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 | Articles 61(c) and 65 EC; co-decision; QMV
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| Department | Constitutional Affairs
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| Basis of consideration | SEM of 4 March 2005
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| Previous Committee Report | HC 42-xx (2003-04), para 3 (18 May 2004),
HC 42-xxvii (2003-04), para 3 (14 July 2004), HC 42-xxxiv (2003-04), para 3 (27 October 2004) and HC 38-v (2004-05), para 1 (26 January 2005)
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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 Articles 61(c) and 65 EC empower the Community to adopt measures
in the field of judicial co-operation in civil matters with 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 the instruments — the
EEO dealing with the recognition and enforcement of existing national
judgments in another Member State and the uniform European order
for payment procedure with obtaining a judgment.
3.3 The Commission's proposal follows the general
principle of the orders 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 matters related to social security.
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 last considered the proposal, we decided
to hold it under scrutiny and ask the Minister to keep us informed
of any developments.
The Presidency text
3.5 The Presidency text envisages a number of changes
to the proposal. If accepted in part or as a whole the Presidency
text will form the basis of a new proposal.
SUBJECT AND SCOPE
3.6 The Presidency has suggested inserting a reference
to cross-border cases in the new Article and a definition of such
cases in the body of the text of the proposal. This was apparently
in response to a request by a very large majority of Member States
which do not want the proposal to apply to purely national cases.
JURISDICTION
3.7 The Presidency proposes to include a new Article
2-1 on rules of jurisdiction. The text provides for two options:
the first gives exclusive jurisdiction to the courts in the country
where the defendant lives, whilst the second follows the rules
in the EEO Regulation where a claimant (as a business) would only
have to initiate action in the courts for the place where the
defendant lived if that defendant was a consumer.
PROCEDURE
3.8 The Presidency text proposes that an examination
of documentary evidence should apply where it is required by national
law (Article 3(2)(a)). The Presidency text also deletes Articles
6 to 8, which means that defendants will no longer be given two
opportunities to object to the claim.
SERVICE OF DOCUMENTS
3.9 The Presidency has also decided to include two
new provisions which add the service provisions from the EEO Regulation
to this proposal (Articles 9-1 and 9-2).
RECOGNITION AND ENFORCEMENT
3.10 Finally, the Presidency text contains a set
of new Articles provisionally numbered 12-0, 12-1, 12-2, 12-3
and 12-4, designed to ensure that the order for payment should
be automatically recognised in another Member State without the
need for a claimant to apply for an EEO to have the European order
for payment enforced in another Member State.
The Government's view
3.11 In her Explanatory Memorandum of 4 March 2005,
the Parliamentary Under-Secretary of State at the Department for
Constitutional Affairs (Baroness Ashton) outlines the Government's
view regarding the changes proposed by the Presidency.
SUBJECT AND SCOPE
3.12 The Government supports the proposed reference
to cross-border cases in the Presidency text. The Minister further
comments as follows:
"Amendments have been suggested to align the
exceptions in Article 2 of the European Enforcement Order (EEO)
Regulation (805/2004) with those in Article 1 of this proposal.
As both instruments are intended to deal with the same types
of case the Government sees merit in such a consistent approach."
JURISDICTION
3.13 In relation to the proposed inclusion of rules
on jurisdiction the Minister comments as follows:
"The Government is not convinced there is a
need for jurisdiction rules in this proposal. The procedure will
be optional for the claimant who will use it when there is a reasonable
expectation that the defendant will not respond. It will also
be optional for the defendant in that he or she can put a halt
to the procedure simply by objecting to the claim by ticking a
box on a standard form which will be available in all official
EU languages. There will be no requirement for the defendant
to provide reasons or attend a court. If the defendant opposes
the claim the matter will be transferred to ordinary proceedings
where existing rules on jurisdiction will apply. This will be
easier than under the EEO Regulation where, depending on national
systems, reasons for a defence may also have to be provided and
a hearing may follow."
3.14 The Minister adds that:
"If there are to be no rules on jurisdiction
the Government will want to ensure that the notification sent
to the defendant states clearly the consequences of not objecting
to the claim both in terms of the enforceability of the order
and the fact that the court of origin will have jurisdiction.
It must also be clear in the proposal that the notification must
be provided in a language the defendant understands. If it is
decided to include the rules on jurisdiction the Government would
prefer them not to go further than those in the EEO Regulation."
PROCEDURE
3.15 The Minister indicates the Government's support
for the Presidency proposal to align the need for documentary
evidence with the requirements under national law, together with
the envisaged waiver of the original safeguard in the proposal
which gave defendants two separate opportunities to object to
a claim. The Minister comments as follows:
"The Government can support the Presidency text
provided any requirements for examination of evidence remain optional
for Member States. It believes that a no evidence model for the
UK (which equates to our current procedures) will be more attractive
and efficient to claimants, will not cause unnecessary burdens
on judges or court staff and can allow claims to be processed
automatically. The Government also believes that defendants will
have sufficient safeguards because all they have to do is tick
a box on a standard form to halt the procedure. What is more
important is to ensure that the defendant is aware of the claim
and has the opportunity to review it in the event of problems
with service (as in Article 12-1)."
SERVICE OF DOCUMENTS
3.16 Regarding the proposed inclusion of the service
provisions from the EEO Regulation, the Minister indicates that
"The Government can accept the inclusion of
these provisions provided they do not go further than the EEO
Regulation. As cross-border service rules will continue to be
determined by Regulation 1348/2000 (Article 15-2) the need for
these provisions will be determined by whether the procedure is
limited to cross-border cases and, if so, whether jurisdictional
provisions require certain cases to be initiated in the Member
State where the defendant lives."
RECOGNITION AND ENFORCEMENT
3.17 Finally the Minister has also indicated that
the Government would support the proposed changes designed to
ensure that the European order for payment could be recognised
in and enforced in another Member State without the need for an
EEO, "provided the relevant provisions go no further than
those in the EEO Regulation".
Conclusion
3.18 We ask the Minister to explain further the
Government's analysis of the proposed reference to cross-border
cases. Bearing in mind that this reference may become a precedent
for other cases where the scope of Article 65EC is in issue, we
ask the Minister to explain if the Government is satisfied that
the proposed definition, which refers to domicile or habitual
residence of the parties, will be sufficient to exclude all cases
which have no cross-border implications and where there is no
necessity for measures to be taken for the proper functioning
of the internal market.
3.19 We also ask the Minister to explain further
the Government's reasons for concluding that there is no need
for the proposed measure to include its own jurisdictional rules.
3.20 We note the Government's support for the
removal of the defendant's dual right to object to the claim under
the original text of the proposal and ask the Minister to explain
more fully the Government's reasons for removing one of the rights
to object, as proposed in the Presidency text.
3.21 We shall hold the document under scrutiny
pending the Minister's reply.
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