6. PAYMENT PROCEDURE IN CIVIL CASES AND
SIMPLIFYING SMALL CLAIMS LITIGATION
(24188)
5247/03
COM(02)746
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Commission Green Paper on a European order for payment procedure and on measures to simplify and speed up small claims litigation.
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| Legal base: | —
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| Document originated: | 20 December 2002
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| Deposited in Parliament: | 16 January 2003
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| Department: | Lord Chancellor's Department, Scottish Executive Justice Department
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| Basis of consideration: | EM of 27 January 2003
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| Previous Committee Report: | None
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| To be discussed in Council: | No date set
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| Committee's assessment: | Legally and politically important
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| Committee's decision: | Not cleared; further information requested
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Background
6.1 One of the conclusions of the Tampere European Council
in October 1999 invited the Council to consider special common
procedural rules for simplified and accelerated cross-border litigation
in small consumer and commercial claims. The conclusions also
referred to the consideration of new procedural legislation in
cross-border cases in relation, amongst other matters, to orders
requiring the payment of sums of money.
6.2 A draft Council Regulation for a European enforcement
order for uncontested claims is already under consideration by
the Council.[7] This draft
Regulation has the same material scope as Council Regulation 44/2001,
which converted the 1968 Brussels Convention on jurisdiction and
the recognition and enforcement of judgments in civil and commercial
matters into a Community Regulation. It would simplify the enforcement
procedure by removing the requirement for registration in the
country of enforcement in the case of an uncontested claim. It
would apply generally to all uncontested claims, whatever the
amount claimed.
The Commission Green Paper
6.3 The Commission Green Paper is concerned with two
subjects. The first is with the possibility of instituting a European
'order for payment' procedure and the second is the consideration
of a simplified procedure for small claims.
6.4 The Green Paper explains that an order for payment
procedure is a feature of the civil procedure of 11 Member States
(Austria, Belgium, Finland, France, Germany, Greece, Italy, Luxembourg,
Portugal, Spain and Sweden). Its distinctive aspects are that
the claimant applies to a court for an order which is then made
on an ex parte[8]
basis. The order is then served on the defendant informing him
that he must abide by the order or contest the claim within a
specified time limit. If the defendant fails to act, the order
becomes enforceable. If the defendant objects, the case is transferred
to be dealt with in ordinary civil proceedings.
6.5 The Green Paper suggests that the question of whether
a European order for payment procedure should be confined to cross-border
cases is 'open to discussion'. The Commission argues that since
the procedures effect the mass collection of debts, 'it could
be considered reasonable to regard a situation implying a marked
disequilibrium with regard to the efficiency of procedural means
afforded to creditors in different Member States as amounting
to a distortion of competition within the internal market'. The
Commission goes on to assert that the creation of a European order
for payment 'could represent an endeavour of harmonisation in
compliance with the principle of subsidiarity as this type of
procedure is not inextricably interrelated with the other rules
governing civil procedure but rather a chapter apart'.
6.6 The Green Paper discusses the existing procedures
in Member States and, in particular, the sufficiency of evidence
which the claimant must produce in support of his claim. The paper
also raises the issues of whether the order should be limited
to claims for sums of money, whether certain types of claim should
be excluded, whether a limit should be placed on the sum which
may be claimed and whether the procedure should be optional or
obligatory.
6.7 The Green Paper also considers questions of jurisdiction
and sets out the considerations for and against any special rule
of jurisdiction which would derogate from the general rules of
Council Regulation (EC) No 44/2001. It points out that a rule
requiring the claimant always to proceed in the courts for the
defendant's domicile would have the advantage that no border would
have to be crossed for the purpose of service. On the other hand,
any objection by the defendant might have the result of requiring
the proceedings to be transferred to the courts of another Member
State, since the general rules of jurisdiction under Council Regulation
No 44/2001 would then apply.
6.8 The Green Paper notes that the civil procedure rules
in Germany provide that a claimant may always bring proceedings
for an order for payment (Mahnverfahren) in the courts for the
place of his own domicile, but that this is an exception to the
normal rule whereby such proceedings are to be brought in the
courts of the defendant's domicile. The Green Paper considers
that it would be 'questionable' for a European instrument to contain
provisions on the internal distribution of jurisdiction within
the Member States and that it would be in line with Council Regulation
(EC) No 44/2001 for the jurisdictional rules to be limited to
the determination of the competent Member State in cross-border
cases.
6.9 The Green Paper also notes that there is a difference
in the practice of Member States between those which make an order
for payment following a summary assessment of the merits of the
case based on written evidence of the debt, and those which make
an order based on the mere circumstance that the defendant did
not contest the claim. States in the former category (Belgium,
France, Greece, Italy, Luxembourg and Spain) confer authority
to make orders on a competent judge, whereas those in the latter
category (Austria, Finland, Germany, Portugal and Sweden)[9]
permit the making of orders by administrative staff. The Green
Paper invites views on whether the European instrument should
contain rules on the question of who is to be entitled to make
an order.
