NOVEMBRE Institut Jacques Isnard - nchb.al

NOVEMBREInstitut Jacques Isnard

2017 08

Enforcement fees:clear, transparent and reasonable

By Jos Uitdehaag

Périodique contenant les études, travaux et communications publiéssous l’égide de l’Union internationale des huissiers de justice

Périodique contenant les études, travaux et communications publiés sous l’égide

de l’Union internationale des huissiers de justice.

Juris-Union est une publication trimestrielle réalisée dans le cadre de l'Institut Jacques Isnard (IJI), institut de droit international judiciaire privé et de droit de l'exécution.

L’Institut Jacques Isnard est constitué d'un conseil scientifique composé de :- Nadhir Ben Ammou (Tunisie), professeur à la faculté de droit et des sciences politiques de Tunis, avocat près la Cour de cassation, ministre de la Justice de Tunisie ;

- Robert W. Emerson (USA), Huber Hurst Professor of Business Law, Hough Graduate School of Business, Warrington College of Business Administration, University of Florida ;

- Frédérique Ferrand (France), professeur de droit à l’Université Jean-Moulin, Lyon III ;- Natalie Fricero (France), professeur à la faculté de droit de Nice, directeur de l’Institut d’études judiciaires ;

- Burkhart Hess (Allemagne), professeur de droit à l’Université d’Heidelberg ;- Ton Jongbloed (Pays-Bas), professeur de droit à l’université d’Utrecht ;- Aida Rosa Kemelmajer de Carlucci (Argentine), juge à la Suprême Cour de justice de la province de Mendoza, professeur à la faculté de droit de Mendoza ;

- Jacqueline Lohoues-Oble (Côte d’Ivoire), professeur à la faculté de droit d’Abidjan ;- Ioan Les (Roumanie), professeur à la Faculté de droit de Sibiu, ancien ambassadeur de Roumanie ;- Paula Meira Lourenco (Portugal), secrétaire adjointe à la présidence du Conseil des ministres ;- Piemonrat Vattanahattai (Thaïlande), juge adjoint à la Cour suprême, professeur à la faculté de droit de Bangkok ;

- Vladimir Yarkov (Fédération de Russie), docteur en droit, titulaire de la chaire de procédure civile et des voies d’exécution, Académie juridique d’État de l’Oural, Ekaterinbourg.

Administrateur : Roger Dujardin, ancien vice-président de l'UIHJSecrétaire : Thierry Guinot, huissier de justice à Paris (France)Cette publication peut être citée de la façon suivante : Juris-Union n° suivi du numéro, suivi du mois et de l’année indiquée en première page de couverture.

JURIS-UNION

Enforcement fees: clear, transparent and reasonable

By Jos Uitdehaag

Novembre 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.

JURIS-UNION N° 8 - Novembre 20176


ABBREVIATIONS 11

1. INTRODUCTION 13

PART I INTERNATIONAL STANDARDS AND PRINCIPLES 15

1. GENERAL INTERNATIONAL STANDARDS AND PRINCIPLES 17

1.1. The European Court on Human Rights 17

1.1.1. Article 6 ECHR 17

1.1.2. The ECtHR and enforcement costs 20

1.2. International standards: Council of Europe 21

1.2.1. Principles and objectives of enforcement 211.2.1.1. Principles and objectives 22

1.2.2. The enforcement agent 271.2.2.1. Professional status 271.2.2.2. Activities of enforcement agents 281.2.2.3. Enforcement agents: supervision 28

