When is it advisable to use the institution of the European order for payment?
Whenever you have a debtor in another country of the European Union (with the exception of Denmark), and at the same time when it concerns an uncontested monetary claim in civil and commercial matters. There is no need to expose yourself to a lack of liquidity due to non-payment of monetary obligations by foreign counterparties. The Skarbiec Law Firm offers more information on this subject.
Kancelaria Prawna Skarbiec provides comprehensive assistance in the effective collection of debts from debtors, not only Polish, but also those with their registered office or place of residence in EU Member States. Taking advantage in this respect of the institution of the European Order for Payment facilitates and accelerates the enforcement of relevant monetary receivables from an unreliable counterparty.
European Order for Payment
The financial liquidity of a company depends mainly on the timely fulfilment of its obligations by its counterparties, but there are often situations in which a counterparty either delays payment of an amount due or fails to pay at all. Particular difficulties are posed by unreliable counterparties from other EU countries. In such cases, one of the most effective solutions is to refer the matter to professional debt recovery.
In the field of debt recovery, the law firm Skarbiec offers, among other things, services related to court debt collection activities – thanks to the experience of our lawyers and appropriate organisation of work, we achieve statistically better results than the national average in terms of the level of debt collection and the duration of proceedings.
In relation to debtors from other European Union countries, it is particularly helpful and advisable to use the procedure associated with the European Order for Payment.
What is the European Payment Order
The existence of the European Union, which brings together most of the countries of Europe, has not only resulted in closer economic and political cooperation, but has also made it possible to facilitate more mundane activities, such as the recovery of debts between entities from different Member States of the European Union. A dishonest debtor from, for example, Germany, France, Spain or the Czech Republic can no longer rely on a creditor from another EU country having to wade through the legal procedures in his own country and then in the debtor’s country of residence/site in order to recover the money owed to him.
The institution of the European Order for Payment allows for a simplified and swift prosecution of a debtor from another European Union country. The procedure for pursuing a claim using the EOPA is similar to the Polish writ of payment procedure. A condition for the possibility to use the European order for payment procedure is, firstly, the cross-border nature of the case (which means that one of the parties to the dispute must be domiciled/established in a Member State other than the Member State of the court hearing the case), and secondly, the procedure may only be used to pursue uncontested monetary claims in civil and commercial matters.
Taking into account the costs of conducting a case abroad and, in the case of some countries, also the lengthiness of the proceedings (e.g. Poland), conducting court proceedings on the basis of the European Order for Payment is much cheaper and faster. Considering also the achievement of an analogous effect as in the case of court judgments issued by a court in the debtor’s country, proceedings on the basis of the European Order for Payment are often practised and used in disputes against unreliable contractors.
The essence of enforcing claims by means of a European Order for Payment is to bypass additional court procedures (in particular the so-called exequatur procedure), which means that a European Order for Payment that has become enforceable in the EU Member State of its issue (e.g. Poland) is recognised and enforced in other EU Member States (e.g. Germany) without the need for a declaration of enforceability and without the possibility of opposing its recognition. In other words, the European Order for Payment that a client obtains can go directly to a bailiff in any EU country, bypassing the time-consuming and complicated court procedures that are normally carried out in addition before the court in whose district the debtor is domiciled or established.
Example: A Polish creditor has a debtor in Germany.
If a Polish entity were to bring an action against a German counterparty before a Polish court on the basis of national law (rather than using the EU procedure related to the European Order for Payment), after obtaining an order for payment/judgment, it would have to apply to the German court with an appropriate application and there still have to carry out the procedure for the recognition of the Polish judgment and its enforceability before referring the case to the German bailiff. If, in the meantime, the debtor moves to yet another member state, e.g. from Germany to Spain, the procedure for recognition of the Polish judgment (before the Spanish court) has to be conducted again. The costs of the entire operation in such a case increase significantly and obtaining satisfaction extends over time. These disadvantages do not exist with the European Order for Payment procedure, on the basis of which the debtor can be prosecuted in almost any country of the European Union without the need for additional court proceedings in the debtor’s place of residence/site.
The procedure would be analogous if a German (Spanish, Italian etc.) creditor had a debtor in Poland.
In addition to the above-mentioned advantage resulting from the application of the institution of the European Order for Payment, further advantages of the application of the EU procedure for the pursuit of a debtor from another EU Member State may also be pointed out, in particular:
a simplified procedure for the enforcement of the claim manifested, inter alia, by a de-formalisation with regard to the filing of the statement of claim (there is no obligation to attach to it the documents from which the claim arises, the court acts only on the basis of the description of evidence and the claimant’s statement that the data contained in the statement of claim is true),
a greater chance of non-objection by the defendant due to the fact that the procedure is unfamiliar and the debtor may be discouraged or simply not know how to lodge an objection after receiving the European Order for Payment,
the speed with which the case is dealt with, as opposed to the use of a national procedure followed by a foreign court recognition procedure (as in the example given above).
The introduction of an EU procedure for the European Order for Payment has one fundamental objective: the countries that are part of the European Union are seeking to simplify and unify procedures for the recovery of monetary claims about which there is, in principle, no legal dispute. Indeed, this issue is of particular importance for economic (and non-economic) operators, since late payment is one of the main reasons for lack of liquidity and insolvency, threatening the existence of small and medium-sized enterprises in particular, and may consequently lead to the loss of a large number of jobs.