Enforcement fees: clear, transparent and reasonable E-Book

Jos Uitdehaag

• Herausgeber: Books on Demand
• Kategorie: Bildung
• Sprache: Englisch

Seitenzahl: 136

Veröffentlichungsjahr: 2018

Beschreibung

The author made an overview of the various visions regarding the structure of enforcement costs in the UIHJ member countries. This publication also gives an overview of international principles regarding a clear, transparent and reasonable fee structure. Finally, this publication does suggestions for the establishment of a fair fee structure.

Leseprobe

November 2017

Disclaimer:

The findings, views, opinions and recommendations expressed in this report are purely those of the writer and do not necessarily reflect the views of UIHJ.

Contents

ABBREVIATIONS

1. INTRODUCTION

PART I INTERNATIONAL STANDARDS AND PRINCIPLES

1. GENERAL INTERNATIONAL STANDARDS AND PRINCIPLES

1.1. The European Court on Human Rights

1.1.1. Article 6 ECHR

1.1.2. The ECtHR and enforcement costs

1.2. International standards: Council of Europe

1.2.1. Principles and objectives of enforcement

1.2.1.1. Principles and objectives

1.2.1.2. Accessibility of enforcement services

1.2.1.3. Realisation of enforcement

1.2.2. The enforcement agent

1.2.2.1. Professional status

1.2.2.2. Activities of enforcement agents

1.2.2.3. Enforcement agents: supervision

1.3. International standards: European Union

1.4. International standards: Ohada

1.5. International standards: UIHJ

1.6. Systems of enforcement

2. INTERNATIONAL STANDARDS AND PRINCIPLES ON ENFORCEMENT COSTS

2.1. Introduction

2.2. The regulation of enforcement costs

2.3. The transparency of enforcement costs

2.4. The clarity and predictability of enforcement costs

2.5. The allocation of enforcement costs

2.6. The relevance of the enforcement action

2.7. Legal aid and enforcement costs

PART II THE STRUCTURE

3. STRUCTURE OF ENFORCEMENT FEES

3.1. Introduction

3.2. The general fee structure

3.4. Enforcement fees

3.5. Performance fee

3.6. Advanced payment of fees

3.7. Legal aid in enforcement cases

3.8. Indexation of fees

3.9. Different approaches regarding to fees

4. SECONDARY ACTIVITIES

PART III ANALYSES OF CURRENT FEE SYSTEMS

5. ANALYSES OF CURRENT FEE SYSTEMS

5.1. Introduction

5.2. Survey: general questions

5.3. Survey: advanced payment of fees

5.4. Survey: exemption of payment of fees

5.5. Survey: enforcement fees and the State (authorities)

5.6. Survey: unsuccessful enforcement

5.7. Survey: negotiable fees

5.8. Survey: voluntary fulfillment of the claim by the debtor

5.9. Survey: fee per phase in the enforcement process

5.10. Survey: fee for the initiation of proceedings

5.11. Survey: enforcement expenses

5.12. Survey: expenses from third parties

5.13. Survey: performance fee

5.14. Survey: fees for amicable debt recovery

PART IV THE METHODOLOGY

6. METHODOLOGY FOR THE DEVELOPMENT OF AN ENFORCEMENT FEE SCHEDULE

6.1. Some experiences with current fee schedules

6.2. Example for a cost price calculation of enforcement fees

6.2.1. Introduction

6.2.2. Methodology

6.2.3. The time registration

6.2.4. The financial study

PART V SOME EXAMPLES

7. SOME EXAMPLES OF FEE SYSTEMS

7.1. Belgium

7.2. Bulgaria

7.3. Estonia

7.4. Latvia

7.5. Lithuania

7.6. Netherlands: amicable recovery, fixed enforcement fees and proportional fees

7.7. Portugal

LIST OF LITERATURE AND SOURCES

ABBREVIATIONS

ADR

Alternative Dispute Resolution

Comonex

World Code on enforcement (International Union of judicial officers)

CEPEJ

European Commission for the Efficiency of Justice

CEPEJ (2009) 11

Guidelines for a better implementation of the existing Council of Europe’s Recommendation on Enforcement, European Commission on the efficiency of Justice (CEPEJ)

CoE

Council of Europe

COMONEX

UIHJ World Code on Enforcement

EBRD

European Bank for Reconstruction and Development

EC

European Commission

ECHR

European Convention for Human Rights

ECtHR

European Court on Human Rights

EEO

European Enforcement Order (procedure) based on EU Regulation 805/2004 of creating a European Enforcement Order for uncontested claims (21 April 2004)

EPO

European Payment Order

EPOP

European Payment Order (procedure) based on EU Regulation 1896/2006 of creating a European Order for Payment procedure (12 December 2006)

ESCP

EU Regulation 861/2007 of establishing a European small claims procedure (11 July 2007)

