European Order for Payment: an Evaluation
It has been seven years now since the European Order for Payment proceedings (EOP) took effect. These uniform European proceedings aim to make recovering cross border claims easier and cheaper. But did this instrument reach its goal and does it facilitate international debt recovery? Our international attorneys share their experiences.
The Promise of the Order for Payment
Payment arrears are an important cause of insolvency and endanger the continued existence of companies, in particular small and medium sized companies. The European Order for Payment (EOP) aims ”to simplify, speed up and make the resolution of conflicts in cross border matters related to undisputed claims cheaper.” The regulation would also ensure the freedom of movement between member states. The European Order for Payment is intended to be “a supplementary and optional instrument for the claimant, who can continue to avail him or herself of national legislation proceedings.” Is there reason, according to our international attorneys, to recommend the European Order for Payment?
The Order for Payment in practice
- Spain: “In Spain, not all Courts are familiar with the EOP. Because not all Courts are used to or have experience with international regulations and European procedural legislation, the handling of European Order for Payment proceedings is delayed. Nevertheless, in some matters these proceedings still have our preference. Contrary to the Spanish order for payment (the “juicio monitorio”), the creditor can opt to drop the matter in the event of a dispute. In the case of a Spanish order for payment, a dispute in the matter would always lead to substantive proceedings, with all the associated costs and lost time.”
- France: “For undisputed matters, the EOP is one of the cheapest proceedings we can initiate. Sometimes, however, these proceedings do not go as rapidly as Dutch clients expect. The time required for these proceedings depends on the efficiency of the local Court. Also, the debtor is rarely ordered to pay interest and costs. The unwieldy form that comes with these proceedings is also much more time-consuming than those of the French order for payment. We do generally obtain an enforceable title after about four months though. Because of these considerable advantages, the EOP is a much- used type of legal action in France.”
- Belgium: “In Belgium, most Courts are not used to the European Order for Payment. Whenever the option to start these proceedings is chosen, the Court will therefore always try to find a reason to not accept the application. Without a strong substantiation, these proceedings, contrary to their intention, only lead to more lost time.”
- Italy: “Under equal circumstances, I would always prefer the Italian order for payment to the European order for payment. This primarily due to the familiarity of the Courts with the national instrument. The EOP certainly has its advantages, but the Italian order for payment is more difficult to contest. The debtor will need to engage the services of an attorney for this and provide the Court with proper proof to the contrary. For the EOP, however, a simple statement from the debtor would suffice.”
- Poland: “In the case of undisputed claims, the EOP certainly has some advantages for the creditor. The EOP is a cheap, fast and efficient means to collect a claim. It is possible to choose in advance whether to halt proceedings if a dispute were to arise. This is not an option for national proceedings. Because of this option to avoid unnecessary costs, the EOP is indeed advisable in some cases.”
- England, Wales and Ireland: “In England the EOP does not provide any advantages compared to normal proceedings. The EOP is not cheaper than the national instrument. The Court is generally less familiar with these proceedings. In Ireland though, this is an effective means to collect. In Ireland, like in Poland and Spain, there is the same advantage of being able to halt proceedings in the event of a dispute. This is not permitted in national proceedings. If you were to choose to halt proceedings in England under those circumstances, then if a dispute were to arise you would be obliged to commence new proceedings. Although the court fee would not be payable again, this does waste time.”
Conclusion: Order for payment yes or no?
In many countries, the Courts are still not or barely familiar with EOP proceedings. That is why these proceedings can take more time in some countries than the national order for payment. However, in some situations the EOP does indeed lead to an enforceable title faster, which compensates for this delay. So, although after seven years the EOP cannot be brought into action without flaw, it does indeed offer advantages to the creditor with claims abroad.
Your debt recovery attorney will always inform you of the likelihood of success of a EOP in your particular case. If you would like to learn more about the EOP, please do not hesitate to contact our attorneys without any obligation. We would be happy to speak with you.