1.3. International standards: European Union 29

1.4. International standards: Ohada 30

1.5. International standards: UIHJ 30

1.6. Systems of enforcement 31

2. INTERNATIONAL STANDARDS AND PRINCIPLES ON ENFORCEMENT COSTS 32

2.1. Introduction 32

2.2. The regulation of enforcement costs 33

2.3. The transparency of enforcement costs 34

2.4. The clarity and predictability of enforcement costs 35

2.5. The allocation of enforcement costs 35

2.6. The relevance of the enforcement action 36

2.7. Legal aid and enforcement costs 37

Contents


PART II THE STRUCTURE 39

3. STRUCTURE OF ENFORCEMENT FEES 41


3.2. The general fee structure 42

3.4. Enforcement fees 42

3.5. Performance fee 43

3.6. Advanced payment of fees 44

3.7. Legal aid in enforcement cases 45

3.8. Indexation of fees 45

3.9. Different approaches regarding to fees 45

4. SECONDARY ACTIVITIES 48

PART III ANALYSES OF CURRENT FEE SYSTEMS 49

5. ANALYSES OF CURRENT FEE SYSTEMS 51


5.2. Survey: general questions 52

5.3. Survey: advanced payment of fees 54

5.4. Survey: exemption of payment of fees 54

5.5. Survey: enforcement fees and the State (authorities) 55

5.6. Survey: unsuccessful enforcement 56

5.7. Survey: negotiable fees 57

5.8. Survey: voluntary fulfillment of the claim by the debtor 58

5.9. Survey: fee per phase in the enforcement process 59

5.10. Survey: fee for the initiation of proceedings 61

5.11. Survey: enforcement expenses 62

5.12. Survey: expenses from third parties 63

5.13. Survey: performance fee 64

5.14. Survey: fees for amicable debt recovery 66


PART IV THE METHODOLOGY 69

6. METHODOLOGY FOR THE DEVELOPMENT OF AN ENFORCEMENT FEE SCHEDULE 71

6.1. Some experiences with current fee schedules 71

6.2. Example for a cost price calculation of enforcement fees 73

6.2.1. Introduction 73

6.2.2. Methodology 74

6.2.3. The time registration 74

6.2.4. The financial study 81

PART V SOME EXAMPLES 87

7. SOME EXAMPLES OF FEE SYSTEMS 89

7.1. Belgium 89

6.2. Bulgaria 91

6.3. Estonia 96

6.4. Latvia 101

6.5. Lithuania 105

6.6. Netherlands: amicable recovery, fixed enforcement fees and proportional fees 107

6.7. Portugal 111

LIST OF LITERATURE AND SOURCES 117Council of Europe principles 119

Reports, Books, Handbooks, Strategies and Project Descriptions 119

Juris-Union 122

UIHJ Publishing 122



ABBREVIATIONS

ADR Alternative Dispute ResolutionComonex World Code on enforcement (International Union of judicial officers)CEPEJ European Commission for the Efficiency of JusticeCEPEJ (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 EuropeCOMONEX UIHJ World Code on EnforcementEBRD European Bank for Reconstruction and DevelopmentEC European CommissionECHR European Convention for Human RightsECtHR European Court on Human RightsEEO 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 OrderEPOP 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 UnionEU Service Regulation EU Regulation 1393/2007 on the service on the member states of

judicial and extrajudicial documents in civil and commercial mattersHCCH Hague Conference for Private International LawHR Human ResourcesIMF International Monetary FundIT Information Technologies OSCE Organisation for Security and Co-operation in EuropePEA Private Enforcement AgentPPP Power Point PresentationPSC Project Steering CommitteeRec 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 LawTransmitting 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 OfficersUNDP United Nations Development ProgrammeUSAID 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 UitdehaagSecretary 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 Greece1. 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

1 Hornsby v. Greece; ECtHR March 19, 1997; number 107/1995/613/701


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:

2 Estima Jorge v. Portugal, ECtHR, 21.4.1998 (number (16/1997/800/1003)3 See for example regarding inactive behavior and lengthy procedures: Sokolov v. Russia, (22 September 2005,

application no. 3734/02); Scollo v. Italy, 28 September 1995, application 24/1994/471/552 par. 40, 44; Matheus v.

France, 31 March 2005, no. 62740/00; Di Pede v. Italy, 26 September 1996, number 83/1995/589/675; Zappia v. Italy, 26

September 1996, number 85/1995/591/6774 See Burdov v. Russia, 7 May 2002, application no. 59498/00. In the case Timofeyev v. Russia 23 October 2003,

application no. 58263/00, ECtHR put a stop to omissions as a reason for non-payment: “... It appears that the

delays in the execution were caused by the bailiffs' unlawful actions, numerous adjournments due to interference

of supervisory-review authorities, and the obscurity of the judgment. The Court considers that the applicant

should not pay the price of these omissions of the State [...] The Court finds it unacceptable that a judgment debt

against the State is not honoured for such a long period of time. [...] By failing to comply with the judgment of the

Leninskiy District Court of Orsk the national authorities prevented the applicant from receiving the money he could

reasonably have expected to receive. The Government have not advanced any justification for this interference.”


“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” […].

5 Karitonashvili v Georgia, 10 May 2009, application 41957/04


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. […]

“The right to a court is not merely a theoretical right to secure recognition of an entitlement by means of a final decision but also includes the legitimate expectation that the decision will be executed. [...] the imposition of the obligation to pay expenses in order to have that judgment enforced constitutes a restriction of a purely financial nature and therefore calls for particularly rigorous scrutiny from the point of view of the interests of justice”

In the case Çakir and others v. Turkey7, the applicants requested the court copies of the writs of execution in order to enforce the judgments in their favour. The Turkish court stated that the writ of execution could not be served on the applicants unless the fees were paid in accordance with the Law on Fees. Like in the case Apostol v. Georgia, also in this case the ECtHR considered this a restriction of a purely financial nature. The court further referred to the obligation of the State to organise its enforcement system (see paragraph 1.1.1):

“Moreover, the Court reiterates that the fulfilment of the obligation to secure effective rights under Article 6 § 1 of the Convention does not only mean the absence of interference but may also require positive action on the part of the State […] It considers that by shifting to the applicants the full responsibility to meet the court costs, the State avoided its positive obligation to organise a system for the enforcement of judgments which is effective both in law and in practice […]. Thus, some consideration should also have been given in the present case to the reasonable relationship of proportionality […] between the payment of the court costs and the work required for the task in hand, namely merely providing the applicants with a copy of the judgment.

6 Apostol v. Georgia, 28 February 2007, application no. 40765/027 Çakir and others v. Turkey, 4 September 2013, application 25747/09


Accordingly, the Court finds that holding the applicants responsible for payment of the charges before they could receive copies of the judgments imposed an excessive burden on them and restricted their right of access to a court to such an extent as to impair the very essence of that right.”

1.2. International standards: Council of Europe

1.2.1. Principles and objectives of enforcement

Since 1997 (Hornsby v. Greece case see paragraph 1.1.2), the development of the case load of the ECtHR showed a constant increase of complaints in the field of civil enforcement. For this reason, the 24th conference of European Ministers of Justice in October 2001, in Moscow, adopted a resolution on "General approach and means of achieving effective enforcement of judicial decisions". The Conference agreed that “the proper, effective and efficient enforcement of court decisions is of capital importance for States in order to create, reinforce and develop a strong and respected judicial system.” Council of Europe’s Committee on legal Co-operation (CDCJ) was requested to identify common standards and principles at a European level for the enforcement of court decisions. In 2003 two sets of Recommendations on enforcement (one on enforcement in the field of administrative law and one recommendation in the field of civil law) were published. Both sets of recommendations were adopted by the Committee of Ministers of the Council of Europe on September 9, 2003.8

Yet, the caseload continued to increase. CEPEJ (the Council of Europe Commission for the efficiency of Justice) created a working group on enforcement of judicial decisions (CEPEJ GT-EXE), in charge of elaborating Guidelines for effective application of the existing Council of Europe standards. These Guidelines were published in December 2009.9

These sets of standards introduced principles that are supposed to be common to all legal systems. As such those standards also apply to the development of a fair and justified fee system.

