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New Help For Businesses With Disputes In The EU

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1 January 2009

Andrew Shipley

Whatever you think of the EU there can be no doubt that it has made trade between member states easier.  The EU is our most important trading partner by a very large margin. Any help to resolve disputes or to secure payment for goods and services delivered into the EU must be welcome.


The Commission has been actively working on this for some time.


In October 2005, they introduced the European Enforcement Order.  This is a much underused mechanism that speeds up the process of taking an English Judgment and forcing a debtor in say France to pay the monies that are due under that judgment.


There are now two more weapons in your armoury.  The first is the European Payment Order and the second is the European Small Claims Procedure.


The European Payment Order

Don't confuse the European Payment Order with the European Enforcement Order.  They are very different.  Sadly, this new measure is much less useful.


It has been available since 12 December 2008 and provides a procedure that can be used in any of the courts in the European Union apart from Denmark to enforce payments of undisputed debts.  In some countries I can see that as being very useful.  If say you want to begin a court process in Italy where the system is notoriously slow, then this new procedure may well give you quicker judgment.  To be sure you will have to talk to an Italian lawyer and of course your claim will have to be made in Italian.


If you are beginning proceedings in the English courts I don't see that this new procedure will become very popular.  It is not compulsory and you can use the traditional methods which will be quicker and cheaper.


European Small Claims Procedure

The European Small Claims Procedure could be much more useful.  The procedure is available from the 1 January 2009.  It provides again a wholly new procedure that is applied in every one of the courts of the EU member states other than Denmark.  It should be marginally quicker than the current Small Claims Track in the UK court system and has the distinct advantage that it is intended to be a written procedure.  There can be hearings and if there are, they will be by telephone or video conference.


On the other hand it is limited to claims of only €2,000 (excluding interest and costs and there is provision to recover costs from the other side if you win.  Some will see that as an advantage, some as a disadvantage depending on how strongly you think your case is!


Previous experience has shown that it takes a while for the courts to become used to new powers and learn how manage them.   There are a great deal of areas where the Rules need to be developed and a practice will no doubt develop across the EU that differs from one country to another but if you are about to bring a case that is likely to be defended but don't think it's worthwhile spending time, money and effort on complex proceedings in far-flung jurisdictions this could be a very useful tool.


The key decision

The key decision though is still the same.  You must decide at the beginning of your claim whether or not it is likely to be defended or not.  That doesn't mean whether or not you agree with the defence that is likely to be advanced.  Is it going to be disputed?  If so, that is a fundamental part of the decision that you will need to make to decide which court to begin your claim in.  Making the right decision and choosing the right procedure will be vital to the commercial good sense of starting the procedure at all.


As an emita member you are entitled to a free 1 hour legal consultation with Roythornes please see member benefits page of website or call 0115 9471767 for more details.

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