European Payment Order

Is your business located in an EU Member State, and is any of your European customers not paying its bills to you? Consider a European Payment Order (EPO). This is a relatively new instrument for debt collection introduced by the European Council and the Parliament. It has made it easier and less costly for creditors to start an official collections procedure against a debtor in any EU Member State. There is no further need for expensive lawyers or Bailiffs, or any cumbersome intermediate application procedures in order to get Rulings recognized in other Member States.

The EU has set up two distinct procedures for a fast recovery of commercial debt within its borders:

European Payment Order (EC Regulation, No 1896/2006): A simplified debt collection procedure for cross-border commercial (monetary) claims in the EU making use of standardized application forms. The whole procedure simplifies, fastens, and substantially reduces the costs of litigation. After submitting an official EPO Form at a competent Court in your own country an automatic procedure is started which will result in an official document enforceable against debtor in any other EU Member State, the EPO.

European Small Claims Procedure (EC Regulation, No 861/2007): A separate written procedure instituted only for claims up to EUR 2.000. It aims for a process even shorter and simpler the above one. The application goes via standard (online) forms. It is available in all EU Member States (except Denmark) as an alternative to national procedures.

Both procedures are fully written which means that there will not be any need to attend Court hearings. However, upon applying for an EPO, several important aspects need to be taken into account:

– Find out which Court would be competent for the debt claim
– Fill in the ‘Form A’ in the language used by that competent Court, amongst which:
– Explaining the cross-border relevance of the claim, and why a EPO should apply to it, and
– Provide a detailed account of how the debt was incurred, thereby
– Attaching all available supporting evidence (translated if necessary)

After the Court has received the application form, it will issue the EPO within the 30 days after receipt. It will then summon the debtor within 14 days granting it a period of 30 days for defense and possible objection. If this does not happen within this prescribed term, the EPO becomes irrevokable and can be enforced in each Member State (as if it was issued within this Member State), i.e. there will be no need to apply at any foreign Court for recognition of it.

IMPORTANT: A European order for payment is issued solely on the basis of the information provided by the claimant (creditor) and is not verified by the Court as such. The Court will only check if it complies to above requirements. If all these are met the EPO thus becomes enforceable, unless the defendant lodges a statement of opposition with the Court of origin.

MDI has experience with filing for an EPO, and the ensuing procedure. We can file the application on your behalf. We will fulfill all the requirements and take care of any necessary translations. Subsequently we will monitor the proceedings and keep you informed on its progress. Please contact us if you need any further information.