8 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 (here after Rec 16(2003)) and Council of Europe

Recommendation Rec (17) 2003 of the Committee of Ministers to Member States on Enforcement (here after Rec

17(2003)9 Guidelines for a better implementation of the existing Council of Europe’s Recommendation on Enforcement,

European Commission on the efficiency of Justice (CEPEJ), (Here after: CEPEJ (2009).


1.2.1.1. Principles and objectives

With regard to the principles and objectives of enforcement, CEPEJ 2009 Guidelines mentions the following:10

• There needs to be an effective but fair enforcement processes;• Enforcement may only be achieved where the defendant has the means or ability to satisfy

the judgment;• Enforcement should strike a balance between the needs of the claimant and the rights of

the defendant;• Member states are encouraged to monitor enforcement procedures, control court

management and take appropriate actions to ensure procedural equality of the parties;• The enforcement process should be sufficiently flexible thus allowing the enforcement

agent a reasonable measure of latitude to make arrangements with the defendant, where there is a consensus between the claimant and the defendant.

• The degree of autonomy of the enforcement agent needs to be clearly defined. • The enforcement agent’s role in enforcement is not limited to enforcement. The

enforcement agent may also have a role as a “post judicial mediator”, during the enforcement stage.

• Arrangements between the enforcement agent and the defendant should be subject to thorough control to ensure the enforcement agent’s impartiality and the protection of the claimant’s and third parties’ interests;

• The enforcement agent's role needs to be clearly defined by national law.

1.2.1.2. Accessibility of enforcement services

Accessibility of enforcement services has several aspects that are outside the scope of the publication. Here I will mention only those principles that directly, or indirectly, have its influence on the requirements with regard to a well-designed fee system.

Clear enforcement procedures

Enforcement procedures should be clear and transparent. In this respect Rec 17/2003 remarks that enforcement is defined and underpinned by a clear legal framework, setting out the powers, rights and responsibilities of the parties and third parties;11 Legislation should be sufficiently detailed to provide legal certainty and transparency in order to make the process foreseeable and efficient.12 The principle is worked out into more detail in the 2009 Guidelines. For example, the legislative framework should contain clear definitions on enforceable documents and the conditions of its enforceability.13 This means that parties are able to

10 CEPEJ 2009 Guidelines nrs. 6-811 Rec 17/2003 under III.1.A12 Rec 17/2003 under III.1.B13 CEPEJ 2009 Guidelines under 15, 23 and 24


understand the process of enforcement in which they are involved, and, where possible, have the option of participating in the proceedings without the need for legal representation.

Proportionality

The enforcement process demands a proper balance between claimants’ and defendants’ interests, bearing in mind, in particular, the provisions of both Articles 6 and 8 of the ECHR.14 This principle is fundamental. The proportionality principle refers to the interests of the creditor and the debtor, but may also refer to the type of enforcement measures to be taken and refers to the extent that certain costs can be made by the enforcement agent. Enforcement actions need to be proportionate to the claim.15 Certain essential assets and income of the defendant should be protected (for example basic household goods, basic social allowances, monies for essential medical needs and necessary working tools.16

Parties in enforcement proceedings

The parties have a duty to co-operate appropriately in the enforcement process.17 An active participation of the parties is expected. Priority should always be given to reaching agreement between parties.18 States must ensure that the enforcement agent has the option of adopting a consensual enforcement procedure at the request of the debtor. Special attention is given to the position of the debtor in enforcement proceedings. Both Rec 17/2003 and the CEPEJ Guidelines expect the debtor to play an active role in the enforcement process and provide information on their income, assets and on other relevant matters;19

Misuse of the enforcement process

States should establish mechanisms which prevent procedural abuses for example by giving judges and/or enforcement agents more authority to penalize parties who are abusive (e.g. issuance of fines and increasing investigative powers).20 In line with the caselaw of ECtHR it must be possible for parties to limit or postpone enforcement; as a safeguard, a review of the decisions taken during the enforcement process must be possible for reasons of a social nature in the field of housing or social guidance.21

14 Rec 17/2003 under III.1.G15 Rec 17/2003 under III.416 Rec 17/2003 under II.1.H17 Rec 17/2003 under III.1.C18 CEPEJ 2009 Guidelines under 7019 Rec 17/2003 under III.1.D20 Rec 17/2003 under III.1.E21 ECtHR, Sofiran & BDA v. France, 11 July 2013, No 63684/09


1.2.1.3. Realisation of enforcement

I limit myself to such principles that directly or indirectly are relevant for the development of a fee system.

The enforcement procedure

International standards also developed requirements with regard to enforcement procedures. Such procedures need to be clearly defined and easy for enforcement agents to administer to reduce any unnecessary complexity that may cause confusion and delays as well as to avoid misuse and/or abuse. 22This means that enforcement titles are clearly defined, as are the rights and duties of defendants, claimants and third parties, including, for creditors and third parties, their rankings and entitlements to monies recovered and distributed amongst claimants.23

The time lines for enforcement procedures should be reasonable.24 Legal certainty means that the length of enforcement proceedings is foreseeable. Member states should consider establishing publicly accessible statistical databases enabling the parties to calculate the likely duration of the different enforcement measures possible in domestic legislation.25

Administrative authorities as debtors

ECtHR interprets the wording “administrative authority” very broadly. According to its caselaw, the ECtHR considers that the State should even be liable for the debts of state owned companies when such a company doesn’t enjoy sufficient institutional and operational independence from the State, regardless of its formal classification under domestic law.26

Administrative authorities are obliged to comply with their obligations within a reasonable period of time.27 Interest payable by such administrative authority, due to non-compliance of a judicial decision should not be less than interest payable by a private person to an administrative authority in a similar situation.28

