House of Lords - Correspondence with Ministers October 2006 to April 2007

Correspondence with Ministers October 2006 to April 2007 - European Union Committee Contents

CROSS-BORDER DEBT COLLECTION (14583/06)

Letter from the Chairman to Rt Hon Baroness Ashton of Upholland, Parliamentary Under Secretary of State, Department for Constitutional Affairs

The Commission's Green Paper was considered by Sub-Committee E at its meeting on 6 December. We agree with the Government that the availability of procedures making it easier to enforce judgments across borders should bring benefits to both consumers and businesses. But, as you say, if any proposal is brought forward under Article 65 TEC it should only apply to "civil matters having cross-border implications" and should not affect purely national enforcement procedures.

We are pleased to see that the Government are consulting interested parties, including the banking sector, and would be grateful to receive a summary of the results of that consultation exercise and a copy of any Response sent by the Government to the Commission.

The Committee decided to clear the document from scrutiny.

7 December 2006

Letter from Rt Hon Baroness Ashton of Upholland to the Chairman

You wrote to me on 7 December 2006 clearing this document from scrutiny but asking for a summary of the results of our consultation exercise and a copy of the Government's response to the Green Paper. I am pleased to enclose both with this letter and I can confirm our response has been sent to the European Commission.

29 March 2007

Annex A

GREEN PAPER ON IMPROVING THE EFFICIENCY OF THE ENFORCEMENT OF JUDGMENTS IN THE EUROPEAN UNION: THE ATTACHMENT OF BANK ACCOUNTS

RESPONSE FROM THE UNITED KINGDOM

General comments

The United Kingdom welcomes the European Commission's consultation on this subject. We believe that this is an excellent opportunity to start to consider how we can introduce procedures that not only make it easier to take protective measures in cross-border cases but also allow enforcement of judgments across borders. Such procedures will bring real benefits to both Europe's citizens and businesses and will be a logical progression from the Brussels I, European Enforcement Order, European Order for Payment and Small Claims Regulations in creating the genuine European area of justice called for at Tampere.

As with any legal process there needs to be a very careful balance between the rights of creditors to recover debts and the provision of adequate protection for defendants. The question of the rights of the defendant is particularly sensitive in this field as the attachment of bank accounts is a measure which has far reaching consequences.

A procedure for the attachment of bank accounts should not only balance the rights of the parties, it should also take proper account of increased administrative and business burdens on banks. For that reason the United Kingdom particularly welcomes the Commission's undertaking to carry out an impact assessment. We believe this assessment should analyse the nature and impact of the problems with the current systems operating across the EU, the different options for addressing these problems including an assessment of their likely costs and the effectiveness of each option. This will help to provide an appropriate evidence base for the evaluation of future work in this area.

It will be essential to ensure that European attachment orders are capable of being easily recognised or identified by banks and provided in a language which the bank understands.

Any instrument should also have regard to the international and national law relating to the legal position of banks, including, in particular, the immunity of certain central banks from attachment orders. That immunity should be protected in accordance with, for example, the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property (General Assembly Resolution 59/38). This links to the more general issue of property belonging to the State and whether it is intended this should be subject to any European attachment order.

Consideration should also be given as to how to handle the liability of banks that fail to comply correctly with an order.

Question 1: Do you see a need for a Community instrument for the attachment of bank accounts as a way to improve debt recovery in the EU? If so, should it create a self-standing European procedure or harmonise Member States' legislation on the attachment of bank accounts?

The ability to attach bank accounts is a valuable tool for creditors seeking to recover monies owed to them and, subject to the results of the Commission's impact analysis, the United Kingdom looks favourably on the possible introduction of a European procedure.

There is no legal base that will allow for harmonisation of national procedures but, more importantly, there is no need for such harmonisation. An effective procedure can be based on either mutual recognition of national systems with agreed minimum standards or a single European procedure for cross-border cases. We are prepared to consider an instrument based on mutual recognition but believe that it will be in the interest of those who litigate in many countries and the banking institutions that will receive orders from several Member States to have a single European procedure.

Question 2: Do you agree that a Community instrument should be limited to protective orders preventing the withdrawal and transfer of monies standing to the credit of bank accounts?

