1. European Order for Payment (“EOP”): Regulation (EC) No. 1896/2006

Duncan Grehan & Partners Solicitors, was one of the first firms to make an application to enforce a European Order for Payment in Ireland pursuant to Council Regulation (EC) 1896/2006 which was issued successfully in December 2010.

This Regulation has led to the introduction of a new procedure to recover cross-border debts and came into force on the 12th of December 2008. It has been implemented into Irish law by Regulations in S.I. 525/2008 dated 09/12/2008 supported by Order 42 C entitled “European Orders for Payment” inserted into the Rules of the Superior Courts by S.I. 551/2008 dated 15/12/2008.

This procedure provides a simplified means for the recovery of uncontested claims in a uniform manner creating an equal playing field for debtors and creditors within the European Union. It provides a less expensive and faster alternative to full civil proceedings for recovering uncontested pecuniary claims in the Member States. It is enforceable in all the Member States except Denmark. The Regulation is an alternative to the national procedures for the recovery of debt but it is only available in cross border cases. A “cross-border case” is one where at least one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court where the claim is being made. Domicile is determined in accordance with Articles 59 and 60 of Council Regulation (EC) No. 44/2001.

This Regulation applies to both civil and commercial matters. Jurisdiction shall be determined in accordance with the relevant rules of Community law, specifically the rules and particulars set out in Brussels 1. However, where the defendant is a consumer and the claim relates to a consumer contract, the claim against them can only be made in the courts of the Member State in which they are domiciled.

The application is made by filling out the prescribed form as set out in Annex I of the Regulation. The court fees must be paid by the claimant who must also provide its bank details to enable the Defendant to pay the amount claimed. The rejection of the application does not prevent the claimant from making a new application or from pursuing another procedure under the law. Once the requirements are satisfied the court shall issue a European Order for Payment using the standard form E as provided for in Annex V of the Regulation.

The European Order for Payment shall notify the Defendant to pay or to oppose the application by lodging a statement of opposition within 30 days of service of the Order with the court of origin. It is the duty of the court to ensure that the Order was served on the Defendant. The Defendant may lodge a statement of opposition within 30 days of service of the Order and the Defendant is not required to set out the grounds for opposing the application. If no statement of opposition is lodged the court shall issue a European Order for Payment which is enforceable using the standard form G as provided for in Annex VII of the Regulation.

The Defendant is entitled to review the European Order for Payment. If the court rejects the application to review then the European Order for Payment shall remain enforceable. However, the European Order for Payment will be null and void if the court decides that a review was justified.

The enforcement of the European Order for Payment shall be governed by the law of the Member State of enforcement.

2. Extension of the Scope of Brussels I

A judgment of any of the Courts of the EU Member States can also be enforced in Ireland. The process is technical and involves an application to the Master of the High Court in Dublin for an Order of its enforcement in Ireland against the debtor resident in Ireland. The Brussels Convention of 1968 first dealt with the jurisdictional and enforcement issues of judgments in civil and commercial matters. Since then, the process by which a judgment obtained in one Member State may be enforced in another Member State has been updated and amended a number of times, most radically by the Brussels I Regulation – Reg 44/2001 which until the enlargement of the EU regulated the enforcement of foreign judgments in fourteen of the fifteen Member States with the notable exception of Denmark.

The Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia all officially joined the EU on 01/05/04. There were a number of key requirements that each of the Member Statess were obliged to meet before their entry was approved, one being the obligation to accede to Brussels I. This took effect upon the date of their accession to the EU, namely 1st May 2004, so that this enforcement procedure is now applicable widely in the national jurisdictions of the EU.

3. EU Judgments obtained in Default of Defence [EU Regulation 805/2004]

Presently, a creditor who obtains against a debtor a judgment in default of defence within the EU must go through a second recognition and enforcement judicial process should he/she wish to enforce that judgment in another EU state. If a foreign-based debtor offers no defence to its suppliers’ local court proceedings for a Judgment for the unpaid invoiced sums, the supplier will still have to enforce that Judgment in the EU country where the debtor is located.

This changes on 21 October 2005 with the coming into effect of the Irish laws to implement EU Regulation 805/2004 which creates a European Enforcement Order for uncontested claims. Under the new system, creditors are saved the time and expense of obtaining an enforcement order from the Master of the Irish High Court.

This Regulation applies to default or summary judgments, i.e. where the defendant debtor offers no defence to the claim made by the creditor. This is frequently the case in debt collection proceedings. Such uncontested orders may be directly enforced in another Member State without having to go through another judicial process in the State where the creditor wishes to enforce the judgment. A judgment that has been certified as a European Enforcement Order by the court of one Member State will therefore be enforced as if it were given in the Member State in which enforcement is sought. The principle behind the Regulation is that a judgment obtained for example, by an individual in Greece or Lithuania can be as easily enforced in that country as it could be were it obtained in Ireland, without the creditor having to go through another judicial process in Ireland.

This development means that creditors will be saved the time and expense of making a second application to the courts of the EU in order to enforce their judgment.

4. Irish High Court proceedings against German retailer are struck out

In March 2005 Duncan Grehan & Partners secured an Order from the High Court striking out High Court proceedings against its German client on the grounds that the High Court had no jurisdiction to deal with the matter pursuant to Brussels I Regulation (Council Regulation (EC) No. 44/2001 of 22/12/2000). The Court felt that by virtue of Article 5 (3) of the Regulation and the judgement of the European Court of Justice in the Kalfelis case, it had no jurisdiction where the root of the Plaintiff’s action against the German retailer related to a contract by which it sold to the Plaintiff a motorcycle helmet from its shop in Nuremberg, Germany.

The Plaintiff, an Irish citizen, had purchased a motorcycle helmet from the German retailer’s shop while he was in Germany. Some years later he and his motorcycle were involved in a road accident in Ireland and he claimed that he was injured because of a defect in the helmet visor which splintered on its impact with the road. The Plaintiff sued the manufacturer of the helmet as well as the retailer company from whom he bought it. The Irish Court found that the Regulation must be interpreted strictly so as to ensure uniformity of its application among the Member States and that as Germany was the place of delivery of the helmet and the place where the retailer company resided, the Plaintiff ought to have brought his action in Germany. The Court declined jurisdiction notwithstanding the Plaintiff’s fear that he may now be out of time to bring Court proceedings in Germany.

See the judgement of Mr Justice Daniel Herbert delivered 8 March 2005 in the case of Burke -v- UVEX and Motorrad TAF GmbH, The High Court.

5. Costs of Debt Collection
Debt collection costs remain higher than may be necessary as monetary jurisdictional limits are not keeping pace with the booming economy. Debts greater than €6,348.69 have to be claimed in the courts of second instance, the Circuit courts. Draft legislation to fix this has not been progressed into law. There is no procedure to obtain an enforcement order other than a court application.

The Brussels I Regulation (Council Regulation (EC) No 44/2001 of 22/12/00 continues to facilitate the enforcement of Judgments of courts of the EU and the Annex V certification procedure is simplifying the application to the Master of the Irish High Court. However, it is still more cost effective and quicker to commence proceedings in Ireland rather than to enforce a foreign court Judgment here.