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European Enforcement Orders – Problems and Solutions

November 2010 - EU & Competition. Legal Developments by Hayes Solicitors .

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Regulation (EC) No. 805/2004 (“the Regulation”) created a European Enforcement Order for uncontested claims within the European Community. The aim of the Regulation was to permit the free circulation of judgments without the requirement for intermediate proceedings in the jurisdiction of enforcement to recognise the foreign judgment and convert it into a domestically enforceable measure.

The Regulation applies to civil and commercial matters and is a step beyond the recognition and enforcement of judgment mechanism provided for in the Brussels I Regulation. However, it is important to note that it is limited to uncontested claims only. The mechanism has been in use for some time now and has been used most particularly by cross-border creditors in relation to uncontested debts which are owed to them by debtors in other member states.

A creditor must apply to his national Courts for judgment against the debtor. Once that has been achieved the creditor must then apply to have the judgment certified as a European Enforcement Order. That certificate can then be sent to the debtor and can be enforced in the debtor's jurisdiction in the same manner as a domestic judgment.

Difficulties have been encountered with the procedure. Because the measure is relatively new in legal terms there exists a lack of familiarity with the provisions of the EC Regulation and a reluctance to certify a judgment as enforceable against a debtor where the debtor has not defended the proceedings. Furthermore, when a judgment has been certified as a European Enforcement Order, difficulties are encountered in the jurisdiction of enforcement where local agencies are equally unfamiliar with the procedure and can be reluctant to enforce the certificate as against the debtor. These difficulties have operated, to some extent, to undermine the rationale behind the European Enforcement Order certificate regime. It is likely that the difficulties encountered to date will lessen over time as the relevant parties become more familiar with the regime.

An alternative for traders who frequently deal with customers in another member state is to amend their terms and conditions of trade so as to provide for the resolution of all disputes in the jurisdiction of purchase. This has the benefit of removing the need to obtain judgment in the creditor's jurisdiction before proceeding to have same enforced in the debtor's jurisdiction. It also avoids duplication in terms of the trader instructing lawyers in its country to instruct lawyers in the purchaser's country. The creditor can deal with one set of lawyers in the debtor's jurisdiction and can by-pass any administrative difficulties which have been encountered to date with the certification and enforcement of European Enforcement Orders. While it would be undesirable for a trader to have a large number of different terms and conditions for each country in which it trades, the measure is worth consideration in those jurisdictions where the trader has a significant amount of business.

Matthew Austin

Solicitor in the Commercial & Business department of Hayes solicitors

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