European order for payment

What it means

The European order for payment is a simplified EU court procedure for recovering an uncontested money claim from a debtor in another member state. The creditor files an application on a standard form and the court issues the order without a hearing, based solely on the form.

It can be used in commercial and civil matters where at least one party is domiciled in an EU state other than that of the court. There is no limit on the amount, and the forms exist in all official EU languages, so the procedure works without knowledge of foreign law.

After service the debtor has 30 days to file a statement of opposition. If none is filed, the order becomes enforceable and is an enforcement title in all EU states without further recognition. If the debtor opposes, the case continues under the ordinary rules of the court’s state.

How it works in practice

For clients supplying abroad it is a cheaper and faster route than suing in a foreign country. Like a domestic payment order, it suits invoices the debtor has neither paid nor disputed.

The application goes to the competent court, usually in the debtor’s state or as agreed in a jurisdiction clause. A court fee is paid under that state’s rules, and late payment interest and costs can be added to the claim.

An enforceable order is enforced in the debtor’s state through local authorities such as a bailiff. For debt collection abroad we therefore work with lawyers in the country concerned and provide documents with a certified translation where the local authority requires it.

What to watch out for

The procedure pays off only for a genuinely uncontested claim. If the debtor opposes, which it can do without giving reasons, the case moves into ordinary proceedings in a foreign state, with local rules, a lawyer and more time.

The limitation period under the law governing the contract must be watched, and while the claim is being pursued an impairment allowance should be made according to the rules. Before filing it is worth sending a letter before action, which often secures payment without going to court.