3 Enforcing payment of uncontested debts
| (25500)
7615/04
COM(04) 173
| Draft Regulation creating a European order for payment procedure
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| Legal base | Article 61(c) and 65 EC; co-decision; QMV
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| Document originated | 19 March 2004
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| Deposited in Parliament | 30 March 2004
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| Department | Constitutional Affairs
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| Basis of consideration | EM of 7 April 2004
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| Previous Committee Report | None
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| To be discussed in Council | No date fixed
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| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared; further information requested
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Background
3.1 Article 61(c) and 65 EC empower the Community to adopt measures
in the field of judicial co-operation in civil matters having
cross-border implications and in so far as this is necessary for
the proper functioning of the internal market. The European Council
meeting in Tampere in October 1999 endorsed a programme of work
on mutual recognition of decisions in civil and commercial matters
and on new procedural legislation in cross-border cases, in particular
those elements which are instrumental to smooth judicial co-operation
and to enhanced access to law, such as provisional measures, taking
of evidence, orders for money payment and time limits.
3.2 In 2000 the Council agreed a programme of work
including the abolition of exequatur for uncontested money
claims. (Exequatur is the special court procedure for
the conversion of a foreign judgment into an order enforceable
in the domestic jurisdiction.) The Commission has decided to
pursue this in two ways; first, by the creation of a European
Enforcement Order (EEO), the common position on which was agreed
by the European Parliament on 30 March, and secondly through the
creation of a European order for payment. The Commission believes
there is a clear demarcation between each instrument with, on
the one hand, the EEO dealing with the recognition and enforcement
of existing national judgments in another Member State and, on
the other, a uniform European order for payment procedure for
obtaining a judgment.
The proposed Regulation
3.3 The Commission's proposal follows the general
principle of the order for payment procedures which currently
exist in 11 Member States (not including the United Kingdom).
It would allow creditors to pursue a simplified procedure for
enforcing uncontested debts in civil and commercial matters.
Article 1 makes clear, however, that the measure would not extend
to revenue, customs or administrative matters, nor would it be
applicable to property disputes in matrimonial law, claims arising
out of bankruptcy proceedings or social security related matters.
3.4 Article 2 provides that the proposed European
order for payment procedure is intended to work as an alternative
to the existing internal procedures in each Member State and that
creditors would remain free to use either procedure. Articles
3 to 5 list the formal requirements to be met for acceptance of
an application for a European order for payment.
3.5 Article 6 provides that, if the formal application
requirements are met, the court seised of the case is to issue
a European payment notification which shall be served on the defendant.
Article 6(2) provides that service without proof of personal
receipt by the defendant is not admissible if a defendant's address
is not known with certainty. The remainder of Article 6 then
lists those matters of which the defendant must be notified, which
include information regarding the amount claimed. The defendant
must also be notified that the court has not examined the justification
of a claim before issuing the notification, and warned that the
court will make an enforceable decision unless it has received
a statement of defence or a statement informing the court about
the payment of the claim by the defendant within the time specified.
The European payment notification served on the defendant must
also advise him of his right to submit a statement of defence
to the claim, which statement is to be returned by the defendant
within three weeks of service.
3.6 Article 8 provides that if a statement of defence
is lodged within the prescribed period any further proceedings
in the matter shall continue in accordance with the rules of ordinary
civil procedure. The transfer to ordinary civil proceedings is
to be governed by the law of the Member State in which the European
payment notification was issued.
3.7 Article 9 provides that, in the absence of a
statement of defence or a statement of payment, the court is to
issue a European order for payment which shall be served on the
defendant. Methods of service which do not require proof of personal
receipt by the defendant are not permitted if the defendant's
address is not known with certainty. Article 9(3) provides defendants
with a second opportunity to object to a claim. The European
order for payment served on the defendant must inform him of his
right to object to the claim within three weeks of service of
the order. Article 10 provides that the European order for payment
shall be enforceable without requiring any security to be provided.
3.8 Article 11 lists the formal requirements for
the issue of a European order for payment. Article 11(4) states
the exceptional conditions under which a defendant may challenge
an order even after expiry of the prescribed time limit. These
include the case where the order for payment was served by a method
without proof of receipt or where service left him insufficient
time to arrange for his defence without any fault on his part.
Article 12 provides that, by analogy with a statement of defence
upon notification, a statement of opposition made after the service
of the order is to have the effect of transferring the claim to
ordinary civil proceedings.
The Government's view
3.9 In his Explanatory Memorandum of 7 April 2004
the Parliamentary Under-Secretary at the Department for Constitutional
Affairs (Lord Filkin) writes as follows:
"The Government remains committed to the Tampere
Conclusions which in practical ways can bring real benefits to
ordinary citizens and businesses who wish to pursue legal cases
across borders. Such measures will generate consumer confidence
and give a boost to the internal market.
"The Government is of the view that the majority
of cross-border uncontested debt cases will be capable of enforcement
using an EEO. However in some cases an EEO will not apply. Where
the creditor is a business in one Member State and the defendant
is a consumer in another Member State the creditor will have to
initiate proceedings in the Member State where the debtor lives.
If businesses in such cases are to benefit from a simplified
cross-border procedure for enforcing uncontested debts a European
order for payment will be necessary."
3.10 The Minister also acknowledges that there is
nothing in the Commission text which limits application of the
proposed measure to cross-border cases. He writes:
"The Government intends to explore further the
Commission's legal authority to propose a measure which goes further
than cross-border claims.
"In other respects the Government is broadly
satisfied with the content of the proposal."
3.11 Finally, the Minister informs us that adoption
of the proposed Regulation would not have any significant regulatory
impact. It would be an optional procedure which was intended
to simplify cross-border litigation. As such it would be likely
to reduce regulation and aid business.
Conclusion
3.12 We thank the Minister for his helpful comments.
We ask if the Government intends to opt into this proposal.
We also have a number of other questions.
3.13 First, we share the Minister's concern in
respect of the apparently intended domestic application of the
proposed measure. We ask the Minister whether he agrees that
Article 65 clearly requires a cross-border dimension, so that
a measure which also applied to purely internal cases would be
beyond the powers conferred on the Community under the EC Treaty.
3.14 Secondly, we note that the proposed measure
for the European Enforcement Order provides a detailed list of
admissible methods of service. We ask the Minister to explain
why the proposed measure for a European order for payment does
not follow a similar approach.
3.15 Thirdly, we ask the Minister whether he agrees
with the proposal in so far as it allows a European order for
payment to be defended or opposed without the need to give reasons.
3.16 We shall hold the document under scrutiny
pending the Minister's reply.
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