22 Rec 17/2003 under II.2.A23 Rec 17/2003 under II.2.C and CEPEJ 2009 Guidelines under 23-2424 CEPEJ 2009 Guidelines under 6325 CEPEJ 2009 Guidelines under 6526 See for example: Liseytseva and Maslov v. Russia, 9 October 2014, applications nos. 39483/05 and 40527/10. In this

case the ECtHR decided: The key criteria used to determine whether the State was indeed responsible for such

debts were as follows: the company’s legal status (under public or private law); the nature of its activity (a public

function or an ordinary commercial business); the context of its operation (such as a monopoly or heavily regulated

business); its institutional independence (the extent of State ownership); and its operational independence (the

extent of State supervision and control)27 Rec 16/2003 under II.2.A28 Rec 16/2003 under II.2.B


In the case of non implementation by administrative authorities of judicial decisions entailing an obligation to pay a sum of money, member states should consider the possibility to seize the property of the administrative authorities within the limits prescribed by law.29

Administrative authorities can be held liable where they refuse or neglect to implement judicial decisions. Public officials in charge of the implementation of judicial decisions may also be held individually liable in disciplinary, civil or criminal proceedings if they fail to implement them.30

Communication and service of documents

For an efficient and effective enforcement, communication and access on information on the enforcement process is important. Member states should take measures to ensure that information is available on the enforcement process and there is transparency of the activities of the court and those of the enforcement agent at all stages of the process, provided that the rights of the parties are safeguarded.31 Here a well organised system for service of documents will have a positive contribution.32 Every act of enforcement must be brought to the attention of the debtor.33 The member states may draw up standard documents to notify parties. These standard documents could relate to the different stages in the enforcement process and to any possible remedies allowing enforcement to be challenged. The notification in all cases should encourage the defendant to comply with the court order voluntarily and include a warning that in case of non-compliance enforcement measures could be used, including, if appropriate, further costs may be applied.34 It should be possible to entrust enforcement agents with the service of notices.35

Information needs to be available for potential parties to enforcement procedures. Such information should include information on the efficiency of the enforcement services and procedures, by establishing performance indicators against specified targets and by indicating the time different procedures might take.36

29 Rec 16/2003 under II.2.D30 Rec 16/2003 under II.1.C31 2009 Guidelines under 932 This is without prejudice to the Council Regulation (EC) No 1393 of 13 November 2007 on the service in the (EU)

Member States of judicial and extrajudicial documents in civil or commercial matters. Rec 17/2003 under II.2.d33 COMONEX article 834 CEPEJ 2009 Guidelines no. 1935 CEPEJ 2009 Guidelines no. 2036 2009 Guidelines under 11


Search for assets

The search and seizure of defendants’ assets should be made as effective as possible taking into account relevant human rights and data protection provisions. There should be fast and efficient collection of necessary information on defendants’ assets through access to relevant information contained in registers and other sources, as well as the option for defendants to make a declaration of their assets.37 In order to estimate of costs and ensure that any measures taken are proportionate to those costs, member states should allow enforcement agents speedy and preferably direct access to information on the defendant’s assets. Member states are encouraged to consider making such information available to the enforcement agent by Internet through a secured access, if possible.38

Co-operation between the various organs of state and private institutions, subject to compliance with the data protection legislation, is essential for enabling a speedy access to the multiple-source information on defendants’ assets.39 All state bodies, which administer databases with information required for efficient enforcement, should have a duty to provide the information to the enforcement agent, within an agreed time-limit if such information is compatible with data protection legislation.40

Enforcement agents bear responsibility for maintaining confidentiality when secret, confidential or sensitive information comes to their attention in the course of enforcement proceedings. In case of a breach of this duty, measures of disciplinary liability should be applicable, along with civil and criminal sanctions.41

Obligation to enforce

In general enforcement agents should be obliged to perform their role whenever they are legally required to do so except in cases of impediment or where they are related by blood or marriage to a party.42

Legal remedies

According to international standards the competent authority to rule on disputes in enforcement proceedings should be the court. The Council of Europe in this respect.43

37 Rec 17/2003 under III.6 38 CEPEJ 2009 Guidelines under 4039 CEPEJ 2009 Guidelines under 4240 CEPEJ 2009 Guidelines under 4341 CEPEJ 2009 Guidelines under 4542 COMONEX article 17 and CEPEJ 2009 Guidelines under 3543 Opinion No 13 (2010) on “The role of judges in the enforcement of judicial decisions” of the Consultative Council

of European Judges; points 8,9 and 18


1.2.2. The enforcement agent

1.2.2.1. Professional status

The enforcement agent is considered a person authorized by the state to carry out the enforcement process irrespective of whether that person is employed by the state or not.44 Their status, role and responsibilities and powers should be prescribed by States should be free to determine the professional status of enforcement agents.45

In case enforcement agents are state employees, the state ensures that they receive appropriate remuneration, particularly in the light of their level of training, experience and the difficulties inherent in their task. They should have proper working conditions, adequate physical resources and support staff. They should also be adequately remunerated.46

Member states should accredit enforcement agents only if the candidates concerned are of a standard and training commensurate with the complexity of their tasks. A high quality of training of professionals is important for the service of justice and to increase the trust of users in their justice system.47 In the recruitment process, consideration should be given to the moral standards of candidates and their legal knowledge and training in relevant law and procedure. To this end, they should be required to take examinations to assess their theoretical and practical knowledge.48

Once recruited, it is important that the professionalism and high standards of enforcement agents are maintained. This should be effected by ensuring that enforcement agents, apart from initial training, also undergo continuous training according to clearly defined and well-structured aims and objectives.49

CEPEJ 2009 Guidelines emphasize on the importance to establish a professional organization representing all members of the profession, thereby facilitating their collective representation and the gathering of information. Within member states which have established professional organizations of enforcement agents, membership of this representative body should be compulsory.50