The United Kingdom believes that it would be unduly restrictive to limit an attachment procedure to protective measures prior to enforcement. There would be real added value in considering an attachment order as a method of enforcement after judgment where funds can be transferred to a creditor. We suggest that at least at the start attachment orders should be limited to attachment against bank accounts.

However if such orders can be used for both protective measures and enforcement different procedures and protections should be applied. For example, for protective measures prior to judgment more onus should be on the creditor to prove a need to freeze a bank account and the defendant will need stronger safeguards for objection.

Question 3: Should an attachment order be available in all of the four circumstances outlined above in paragraph 3.1 or only in some of them?

We agree that an attachment order should be available in all of the four circumstances listed. However if an order is to be granted prior to the initiation of legal proceedings on the merits of the claim the applicant should be required to give both an undertaking to the court that a claim will be initiated within a specified period and reasons why it is necessary to take urgent action to obtain such an order. Therefore the earliest an order should be capable of being granted is immediately prior to the commencement of proceedings.

Further to our answer to question 2 we believe that it should be possible to have an attachment of bank accounts order after judgment which is a form of enforcement rather than just protective measures.

Question 4: What onus should lie on the creditor to persuade the court that he has a claim against the debtor sufficient to justify the granting of an attachment order?

Different procedures should apply depending on whether an application is before.or after a judgment has been issued by the court and whether or not the order is for protective measures or for enforcement.

If pre-judgment or post-judgment for protective measures a creditor should have to provide affidavit evidence sufficient to satisfy a court that there is a good arguable case to justify an order being granted. This should set out the facts on which the applicant relies to make the claim. The applicant should be required to include all material facts of which the court should be aware.

Post-judgment for enforcement purposes the creditor should provide a copy of the judgment or court order with details of the total amount of the judgment still owing, including any costs and interest, and known details of anyone else who has an interest in the money.

Question 5: Should urgency be a condition for granting an attachment order prior to obtaining an enforceable title? If so, how should this condition be defined?

We believe that it is essential that urgency be a condition for granting an attachment order prior to obtaining an enforceable title. This is to ensure proper protection for the defendant. The applicant should provide information to the court which is sufficient to satisfy it that there is a real risk of the defendant becoming insolvent, that he/she might remove, dispose of or conceal assets or otherwise frustrate the debt if the order is not granted.

It would be useful for the application to include a statement of truth similar to that included in Annex I to Regulation 1896/2006 creating a European Order for Payment—ie the applicant should declare that to the best of his/her knowledge the information provided is true and he/she should acknowledge that any deliberate false statement could lead to appropriate penalties under the law of the Member State of origin.

Question 6: Should the court have discretion when granting an attachment order to require the creditor to provide a security deposit or a bank guarantee? How should the amount of any such security deposit/guarantee be calculated?

We also believe that if is essential that an applicant should provide an undertaking to the court to pay any damages which the defendant sustains and which the court considers the applicant should pay. As part of this undertaking we would prefer the applicant to be required to provide details of a bank account from which the security deposit or bank guarantee can be paid. The amount can be set at the court's discretion, having regard to the loss which the defendant might sustain if the attachment was subsequently set aside as unjustifiable. If a court has doubts about the claimant's financial standing he/she could be asked to fortify the undertaking by providing tangible security.

Where an order is used post-judgment as a method of enforcement rather than a protective measure such an undertaking is not required.

Question 7: Should the debtor be heard or notified prior to the granting of a bank attachment?

In general the defendant should not be heard or notified prior to the granting of an order. Such orders will be less effective if the defendant has the opportunity to move assets before an order takes effect. However it is essential that easily accessible and quick procedures are available to allow the defendant to challenge the order. Consideration should be given as to whether a judge who is not satisfied as to the risk which the creditor asserts should have the discretion to require prior notice to be given to the debtor.

Where an order is used for enforcement of a debt we suggest that a provisional order should be granted without notice to the defendant which freezes the account up to the amount of the debt. A final order to release the money to the creditor should be granted only after the defendant has had an opportunity to be heard by the court.

Question 8: What should be the minimum degree of account information required for the issue of an attachment order?

