European Small Claim and European Payment Order Procedures: Advantages and Drawbacks Lawyer Dr. Laura Gumuliauskienė

PRIORITIES OF CONSUMER RIGHTS PROTECTION IN THE EUROPEAN UNION “Union policies shall ensure a high level of consumer protection. “. Charter of Fundamental Rights of the European Union, Article 38. European Union:  Helps implement consumers’ right to information,  educational activity,  Encourages consumers to join organizations for protection of their own interests.

Consumers in Europe complained most often about such areas in data of Eurobarometer qualitative survey

SUMMARY PROCESSES OF THE EUROPEAN UNION Regulation of the European Parliament and the Council of December 12, 2006, (EB) No 1896/2006, defining the European Order for Payment Procedure (EOP). Applicable as of December 12, 2008 (in all EU member states, except Denmark). Regulation of the European Parliament and the Council of July 11, 2007, No 861/2007, defining the European Small Claims Procedure. Applicable as of January 1, 2009 (in all EU member states, except Denmark).

Area of Application Applicable in the European Union civil proceedings area in civil law suits with a foreign element (autonomous interpretation principal). Regulation (EB) No 1896/2006, Article 2 Regulation (EB) No 861/2007 Article 2 Cross-border case is one in which at least one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court seised. Regulation (EB) No 1896/2006, Article 3, Paragraph 1. Regulation (EB) N 861/2007, Article 3, Paragraph 1. Permanent residence (business) location Briuxelles I Regulation, Articles 59-60

Definition of a Consumer Contract A consumer contract shall be a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession, i. e. for his personal consumption (Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Bruxelles I), Article 15). It is possible to follow Bruxelles I Regulation in order to correctly establish the international case jurisdiction only by making sure that: The contract, which is the reason for a claim, has been concluded with a person as a consumer, and The dispute that arose between a person and a seller or a service provider is of a cross-border character.

Cross-border Jurisdiction in Consumer Cases Alternative jurisdiction shall be established in consumer disputes: A consumer may bring proceedings against the other party to a contract (a seller or a service provider) either in the courts of the Member State in which that party is domiciled or in the courts for the place where the consumer is domiciled. Proceedings may be brought against a consumer by the other party to the contract only in the courts of the Member State in which the consumer is domiciled. Regulation (EB) No 44/2001, Article 16

Agreed Jurisdiction in Consumer Cases  Agreement on cross-border jurisdiction of a dispute may be concluded only after a disputes arises between a consumer and a seller (service provider) or  Such an agreement on defining cross-border jurisdiction for bi- lateral litigation provides the consumer with an additional choice of bringing proceedings against a seller or a service provider in still another EU member state different from that defined in the Bruxelles I Regulation. The parties, i. e. the consumer and the seller (service provider), shall not conclude an agreement, which would limit the consumer’s rights stipulated by the Bruxelles I Regulation.

Law Applicable to Consumer Disputes The law shall be applied and interpreted by the Court ex officio. Regulation of the European Parliament and the Council of June 17, 2008, (EB) No 593/2008 on the law applicable to contractual obligations (Rome I Regulation): For disputes arising from consumer contracts shall be governed by the law of the country where the consumer has his habitual residence Independent of the country, the court of which is decided to be applied to, the main proceedings shall follow the same uniform rules.

Application of European Instruments in Consumer Disputes When a consumer claims compensation for the costs of eliminating deficiencies of a product, or When a consumer unilaterally terminates the contract and claims pay-back of the price paid for the product (service). EPO procedure may be applied for the protection of the violated rights of the consumer, when the claim is:  About cash  Clear  Not litigated by the defendant (seller, provider of service).

Principals of the European Payment Order Procedure The application submitted shall state a description of evidence supporting the claim, but the evidence shall not be submitted. Standard form shall be used. The application form shall be filled in in one of the working languages of the court applied to (or a translation of the application form shall be submitted to the defendant). The defendant may only state in the statement of opposition that he contests the claim, without having to specify the reasons for this. The European order for payment usually is issued within 30 days. Representation by a lawyer or another legal professional shall not be mandatory, i. e. there is no requirement for the consumer to be represented by a lawyer in respect of the application for a European order for payment (Article 24 of the Regulation).

Execution of the EPO in other EU Member States If the defendant lodges no statement of opposition to the EPO, the court of origin shall without delay declare the European order for payment enforceable using standard form G. The court shall send the enforceable European order for payment to the claimant without any separate request. A European order for payment which has become enforceable shall be recognised and enforced in the other Member States without the need for a exequatur procedure.

Opposition to the European Order for Payment -A previous court ruling or order was taken in an identical case, and -A previous court ruling is in compliance with the conditions of its recognition, and -It was not possible to object on the non-compliance in the member state of origin.

Europos ieškinių dėl nedidelių sumų procedūros principai All the actions are performed by using standard forms (except for the court judgment). Enforceable court judgment shall be enforced in the other Member States without the need for a exequatur procedure. A comprehensive procedure based on the principle of competition has been created, which is available to the consumers as an instrument of choice in submission of cross- border claims. In respect of the application for a European order for payment, there is no requirement for the consumer to be represented by a lawyer or another legal professional (Article 10 of the Regulation).

Area of Application The claim amount, with no interest, costs or expenses included, shall not exceed EUR 2,000. EUR 1 = LTL (i. e. it shall not exceed LTL ). The exchange rates of these national currencies to the euro are fluctuating: Czech koruna Danish krone British pound Hungarian forint Latvian lats Polish zloty Romanian leu Swedish krona

Court Judgement Execution without exequatur procedure  The following shall be submitted for execution: 1)Copy of the court judgment; 2)Copy of the standard form; 3)Translation of the form. Opposition to the European order for payment is possible if: a previous court judgment was taken in an identical case in the country of origin or another EU state, and the defendant was not able to oppose in the course of the procedure of the European small claims.

Appeal and Review of the Judgment The court judgment may be appealed against in accordance with the national rules. + The judgment may be reviewed and become invalid if: 1)the case has no proof of receipt by the defendant of the document personal service; 2)the defendant did not have time enough to prepare for the defense; 3)the defendant was not able to oppose the order due to force majeure situation.

Common Principles of the EOP and the ESC Procedures They can be used only when the residences of the claimant and the defendant are located in different EU member states, i. e. only in cross border cases. All the document forms are standard. These are alternative procedures for national processes. The procedural deliberation rules are established individually by each country. The representation by the lawyer is not mandatory. The European order for payment and the court judgment made in accordance with the European small claim procedure are applicable in all EU member states (except Denmark).

Thank you for your attention. Dr. Laura Gumuliauskienė