EU

European Union

EU Service Regulation

EU Regulation 1393/2007 on the service on the member states of judicial and extrajudicial documents in civil and commercial matters

HCCH

Hague Conference for Private International Law

HR

Human Resources

IMF

International Monetary Fund

IT

Information Technologies

OSCE

Organisation for Security and Co-operation in Europe

PEA

Private Enforcement Agent

PPP

Power Point Presentation

PSC

Project Steering Committee

Rec 16/2003

Council of Europe Recommendation (2003) 16 of the Committee of Ministers to member states on the execution of administrative and judicial decisions in the field of administrative law (adopted by the Committee of Ministers on 9 September 2003 at the 851st meeting of the Ministers’ Deputies)

Rec 17/2003

Council of Europe Recommendation (2003) 17 of the Committee of Ministers to member states on enforcement (adopted by the Committee of Ministers on 9 September 2003 at the 851st meeting of the Ministers’ Deputies)

Receiving Agency

Court, public officer, authority or other person competent for the receipt of judicial and/or extra judicial documents to be served or enforced in another State

Regulation 655/2014

Regulation 655/2014 of the European Parliament and the Council of 15 May 2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters

RoL

Rule of Law

Transmitting Agency

Court, public officer, authority or other person competent for the transmission of judicial and/or extra judicial documents to be served or enforced in another State

UIHJ

International Union of Judicial Officers

UNDP

United Nations Development Programme

USAID

United States Agency for International Development

1. INTRODUCTION

Enforcement fees are under attack: from creditors who are disappointed in the outcomes of an unsuccessful enforcement and are confronted with payment of enforcement costs; from debtors who are confronted with, at least in their opinion, unnecessary and too high enforcement costs; from politicians who consider a discussion on the fairness of enforcement costs a challenge to attract new voters; from courts and authorities who hear those complaints and finally from the enforcement agents who have to continuously justify themselves.

At the request of the UIHJ, I have tried to make an overview of the various visions regarding the structure of enforcement costs in the UIHJ member countries. Many thanks to the UIHJ countries that have participated in the survey. Many thanks also to the UIHJ “Grande Questionnaire” working group (Patrick Gielen, Jonathan van Leeuwen, Fanny Cornette and UIHJ’s secretary-general Mathieu Chardon) for the effectuation of the survey and the collection of the data, data capture and data editing.

Many thanks also Marc Schmitz (Belgium), Todor Lukov (Bulgaria), Elin Vilippus (Estonia), Guna Berlande (Latvia), Dovile Satkauskiene (Lithuania) and Jacinto Neto (Portugal) for the information I received from them on their respective fee systems.

This publication further gives an overview of international principles regarding a clear, transparent and reasonable fee structure. For this I also considered it useful to put those principles in a broader context. Reason that this publication starts with a general overview of principles on enforcement and the enforcement professional, the enforcement agent.

Finally, this publication does suggestions for the establishment of a fair fee structure. Suggestions that are based on my long-term experience as an active enforcement agent, as a board member of the Dutch Chamber of enforcement agents (KBvG) and UIHJ, and, last but not least, my long years of commitment as an expert in legal reform projects in various countries.

I hope this publication is a good and balanced basis for any discussion towards a clear, transparent and reasonable fee structure. Regarding the information on the fee systems in various countries: as much as possible this is the situation as per 31 October 2017. It means that e.g. the amendments to the Civil Procedure Code from 27 October 2017 in Bulgaria are also implemented.

November 2017

Jos Uitdehaag

Secretary UIHJ

PART I INTERNATIONAL STANDARDS AND PRINCIPLES

1. GENERAL INTERNATIONAL STANDARDS AND PRINCIPLES

1.1. The European Court on Human Rights

1.1.1. Article 6 ECHR

Article 6 ECHR guarantees the right to a fair and public hearing in the determination of an individual’s civil rights and obligations or of any criminal charge against him:

Article 6 paragraph 1 ECHR: Right to a fair trial:

In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.

The title of the article (“fair trial”) might give the impression that the provision only refers to proceedings. From case law however, it is obvious that the “fair trial” principle also applies to the enforcement phase. The article needs to be interpreted in such a way that the fair trial guarantee not only refers to proceedings, but also applies to the enforcement phase. The landmark case in that respect was Hornsby v Greece.1 In this case the ECtHR held by seven votes to two that there had been a violation of Article 6 paragraph 1 of the ECHR on account of the Greek administrative authorities' failure to comply within a reasonable time with two judgments of the Supreme Administrative Court. By refraining for more than five years from taking the necessary measures to comply with a final, enforceable judicial decision the Greek authorities had deprived the provisions of Article 6 § 1 of the Convention of all useful effect:

“[…] Article 6 § 1 secured to everyone the right to have any claim relating to his civil rights and obligations brought before a court or tribunal; in this way it embodied the "right to a court", of which the right of access, that is the right to institute proceedings before courts in civil matters, constituted one aspect. However, that right would be illusory if a Contracting State's domestic legal system allowed a final, binding judicial decision to remain inoperative to the detriment of one party. […] to construe Article 6 as being concerned exclusively with access to a court and the conduct of proceedings would be likely to lead to situations incompatible with the principle of the rule of law which the Contracting States undertook to respect when they ratified the Convention. Execution of a judgment given by any court therefore had to be regarded as an integral part of the "trial" for the purposes of Article 6; […].”