The applicant should provide the full name of the defendant and, where known, his/her address. At the very least the applicant should provide the name and address of the head office of the bank or similar financial institution at which the assets are held. Although not essential, it would also be helpful where such details are known for the applicants to provide the name and address of the branch of the bank etc. where the account is held, and identifying codes (eg BIC or other relevant code) and the account number of the defendant (eg IBAN or other relevant code). Safeguards should be provided to prevent creditors from undertaking "fishing expeditions" to find out whether the defendant has an account with a particular bank. For example it might be felt that there should be a provision in which the creditor should have to substantiate to the court his/her belief that the defendant has an account at a particular bank.

In addition to the account information it is essential that the amount to be frozen should be specified.

Question 9: Do you agree that the courts having jurisdiction for the merits of the case under relevant Community law and/or the courts where the account is situated should be competent to grant an attachment order? Should the court of the defendant's domicile always have jurisdiction to issue an attachment, even if it does not have jurisdiction under Regulation 44/2001?

The question as to which courts should have jurisdiction is central to the effectiveness and equity of the procedure. As mentioned above, we believe it is essential that a European system for the attachment of bank accounts should strike the right balance between the rights of the creditor to recover a debt and the provision of adequate protection for the defendant. Protection for the defendant means access to a quick and simple procedure to challenge the order.

While we appreciate the practical difficulties, we believe serious consideration should be given to allowing joint jurisdiction. The court with jurisdiction for the merits of the case under Community law could be responsible for granting an order while a court of the defendant's domicile, whether or not that is the court with jurisdiction under Regulation 44/2001, could have competence to consider a challenge from the defendant.

The need to inform banks of the orders as quickly as possible and in a format they recognise both in terms of language and authenticity and by a method with which they are familiar should also influence the choice of which courts should have jurisdiction. Consideration will need to be given to whether, for example, in terms of speed it would be better for the court with competence under Regulation 44/2001 to both grant and issue the order or whether, as the account to be attached is likely to be in the same Member State as the defendant, it would be better for the banks if the court of the defendant's domicile had responsibility for issuing the order which had been granted by the court with competence for the main proceedings.

Whichever method is chosen, if the court with competence to consider a challenge from the defendant is a court of the defendant's domicile it is essential that there is close liaison between that court and the court dealing with the main proceedings to ensure awareness of the order before any challenge is made.

Question 10: Do you agree that the attachment should be limited to a specific amount? If so, how should this amount be determined?

We believe that attachments should be limited to the amount of the debt only (including any interest and court fees). There is no justification in allowing the effect of an order to extend to the freezing of an entire bank account.

Question 11: Do you consider that the banks should be paid for the execution of an attachment order? If so, should the amount to which they would be entitled be capped? Should the creditor have to pay the bank in advance or should the amount due be deducted from the credit balance of the account seized?

With different national practices it will be difficult to get consensus on this issue. It is also likely to produce discrimination for both banks and defendants if for national orders a fee applies but for European orders executed in the same bank there is no fee, or vice versa. It would be preferable to leave this matter to the national law of the Member State where the account is attached. There is a precedent for this solution in the European Order for Payment Regulation (1896/2006) which although an EU-wide procedure leaves the setting of court fees to national law.

Where banks are able to receive payment for the execution of an attachment order it would be easier to administer if this was a fixed sum. However we recognise that where banks are allowed to charge they should be able to recover their reasonable costs. These costs are likely to be greater where a bank has to search for relevant accounts so a scale of fixed charges might be more appropriate. If the creditor is required to pay this fee it will act as an incentive not to initiate unjustified proceedings. These costs could be recovered from the defendant in the event that the claim is successful.

Question 12: If an attachment order is to extend to several accounts, how should the sum to be seized be allocated among each of the accounts?

Where an applicant wishes attachment against several accounts in different banks it is for him/her to apply to the court for separate orders, the total of which should not exceed the amount of the debt (including any interest and court fees). Where the defendant has several accounts in one bank the bank should decide how best to allocate the attachment to those accounts.

Question 13: How should the attachment of joint and nominee accounts be dealt with?

When dealing with joint accounts a balance needs to be struck between the rights of the creditor to pursue a claim or recover a debt after judgment and the rights of the account holder or holders who are not the defendant to have access to their money. A system which does not allow attachment of joint accounts will be much simpler to operate. If joint accounts are to be included there should be a mechanism which allows any holders of the account that are not the defendant or defendants to apply to the court to have released any amounts in the account to which they can show they have a claim.