44 Rec 17/2003 under 1B45 Rec 17/2003 under IV.2 and CEPEJ 2009 Guidelines under 3746 Rec 17/2003 under IV.7 This Principle refers only to state employed enforcement agents and not to self-employed

enforcement agents who finance and remunerate themselves independently of the state.47 CEPEJ 2009 Guidelines under 2548 Rec 17/2003 under IV.349 Rec 17/2003 under IV.8 and CEPEJ 2009 Guidelines under 2650 CEPEJ 2009 Guidelines under 29 and 30


1.2.2.2. Activities of enforcement agents

Enforcement agents should be responsible for the conduct of enforcement within their competences as defined by national law. CEPEJ 2009 Guidelines recommend that enforcement agents is given sole competence for the enforcement of judicial decisions and other enforceable titles or documents and the implementation of all enforcement procedures provided for by the law.51 The professional status must allow judicial officers and enforcement agents to pursue secondary activities that are compatible with their position. This refers for example to amicable collection of debts, bankruptcy procedures and representing parties in court.52

In general enforcement agents should be obliged to perform their role whenever they are legally required to do so unless there is a justified reason not to carry out enforcement (see also paragraph 1.2.1.3).

In case enforcement agents are active as self-employed professionals, they should be obliged to open a non-attachable account specifically intended for depositing funds collected on behalf of clients and take out professional and civil liability insurance. Enforcement.53

1.2.2.3. Enforcement agents: supervision

It is obvious that the enforcement agent is considered to have a high profile as a person authorized by the state who, at all times, should act in an appropriate (competent) manner in accordance with recognized high professional and ethical standards that are fitting to the profession. States are to ensure that enforcement agents are honourable and competent in their duties. They should be unbiased in their dealings with the parties and be subject to professional scrutiny and monitoring which may include judicial control.54 States must take measures to define the rules of the professional ethics of enforcement agents and judicial officers.55 Enforcement agents alleged to have abused their position should be subject to disciplinary, civil and/or criminal proceedings, providing appropriate sanctions where abuse has taken place.56 The disciplinary procedure should comply with the rules of fair process before an independent organ that decides in adversarial proceedings must be installed. The disciplinary sanctions must be defined and be proportional to the gravity of the errors committed.57

51 CEPEJ 2009 Guidelines under 3352 COMONEX article 21 and CEPEJ 2009 Guidelines under 3453 CEPEJ 2009 Guidelines under 3654 Rec 17/2003 under IV.455 COMONEX article 1956 Rec 17/2003 under IV.6 and CEPEJ 2009 Guidelines under 8057 COMONEX article 20 and CEPEJ 2009 Guidelines under 81


The legislator has an important role in the establishment of the working environment of the enforcement agent. CEPEJ 2009 Guidelines comes with concrete suggestions, such as defining certain quality standards.58 Additional to defining quality standards the control over the activities of the enforcement agents of the lawfulness of the actions carried out by a supervisory authority.59 The Member states should ensure that their enforcement activities are assessed on an ongoing basis. This assessment should be performed by a body external to the enforcement authorities (for example, by a professional body) The Member states' authorities should clearly determine the control procedures to be performed during inspections.60

1.3. International standards: European Union

Rec 16 (2003), Rec 17(2003), CEPEJ 2009 Guidelines contain merely the same principles as the case law of the ECtHR. The standards as set by the Council of Europe are fully endorsed by the European Union and meanwhile have become benchmarks for the European Union in the area of human rights, the Rule of Law and democracy in Europe.

European Union in several regulations also refers to international enforcement principles. A good example is the exemption of certain goods or incomes from attachment. For example, article 31 EU regulation 655/201461 (European Account Preservation Order procedure) states that certain amounts in the bank account of the debtor are exempted from the preservation order. The principle also ensures that the rights of debtor’s dependents such as children (e.g. maintenance) are guaranteed.

Another example, from the same European Account Preservation Order Regulation, is the principle to obtain information on the assets of the debtor. Article 14 EU Regulation 655/2014 enables a creditor who is the holder of an enforceable title to request information on the bank accounts of the debtor through a court.62

58 CEPEJ 2009 Guidelines under 75-7659 CEPEJ 2009 Guidelines, glossary60 CEPEJ 2009 Guidelines under 7861 Regulation no.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 matters62 Article 14 paragraph 1 Regulation 655/2014: Where the creditor has obtained in a Member State an enforceable

judgment, court settlement or authentic instrument which requires the debtor to pay the creditor’s claim and the

creditor has reasons to believe that the debtor holds one or more accounts with a bank in a specific Member State,

but knows neither the name and/or address of the bank nor the IBAN, BIC or another bank number allowing the

bank to be identified, he may request the court with which the application for the Preservation Order is lodged to

request that the information authority of the Member State of enforcement obtain the information necessary to

allow the bank or banks and the debtor’s account or accounts to be identified.


1.4. International standards: Ohada

According to article 47 of the Uniform Act organizing Simplified Recovery Procedures and Measures of Execution of Ohada of 10 April 1998):

“The costs of the compulsory distraint shall be borne by the debtor, save where it is clear that they were not warranted at the time they were incurred. Save where they concern an act whose performance is provided for by the national law of each Contracting State or by this Uniform Act, or is authorized by the competent court, costs incurred for recovery without an executory clause shall be borne by the creditor. At his request, however, the competent court may transfer all or part of the costs incurred to the mala fide debtor”

1.5. International standards: UIHJ

UIHJ, the International Union of Judicial Officers, for several years has been working on the construction of a set of norms and standards that would enable states to harmonize their enforcement system in accordance with international principles. The Global Code of Enforcement (here after Comonex)63

The standards are based on the following principles:

• 1. A new balance between the rights of the creditor and the protection of the fundamental rights of the debtor:• Enforcement law must not be inhumane: its structuring principles must be able to

guarantee the payment of the creditor while still protecting the fundamental rights of the debtor. COMONEX defines the rights and duties of each of the parties.

