The European Regulation (EC) No. 1896/2006, of December 12, 2006 (hereinafter the EU Regulation on the European Order for Payment Procedure) created the so-called European Order for Payment Procedure, which also applies in Spain. Essentially, the Regulation pursues the creation of uniform procedural rules for cross-border debt recovery within the European Union.
In Spain, the European order for payment procedure is still less common, and local attorneys usually choose the traditional Spanish order for payment procedure (proceso monitorio) to recover claims.
The simplicity, creditor-friendliness, and field of application for cross-border debt collection within the European Union characterize the European order for payment, hence its increased use by credit institutions and other institutions.
Yet in Spain, the European order for payment procedure has its difficulties, often underestimated by foreign lawyers and companies. Even small formal mistakes from the creditor often unnecessarily prolong the proceedings and result in unpleasant additional costs. Incorrect conduct of the proceedings can also result in considerable disadvantages for the defendant.
Application for the issuance of a European order for payment in Spain
According to the EU Regulation on the European order for payment procedure, the initiation of the proceeding seems simple. An application for the issuance of a so-called European order for payment has to be filed, for which a simple form is sufficient (Form A according to Annex I of the EU Regulation on the European order for payment procedure). It is not obligatory to be represented by a lawyer nor, in Spain, to be represented by a process agent (Procurador).
However, the successful execution of a European order for payment procedure in Spain is in practice somewhat more complicated than it may seem at first glance!
The Spanish legal system and its formalisms
In practice, we must keep in mind that pervasive formalism characterizes the Spanish legal system. And this is also evident in the implementation of the European order for payment procedure. This type of procedure can also be useful in Spain – but only if one knows how to deal with the pitfalls of the Spanish legal system!
Foreign companies and colleagues are always surprised to learn that litigation in Spain requires a formal power of attorney.
Formal means: drafted in two languages, duly notarized by a Notary Public (the certification of the signature is not sufficient!), provided with a Den-Hague Apostille, and, if necessary, including a sworn translation. And be cautious! The sworn translator, of course, needs to be licensed in Spain. If any of the above fails, one quickly starts from scratch.
Whether such a power of attorney according to Article 17 of the EU Regulation on the European Order for Payment Procedure is also necessary in the European Order for Payment Procedure in Spain could be discussed from a legal point of view. However, whether it is worthwhile to get involved in such discussions with a Spanish provincial court is another question. Experience has shown that for reasons of time and costs it is most effective to adhere to Spanish standards from the beginning.
Formal notification, languages, and other hurdles
It is important to remember that a formal notification often takes longer in other European countries than locally. Notices from Spanish courts frequently arrive late (or not at all) if the recipient resides abroad.
It is avoidable by appointing an authorized recipient in Spain. In addition to the Spanish lawyer, it is common to name a process agent (Procurador), who routinely takes over the communication with the court and thus easing the process considerably for the applicant (and his lawyer).
Besides, it is worth noting that even by a European order for payment procedure, the Spanish court issues documents in the Spanish language. These may contain, among other things, time-bound requests to complete or rectify the European order for payment. By non-compliance with the deadlines, the application may be considered inadmissible and rejected. The European order for payment procedure must start anew.
Filing an objection and initiating ordinary civil proceedings
The EU Regulation on the European order for payment procedure provides that the defendant may lodge a statement of opposition to the European order for payment within a period of 30 days.
In essence, a simple form (Form F according to Annex VI of the EU Regulation on the European order for payment procedure) is sufficient here as well, although in Spain the special features already mentioned concerning the initiation of the European order for payment procedure must be observed.
The objection will result in the initiation of ordinary civil proceedings conducted under the Spanish Code of Civil Procedure.
If no objection is filed within the specified time limit, the court declares the European order for payment enforceable. Only in exceptional cases will it be reviewed.
If the debtor still does not pay voluntarily, separate enforcement proceedings, formally governed by the applicable civil procedure code in the so-called Member State of enforcement, will be necessary.
Conclusion: You need a Spanish lawyer!
The European order for payment procedure can bring considerable advantages to creditors for cross-border debt recovery within the European Union. But the particularities of the procedural law and legal customs applicable in the competent Member State (the Member State of origin) must be observed in each case.
For European order for payment procedures executed in Spain, formal requirements apply, which foreign companies and lawyers sometimes underestimate. Experience has shown that for reasons of cost and time it is worthwhile to involve a Spanish lawyer before initiating the debt recovery process in Spain.
Pia V. Kohrs
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This article is not considered legal advice