10 Enforcing payment of uncontested debt
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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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| 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 | Minister's Letter of 17 November 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),
HC 38-v (2004-05), para 1 (26 January 2005),
HC 38-xii (2004-05), para 3 (23 March 2005),
HC 34-viii (2005-06), para 2 (2 November 2005) and
HC 34-x (2005-06), para 3 (16 November 2005)
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| To be discussed in Council | Political agreement intended at Council on 1 December 2005
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| Committee's assessment | Legally and Politically important
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| Committee's decision | Clear
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Background
10.1 The Commission's proposal would allow creditors to pursue
a simplified procedure for enforcing uncontested debts in civil
and commercial matters. Debtors would be given the opportunity
to object within a specified period of time. Any opposition by
the defendant would have the effect of transferring the claim
to ordinary civil proceedings. The proposed order for payment
procedure would not extend to revenue, customs or administrative
matters, nor would it apply 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.
10.2 When we last considered the proposal we expressed
continuing concern about the proposed definition of cross-border
cases and invited the Government to comment on our suggestion
of an alternative transaction-based definition.
The Minister's Letter
10.3 The Parliamentary Under-Secretary of State in
the Department of Constitutional Affairs (Baroness Ashton of Upholland)
has now replied and in her letter of 15 November again invites
us to clear the proposal from scrutiny. The Minister writes as
follows:
"Your Committee considered this matter at its
last meeting. You decided not to clear the document from scrutiny
as you have concerns about the proposed definition of cross-border
cases. In particular you consider that domicile and habitual residence
can be arbitary criteria for determining legislative competence
and can include many cases which are in fact internal. You asked
me to consider whether a test based on the cross-border nature
of the transaction giving rise to the claim would be preferable.
"I understand the Committee's concerns, but
in deciding what is the best definition of cross-border it is
important to balance the need for something which is simple for
parties to use and courts to apply and therefore allows for legal
certainty — with the provision of added value in allowing
appropriate cases to use the procedure. At the same time we need
to ensure that Article 65 TEC is respected.
"I believe it will be difficult to find a perfect
definition. For example, in your suggestion where the deciding
factor is the cross-border nature of the transaction, it is possible
to imagine that two parties in England could be in a dispute where
the assets are in another Member State. That would be an internal
case where just enforcement was necessary in another country.
Such matters are already provided for in the European Enforcement
Order Regulation. Alternatively two French drivers could have
a car accident in Germany, the car could be repaired there but
legal action could take place in France.
"I accept that the definition based on the habitual
residence or domicile of the parties is also not perfect but it
has the advantage of being based on the precedent of the Legal
Aid Directive. We are working with Member States to see how it
might be improved.
"The Government believes that we have the opportunity
to reach agreement on a proposal which will bring real added value
to Europe's citizens and businesses under the UK Presidency. I
agree with the Committee that the definition of cross-border is
a very important element of the proposal but I reiterate that
the final decision on the content of that definition is unlikely
to be agreed before the Council on 1 and 2 December.
"I hope it will be possible for your Committee
to agree to clear this document from scrutiny on the basis that
the restriction to cross-border is guaranteed and that we will
seek agreement on a definition that respects the principles of
Article 65 TEC."
Conclusion
10.4 We thank the Minister for her quick response
and detailed comments comparing the merits of a transaction-based
definition of cross-border cases with the proposed residence-based
definition. We accept that neither definition can be assumed to
be unproblematic and that there will be cases where a transaction-based
definition will bring cases within the Community's competence,
which would remained outside it under a habitual residence approach.
Accordingly we are now content to clear the document.
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