• Rights of the creditor : a right of general security on all of the goods, the ability to invoke measures appropriate to the nature of the goods, the freedom to choose enforcement measures, the right to receive the assistance of the State to enforce judgments, the award of compensation and interest in the event of unjustified resistance by the debtor.

• Rights of the debtor: the protection of privacy and the family, the protection of certain goods that cannot be seized, the granting of procedural rights (rights of defence, recourse to the courts in the event of difficulty), the ability to benefit from a period of grace, the right to compensation in the event of incorrect enforcement, the right to participate in the definition of enforcement procedures (participatory enforcement, amicable enforcement procedures), and where applicable the possibility of expunging the debt with a view to reestablishment of his solvency.

63 Comonex, or Code Mondial de l’Execution (Global Code of Enforcement).


• 2. COMONEX introduces modern concepts such as “amicable” enforcement, “participatory” enforcement, and “soft” enforcement (the active participation of the debtor in the procedures of the enforcement).• COMONEX applies to all forms of enforcement, including collective enforcement with

the effects related to class action suits.

• 3. COMONEX anticipates the recourse to new technologies for modernizing enforcement methods.

• 4. COMONEX responds to new economic factors: the right to the effective enforcement of enforceable titles is a factor in the development of a socially responsible economy in the world. • The absolute necessity of finding solutions in this time of economic crisis give a

particular urgency to the process of reflection embarked upon by the UIHJ on worldwide enforcement standards. In effect, the right to effectively enforce enforceable titles is a key tool for economic development. All international organizations concerned with sustainable development strategies stress the need of granting a right to enforce to both private individuals and companies.

The past few years COMONEX has been endorsed by all major international organizations such as the World Bank, Ohada (Africa), Asean, Council of Europe and The Hague Conference for Private International Law (HCCH). Non-European countries (e.g. in Africa) accepted the benchmarks, including COMONEX, as international standards.

1.6. Systems of enforcement

Neither the Council of Europe, EU, CEPEJ nor UIHJ, has taken a formal position on the professional and institutional status of enforcement agents. In case a state uses enforcement agents to carry out the enforcement process, they should comply with the principles contained in the recommendations.64

64 Rec 17/2003 under IV.1


2. INTERNATIONAL STANDARDS AND PRINCIPLES ON ENFORCEMENT COSTS

2.1. Introduction

As we have seen in chapter 1, ECtHR in numerous cases referred to the responsibility of the State in enforcement proceedings. The State is responsible for the well-functioning of its enforcement system as far as the factors impeding or blocking their full and timely enforcement are within their control. At the same time however, a successful litigant may be required to undertake certain procedural steps in order to have the judgment enforced, at least as long as the required formalities do not gravely restrict or reduce his or her access to the enforcement proceedings.65 Such responsibility also refers to a fair and just fee system. An obstacle such as advanced payment of fees as a restriction of a purely financial nature, may be an infringement of article 6 ECHR. See also Comonex:

States must ensure that these enforcement costs are fixed, predictable, transparent and reasonable.They must make certain that all creditors have equal access to enforcement measures by providing legal support.66

Another conclusion from chapter 1 is the need for a clear legal framework. It is obvious that such framework also includes provisions on the fee system.

We ended chapter 1 with a remark on the differences in the professional and institutional status of enforcement agents. Indeed: international standards and principles do not prefer a certain enforcement system. Justice is supposed an affordable option for parties, no matter if enforcement is carried out by civil servants or self-employed enforcement systems. Some countries even have both systems parallel to each other (e.g. Albania, Georgia and Bulgaria).

In that context, CEPEJ Guidelines note that States should avoid any discrimination in terms of costs for the debtor between enforcement agents of different status but equal competence:

Where, within the same member state, there are enforcement agents working in both private and public sector, the state should avoid any discrimination in terms of the costs for the debtor between enforcement agents of different status but equal competence.67

Is there an ideal fee system? Such question is difficult to answer. However international standards dis provide a clear framework for fees: clear, transparent and reasonable. In this chapter, we will have a closer look at such standards.

65 Dadiani and Machabeli v. Georgia, 12 September 2012, application 8252/08)66 Article 5 COMONEX67 CEPEJ 2009 Guidelines under 48


2.2. The regulation of enforcement costs

A clear legal framework means that the law should prescribe the fees. Any costs not determined by law cannot be charged:

Each member state is encouraged to introduce regulations governing the level of enforcement costs to ensure effective access to justice notably through legal aid or schemes allowing for the waiver of costs or a postponement of their payment, where such costs are likely to fall to the parties. The parties should be protected to ensure that they will pay only the costs determined by law.68

Where, within the same member state, there are enforcement agents working in both private and public sector, the state should avoid any discrimination in terms of the costs for the debtor between enforcement agents of different status but equal competence.69

It is most common that the basis of the fee structure is mentioned in law and the amounts connected with such structure are further regulated by secondary legislation. In order to be as intelligible as possible, the fee for a certain enforcement action should depend on a limited number of factors. When setting enforcement fee tariffs, CEPEJ recommends exchange of experiences among the various countries. Examples of factors to take into account are the amount of the debt, any particular urgency and the difficulties that the enforcement agent is likely to encounter.70 The fee should be set out in the regulation as simply, clearly and concisely as possible.71

When necessary parties must be given the opportunity to challenge the costs:

Member states should introduce a procedure whereby parties may challenge the costs of the enforcement agents.72

68 CEPEJ 2009 Guidelines under 4769 CEPEJ 2009 Guidelines under 4870 CEPEJ 2009 Guidelines under 5571 CEPEJ 2009 Guidelines under 5472 CEPEJ 2009 Guidelines under 49


2.3. The transparency of enforcement costs

The CEPEJ Guidelines make a distinction between various costs in the enforcement procedure:73

• Enforcement costs: Enforcement costs consist of the enforcement expenses (= enforcement fees) and any performance bonus (= performance fee) paid by the claimant to the enforcement agent in the form of fees:

• Enforcement Fee (enforcement expenses): The expenses of the process itself, in other words, the total of the amounts for each action undertaken by the enforcement agent in the course of a single case (see Enforcement costs).

