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MEPs Back Small Debt Recovery Plans

The European Parliament’s legal affairs committee has given its backing to plans to improve and broaden the use of a simplified procedure for low-value cross-border claims to recover money from abroad.

The proposed changes would cut costs and paperwork for both consumers and businesses, and also make the procedure available for more cases, cap court fees and encourage the use of electronic communications, such as emails and video-conferences.

The European Small Claims Procedure, in use since 2009, is a simplified procedure based on standard forms for recovering money owed by someone in another EU country. It is estimated to have reduced the costs of litigation for cross-border small claims by up to 40% and the duration of litigation from two years and five months to an average of five months.

While the Commission proposed to raise the threshold below which the procedure can be used from EUR 2,000 to EUR 10,000, legal affairs MEPs said the EUR 10,000 ceiling should only be for cases against legal persons (such as a company), to safeguard the procedural rights of citizens. If the claim is against a natural person, the procedure would only be available for recovering debts of less than EUR 5,000, MEPs proposed.

MEPs also proposed that claims based on employment law, such as claims relating to salaries earned in different member states, should be included within the scope of the simplified procedure.

“With the rise in cross-border trade in the EU, the need to provide effective redress mechanisms to support economic activity has become increasingly vital,” explained the lead MEP, Lidia Joanna Geringer de Oedenberg.

“I am pleased with the European Commission's proposal to make the procedure for the investigation of cross-border claims simple and easy to use for citizens, regardless of where they live or what language they speak, in addition to increasing the threshold to 10,000 €, allowing both individuals and SMEs to use this method of legal redress,” she added.

Negotiations will now take place with the Council of the EU to seek agreement to the proposals at first reading.

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