Nominee accounts should only be attachable where the debtor is the beneficiary rather than the nominee of the account.

Question 14: Should the question whether amounts are exempt from execution be dealt with ex officio when issuing/executing the attachment or should the onus be on the debtor to object on this ground? How and by whom should the amount exempt from execution be calculated and on what basis?

It is important to ensure that a defendant, whether an individual or a business, has the opportunity to seek protection to ensure certain amounts are exempt from execution. We believe it is essential that the amount should be defined and calculated according to the law of the Member State where the order will take effect. Different circumstances apply in each Member State. For example in the United Kingdom state benefits, tax credits and other payments are usually paid into bank accounts. Only local authorities will be aware of these issues. These decisions must be made by judges on application by the defendant. The judge should be able to decide whether any conditions should be attached to the exemption—for example whether the amount of sums to be withdrawn from an account should be agreed before withdrawal between the parties legal representatives or should be subject to court approval

It should be possible for the defendant to apply to the court on more than one occasion to vary the order on evidence of needs. For the reasons given above we believe that for the protection of the defendant it would be preferable for such matters to be heard by a court in the Member State of the defendant's domicile.

Question 15: Do you agree that the exequatur procedure should be abolished for the attachment order?

We agree that exequatur should be abolished for these orders but the authorities that grant the order should, at the very least, liaise closely with the enforcement authorities in the Member State of the defendant's domicile or, preferably, have control of the enforcement of the order, to ensure the defendant is properly protected.

Question 16: How should an attachment order be transmitted from the issuing court to the bank where the account is situated? What time limit should the bank have to respect in order to implement an attachment? What should the effect of an attachment order be on ongoing operations?

It is important to determine first whether there is to be a distinction between the court that grants an order and the court that issues the order. In response to question 9 we suggested that the court that has jurisdiction for the merits of the case under Community law could be responsible for granting an order but the court with competence to issue the attachment to the bank or other financial institution could be a court in the Member State of the defendant's domicile. In the vast majority of such cases it will be likely that the bank account will be in the same Member State as the issuing court and there will be advantages for the banks in terms of language and familiarity of procedures. In such cases the method of transmission should be left to national law or procedure.

Where the account is held in a different Member State other than that of the defendant's domicile the order should be issued and transmitted using Regulation 1348/2000 or an electronic procedure agreed as part of this instrument.

While our preference is for the issuing court to be in the Member State of the defendant's domicile, if it is decided that another court can issue the order it is essential that it should be sent to the enforcement authorities in the Member State of the defendant's domicile so that they are aware of the order if the defendant challenges it.

Banks should be under a duty to implement the order as quickly as practicable after receipt of the notification from the issuing authority. Careful consideration needs to be given to the effect of electronic service on the banks not only in terms of authentication and identification of the order but also when the order will be considered to have arrived at the bank. As electronic notification can be made at any time of the day or night any day of the week, if it is sent after normal business hours it would be preferable to treat it as if it had arrived at the bank on the next working day.

Question 17: Do you agree that upon receipt of an attachment, it should be the duty of the banks to inform the enforcement authority whether and to what extent an attachment has successfully secured the monies liable to be paid by the debtor to the creditor?

We agree that banks should inform the enforcement authority of the extent to which the order has been applied, including confirmation that the defendant has an account with the bank and whether that account is solely in the name of the defendant or a joint account. However we believe it is important to limit the amount of information the banks can give. First the effect of an order must be limited to the amount of the debt only and should not extend to the entire account. The information should then be limited to the amount of the debt. If the amount in the bank account is less than the debt then the bank should be able to declare the actual amount. If, however, the amount in the account is greater than the debt there is no need for a bank to give details of the full balance and for data protection reasons it should not provide such information.

Question 18: When and by whom should the debtor be notified formally that an attachment has been granted and taken effect?

We believe it is important to ensure that a defendant is notified of the order after the bank so that he/she does not have the opportunity to remove their money. We believe that who has responsibility for notifying the defendant should be left to the national law or procedure of the Member State of the defendant's domicile. As in most cases that will be the same Member State where the account is held it will make it easier for banks who will be able to follow the same procedure for both cross-border and national cases. Together with the notification of the attachment the defendant should receive information about how the order can be challenged. We suggest that the order should be notified to the defendant as quickly as practicable after it has taken effect.

