be challenged. The rejection is thus permanent. However, this rejection does not prevent the claimant from applying for a new European Order for Payment or for any other national procedure available according to the domestic law of its Member State.

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8.  Issue of a European Order for Payment (Article 12)

Period

The court shall issue a European Order for Payment as soon as possible and normally within 30 days of the lodging of the application.

This period can be extended for the period given by the court to the claimant to complete or rectify his application.Form of the order for payment

The order of payment is issued by using Standard Form E set out in Annex V of the Regulation.

It is delivered together with a copy of the form of the applicationInformation given to the defendant

In the European order for payment: the defendant shall be advised of his options to:

In the European Order for Payment, the defendant shall be informed that:

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1. Principle

Article 12.5 of the Regulation states: “The court shall ensure that the order is served on the defendant in accordance with national law by a method that shall meet the minimum standards laid down in Articles 13, 14 and 15.”

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2. Respect for the rights of the defence

Article 27 of the Regulation explains that service of documents should be made according to the EC Regulation 1393/2007  on the service in the Member States of judicial and extrajudicial documents in civil and commercial matters.

The execution agent is responsible for doing his utmost, with all the means at his disposal, in order to deliver the European Order for Payment to the recipient himself or to an address where he can guarantee that the recipient lives and then, where he will be able to be informed about the European Order for Payment.

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3. Service with proof of receipt by the defendant

Article 13 organises four different ways of serving the document which common point is to ensure the proof of receipt by the defendant.

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4. Service without proof of receipt by the defendant

The means of communication provided for in Article 14 do not guaranty the effective receipt of the document by the addressee. It is a compromise as some European States use service by postal channel without any certificate from the authority, which is in charge.

Due to the lack of security of some of these means of service, the European legislator added one condition. Such a service will be valid only if the address of the recipient is known with certainty. Moreover, protective measures such as the faculty to lodge a statement of opposition or to ask for a review of the decision in exceptional cases have been created.

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5. Service on a representative

Article 15 states that “Service pursuant to Articles 13 or 14 may also be effected on a defendant’s representative.”

In case of doubts concerning the identity of the representative of the defendant, it is better to serve the document to the defendant himself.

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1. Opposition to the European Order for Payment

Opposition procedure

To protect the defendant, he can lodge a statement of opposition against the claim according to Articles 16 and 17.

Article 16.1 of the Regulation states that the defendant can lodge a statement of opposition to the European order for payment within 30 days of service of the order on the defendant by using Standard Form F as set out in Annex IV which shall be supplied to him together with the European order for payment.

The defendant only needs to lodge a statement of opposition against the order for payment. He does not need to give the grounds of challenge.

According to Article 16.4, the statement of opposition shall be submitted in paper form or by any other means of communication, including electronic, accepted by the Member State of origin and available to the court of origin.

Period of 30 days

According to Article 16.2 of the Regulation the period starts from the service of the European order of payment to the defendant.

Article 18 states that after this period of thirty days the European order for payment can be enforceable. Moreover Article 17.1 states that if a statement of opposition is entered within thirty days, the proceedings shall continue before the competent courts of the Member State of origin. One can deduce from these two articles that if a statement of opposition if lodged too late, it must be declared inadmissible.

Effects of the opposition procedure

As a consequence of a valid statement of opposition, lodged in the period of thirty days by the defendant, the procedure will continue before the relevant court of the Member State of origin according to the domestic rules concerning civil procedure.

The claimant can avoid such a procedure if he clearly expressed his wish to end the procedure in such a case. Such a choice might avoid him to support costs that would be disproportionate compare to the amount of the debt to recover.

According to Article 17. 2 of the Regulation, the law of the Member State of origin shall govern the transfer to ordinary civil proceedings. Each Member State must adapt its legislation to determine how to proceed for the transfer from a unilateral European order for payment procedure to a domestic procedure, which is open.

Finally, in order not to harm the interests of the claimant, Article 17.1 paragraph 2 states that “Where the claimant has pursued his claim through the European order for payment procedure, nothing under national law shall prejudice his position in subsequent ordinary civil proceedings.”

The court decision issued after the opposition procedure will circulate among the Member States following the same procedure as a domestic judgement.

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2. Review in exceptional cases

Generalities

If the defendant does not lodge a statement of opposition to the European order for payment within thirty days after the service of this act, it becomes irrevocable and cannot be challenged anymore.

However, the European legislator allowed a review in exceptional cases. According to Recital 25, this option cannot be considered as a normal appeal contrary to the opposition procedure. This Recital states that: “(..) Review in exceptional cases should not mean that the defendant is given a second opportunity to oppose the claim. During the review procedure the merits of the claim should not be evaluated beyond the grounds resulting from the exceptional circumstances invoked by the defendant. (…)”. As a result, it has to be strictly interpreted.

Three exceptional cases of review exist:

Consequences of the review in exceptional cases

If the court rejects the request of the defendant because none of the conditions to review stated in paragraph 1 and 2 of article 20 is met, the European order for payment is still valid.

On the contrary, if the court decides that the review is justified as one of the conditions of the paragraph 1 or 2 of article 20 is met, the European order for payment is null and void.

Conclusion

In its Article 20, the Regulation organises the cases where a review can be asked by the defendant before the courts of the Member States of origin and its consequences.

The Regulation does not create forms for the review nor explains how the defendant can be informed of his faculty of asking for a review and it does not explain either which court shall deal with the review.

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3. Refusal of enforcement (Article 22)

The defendant has means to challenge the enforcement of the European order for payment. This means must be used before the courts of the Member State of enforcement and not in the Member States of origin.

But, as specified in Article 22.3, “Under no circumstances may the European order for payment be reviewed as to its substance in the Member State of enforcement”

Enforcement shall be refused based on two grounds:

Incompatibility with an earlier decisionEnforcement shall be refused by the competent court in the Member State of enforcement if the European order for payment is irreconcilable with an earlier decision or order previously given in any Member State or in a third country, if three cumulative conditions are met:

Prior paymentThe relevant court of the Member State of execution also refuses enforceability if the defendant already paid to the claimant the amount determined in the European Order for Payment.

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4. Stay or limitation of enforcement (Article 23)

According to Article 23 of the Regulation, the defendant, when he asked for a review according to Article 20, can neutralize the execution of the European order for payment by lodging his case with the relevant court of the State of execution. This court is competent to adopt various measures such as to:

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1. Enforceability (Article 18)

If within thirty days after the date of service, the defendant does not lodge any statement of opposition, the court of origin shall declare the European order for payment enforceable using Standard Form G as set out in Annex VII.

To do so, the court shall verify the date of service. The claimant is responsible for asking the Court to declare the order for payment enforceable.As a consequence, it will be able to circulate and to be executed in all the countries of the European Union, (except Denmark).

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2. Execution (Articles 19 and 21)

Article 19 of the Regulation defines the principal and states: “A European order for payment which has become enforceable in the Member State of origin shall be recognised and enforced in the other Member States without the need for a declaration of enforceability and without any possibility of opposing its recognition.”

Article 21 paragraph 1 states that “enforcement procedures shall be governed by the law of the Member State of enforcement. A European order for payment which has become enforceable shall be enforced under the same conditions as an enforceable decision issued in the Member State of enforcement.”

The creditor has a court decision from the Member State of origin that can “travel” freely and without any constraints in all the Member States. It will be assimilated to a national title. This principle of assimilation means that the European order for payment does not bestow less nor more rights than a national title.

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