by Joana Covelo de Abreu, Junior Editor

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Effective judicial protection concerning debt recovery: branding the judicial reentrée

The European Union is now living a post crisis’ recovery and, to achieve that, the Commission understood in its 2013 Citizenship Report the European Union was now pursuing two new goals: an economic recovery and a sustainable growth. To meet those political objectives, the European Union adopted Regulation (EU) No. 2015/2421 which revised both European Small Claims Procedure [Regulation (EC) No. 861/2007] and the European order for payment procedure [Regulation (EC) No. 1896/2006]. In fact, both these instruments were reputed, already in 2013, as being able to definitely influence European economic recovery by boosting Internal Market functioning and delivering better observance of fundamental freedoms by protecting those economic agents that interacted in a cross-border context.

The changes brought by Regulation No. 2015/2421 are applicable since 14^th July 2017 and, so, as the courts’ recession is going on – for instance, in Portugal this started in the 16^th July 2017 and it will end in the 31^st August 2017 – the real impact of these legislative precisions are going only to be felt when the judicial réentrée happens.

In fact, the European order for payment procedure pursues a pragmatic approach by delivering quick results where judicial intervention (in a strictu sensu) can be reduced depending on which information are delivered by Member States. Its settlement was happily welcomed since the payment delays were one of the main reasons that created a true menace to companies’ survival, especially small and medium ones. Furthermore, despite most Member States had already internal means of debt recovery, there were substantial differences between legal orders, namely relating to deadlines, competent entities (judge or an administrative / parajudicial structure?) and the procedural steps to follow. New Regulation No. 2015/2421 brought small but effective changes. In fact, the order for payment procedure will produce all its effects by collecting a definitive title that can be executed in other Member States, especially those where the debtor assets are located, if the defendant does not present an opposition in due time. However, when the defendant presented an opposition, that one was going to follow its course in accordance with the internal procedural means existing in the Member State’s internal order where the European order for payment procedure was running – and this demotivated some creditors to use the European procedure. In this particular approach, main changes related to the fact that, depending on the amount demanded in these proceedings, if it is located beneath the pecuniary limit set for the small claims procedure, the proceedings – after the defendant’s opposition – will follow the small claims procedure. Therefore, it is already a major predictability on how the proceedings will continue to run even if the defendant presents an opposition.

The European small claims procedure also aspires to produce a quick and effective credits recovery and it was thought so that economic agents were able to recovery those undersized amounts that were in debt in a cross-border economic relation. Despite other changes, we perceive as the great of all the fact the European legislator had moved up the pecuniary limit of these proceedings. In the beginning, that amount could not be higher than 2.000,00€ but, with those changes produced under Regulation No. 2015/2421, the amount is now set in 5.000,00€. The amount’s limit only relates to the credit: all due interests and other expenses are not accounted to meet that limit but they can be asked in this litigation.

Even if we understand that the changes could be greater in both procedures, they are in fact grounding our dogmatic belief European Union is rapidly setting what we can call as a true judicial integration in civil matters that cannot be explained in the mindset of a sole judicial cooperation.

Furthermore, these changes – especially when they are perceived in relation with the creation of an European account preservation order [Regulation (EU) No. 655/2014] – are setting the tone in the European context, so there are true proceedings in the European Union, where all the procedural steps are determined in European Regulations. This grounds our belief there is already an input in order to establish a judicial integration – redefining the dogmatic approach on how we perceive the EU Procedural Law – but it is also related to e-Justice (=electronic Justice) concerns.

Recently, a research team of the Centre of Studies in EU Law (CEDU) – composed by Alessandra Silveira, Pedro Froufe, Sophie Perez and I – saw its research concerns recognised by the Education, Audiovisual and Culture Executive Agency of the European Commission by the approval of a Jean Monnet Project under the theme “EU Digital Single Market as a political calling: interoperability as the way forward (INTEROP)”. Among other goals, this project aims to test if a judicial interoperability is the way forward to further develop e-Justice since there is a lack of dogmatic setting to explain main improvements made on making access to justice easier, faster and more efficient through a digital approach.

Those sensibilities were developed since these changes – as those brought by the Regulation No. 2015/2421 – will only be more effective if they can rely on digital solutions, otherwise they will continue to come shorter than the results aimed when they were adopted.

Deepening economic cross-border relations is one of the keys: but to do so, the European Union has to meet European Digital Agenda’s goals by setting true interoperable systems and it has to deliver e-Justice solutions especially on those areas relating to debt recovery since it is and will continue to be one of the major aspects so economic agents venture on other Member States.

Picture credits: Pile of debt  by Mikko Saari.