Question 19: Should the attachment be revocable or lapse automatically if the creditor does not file the principal action within a specific time period?

As mentioned in our answer to question 3 we agree that it should be possible for an order to be granted immediately prior to the commencement of proceedings but only after an undertaking has been made that the claim will be initiated within a specified period. If the principal action is not filed in that period the order should lapse. The creditor should be able to apply to the court for an extension of time if it is unavoidably needed.

Question 20: On what grounds and to what extent should the debtor be entitled to object to the order for an attachment? Which court should be competent to hear the debtor's objection against an attachment?

Where an attachment order is made for protective reasons the defendant should be able to object on at least one of the following grounds:

— that there is no real risk of dissipation of the assets;

— that the applicant has not made a full disclosure of evidence;

— that there is no arguable cause for the action;

— that the order was excessive, disproportionate and/or oppressive;

— the money in the relevant account belongs to someone else; and

— that the order is invalid for a specific reason.

When an order is made for enforcement purposes the defendant should be able to object on the following grounds:

— that the order is invalid for a specific reason;

— the money in the relevant account belongs to someone else; and

— that the order will cause undue hardship (eg where the funds in the account are state benefits).

We believe that in the interests of justice defendants should be able to challenge a decision as easily as possible. For the reasons given above we believe that serious consideration should be given to allowing defendants to challenge an order in the courts or enforcement authorities in the Member State of their domicile.

Question 21: Should the creditor's liability in case the attachment proves to be unfounded be harmonised on a European level and, if so, how?

We believe that an applicant should be required to give an undertaking to the court that grants the order that he/she will pay any damages which the defendant sustains. It should be the responsibility of that court to decide the applicant's liability. The liability should be limited to quantifiable damages that the defendant can prove he/she will sustain or has sustained.

Question 22: Should there be European rules that determine the ranking of competing creditors? If so, which principle should apply?

The ranking of competing creditors should be left to the national law of the Member State where the account is held. However national and European insolvency rules will have to be respected.

Question 23: How should an attachment order be transformed into an executory measure once the creditor has obtained an order which is enforceable in the Member State where the account is situated?

As mentioned before, we believe that this is an ideal opportunity to think about the introduction of an attachment of bank accounts order that is more than a provisional measure and can be used as a method of enforcement. There could be two types of order—one protective and the other allowing enforcement. Creditors would be able to apply for the latter if they have an enforceable judgment/order. The evidence test should be stricter for a protective order.

Where a creditor has a protective order and subsequently obtains an enforceable judgment, rather than allow an automatic transformation we believe it would be preferable for the creditor to make an application to the court for the order to have enforceable effect. Protection measures and enforcement procedures are different processes with the need for different considerations by the court and protections for the defendant. In addition as a protective order might be made early in the proceedings there might be a considerable period of time before judgment is given and it would be preferable for there to be further scrutiny by the court.

Once the order has enforceable effect the defendant should be given the opportunity to object in the way we suggest in our answer to question 7.

Annex B

SUMMARY OF CONSULTATION

Those Consulted in England and Wales

Advice Services Alliance

Association of District Judges

Bank of England

Bar Council of England and Wales

British Bankers' Association

Chancery Bench of England and Wales

Civil Court Users Association

Civil Justice Council

Commercial Court Judges

Council of Circuit Judges

Insolvency Service

Institute of Credit Management

Law Society

Office of Fair Trading

Responses Received From

Association of District Judges

Bank of England

Bar Council of England and Wales

British Bankers' Association

Chancery Bench of England and Wales

Civil Court Users Association (personal response from the Chair)

Commercial Court Judges

Council of Circuit Judges

Insolvency Service

Law Society

Office of Fair Trading

GENERAL COMMENTS

Most consultees mentioned the importance of providing a proper balance between the rights of creditors and protection for defendants. This was particularly true in circumstances prior to judgment which the Association of District Judges thought were right to be severely circumscribed. The Council of Circuit Judges believed that the procedure should be restricted to the higher courts in each Member State. The Chancery Bench thought there was a need for a liberal availability of judicial discretion in the procedure.

