Katie Paxton-Doggett looks at the ramifications of the European small claims procedure


On 13 June 2007, the European Council of Ministers of Justice adopted the proposal for a regulation creating a European small claims procedure (ESCP), and Regulation (EC) No861/2007 establishing an ESCP was adopted on 11 July 2007.



It has long been recognised that rules under the Brussels and Lugano conventions for initiating proceedings for torts or contractual breaches that occur in other member states can give rise to considerable complexity, both in cost and process. Therefore, the European Council meeting in Tampere in October 1999 invited the council and the European Commission to establish special common procedural rules for simplified and accelerated cross-border litigation on small consumer and commercial claims, and to abolish the intermediate measures required to enable the recognition and enforcement of a decision or judgment in the requested state for all titles in respect of small claims.



The ESCP procedure is intended to speed up litigation in cross-border cases involving claims of up to ¤2,000. This figure represents the value when the claim form is received by the court or tribunal with jurisdiction, excluding all interest, expenses and disbursements. The measures are hoped to allow resolution of contested claims in a simpler and cheaper way than through the existing national systems. The rapporteur, Hans-Peter Mayer, called it 'a simple, cheap and citizen-friendly procedure'. It will be enforceable in all member states, with the sole exception of Denmark, which is subject to an opt-out.



The legislation promotes access to justice across Europe. Originally, the commission proposed that the procedure would apply to claims within individual member states as well as cross-border claims. However, the amendment was incorporated following discussions with the council on what would be acceptable to member states and in an attempt to minimise potential disruption to domestic law and procedures.



There are some exceptions to the use of the ESCP. It will not apply to matters concerning the status or legal capacity of natural persons; property rights arising from a marriage; bankruptcy or insolvency; social security; arbitration; employment law; tenancies of immovable property (apart from actions on monetary claims); or violations of privacy and rights relating to personality, including defamation.



Furthermore, the ESCP shall not apply, in particular, to revenue, customs or administrative matters or the liability of the state for acts and omissions in the exercise of state authority (acta iure imperii).



The ESCP will generally be a written procedure using standardised forms to simplify claims. One specific form, Form A, available in all EU official languages, must be used to submit a claim.



The claim form will include a description of evidence supporting the claim and be accompanied, where appropriate, by any relevant supporting documents. The claim form, the response, any counterclaim, any response to a counterclaim and any description of relevant supporting documents shall be submitted in the language, or one of the languages, of the court or tribunal. If any other document received by the court or tribunal is in a language other than the language in which the procedure is conducted, the court or tribunal may require a translation of that document - only if the translation appears to be necessary for giving the judgment. The member states shall ensure that the parties can receive practical assistance in completing the forms.



Documents shall be served on the parties by registered letter with acknowledgment of receipt (or by any simpler means such as letter, fax or email).



Once the claim form has been received, the court completes part 1 of the standard answer Form C, which is then served on the defendant together with a copy of the claim form and any applicable supporting documents. These must be dispatched within 14 days of receiving the properly completed claim form.



The defendant has 30 days from service of the claim form and answer form to submit a response and counter-claim by filling in part 2 of standard answer Form C.



Within 14 days of receipt of the response form, the court must dispatch a copy to the claimant. If the defendant claims that the value of a non-monetary claim exceeds the ¤2,000 limit, the court must decide within 30 days whether the claim is within the scope of the regulation. The claimant has 30 days from service of any counter-claim to respond.



A final 30 days from receipt of the response form from the defendant or the claimant is available for the court or tribunal to give a judgment, demand further details of the claim, take evidence or summon the parties to an oral hearing, to be held within 30 days.



The court or tribunal must render the judgment within 30 days of any hearing or after having received all information necessary for delivering the judgment.



In order to reduce the costs of proceedings, there is no need for the parties to be represented by a lawyer or another legal professional. The court shall determine the means of taking evidence and the extent of the evidence necessary for its judgment under the rules applicable to the admissibility of evidence. It may admit the taking of evidence through telephone or written statements of witnesses, and an audio, or the court may hold a hearing through an audio, video or email conference or other communications technology if the technical means are available.



The unsuccessful party will bear the costs of the proceedings. However, the regulation stipulates that the court or tribunal will not award costs to the successful party to the extent that they were unnecessarily incurred or disproportionate to the claim. This is supposed to ensure that parties are not left with an inappropriate financial burden.



This means that the ESCP opens a chasm between the new procedure and the existing procedure for small claims cases in England and Wales. Here, the court allocates claims with a value no higher than £5,000 (unless in the case of personal injury) to the small claims track, which is significantly higher than the ¤2,000 imposed under the ESCP. Furthermore, in the small claims procedure in England and Wales, the vast majority of legal costs are not generally recoverable from the losing party.



Critics, such as Citizens Advice, have claimed that this makes the ESCP manifestly unjust: for example, a UK citizen who is injured in France will be able to pursue a claim via the ESCP with the unsuccessful party bearing the costs, which may include the fees of a legal representative, while a UK citizen who is injured by another UK citizen will have to bring the claim in the current UK small claims court where they will retrieve no costs, win or lose.



The ESCP also enables the recognition and enforcement of an ESCP judgment in all member states by removing the need for any intermediate measures required by a member state to enforce the decision. The enforcement procedures will be governed by the law of the member state of enforcement. A judgment delivered in an ESCP will be enforced under the same conditions as a judgment handed down in the member state of enforcement. However, under no circumstances may the judgment be reviewed as to its substance in the member state of enforcement.



The ESCP is due to enter force in January 2009. However, the commission and member states are to present an assessment report by 2014 to allow the regulation to be revised if necessary on matters such as the limit to the value of the claim, court fees, the speed of the procedure, efficiency, ease of use and the internal small claims procedures of the member states.



Katie Paxton-Doggett is a solicitor and producer at the Law Channel, Einstein Network