6.10 The Green Paper goes on to consider a number of
procedural issues such as the format and content of a European
order and the sufficiency of evidence required in support, the
desirability of rules on service, appeals and representation by
a lawyer.
6.11 The second subject addressed in the Green Paper
is that of small claims litigation. The Green Paper notes that
a number of Member States have introduced simplified forms of
procedure for litigating small claims, and invites views on their
effectiveness. The Green Paper also invites views on whether small
claims procedures should be limited to claims for sums of money,
and as to whether particular types of claim should be excluded.
It also considers whether the procedure should be optional or
mandatory, whether costs should be recoverable, representation
(by lawyers or non-lawyers) and the simplification of rules of
evidence and use of a written procedure.
6.12 A basic question raised in the introduction to the
Green Paper is that of whether any European instrument should
apply only to cross-border cases, or whether it should apply generally.
As with the European payment order, the Commission argues that
differences in the procedural means available to creditors for
the pursuit of their claims 'be they small or uncontested, could
have a direct bearing on the proper functioning of the internal
market'. The Commission suggests that 'it could be considered
unsatisfactory to make a specific efficient European procedure
available only for claims with an international dimension whilst
plaintiffs in purely internal cases are possibly left with a burdensome
ordinary civil procedure system that does not meet their justified
needs'. The Commission concludes that European instruments on
orders for payment and on small claims 'could be deemed useful
also in cases of purely internal litigation'.
The Government's view
6.13 In their Explanatory Memorandum of 27 January 2003,
the Parliamentary Secretary at the Lord Chancellor's Department
(Baroness Scotland of Asthal QC) and the Deputy First Minister
and Minister for Justice for Scotland (Jim Wallace QC) undertake
to inform us of their response to the Green Paper. They explain
that the Government would look positively at proposals for measures
which are capable of delivering real benefits to ordinary people
by reducing the cost, complexity and inefficiency often associated
with pursuing claims across borders, provided it is satisfied
that such measures are genuinely necessary for the proper functioning
of the internal market.
6.14 In relation to the European order for payment procedure,
the Ministers consider that there is a real issue as to the extra
value which would be added by such a procedure. They point out
that in those Member States which do not have an order for payment
procedure there are effective comparable arrangements, such as
the use of judgment by default in England and Wales and Northern
Ireland, and decrees in absence in Scotland. They add that the
Government will also consider whether a measure for mutual recognition
of payment orders might be a practicable alternative approach,
bearing in mind that in some countries such orders are not made
following a judicial procedure.
6.15 In relation to small claims, the Ministers explain
that the Government supports in principle the introduction of
measures to make it easier to pursue small claims across European
borders and that evaluation of any proposal will have to be based
on its practical benefit to users. They add that 'a properly considered,
practical and proportionate measure focussing on the need for
speed, simplicity and cost-effectiveness could increase consumer
confidence and make a significant contribution to the functioning
of the internal market'. Such a measure should complement, and
not replace, the provisions in Section 4 of Council Regulation
No 44/2001 which allow consumers, under certain circumstances,
to sue in their own countries.
6.16 The Ministers comment in relation to both issues
that the Government will need to be persuaded that measures aimed
at providing new mechanisms in purely domestic cases fell within
Article 65 EC and satisfied the subsidiarity test, and that the
Government is not persuaded of the need for harmonised rules for
serving documents in purely domestic cases.
Conclusion
6.17 We thank the Ministers for their helpful Explanatory
Memorandum. Like the Ministers, we are concerned that the Green
Paper is advocating measures which would apply to purely internal
cases, and thus make substantial revisions to the civil procedure
of Member States. This seems to us to go beyond the conclusions
of the European Council at Tampere and to exceed the scope of
Article 65 EC (which is concerned with judicial cooperation in
civil matters having cross-border implications).
6.18 We also share the concerns of the Ministers in
relation to subsidiarity, and can see little or no justification
for civil procedure measures adopted at Community level which
relate to matters internal to a Member State. We therefore consider
that, whatever the eventual substance of the proposals on payment
orders or small claims litigation, no obligation should be placed
on Member States to apply them to internal cases.
6.19 We note that the Ministers intend to consult
widely, and we ask them to provide us with an account of the views
expressed so that we may comment further before the Government
submits its reply to the Green Paper. In the meantime, we shall
hold the document under scrutiny.
7 (23474)
8465/02; see HC 152-xxxv (2001-02), paragraph 13 (3 July 2002). Back
8 i.e.
without notifying the defendant. Back
9
The Green Paper notes that in Austria and Germany court clerks
(Rechtspfleger) have several years of legal education. Back
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