The Bank of England mentioned the principle of immunity from attachment of assets belonging to central banks and other procedural privileges attached to central banks and States generally.

The British Bankers' Association said that a European procedure should not expose banks to additional legal risk such as a liability to the creditor or, if a bank was acting in good faith, a liability to the debtor if the claim or creditor proved unfounded or the account holder misidentified. However the Chancery Bench thought that banks should have a duty to the creditor who had obtained an attachment order.

There was general support for the idea of European instrument from the Association of District Judges, the Chancery Bench, the Council of Circuit Judges, the Chair of the Civil Court Users Association, the Law Society and the Office of Fair Trading.

The Bar Council agreed that the ability to attach bank accounts was a useful and valuable tool in civil litigation both pre- and post-judgment but they queried whether a European procedure was necessary now. They suggested that Regulation 44/2001 should be amended and a streamlined and faster administrative process for the mutual recognition of orders should be tried first. The banks wanted to know what difficulties were being experienced under current arrangements and were concerned about the burdens that might be imposed on them. They wanted to see a proper impact assessment from the Commission.

A single European system was favoured by the Association of District Judges, the Chancery Bench, the Law Society, the Chair of the Civil Court Users Association, and, on balance, the British Bankers' Association.

The Council of Circuit Judges, the Commercial Court Judges and the Bar Council preferred harmonisation. However, the latter stipulated it should be only minimum harmonisation.

Question 2: Do you agree that a Community instrument should be limited to protective orders preventing the withdrawal and transfer of monies standing to the credit of bank accounts?

This question was interpreted by consultees in different ways. The Commercial Court Judges, the Council of Circuit Judges and the British Bankers' Association thought that the orders should be confined to assets in bank accounts. The Law Society saw no reason why it should be limited to bank accounts. The Chancery bench thought that an extension of scope could be considered later.

The Law Society also interpreted the question by saying the order should be limited to protective orders. The Bar Council agreed. The Association of District Judges thought any instrument should be limited to withdrawal and transfer of funds with domestic enforcement law applying thereafter.

The Chair of the Civil Court Users Association thought that preventing the creditor from removing funds would mean the procedure would be incomplete.

Question 3: Should an attachment order be available in all of the four circumstances outlined above in paragraph 3.1 or only in some of them?

Most consultees agreed that an order should be made available in all of the four circumstances listed although if prior to the initiation of the proceedings on the merits of the claim there was concern from some that it should be very close to the initiation of proceedings. However the Association of District Judges opposed the routine availability of orders before the creditor had obtained a court order or judgment. The Chair of the Civil Court Users Association thought all four options were possible but it might be better to start with valid judgments or orders.

Question 4: What onus should lie on the creditor to persuade the court that he has a claim against the debtor sufficient to justify the granting of an attachment order?

There was consensus from the consultees that the creditor should have to satisfy a court he/she had a claim of sufficient substance to justify an order and that there was a real risk of dissipation of the assets. Where an order was requested post-judgment the test did not have to be as high.

Question 5: Should urgency be a condition for granting an attachment order prior to obtaining an enforceable title? If so, how should this condition be defined?

It was agreed by most consultees that urgency was important where there was a real risk of dissipation of assets.

All agreed that the court should have such discretion although there was a difference of opinion as to how the amount should be calculated. The Chair of the Civil Court Users Association thought a sliding scale with appropriate protection might be possible; the Association of District Judges believed that an estimate of the potential loss should be a starting point with a minimum figure of £1,000; and the Chancery Bench suggested a bond of €1,000,000 or three times the amount sought to be attached, whichever was lower.

Others including the Commercial Court Judges, the Bar Council and the Council of Circuit Judges suggested the amount should be left to judicial discretion.

Question 7: Should the debtor be heard or notified prior to the granting of a bank attachment?

There was agreement that it would be preferable for the debtor not to be notified prior to the granting of a bank attachment. However some consultees thought there should be exceptions. The Chancery Bench wanted judges to have discretion where they were not satisfied of the risk asserted by the creditor. The Association of District Judges thought that where a defendant had no notice of any proceedings applications for such orders should be made on notice.

Question 8: What should be the minimum degree of account information required for the issue of an attachment order?

