Member Article

The difference is that the European order for payment procedure applies in cross-border cases, i.e. when the claimant and the alleged debtor live in different member states. The purpose is to ensure the free movement within the EU and to achieve a faster, simpler and cheaper procedure for uncontested, due and monetary claims for a specific amount within the EU. The fact that an order for payment is enforceable means that it can be recognized and enforced in every member state in the EU, with the exception of Denmark, without any other declaration of enforceability being needed and without the possibility for the defendant to oppose its recognition.

In practice, the procedure for the European order for payment will work roughly in the same way as the Swedish order for payment. One new feature for the European order is that standard forms, which are identical for the entire EU, will be used throughout the procedure. The application fee shall, in contrast to the Swedish procedure, be paid in advance. An application for European order for payment from a Swedish applicant against a defendant in another member state is to be submitted to the appropriate authority in the country where the defendant lives and must be in a language which is accepted by the court of law where the claim is filed. For application by a foreign applicant against Swedish companies or individuals, the application must be submitted to the Swedish Enforcement Authority.

The court of law, to which the application for order for payment is submitted, must issue a European order for payment within 30 days of the application. The application must be served on the defendant, who can choose to pay the amount to the claimant or to contest the claim within 30 days. If the defendant has not contested the application within 30 days after being served, the order will be declared enforceable. The fact that the order is enforceable means that the claimant can compel authorities to take action, such as seizing and selling property, against the debtor in order to collect money. Otherwise, the order for payment – if the claimant has not revoked the matter because it has been paid – will be handled in accordance with national procedural rules, which in Sweden means that the application is to be submitted from the Swedish Enforcement Authority to the appropriate district court. Hence, if contested, the procedure is automatically transferred to the appropriate court, unless the claimant has made it clear in the application that the procedure shall be terminated.

For applications against defendants in member states other than Sweden (or Denmark), it is normally the court in the country where the defendant lives, or has its registered office, which decides on European order for payment procedure. However, other courts may also be authorized, e.g. in situations where the claimant and the defendant have agreed that a specific court is to resolve the matter or in certain consumer or employment circumstances.

The greatest advantage of this new procedure is that a person in one country who has received a decision that a person or company must pay this person under an order for payment procedure, can have this decision enforced in another country in the EU (with the exception of Denmark) without first having to apply for enforcement of the decision in the other country as well. This is of special importance when one is dealing with private individuals who move between different countries in the EU, or persons and companies with assets in several countries.

Marita Gröndahl, Member of the Swedish Bar Association (Senior Associate)