European order for payment
The European Union aims to create, maintain and develop an area of freedom, security and justice in which the free movement of persons is guaranteed. In order to achieve this objective and in order to ensure the proper functioning of the internal market, the Union provides the adoption of measures in various fields, one of which is the field of judicial cooperation and civil matters having cross-border implications.
The EU also aims to guarantee stability of the economic operators by limiting the causes that lead to insolvency, notably by ensuring the prompt and effective recovery of outstanding debts, over which no legal controversy exists.
The adoption of Regulation (EC) № 1896/2006 of the European Parliament and of the Council of 12 December 2006 Creating a European Order for Payment Procedure is the result of the simultaneous efforts of the EU in these two fields.
The European Order for Payment (EOP) is intended and developed to be a quick and at the same time effective mechanism for recovery of uncontested pecuniary debts within the European Union.
The procedure is applicable in all Member States except for Denmark. In other words, this means that such an order could be issued or enforced by the respective competent court in each Member State except for Denmark. The regulation applies only to claims arising from civil or commercial matters – for example commercial transaction receivables (forwarding agreements, lease agreements, etc.) or claims arising from civil contracts (leasehold agreements, loan agreements, etc.), which have cross-border implications.
A specific case could be defined as a cross-border case if one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court that has been seised. The two terms shall be interpreted with regard to their meaning expressed in Regulation (EC) 44/2001.
The procedure provides an additional and thus optional remedy for the claimant that does not prevent him from undertaking procedures under the respective national legislation. The regulation develops a simplified and speeded-up procedure that reduces the litigation costs and ensures the free circulation of European Payment Orders within the Union.
The procedure commences once a claim is submitted before the respective competent court. In order for the claim to be valid, it shall be drafted in accordance with an established form. The claimant shall identify the parties and the amount of the claim (the principle, and where applicable the interest demanded on the claim, the contractual penalties and other costs related). The claimant shall also state the cause of his action and the circumstance in connection with his claim, as well as a description of the evidence supporting the claim. Along with this, the grounds of the jurisdiction and the cross-border nature of the case shall be defined. The claimant is not required to provide the court with any other additional documents, though he may do that at his discretion.
In fact, if the requirements of the Regulation that concern the application form are met and if the court adjudges that the claim appears to be founded, the latter shall issue, as soon as possible and usually within 30 days, a European Order for Payment. When issuing such an order, the court also uses a unified form.
In order to provide the defendant with information that would help him arrive at an informed decision about his possible actions, the application form requires thorough description of the circumstances related to the claim. Either the defendant could pay the amount stated in the order, or he could lodge a statement of opposition with the court within 30 days of service of the order on him. Where a statement of opposition is lodged, the EOP could not be enforced by the court. In that case, the proceedings shall continue in accordance with the rules of the ordinary civil procedure unless the claimant explicitly requests the termination of the procedure.
The claimant, who succeeds in proving the merits of his claim before the court, receives an enforceable titulus in a relatively short time. On the other hand, the defendant is protected – if the claimant does not manage to provide a detailed description of the circumstances related to his claim, the court will not issue an order. Even if the court issues such an order, the defendant may lodge a statement of opposition that will lead to transformation of the procedure to the ordinary civil once. The latter would prevent the quick effect of the EOP.