All who responded agreed that the creditor should provide enough information to identify the defendant—ie name and address and the bank where the account was held. Most thought it unnecessary to require the claimant to provide the account number, sort code and branch address. The British Bankers' Association was concerned that an order should apply only to accounts held by the bank in the Member State served and that creditors should be able to substantiate a belief that a debtor had an account at a particular bank so as to prevent "fishing expeditions".

All consultees agreed there should be some flexibility in jurisdiction. The Chancery Bench thought that the court adjudging the merits of the case against a defendant would be better informed about those merits whilst the courts of the jurisdiction where the account was held (likely to be the defendant's own jurisdiction) would be better informed about the account and the harm that an attachment might cause the defendant. They suggested that the court with jurisdiction under Community law, the account holder's and the debtor's jurisdictions should each be formally competent to grant orders. The Association of District Judges and Commercial Court Judges agreed and the Bar Council thought all should be considered although the latter and the Chancery Bench questioned whether there should be mixed competence. The Law Society agreed that the court with jurisdiction under Community law should grant the order which could then be issued by the court of the defendant's domicile.

Question 10: Do you agree that the attachment should be limited to a specific amount? If so, how should this amount be determined?

It was agreed by all who responded that the attachment should be limited to the amount it was claimed was owed. Some thought that this amount could include a reasonable amount for costs and interest.

The British Bankers' Association, the Commercial Court Judges, Association of District Judges, Law Society, Bar Council, and the Chair of the Civil Court Users Association thought that banks should be able to make reasonable charges for executing an attachment order. Several thought this should be payable by the creditor and could help to discourage frivolous applications. However the Council of Circuit Judges believed the banks should provide this service without charge as part of their public duties.

Question 12: If an attachment order is to extend to several accounts how should the sum to be seized be allocated among each of the accounts?

There was a range of opinions on this subject. The Chancery Bench thought the amount could be spread over all accounts; the Chair of the Civil Litigation Committee and Bar Council thought that the amount attached could be placed in a specific fund/account and failing that the Bar Council suggested the attachment should apply to all accounts covered by the order. The Law Society said that priority should be given to allocating the amount to be seized to one or more accounts in the sole name of the debtor.

Several consultees emphasised the importance of restricting the amount of the attachment to the value of the debt even where that was spread across several accounts. Where it would be necessary to vary the attachment to accommodate several bank accounts the creditor should have to return to the bank to apply for a change to the order. The Council of Circuit Judges thought that the allocation could be a matter for the court that heard the debtor and possibly the bank after the order had been served.

Question 13: How should the attachment of joint and nominee accounts be dealt with?

Again there was a range of views on this subject. The British Bankers' Association and the Association of District Judges thought that joint accounts should not be capable of attachment. Others such as the Chair of the Civil Court Users Association thought it was important that joint accounts should be capable of attachment. The Commercial Court Judges and the Chancery Bench thought that orders against the defendant in person could be made in relation to funds to which the defendant was the beneficial owner. The Law Society thought that it should be possible to attach joint accounts on the assumption that each party to the account had an equal share of the assets. The Council of Circuit Judges and Bar Council suggested that the joint holder or nominee should be given the opportunity to make representations to the court. Courts should then have rules to protect the interests of any third parties.

All who responded on this issue agreed that there should be a provision which allowed exemptions to the order. The Chancery Bench, the Commercial Court Judges, the Council of Circuit Judges, the Law Society and the Bar Council thought that this provision should be made available by the court when the order was granted with the defendant being able to apply for a variation. The Chair of the Civil Court Users Association thought the onus should be on the debtor to apply. The Association of District Judges pointed out that as the average cost of living in each Member State varied it would be unworkable and unjust to expect a judge in a country other than that of the domicile of the defendant to stipulate what should be allowable expenditure. The defendant should therefore apply for exemption to a local court when he/she became aware of the order.

Question 15: Do you agree that the exequatur procedure should be abolished for the attachment order?

There was agreement that there was no need to apply the exequatur process.

Electronic notification was favoured by the Commercial Court Judges, the Council of Circuit Judges, the Bar Council, and the Chair of the Civil Court Users Association. The latter said this could be followed by a hard copy. The Chancery Bench thought that transmission should be by any one of the various ways in which service of an order was permitted in the jurisdiction of the bank's locus. The Law Society said that the attachment order should be transmitted by such means as would guarantee service upon the bank on the second day after posting or transmission.

