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29/01/2009

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Simple and cheaper procedure for the processing of small cross-border claims

If you cannot reach an amicable agreement or if mediation does not provide a solution for a cross-border consumer problem, you will have no other option but to contact the court. But how do you approach this? Which procedures should be observed in your opposing party’s home country? How do you break through the language barrier if the opposing party speaks a language you have not mastered? And who pays the legal costs? All too often, consumers who are in dispute with a company based in another European member state are deterred by such matters.

In order to encourage consumers to enforce their rights in another member state, the European Commission is introducing a new legal procedure for minor claims called ‘small claims’. This procedure aims to both simplify and speed up the process, and minimise the associated costs. The regulation which defines this procedure was approved by the European Commission and took effect on 1 January 2009.

Which disputes qualify for this procedure?

Since 1/1/2009 this procedure can be used for all cross-border civil and commercial matters in which 2 parties from 2 different European member states are in dispute (Denmark excepted), irrespective of the nature of the court having jurisdiction and involving a claim not exceeding € 2,000.

For example
You hired a car in Spain. Upon your return, you receive a bill for € 1,500 for damage to the car from the car hire company. But you know this damage was not caused whilst you were using the vehicle. Your attempts to reach a mutual agreement with the car hire company fail. Even an intervention by the ECC-Net does not provide a solution. That’s when this procedure provides a way forward.

Procedure

In principle the entire procedure is conducted in writing, using standard forms for the claimant, the defendant and the court. Oral proceedings will only take place when the court deems this necessary or when this approach is requested by one of the parties. Each stage of the procedure must be completed within predefined time limits.

The parties are not obliged to seek representation from a lawyer or any other legal representative.

The procedure is governed by the procedural law of the member state where it takes place.

The decision is recognised by, and implemented in, another member state without prior formalities.

Costs

The losing party will have to pay the legal fees. The court will not allocate compensation for costs incurred unnecessarily or costs not in proportion to the claim to the winning party.

Appeal

It is possible to appeal the decision provided that the procedural law in the country where the decision was made allows appeals.

The new procedure will be in place from 1 January 2009 and the European Commission will evaluate whether it has generated actual progress in 2014.

Click on this link to read the actual regulation text.

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