The current European Small Claims Procedure available to both consumers and traders is set to improve. The recent approval by the European Parliament’s legal committee of draft new rules has ensured that the ball will keep rolling in the right direction in order to enhance the current system by which small cross-border claims for monies due can be resolved.
The current small claims procedure, in use since 2009, ensures that any consumer or small and medium sized enterprise who has a cross-border claim less than €2,000, can benefit from a procedure which is fast, easy and simple in order to recover what is due to him. The system is based on standard forms and it can be used in all cases of disputes which are civil or commercial in nature and have an EU cross-border element. The judgment is given in the country of residence of the consumer, or in the country of the defending company should the consumer so choose and, once given, becomes directly enforceable in the country of the losing party and in any other EU country.
Thus, by way of example, a disgruntled consumer who registers a dispute with a trader in another member state because of an item bought and paid online but which was never delivered can make use of this small claims procedure in order to recover the price paid. The same may be said of a contractor who has performed a job in another member state and for which the client refuses to pay.
A number of changes to the current system have been envisaged with the ultimate aim of enhancing it. The proposed changes are intended to make the procedure available for more cases, to cap court fees and to encourage the use of electronic communications, such as e-mails and videoconferences.
The new rules will thus enable claimants to launch the procedure online since e-mail is set to become a legally valid means of communication between the parties involved. Teleconferencing or videoconferencing will also become natural tools in oral hearings, wherever these are necessary.
The threshold below which the procedure can be used is also set to rise. While agreeing to a rise in the threshold, the MEPs of the Legal Committee of the EP have somewhat strayed from the European Commission’s original intention to raise the threshold from €2,000 to €10,000 across the board by proposing that the €10,000 ceiling should only be applicable in cases against legal persons such as companies. If the claim is against a natural person, the procedure would only be available for recovering debts of less than €5,000 and this in order to safeguard the rights of individuals. Small businesses are set to be the main beneficiaries of such an increase in the threshold since currently only 20 per cent of business claims fall below the €2,000 threshold.
Under the existing small claims procedure, court fees can sometimes be disproportionate, in some cases even exceeding the value of the claim itself. MEPs have therefore proposed to cap the court’s fees at 5.0 per cent of the value of the claim compared to the 10 per cent proposed by the Commission. In addition, the Parliamentarians are proposing that each member state should introduce a minimum income threshold under which there would be no requirement to pay any court fees. The Legal Affairs Committee of the European Parliament is also insisting that claims based on employment law should be included within the scope of the simplified procedure.
The road ahead for the final adoption of these amendments to the current European Small Claims Procedure is a long one. When adopted, the changes envisaged will serve not only to enhance the efficacy of the current system but also to boost consumer and trader confidence in cross-border trade.
mariosa@vellacardona.com
Mariosa Vella Cardona is a freelance legal consultant specialising in European law, competition law, consumer law and intellectual property law.