European Enforcement Orders

Europe is trying to help with debt recovery. We now have European Enforcement Orders (EEOs), European Orders for Payment (EOPs) and a European Small Claims Procedure (ESCP).

The aim of all of these is to make the enforcement of judgments cheaper and easier between EU countries because an EEO, an EOP or an ESCP judgment should be recognised without any great formality by other EU countries. If you can't use one of these procedures it is perfectly possible to enforce a judgment elsewhere in the EU though it can be relatively time consuming.

You can get a European Enforcement Order to enforce either a judgment in default of defence or at a hearing which the debtor doesn't attend.

In cross border cases i.e. where the debtor is domiciled or habitually resident outside England and Wales, you can issue a European Small Claims claim form. The debt must be 2000 Euros or less. The whole case will normally be dealt with on paper, without a hearing.

If you can't use a European Small Claim, you can apply for a European Order for Payment. But, if the debtor says he is contesting the case, it has to carry on as a normal case. So we'd guess that most debtors will do that!

Generally, these European procedures require the proceedings to be served personally on the debtor and for the papers to be translated into the debtor's language. Therefore, the costs of European litigation still put it out of reach for many clients who prefer using our PreLegal service on "No Collection - No Commission basis."

Prompt Payment Code

The Government in conjunction with the Institute of Credit Management has introduced their own Prompt Payment Code in an attempt to tackle the crucial issue of late payment and help business cash flow issues. Suppliers can have confidence in doing business with any company that has signed up to the code, knowing that they will be paid within clearly defined terms.

With the backing of the Secretary of State for Business and three of the major banks this should be a welcome and positive move to help combat some of the realities of the 'credit crunch'.

If you wish to become a signatory please follow the link: http://www.promptpaymentcode.org.uk

Budget 2009 - Credit Insurance Scheme

Last year Credit insurers insured £302.5 billion of turnover, up 7 per cent on 2007. One in five companies in the UK use credit insurance.

In their Budget statement for 2009, the Government announced it will be introducing its long heralded 'top-up' trade credit scheme.

The scheme is planned to run from May 2009 until the end of December 2009. UK Businesses should be able to purchase six months worth of 'top-up' credit insurance cover from the Government to compensate for where insurers have withdrawn partial cover.

There is a maximum limit of £1m in the value of top-up cover that can be purchased. The total amount the Government will be able to supply will be capped at the £5bn level.

The scheme will not be available for companies that had their credit reduced before 1 April 2009, or where credit insurance has been withdrawn altogether so for many Companies it is unlikely to prove to be the panacea they are seeking.

Enforcing Judgments - Time Limits

You know there's a six year time limit on taking court action to recover a debt. But did you know that generally there's no time limit for enforcing a judgment?

For example, there's no time limit for applying for a charging order. You could get judgment against a debtor with no money or property. Many years later, when their fortunes have changed, you could get a charging order.

There is also no time limit for enforcing a charging order. You can get the order and then wait as long as you wish before applying for an order for sale.

The court does have discretion whether or not to make a charging order. But the fact a creditor waits a long time before applying is not relevant.

The same applies to an application for a third party debt order. Your right to serve a statutory demand should also be kept alive indefinitely.

The court's permission is required to issue instructions to the County Bailiff or High Court Enforcement Office after 6 years but can be obtained in the right case.

There is a 6 year time limit for starting fresh action based on the judgment, but doing that is unusual. You'd only do that if for some reason you needed a fresh judgment. For example, in one case, the claimant was concerned that a foreign court would not enforce an English judgment that was more than 6 six years old.

Debt Recovery and Commercial Litigation Specialists

Bramley House, The Guildway, Old Portsmouth Road, Guildford, Surrey, GU3 1LR DX: 58306 Godalming
Legal Department: Tel: (01483) 457500 Fax: (01483) 457700
Commercial Litigation: Tel: (01483) 457501 Fax: (01483) 457511
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