Cross border debt collection
PointLaw is specialised in cross border debt collection for (international) companies. Besides our own clients, other law firms are welcome to outsource ad hoc cross-border disputes too.
Even for significant claims, international debt collection is often left aside by the established law firms, as being too unknown, allegedly too long term and too costly. PointLaw is convinced that measures to freeze the debtors bank account should be used more often by creditors suffering from long-term outstanding invoices.
A freezing order is a mechanism to prevent the risk of creditors of being unable to enforce a favourable judgment by applying for precautionary garnishee orders against the debtor. In most jurisdictions, enforcing a judgment becomes more complicated in case the debtor or its assets are located in another EU member state. Since, until January 2017, only national garnishee orders could be enforced via the Brussel Ibis Regulation, the EAPO Regulation is a welcome alternative for cross border claims within the European Union.
The Brussel Ibis Regulation provides limited options for successful enforcement of precautionary measures in other jurisdictions. The EAPO Regulation, the European Account Preservation Order, available since 2017, appears to have significant benefits. Mainly, the surprising effect of these precautionary garnishee orders, the harmonisation of this measure within 26 participating member states and the possibility to include measures in more than one member state at the same time, in only one request to a single court, are definitely valuable additions to the European law.
Opposite these benefits for creditors, sufficient safeguards against abuse are provided for the interests of the debtor. Unlawful damage to debtors must be prevented. Therefore, the requirements to satisfy the court about the reliability and the amount of the claim; the guarantee that has to be paid as a security to compensate damages of the debtor and even; the short time frame between the moment of implementation of the garnishee order up to the appeal for its revocation or modification are meant to balance the interests of both parties.
Another benefit of the EAPO regulation is the possibility to acquire bank account details from your debtor via the court order. Beside the requirement that a judgment proving your claim is already available, the threshold to acquire the bank account information is high. The creditor must satisfy the court why the debtor might have a bank account or a certain bank relationship in the specific member state by showing evidence of this statement. The simple assumption that a debtor has commercial or personal connections in a member state is not enough to file a request for account information. A thorough substantiation of a request for bank account information is indispensable. PointLaw will assist you in this legal jumble.
Finally, after a successful provisional measure, the case might continue in various ways. The most desired result is that the defendant will pay the outstanding amount plus costs made, to solve the case and end up the measure on its bank account. This is a result that is plausible if the claim is not disputed by the creditor or in case a judgment is already available. Alternatively, legal proceedings are to be started within a certain amount of days, depending on the national law. In the latter situation, PointLaw will lead you to bring the case to court.
PointLaw cooperates with local law firms in cross border cases, on the execution of preservation orders and transfer of cases to the participant in the jurisdiction which is competent on the merits.
Are you struggling with an outstanding invoice with an international aspect? PointLaw is the right partner.