• Performance fees: The sum payable by the claimant to the enforcement agent in the event of satisfaction. Under the legislation of different countries fees may be negotiated, set in advance or prohibited (See Enforcement costs).

Transparency of enforcement costs means that the fees should be made public. This is a task, not only by the enforcement agent, but also by the courts, consumer organizations, procedural codes or via the official Internet sites of the judicial and professional authorities:

Where enforcement costs are likely to fall to the parties, the member states should ensure that the latter are informed as fully as possible about the enforcement costs (enforcement fees and the performance fees due upon successful completion). This information should be made available to the parties not only by the enforcement agent but also by the courts, consumer organizations, procedural codes or via the official Internet sites of the judicial and professional authorities.74

In recognition of the growing mobility of persons and services in Europe, there is an increasing need for international enforcement of court decisions. The transparency of enforcement costs should therefore go beyond mere domestic level: the member states should agree to set up a database of the amounts charged for the procedural acts most frequently performed and make it as broadly available as possible, with the aim of giving persons in other member states access to each country's structure of charges.75

To undertake quality control of enforcement proceedings, CEPEJ recommends to development of quality standards/criteria through an independent review system and random on-site inspection. The data (which include rapidity, effectiveness, reasonable costs of enforcement proceedings, the enforcement costs incurred and how they are recovered)76 should be published.77

73 CEPEJ 2009 Guidelines, glossary74 CEPEJ 2009 Guidelines under 5075 CEPEJ 2009 Guidelines under 5176 CEPEJ 2009 Guidelines under 7577 CEPEJ 2009 Guidelines under 76


2.4. The clarity and predictability of enforcement costs

Transparency of enforcement fees also includes clarity of the fees. The fee for an action should depend on a limited number of factors. The fee should be set out in the regulation as simply, clearly and concisely as possible, taking into consideration certain factors such as the amount of the debt, any particular urgency of the case and the difficulties that the enforcement agent is likely to encounter.

CEPEJ 2009 Guidelines suggest that procedural documents clearly indicate the amount of the action.78

To a large extend, the enforcement agent is known with the defendant’s financial situation. In case the enforcement agent recommends a particular enforcement action or procedure, the enforcement agent should inform the claimant about the type of action envisaged and the likely resulting costs at the beginning of and at each stage in the procedure.79

2.5. The allocation of enforcement costs

In general, the defendant should bear the costs of enforcement (though CEPEJ Guidelines also enable payment of the performance fee by the claimant; see however my remark in paragraph 2.3). After all the enforcement will usually be initiated only because the defendant failed to pay or to comply with a court order, or failed to contact the court or claimant to explain his/her failure.80

Where the defendant is insolvent, the enforcement fees should be paid by the claimant.81

This principle however does not preclude the possibility of other parties who abuse the process to bear costs too.82

Also where enforcement is deemed to be wrongful or irregular, liability for the costs should be borne by the persons or the bodies responsible for the wrongful or irregular act. This might also include a liability of the enforcement agent in case the costs are considered irrelevant or wrongfully incurred.83

78 CEPEJ 2009 Guidelines under 5279 CEPEJ 2009 Guidelines under 5380 Rec 17/2003 under III.581 CEPEJ 2009 Guidelines under 6082 CEPEJ 2009 Guidelines under 6183 CEPEJ 2009 Guidelines under 57


Similar provisions can also be found in COMONEX:

The costs of enforcement are payable by the debtor, but the creditor must pay them in advance, except in those cases provided for by the law (in particular for the payment of maintenance).In the event of the insolvency of the debtor, the costs are borne by the creditor.Should the judge decide that the creditor has abused his power to seek enforcement, he may direct the creditor to pay the costs of enforcement and to compensate the loss sustained by the debtor.84

2.6. The relevance of the enforcement action

In paragraph 1.2.1.3 we already paid attention to the (general) principle of proportionality: the attempts to carry out enforcement should be proportional to the claim, the anticipated proceeds to be recovered, and the interests of the defendant.85 The enforcement agent should take the most appropriate and effective means of action that is best suited to the claimant and defendant and which is proportional to the objective of the enforcement (e.g. not seizing excessive amounts of assets to satisfy the amount adjudged).

Proportionality also refers to the enforcement costs. Such enforcement costs should be in due proportion to the remedy sought. This means that states should provide an effective enforcement procedure for all level of debts, either large or small.86

In case the enforcement agent is familiar with the defendant’s financial situation, the claimant should be informed about the type of action envisaged and the likely resulting costs at the beginning of and at each stage in the procedure.87 In order to produce an estimate of costs and ensure that any measures taken are proportionate to those costs, CEPEJ Guidelines recommend states to allow the enforcement agent speedy and preferably direct access to information on the defendant’s assets.88

It is the enforcement agent who decides which enforcement action is most appropriate. Where costs are considered irrelevant or wrongfully incurred these costs should be borne by the enforcement agent.89

84 Article 5 COMONEX85 Rec 17/2003 under III.486 CEPEJ 2009 Guidelines under 5687 CEPEJ 2009 Guidelines under 5388 CEPEJ 2009 Guidelines under 4089 CEPEJ 2009 Guidelines under 57


2.7. Legal aid and enforcement costs

The enforcement fees should not limit the access to the enforcement system for vulnerable creditors. See in this respect, for example:

Article 47 paragraph 3 of the Charter of Fundamental Rights of the European Union

Legal aid shall be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice.

