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Are you the owner of a French SME with a German customer who hasn't paid his invoice for 12,000 euros for three months? Do you sell products online to Spanish consumers who are accumulating unpaid bills? The European payment order could be the solution.
The problem of cross-border debt collection
Recovering a debt abroad has long been an obstacle course. Different procedures, language barriers, prohibitive costs... these obstacles have often led creditors to abandon their claims, particularly for modest amounts.
The European Union has come up with a response: the European order for payment. This procedure has existed since 2008 and considerably simplifies life for creditors in cross-border disputes.
What is the European order for payment?
The European order for payment (EOP) is a standardised procedure enabling creditors to recover uncontested pecuniary claims in cross-border disputes. It is governed by Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006.
A dispute is considered to be cross-border when at least one of the parties is domiciled or habitually resident in a Member State other than that of the court seised (Article 3 of EC Regulation 1896/2006).
The European order for payment applies in civil and commercial matters. Please note, certain areas are excluded from its scope of applicationincluding :
- matrimonial property regimes
- wills and inheritance
- social security
- bankruptcies and similar proceedings
Objectives and fundamental principles
The regulations have two main objectives:
- Simplifying and speeding up the settlement of cross-border disputes concerning uncontested claims
- Reduce the costs of these procedures
This system is based on the principle of reversal of litigation. In practical terms, the injunction is issued by the judge solely on the basis of the information provided by the creditor. It is then up to the debtor to take action if he wishes to contest.
Key features
This procedure has a number of distinctive features that make it particularly suitable for cross-border disputes.
A written, standardised procedure
The IPE is conducted entirely in written form, using standardised forms available in all EU languages. These forms make it possible to overcome language barriers and ensure a degree of predictability in the procedure.
In France, under article 1424-1 of the Code of Civil Procedure, the judge of the tribunal d'instance has jurisdiction in civil matters, and the president of the tribunal de commerce in commercial matters.
No mandatory representation
Neither the claimant nor the defendant is obliged to be represented by a lawyer (Article 24 of the Regulation). This feature reduces procedural costs.
However, the legal complexity of cases and the financial stakes involved may justify the involvement of a lawyer. Legal advice can help to avoid procedural errors that could jeopardise recovery.
Technique for reversing litigation
The procedure is based on the principle of reverse litigation: the defendant is only informed once the injunction has been issued. The defendant then has 30 days in which to object.
If no opposition is lodged within this period, the order becomes enforceable in all Member States (except Denmark), without any intermediate procedure. This is known as the "abolition of exequatur" (Article 19 of the Regulation).
In the event of an objection, the proceedings continue under the rules of ordinary civil procedure of the competent Member State or, since the reform introduced by Regulation (EU) No 2015/2421, under the European Small Claims Procedure if applicable.
Benefits for businesses and individuals
The IPE offers a number of advantages:
- Speed the injunction must in principle be issued within 30 days of the request being made (Article 12 of the Regulation).
- Economy Costs are considerably lower than with traditional procedures.
- Efficiency : once bindingIn addition, the order circulates freely in all Member States without any further formalities.
- Accessibility The procedure can be used without a lawyer, using standardised forms.
For SMEs and entrepreneurs, this tool can prove invaluable. According to the European Commission's report of 13 October 2015 (COM(2015) 495 final), late payment is one of the main causes of insolvency threatening the survival of businesses.
Coordination with national procedures
The IPE coexists with national procedures. The creditor always retains the freedom to choose between the ECI and other procedures provided for under national law (Article 1(2) of the Regulation).
In France, the relationship between the IPE and the national injonction de payer is set out in articles 1424-1 to 1424-15 of the Code of Civil Procedure.
The European order for payment is neither better nor worse than national procedures. It is an additional option, particularly suited to cross-border disputes of low conflict intensity.
If your company is facing cross-border non-payment problems, please contact us to discuss a strategy for dealing with them. debt collection best suited to your situation.
Sources
- Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure
- Code of civil procedure, articles 1424-1 to 1424-15
- Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the application of Regulation (EC) No 1896/2006, COM(2015) 495 final, 13 October 2015
- Regulation (EU) No 2015/2421 of the European Parliament and of the Council of 16 December 2015 amending Regulation (EC) No 1896/2006.
- PAYAN Guillaume, "Procédure d'injonction de payer européenne", Répertoire de procédure civile, 2018
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