Based on this judgment, the enforcement of a court judgment is an integral part of the fundamental human right to a fair trial within a reasonable time, in accordance with Article 6 of the ECHR. However, the ECtHR stressed that the rule of law principle can only be a reality if citizens can, in practice, assert their legal rights and challenge unlawful acts, no matter the existence of prior court proceedings. A good example is the case Estima Jorge v. Portugal2. In this judgment ECtHR decided that, based on article 6 paragraph 1 of the ECHR, enforcement has an independent value, irrespective of the nature of the enforcement writ, and even irrespective of the prior existence of court proceedings. In the Estima Jorge case there was neither a dispute, nor prior court proceedings; the case dealt with the enforcement of a notarial deed received as a security for mortgage. The ECtHR considered that “conformity with the spirit of the Convention required that the word “contestation” (dispute) should not be construed too technically” – that it should be given “a substantive rather than a formal meaning”. Therefore, even in the absence of preceding trial, the Court found violation of the reasonable time provision under Article 6 paragraph 1 of the ECHR.

During the years the scope of enforcement under article 6 ECHR, was further extended by the ECtHR, among others with regard to inactive behavior of enforcement authorities and lengthy enforcement procedures.3

The case law also referred to enforcement fees, as we will see in the next paragraph (1.1.2). It is beyond the scope of this Juris Union to give a detailed overview of the caselaw of the ECtHR in other areas. Here I only want to mention one aspect: the role of the State in enforcement proceedings.

The State has various roles in enforcement proceedings. A first, negative, role is the State as a debtor. In the case Burdov v. Russia4 the ECtHR concluded that lack of funds is not an excuse for not honouring a judgment debt:

“It is not open to a State authority to cite lack of funds as an excuse for not honouring a judgment debt. Admittedly, a delay in the execution of a judgment may be justified in particular circumstances. But the delay may not be such as to impair the essence of the right protected under Article 6 § 1 [...] In the instant case, the applicant should not have been prevented from benefiting from the success of the litigation, which concerned compensation for damage to his health caused by obligatory participation in an emergency operation, on the ground of alleged financial difficulties experienced by the State.”

So it is obvious that the State does not have an exceptional position when it comes to enforcement. Yet several states in their legislation still maintain such exceptional position, also when it comes to for example the payment of enforcement fees.

State is also liable for the organization and well-functioning of the enforcement system and the actions or inefficiency of its enforcement agents. An excessive case-load or a reform of the justice system are no excuses for inefficiency. A good example is the case Karitonashvili v Georgia.5

In this case, the applicants requested the district court to quash a final judgement from 29 November 1999. In this case the eviction proceedings were delayed, first due to a reorganization of the judicial system, than the file was misplaced in the archives and after that several hearings were planned that were adjourned. Proceedings were still pending (already for 8 years and 11 months) at the moment the ECtHR decided on the matter:

“The Court reiterates that the reasonableness of the length of proceedings must be assessed in the light of the circumstances of the case and with reference to the following criteria: the complexity of the case, the conduct of the applicant and the relevant authorities and what was at stake for the applicant in the dispute […]

It is regrettable that the eviction proceedings have already been pending for more than eight years and eleven months, yet the first-instance court still faces the original procedural challenge – the need to conduct a technical assessment of the disputed house […]. As to the Government’s reference to an excessive case-load and the reorganisation of the judicial system, the Court reiterates, first, that a chronic backlog of cases is not a valid explanation for excessive delays, and, secondly, it remains the responsibility of the Contracting State to organize its courts in such a way as to guarantee everyone’s right to the determination of their civil rights and obligations “within a reasonable time” […].

1.1.2. The ECtHR and enforcement costs

In its caselaw, ECtHR also questioned the fairness of enforcement costs, especially when it comes to preliminary expenses. According to the ECtHR the access to enforcement proceedings cannot be limited depending on the payment of a preliminary enforcement fee.6 For example in the case Apostol v. Georgia the ECtHR concluded:

“In so far as enforcement proceedings constitute an integral part of the trial […] the Court considers that the right to a court, along with access to first-instance and appeal courts for the determination of “civil rights and obligations” likewise protects the right of access to enforcement proceedings. […]

It must be emphasised in this regard that the right of access to a court is not absolute but may be subject to limitations; these are permitted by implication since the right of access by its very nature calls for regulation by the State. However, the Court must be satisfied that the limitations applied do not restrict or reduce the access left to the individual in such a way or to such an extent that the very essence of the right is impaired. […]