While some consultees wanted the order to take effect immediately, the British Bankers' Association, while prepared to accept electronic notification, were concerned if that implied an obligation to act on the order as soon as it was received even if it was outside normal banking hours. They wanted a sufficient time to search and process the order. The Law Society wanted the onus on the bank to deal with the order to be as swift as possible (preferably within 24 hours of receipt). The Commercial Court Judges thought that as the systems at some banks might require more time than others, rather than specify a time limit for implementation banks should be placed under a duty to implement orders as quickly as practicable. They also thought that the cut-off point should be the debiting of the defendant's account in the ordinary course of the bank's business. The Association of District Judges said that any transaction not posted to the account at the time the order was implemented should not be attachable.

The British Bankers' Association also said it was essential for a European Attachment Order to be easily recognised and identified by banks. Among other things, this meant that a bank would need to receive the order in its own language. They suggested it might be preferable for all orders to be despatched by a central EU agency.

All respondents agreed that banks should send notification of the implementation of the order although the Chancery Bench thought that rather than to the enforcement authority it should be the creditor and defendant who were notified.

The British Bankers' Association wanted the information disclosed to take account of issues of banking confidentiality and said it would be essential for banks to be given a realistic period of time to provide the information supplied by the court. Ideally they wanted at least the seven days allowed for third party debt orders in England and Wales.

Question 18: When and by whom should the debtor be notified formally that an attachment has been granted and taken effect?

The Association of District Judges, the Council of Circuit Judges and the Chair of the Civil Court Users Association agreed that the defendant should be notified by the court. The Commercial Court Judges and the Bar Council thought notification should be made by the claimant and the court/enforcement authority. The Law Society thought the bank should send the notification. The Chancery Bench said the defendant should learn as soon as is practicable of the order by service either from the court or the creditor, whichever method the domestic jurisdiction used for service of orders.

Question 19: Should the attachment be revocable or lapse automatically if the creditor does not file the principal action within a specific time period?

There was a difference of opinion from the consultees. The Chancery Bench and the Bar Council thought that if the claimant had failed to issue proceedings by a given date the defendant should be able to apply to have the order revoked. However the Association of District Judges and the Commercial Court Judges believed that if proceedings had not been commenced by a specified date the order should lapse. The latter said that the claimant should be able to apply to the court for an extension of time if unavoidably needed.

There was general agreement on the grounds on which the debtor should be able to object to an order—including there was no proper cause of action, there was no risk of dissipation of assets, a failure to disclose all evidence, the order was excessive, hardship, the assets belonged to someone else and the debt had been paid. Several respondents said that a list should not be prescriptive and that the matter should be left to judicial discretion.

The Chancery Bench, the Commercial Court Judges, the Bar Council and the Council of Circuit Judges thought that the competent court to hear the objection should be the issuing court. The Insolvency Service thought it should be a local court to the defendant.

Question 21: Should the creditor's liability in case the attachment proves to be unfounded be harmonised on a European level and, if so, how?

Only the Association of District Judges and Council of Circuit Judges favoured harmonisation.

Question 22: Should there be European rules that determine the ranking of competing creditors? If so, which principle should apply?

Only the Council of Circuit Judges favoured European rules. The Bar Council, Association of District Judges, Commercial Court Judges, the Chancery Bench, the British Bankers' Association and the Insolvency Service drew attention to the need to remember the relationship with insolvency rules.

Question 23: How should an attachment order be transformed into an executory measure once the creditor has obtained an order which is enforceable in the Member State where the account is situated?

There was a range of views in response to this question. The Bar Council thought that a distinction should be made between protective orders and enforcement. A court having territorial jurisdiction where the account was situated should have responsibility for execution. The Association of District Judges agreed that a formal application would have to be made to a competent court before any monies could be transferred. The Law Society and Commercial Court Judges agreed the competent court should be in the Member State where the order was functioning. The Chancery Bench said that in order to release monies from the attachment an order should be made by the court. Such an order could be of a kind corresponding to these new rules. The Council of Circuit Judges thought it would be a waste of resources to require a successful creditor to obtain a declaration of enforceability and proceed to enforce in the jurisdiction in which the bank was situated.