How Do I Collect an Overseas Debt?

How Do I Collect an Overseas Debt?

If your debtor is based overseas, it is a common mistake to believe that it is not cost effective to chase the debt. This is certainly not the case and even more so if your debtor is based within the EU.

Debts Within EU

European Order for Payment Procedure (EOP)

The EOP makes it easier and quicker for creditors to recover uncontested monetary debts, in cross-border cases i.e. where one of the parties lives in a different EU Member State from where the case is to take place.

The procedure operates on the basis of standard forms and a uniform process across all EU member states. It can be used in both civil and commercial matters and does not require the use of lawyers. The procedure is optional and can be used instead of existing procedures under national law.

A creditor who obtains an order using this procedure will not have to undertake intermediate steps to enforce the decision in another EU Member State.

European Small Claims Procedure (ESCP)

From 1 January 2009 The European Small Claims Procedure will provide consumers and businesses all over Europe with a uniform, speedy and affordable debt recovery process for low value claims in cross-border cases.

The procedure will apply in civil and commercial matters where the value of a claim does not exceed EU 2000. The procedure applies to monetary claims as well as to non-monetary claims.

The ESCP introduces standard forms to be used by the parties and the court across the EU and establishes time limits for the parties and for the court in order to simplify and speed-up litigation concerning small claims.

European Enforcement Orders (EEO)

An EEO provides a simpler method for enforcing your uncontested judgment in another country within the European Union. But if the claim becomes a defended claim you must follow the normal rules of the court for enforcing a judgment abroad.

Debts Outside of EU

Lugano Convention 2007

Covers member of the European Free Trade Association (EFTA); Iceland, Liechtenstein, Norway and Switzerland.

The Basic rule for Brussels and Lugano is that a debtor must be sued in the country in which they are domiciled regardless of nationality. Unless it's a case of negligence, employment, insurance or land disputes.

Countries covered by the regulation and convention will enforce judgments made in other countries.

The Administration of Justice Act 1920

The Administration of Justice Act 1920 facilities for recognition and enforcement in England from judgments made by courts in: Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, Botswana, British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Christmas Island, Cocos (Keeling) Islands, Dominica, Falkland Islands, Fiji, The Gambia, Ghana, Grenada, Guyana, Jamaica, Kenya, Kiribati, Lesotho, Malawi, Malaysia, Mauritius, Montserrat, New Zealand, Nigeria, Territory of Norfolk Island, Papua New Guinea, St Christopher and Nevis, St Helena, St Lucia, St Vincent and the Grenadines, Seychelles, Sierra Leone, Singapore, Solomon Islands, Sovereign Base Area of Akrotiri and Dhekelia in Cyprus, Sri Lanka, Swaziland, Tanzania, Tasmania, Trinidad and Tobago, Turks and Caicos Islands, Tuvalu, Uganda, Zambia and Zimbabwe.

Foreign Judgments (Reciprocal Enforcement) Act 1933

An Act to make provision for the enforcement in the United Kingdom of judgments given in foreign countries which accord reciprocal treatment to judgments given in the United Kingdom, for facilitating the enforcement in foreign countries of judgments given in the United Kingdom. Countries include: Australia, Australian Capital Territory, Canada, India, Guernsey, Isle of Man, Jersey, Pakistan, Suriname and Tonga.

If no reciprocal agreement, convention or regulation then it may be possible to enforce using the rules of the particular land.

In most cases the defendant will need to be served documents in their own country in accordance with the law of the land. The documents will need to be served through official channels and this can take several months.