Trade within the EU across borders is on the rise. But what if your invoices remain unpaid? How do you get someone in another EU member state to pay?
The EU wants business within the union to flourish. For this, a convincing incentive for companies abroad to pay their bills is essential. Therefor the EU has introduced several simple and low cost collection proceedings. You don’t even need a solicitor, you can do it yourself.
For the collection of small claims (up to € 5.000) the European Union has created the “Small claims proceeding”. It’s really simple: you fill out a form, send it to the competent court in the country where your debtor resides and the court sends you the verdict. A verdict you can execute all over the EU without any further formalities. You could f.i. seize the bankaccount of your debtor.
A second option – that is also possible for larger sums – is the European payment order. This is also almost as simple as writing a letter. You fill out the form, send it to the competent court in your debtors country and you get your readily executable payment order. However, the European payment order does have some limitations. Firstly, the outstanding amount has to be undisputed. Secondly, as soon as your debtor contests the payment order (by filing another form) the payment order vanishes into thin air. In that case you have to follow local non-EU proceedings to get paid.
Another simple and effective instrument the EU has introduced is the European (bank) account preservation order. This proceeding enables you to (i) get information about your debtors bank accounts in another EU country and (ii) seize these accounts, even before you have a verdict that can be executed. This is rather unique as – apart from The Netherlands – preservation of bank accounts is generally not possible within the EU. Demanding information about the bank accounts of a debtor is not even possible in The Netherlands, but the EAPO Regulation provides just that in cross border situations within the EU.
Once you have a verdict from a judge in the EU, execution is childs play. The verdict is readily executable throughout the EU, without further formalities. You can simply send the verdict to the official that is appointed to execute court decisions. In The Netherlands this is the bailiff (in Dutch: “gerechtsdeurwaarder”). That official can execute the court decision without previous consent from a local judge, which would be necessary for verdicts from outside the EU.
” To top it off” the EU has introduced the European business interest, as an incentive for companies to pay their B2B debts. This interest is higher than the usual interest due according to local law, and is the same for all the EU.
The basic idea of these EU proceedings is great. Anyone can fill out the forms for these proceedings and file these with the competent court.
However, in daily practice this proves to be more difficult than it would seem. You do need some litigation knowledge to choose which proceeding to follow. And which law applies to the case at hand? How do you explain the legal grounds for your claim? What is the sum you can put in the form? Which interest? Can you claim legal costs? And last but not least: how do you find out which court to file the documents with?
These questions form a threshold for using these seemingly easy proceedings, which is a pity. Even many lawyers are unfamiliar with these proceedings and how to use them.
DV Advocatuur can help you with this. We have the network and knowledge to collect debts throughout the EU, using these uniform European proceedings. As the proceedings are simple (at least for us) it doesn’t cost you a leg and an arm. We also master several European languages – English, German, French and Dutch (and even Russian but that’s no EU country ;-).
Try us. Your unwilling debtors often think they are untouchable. When suddenly your claim arrives at their doorstep in their own country and in their own language, they are startled and often that results in instant payment even before the proceeding has begun.
PS these proceedings also apply to debtors in the UK until the end of 2020!
mr. M. de Vries, april 2020