3 Enforcing payment of uncontested debt
| (25500)
7615/04
COM(04) 173
| Draft Regulation creating a European order for payment procedure
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| Legal base | Articles 61(c) and 65 EC; co-decision; QMV
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| Department | Constitutional Affairs
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| Basis of consideration | Minister's letter of 28 June 2004
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| Previous Committee Report | HC 42-xx (2003-04), para 3 (18 May 2004)
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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; revised proposal awaited
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Background
3.1 Articles 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
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.
3.3 The Commission's proposal follows the general
principle of the order for payment procedures which currently
exist in eleven 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.
The proposed European order for payment procedure would not extend
to revenue, customs or administrative matters, nor would it be
applicable to property and matrimonial law, claims arising out
of bankruptcy proceedings or social security related matters.
The measure is intended to work as an alternative to the existing
internal procedures in each Member State and creditors would remain
free to use either procedure.
3.4 When we considered the proposal we decided to
hold it under scrutiny and to ask the Minister whether the Government
intended to opt into the proposed measure. Secondly, we asked
the Minister whether the Government agreed that Article 65 required
a cross-border dimension and that the measure, in so far as it
applied to purely internal cases, would be beyond the powers conferred
on the Community under the EC Treaty. Thirdly, we asked the Minister
to explain why the proposed measure did not follow the same procedure
as the proposed European Enforcement Order by providing a detailed
list of admissible methods of service. Finally, we asked whether
the Government agreed with the current text of the proposal which
allowed a European order for payment to be defended or opposed
without the need to give reasons.
The Minister's letter
3.5 The Parliamentary Under-Secretary of State at
the Department for Constitutional Affairs (Lord Filkin) has now
replied to our questions and in his letter of 28 June 2004 writes
as follows:
"I can confirm that the Government has decided
to opt-in to the European order for payment.
"I agree with the Committee that a proposal
under Article 65 TEC should require a cross-border dimension.
You will be aware from my letter of 24 May to the Chairman of
the Select Committee on the European Union, a copy of which was
sent to you, that at the first meeting of the Civil Law Committee
to discuss this proposal on 6 May the United Kingdom was joined
by 17 other Member States in questioning the Treaty base to allow
the Commission's proposal to extend further than cross-border
claims.
"In the light of the significant majority of
Member States who support our position, and from what we have
heard informally, we believe it is unlikely that the Commission
will be able to keep purely national cases within the scope of
the current proposal. I shall of course keep you informed of
developments.
"You ask why the admissible methods of service
under Regulation 805/2004 creating a European Enforcement Order
for uncontested claims are not included in this proposal. Although
the service provision are not specifically detailed in this proposal
there are close links with the EEO Regulation. Service under
Articles 6(2) and 9(2) is left to the methods under national law.
In practice this means that in most Member States there will
be personal service. For those like us who do not have personal
service as the norm, other methods such as postal service will
be available as long as, under Article 11, the safeguards under
Article 19 of the EEO Regulation apply.
"You also ask whether I am satisfied that the
proposal allows a European order for payment to be defended or
opposed without the need to give reasons. It is a common feature
of current order for payment systems that detailed defences are
not necessary. As order for payment is meant to be a simplified
procedure for dealing with the large number of debt cases which
remain undefended. A balance is struck between making it easier
for a creditor to pursue a claim and safeguarding the rights of
the defendant. Once an objection is raised by the debtor the
claim is no longer undefended and the procedure no longer applies.
If the creditor wishes to pursue the matter through ordinary
proceedings and the debtor wishes to defend that action he or
she will then be required to provide a detailed defence."
Conclusion
3.6 We thank the Minister for indicating the Government's
intention to opt in to the proposed measure and for his reply
to our questions.
3.7 We note that the Government shares our reservations
about the adequacy of the proposed legal base for the measure
and that this view is apparently shared by a majority of Member
States. We also note the Government's expectation that the Commission
will be unlikely to be able to keep purely internal cases within
the scope of the proposal. We ask the Minister to keep us informed
of further developments.
3.8 We shall continue to hold the proposal under
scrutiny, while awaiting a revised proposal.
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