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The cross-border enforcement of claims was generally extremely costly and time consuming before, especially in the case of uncontested claims, where it is primarily the creditor’s rapid acquisition of a writ of execution that is sought.
As a result of Regulation (EC) no. 1896/2006 of 12 December 2006, which came into force in 2008, a European payments procedure has now been introduced with the aim of speeding up cross-border cases, whilst minimising the legal costs incurred.
Free circulation of European payment orders in Member States (excluding Denmark) has simultaneously been facilitated by the establishment of minimum standards. When these minimum standards are met the costs of recognition and enforcement are incurred in the Member State of enforcement.
a) Covered by the Regulation
The Regulation is to be applied in civil and commercial matters in cross-border cases, whatever the nature of the court or tribunal. A “cross-border” case is present within the Regulation’s terms if at least one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court hearing the action. The authoritative time for this is the time at which the application for issue of a European order for payment according to this Regulation was submitted.
b) Not covered by the Regulation
Revenue and Customs matters, administrative matters and the State’s liability for acts or omissions in the exercise of State authority, on the other hand, are not covered by Regulation (EC) 1896/2006.
The following are also excluded from the regulation’s scope:
Matrimonial property regimes, the area of inheritance law including wills,
Bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings;
Claims arising from non-contractual obligations, unless they have been the subject of an agreement between the parties, or there has been an admission of debt, or they relate to liquidated debts arising from joint ownership of property.
Jurisdiction of courts to execute European orders for payment is determined by the provisions of Community legislation that apply to this, in particular Regulation (EC) 44/2001.
a) Applying for a European order for payment The regulation includes a form, standard form A set out in Annex I, to be submitted to the competent court when applying for a European order for payment, (download Application for a European order for payment form). Pursuant to Art. 7 of Regulation 1896/2006 the application must include the following details:
The names and addresses of the parties and their representatives and those of the court to which the application is made;
The amount of the claim, including the principal and, where applicable, interest, contractual penalties and other costs;
When interest is claimed, the interest rate and the period for which interest is claimed, unless statutory interest is automatically added to the principal according to the law of the originating Member State;
The cause of the action, including a description of the circumstances invoked as the basis of the claim and of the interest demanded;
A description of the evidence used to substantiate the claim;
The reasons for the jurisdiction;
The cross-border nature of the case within the terms of Article 3.
The court to which an application for a European order for payment has been made considers the completeness of the information, and whether the claim is well-founded, i.e. it is not manifestly unfounded. The court gives the claimant an opportunity to complete or rectify the application, unless the requirements specified in the Article have not been fulfilled and the claim is not clearly unfounded or the application inadmissible. The rectification or completion must occur within a deadline set by the court.
b) Issuing a European order for payment
If the conditions are met the court issues a European order for payment within 30 days of the application being lodged. The order is then served on the defendant. Any periods of time granted for the claimant to rectify his application are not taken into consideration when calculating the 30-day period. The defendant is informed that he or she has the option of not paying the amount of the claim and contesting the order.
c) Contesting a European order for payment
Pursuant to Art. 16 of Regulation (EC) 1896/2006, the defendant can lodge a statement of opposition within 30 days of the order being served on the defendant. If the statement of opposition is lodged in time, ordinary proceedings are commenced before the competent courts in the originating Member State unless the applicant applies for the proceedings to be terminated.
If the European order for payment is not contested, the court declares this immediately enforceable and sends the claimant an enforceable copy for the purposes of execution. Basically all other Member States recognise and enforce the enforceable European order for payment without the need for an exequatur for a declaration of enforceability.
It is, however, worth noting that in some specific exceptional cases (Art. 20, 22,23 Regulation (EC) 18296/006) the European order for payment may be reviewed, or enforcement can be suspended or even refused. Enforcement arising from the European order for payment otherwise occurs on the same conditions as an enforceable decision in the enforcing Member State (Art. 21 of the Regulation).
The court costs of a European order for payment, and ordinary civil proceedings connected with a statement of opposition to the European order for payment in a Member State must not exceed in total the court costs of an ordinary civil case without a prior European order for payment in this Member State (Art. 25 of Regulation).