European order for payment procedure

If you hadn´t had problems with your client’s payments, you are probably not aware of the order for payment procedure. (Small Claims procedure).

But before introducing the European order for payment procedure, we will briefly bring its concept and regulation in Spain.

The order for payment procedure in Spain

This is a brief approximation to the Spanish Order for payment procedure, you will find more details by clicking here: Order for payment procedure in Spain

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Order for payment procedure

Payment procedure. Regulation and admissibility criteria. Aspects to take into account in matters related to consumers and users.

In Spain this procedure is regulated by articles 812 and following of the Civil Procedure Act. It is a speed judicial procedure for the claiming of debts. It only requires trial if the debtor rejects the claim.

If the debtor neither rejects nor pays the debt, the Court will order the procedure’s termination. That Court’s order will be enough for the debt’s execution.

It is a widely used procedure in Spain, especially as a consequence of the 2008 crisis. In fact, it is the most recurrent procedure according to the Ministry of Justice´ database.

Regulation of the European Order for Payment Procedure

Its main law is the Regulation 1896/2006 which set up the European order for payment procedure (The “Regulation”). The order for payment was created to simplify, speed up and reduce the costs in cross border pecuniary claims.

This regulation was enforced in 12/12/2008 and applies to all member states save Denmark.

Subject Matter:

The aim of this regulation is set out in Article 1, i.e.:

• To simplify and speed up the debt-recovery of claims by the debtor in cross-border cases between EU countries.
• To allow the recognition, free circulation and enforcement of European orders for payment in all EU countries.

Scope:

The European order for payment applies to cross-border cases in the EU in civil and commercial matters.

At least one of the parties must have its address or habitual residence in an EU country.  That country of residence must be different from the country where the application was filed.

The European order for payment procedure does not apply to:

• Rights in property arising out of a marital relationship, will and/or succession;
• Bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings;
• Social security;
• 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.

Application for the European Order of Payment

The application is detailed in Articles 7 and following of the regulation.

The Regulation includes as Annex I, a standard form for the application of a European order for payment. All applications may be done following that form.

The order shall state the amount of the claim, including the principal and, where applicable, interest, contractual penalties and costs.

The court evaluation of an application shall examine if the requirements set out in the regulation are met. It will examine also if the application is duly founded. (Article 8. Examination of the Application. Conditions of admissibility including cross-border nature of the dispute, civil and commercial matters, the jurisdiction of the court, etc.)

If the application is rejected, it must state the grounds of its rejection. And if there is, or not, right of appeal against the rejection. In any event, rejection does not preclude a new application.

Issue of a European order for payment (Art. 12)

If the necessary requirements are met, the court shall issue a European order for payment. Normally, within 30 days of the lodging of the application.

The European order for payment is issued on the basis of the information provided by the claimant.

Service with proof of receipt by the defendant

The European order for payment have to be served to the defendant. It will be served in accordance with the national law of the State in which the service is to be effected.

Opposition to the European order for payment (Art. 16)

The defendant may lodge a statement of opposition with the Court that issued the order for payment. This statement of opposition must be presented within 30 days from the service of the order.

Form F in Annex IV of the Regulation is the one for lodging the opposition. The opposition does not require a statement of reasons, only the indication that the claim is “contested”.

Once opposition is lodged, the procedure continues before the Courts of the country of origin in accordance with its national rules.

Enforceability (Art. 18)

If no opposition is lodged, the request will be automatically recognized and executed. The title of payment will be enforceable in all EU countries without any possibility of challenging its recognition.

Conclusions

The advantages of the European order for payment procedure are similar to those of under Spanish legislation. We emphasize the accessibility of the European order for payment and the possibility of lodging the claim at the creditor’s address.

The main problem is that many European orders for payment remain paralyzed in their subsequent enforcement. Taking into account that the order for payment has to be enforced in the debtor’s country. So unless there is voluntary payment, in the end the creditor the creditor will have to sue the debtor abroad.

If this article has been of interest, we also suggest you to read the following article published on our website: The Three Keys to Debt Collection (and 5 other keys which you probably ignore)