Out-Law / Your Daily Need-To-Know
Since Friday, a judgment concerning uncontested claims obtained in one Member State is enforceable in any other Member State, without involving the courts in the debtor's Member State through time-consuming and costly formalities.
Background
Until an EU Regulation came into force on Friday, such a foreign judgment was not automatically enforceable in another Member State. Instead, the judgment creditor had to enter a special procedure called exequatur, which allows the foreign judgment to be enforced.
In addition, the exequatur decision is submitted to the possibility of appeal, which is a contradiction in terms in regard to uncontested claims because, if a debtor has not contested the debt during the original proceedings, it is nonsense to permit this at the moment of the enforcement abroad.
Consequently, if exequatur must be obtained, enforcement of judgments abroad is delayed and it is costly and often rendered ineffective. As a result, the European Commission points out that the exequatur procedure, especially in the specific field of uncontested claims, obstructs the free movement of judgments and renders decisions subject to a territorial notion of justice that is inappropriate in a Community environment.
In November 2000, the Council began to implement a principle of mutual recognition of decisions in civil and commercial matters. The aim was to abolish all procedures needed for the enforceability of judgments in civil and commercial matters. It was decided to proceed gradually, beginning with a very specific pilot project – the abolition of the exequatur procedure for uncontested claims, which represents the largest category of claims.
That led to the Regulation of 2004 which created a European enforcement order for uncontested claims. The Regulation entered into force on 25th October 2005.
The new Regulation
It dispenses, under certain conditions, with all intermediary measures in the Member State in which enforcement is sought in cases where the defendant has not contested the nature or extent of a debt.
The conditions for abolishing exequatur mainly concern the service of documents in the case of judgments by default. Abolishing exequatur will enable creditors to obtain quick and efficient enforcement abroad without involving the courts in the Member State where enforcement is applied for through time-consuming and costly formalities.
The Regulation applies to “uncontested claims” so that in order for a creditor to obtain a European Enforcement Order the defendant either has to agree to the debt in court proceedings or not appear in court when the claim is heard.
A judgment that has been certified as a European Enforcement Order by the court of origin should, for enforcement purposes, be treated as if it had been delivered by a court in the Member State in which enforcement is sought.
Obviously, the abolition of any checks in the Member State of enforcement is inextricably linked to and dependent upon the existence of a sufficient guarantee of observance of the rights of the defence. For this reason, the Regulation has established minimum standards for the proceedings leading to the judgment in order to ensure that the debtor is informed about the court action against him, the requirements for his active participation in the proceedings to contest the claim and the consequences of his non-participation in sufficient time and in such a way as to enable him to arrange for his defence.
The Regulation does not imply an obligation for the Member States to adapt their national legislation to the minimum procedural standards set out herein. It provides an incentive to that end by making available a more efficient and rapid enforceability of judgments in other Member States only if those minimum standards are met.
The European Enforcement Order is a voluntary procedure: the creditor may also choose the system of recognition and enforcement under the so-called Brussels I Regulation or other Community instruments.
