Credit Manager Magazine 9/2021

51 CREDIT MANAGER MAGAZINE WRZESIEŃ / SEPTEMBER 2021 minders to collect outstanding claims, writ- ten reminders are not required in all Euro- pean countries before starting a court proce- dure. The efficiency of dunning letters should be reviewed critically, as it is a fact in debt collection practice that delays in the collection process significantly increase the risk of col- lectability. One or two reminders with short payment deadlines should be the maximum. • Court Collection In order to start court collection, the lo- cal lawyer will require a power of attorney. Whether the Power of Attorney has to pre- sented to the court depends on the jurisdic- tion. It should be noted that claims can be made in foreign currencies. In most jurisdic- tions even liens on real estate can be regis- tered in all EU currencies. Sellers have to be aware that court costs and lawyer fees vary widely within the European Union. The same applies to the duration of a court proceeding. Whereas under summary proceedings (i.e., payment order, European payment order) execution titles may be obtained within 2 – 8 weeks, obtaining a judgement for disput- ed claims in the ordinary proceedings takes much longer in the various European states and varies from6months to 2 years. The ECN book Debt collection in Europe provides de- tailed information on these issues. Foreign companies are often reluctant to start legal proceedings for fear of costs and unknown procedural laws. It is true that the legal sys- tems of Europe and the U.S. are different but that does not mean that European proceed- ings are less efficient or more costly. Especial- ly the costs should not be a cause of concern because there is basically no discovery, the proceedings are guided by the judge, the pro- cedural costs are widely recoverable and de- fault interest of at least 8% over reference rate of the European Central Bank are awarded. II. Recognition of Judgements in Europe To facilitate the circulation of judgements and enhance access to justice the European Union established Brussels Regulation on jurisdiction and the recognition and enforce- ment of judgements in civil and commercial matters, the European Enforcement Order, the European Order for Payment Procedure and the European Small claims Procedure. • Brussels Ia Regulation, Regulation (EU) No 1215/2012 of 12 Decem- ber 2012 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters is applicable between all Member States of the EU. Due to its exten- sive scope of application, this Regulation is the most important legal basis concerning enforcement of foreign titles in practice. The Brussels Ia Regulation is exclusively ap- plicable to legal proceedings instituted on or after 10 January 2015. Executory titles from before that date fall within the scope of the predecessor regulations. As a general rule, a judgement, an authentic instrument or a court settlement that was issued and is enforceable in one Member Country is enforceable in all Member Coun- tries. The grounds to refuse recognition and enforcement are limited to serious violations of fundamental rules of law (e.g. contrary to public policy (ordre public) right to be heard / due process of law). To use a judgement from another Member State, the judgement as well as a certificate from the court of origin is needed. The court of origin issues the certification after appli- cation of any interested party within short notice. When these documents are available, the foreign title is executed in the same way as a domestic title. The procedure of enforce- ment is then governed by law of the member state in which the title is enforced. • European Enforcement Order Regulation, Regulation (EC) No 805/2004 of 21 April 2004 introduces a European Enforcement Order for uncontested claims concerning judge- ments given, court settlements concluded and authentic instruments registered after 21 October 2005. The European Enforcement Order Regulation lost its practical relevance after introduction of Brussels Ia. The proce- dure under the European Enforcement Or- der Regulation is optional, meaning enforce- ment according to the Brussels Ia Regulation is also possible in its scope. “Fortunately, within the European Union a set of well-established rules enables efficient cross border debt collection thus ensuring that also when the company was selling to a customer in Europe who ends up seriously delinquent or in default the situation is not hopeless.” BUSINESS