European European small claims procedure: Legal analysis of the Commission's proposal to remedy weaknesses in the current system: in-depth analysis

Abstract

The number of cross-border consumer transactions in the EU is growing at a rapid pace: the number of EU consumers entering into such transactions doubled over the decade 2002-12. Particularly significant growth is visible with regard to online cross-border transactions, with the number of EU consumers engaging in these having grown six times in the same period. However, the individual value of such transactions remains relatively small, with almost half of them falling below the threshold of €100. Just as in the case of domestic transactions, cross-border bargains too do not always end with the outcome desired by both parties, with a dispute the result. If these cannot be resolved amicably, the creditor has the choice either to pursue the case in court, or to give up the claim. However, the costs and burdens of ordinary civil procedures often act as a deterrent to pursuing claims. Therefore, most EU Member States have introduced some form of simplified track for small claims. These procedures, often successful with regard to domestic litigation, are not, as a rule, well adapted for crossborder disputes. With the aim of overcoming this gap, the EU legislature adopted a European Small Claims Procedure (ESCP) in 2007. The ESCP is a simplified and accelerated civil procedure, available only in cross-border cases, for claims up to €2 000. It is an optional procedure, in that it does not replace similar national procedures. Whereas the Regulation covers several aspects of the procedure, in particular the standard forms to be used by parties, deadlines imposed upon the court and parties, rules on the written phase of proceedings, as well as minimum standards for review of the judgment, many other key aspects have been left to national law. This applies in particular to the jurisdiction of courts, court fees, detailed rules of evidence law, rules on appeals and finally details of the enforcement procedure. Despite its potential to facilitate cross-border enforcement of small debts in the EU, the Regulation has not been a major success in practice. The limited statistical data available indicates that very few cases are being filed, with an average of approximately 100 per Member State each year. Various reasons for this have been identified, in particular lack of knowledge about the procedure among citizens and judges, the high costs of translation, the absence of clear rules on the service of judgments, and the fact that rules on enforcement proceedings have not been unified, but are left to the Member States. In 2013, the Commission put forward a proposal for amending the ESCP Regulation with a view to increasing its attractiveness. Four key issues have been addressed. Firstly, the threshold of a 'small' claim would be raised from €2 000 to €10 000. Secondly, expanding the notion of a 'cross-border' claim would be considerably liberalised. Thirdly, there would be a maximum cap on court fees set at 10% of the value of the claim. Finally, the use of means of distant communication would become obligatory when parties are domiciled in different Member States. Nevertheless, a number of key aspects of the ESCP would continue to be regulated by domestic civil procedure, in particular the jurisdiction of courts within a Member State, the language of proceedings, admissibility and forms of appeal, rules on evidence and on computation of time, and rules concerning enforcement proceedings.