This means that a well-developed fee system also entails the possibility of legal aid in enforcement. In this respect, CEPEJ 2009 Guidelines notes:

In order to guarantee access to justice, legal aid schemes, or alternative funding schemes, should be available to claimants who are unable to pay enforcement fees (i.e. by means of State funding or by remitting the fees). Where legal aid is granted, the State may, if considered just, avail itself with mechanisms allowing it to recover its outlay from the proceeds of enforcement.90

In case of legal aid, the Guidelines recommend that the state should verify the relevance of the costs incurred, so that the community does not have to bear unjustified costs.91

A similar provision can be found in the Council Directive No 2002/8/EC from European Union of 27 January 2003 on legal aid92:

“Natural persons involved in a dispute covered by this Directive shall be entitled to receive appropriate legal aid in order to ensure their effective access to justice in accordance with the conditions laid down in this Directive”.

This right is not confined to the phase of obtaining a judicial decision but, the costs “incurred in having a judgment declared enforceable or enforced” fall likewise within the scope of application of this directive”.93

90 CEPEJ 2009 Guidelines under 6291 CEPEJ 2009 Guidelines under 5892 Council Directive 2002/8 of 27 January 2003 to improve access to justice in cross border disputes by establishing

minimum common rules relating to legal aid for such disputes93 See consideration No 20 Council Directive No 2002/8/EC of 27 January 2003



PART II

THE STRUCTURE



3. STRUCTURE OF ENFORCEMENT FEES

3.1. Introduction

From the international standards as given by Recommendations 16/2003 and 17/2003 and the CEPEJ 2009 Guidelines, it is obvious that a fee schedule should not exclusively be based on the cost-effectiveness of the enforcement process. Certain requirements need to be met in order to establish a fee system in accordance with the European standards: justice (enforcement) should be an affordable option for the parties.

To summarize the requirements regarding a fee structure in accordance with those principles, this means that the enforcement structure should be prescribed by law. With regard to the enforcement costs it means that:

• Enforcement costs are fixed;• Enforcement costs are transparent;• Enforcement costs are made known to the parties in advance so that they may foresee

enforcement events and act appropriately within a reasonable time;• Enforcement costs are reasonable (e.g. the principle of proportionality when carrying out

the enforcement process regarding the amount of income and/or assets needed to be attached to satisfy the claim);

• Enforcement costs are not excessive;• Enforcement costs are affordable in order to guarantee access to justice, legal aid schemes,

or alternative funding schemes, to claimants who are unable to pay enforcement fees; • Enforcement costs might include variable interest rates as an incentive on defendants to

pay their debts more quickly;• Enforcement costs might be negotiable between claimant and enforcement agent up to the

maximum prescribe by law, while defendants will be protected by paying the enforcement fees as prescribed by law.

• Enforcement costs do not hinder alternative solutions where it is practicable to do so;• Enforcement costs are generally paid by the defendant except if he/she is insolvent or

vanished;• Enforcement costs might include an ‘enhanced’ form of service for an extra fee, in which

case the defendant bears this extra only in case he/she is warned in advance of the possibility that the claimant might access that service if the defendant did not comply with a court order;

• Enforcement costs in case they are considered illegal or wrongfully incurred should be borne by the enforcement agent.


3.2. The general fee structure

The enforcement agent is a highly qualified legal professional.94 The system of remuneration should be in accordance with such qualifications. The structure of the fees is, normally, regulated by law, whereas the fee tables are regulated by secondary legislation.

In general, most countries use the descriptions as mentioned in the CEPEJ 2009 Guidelines, defining the different components of enforcement costs: Enforcement costs: Enforcement costs consist of the enforcement expenses (= enforcement fees) and any performance bonus (= performance fees) paid by the claimant to the enforcement agent in the form of fees.

There are two major components within the enforcement costs: the enforcement fee and the performance fee:

• Enforcement fees: The expenses of the process itself, in other words, the total of the amounts for each action undertaken by the enforcement agent in the course of a single case;

• Performance fees: The sum payable by the claimant to the enforcement agent in the event of satisfaction. Under the legislation of different countries fees may be negotiated, set in advance or prohibited.

3.4. Enforcement fees

In most countries with regard to the enforcement fees a further distinction is made between following components:

• Initiation fee: this is the payment for initiating the enforcement proceedings. In general, it is established as a fixed nominal value. The initiation fee is intended to cover the expenses of the enforcement agent setting up a new enforcement case such as the registration of the enforcement case and the verification of the regularity of the enforcement case. The advantage of the introduction of an initial fee is that it will reduce the administrative and financial burden and thus will lead to a more efficient enforcement process. The initial fee is normally a small administrative fee (e.g. in Sweden € 60 and in Bulgaria € 35);

94 For example: in Europe 77,42% of the enforcement agents, in order to be appointed has minimum bachelor level,

plus a traineeship, plus initial training (75%) and a special admission exam (Europe: 28 from 33 countries). Source :

Efficacité de l’exécution des décisions de justice dans le monde ; rapport sur l’exécution dans les pays membres de

l’UIHJ ; second edition, November 2017


• Costs of third parties: these costs include any external expenses incurred by the enforcement agent outside his office, necessary to fulfill the enforcement action and which are not covered by the enforcement expenses. The expenses from third parties include for example: the services for transportation and storage of attached assets, travel, translation, use of experts or specialists, banking fees and commission, bringing a person in for interrogation, getting access to premises, public announcement of enforced sales, obtaining documents from the land registry or other registries to identify the assets of the debtor;

• Enforcement expenses: these enforcement expenses might be established as fixed nominal values and are intended to cover procedural costs and costs of implementing the actions of the enforcement agent. Alternatively, this might be a certain percentage or an amount depending on the progress in the enforcement process. Enforcement expenses should be cost-covering, meaning that those costs include also a certain compensation of the overhead expenses (administrative costs, labor costs, office costs).

In line with international standards, it is the debtor who pays the enforcement fees. Normally such fees are a preferred claim, also towards the initial claim. In case the debtor is insolvent and enforcement was unsuccessful in most cases the creditor pays the enforcement fees. However, there are some exceptions. For example, in some countries (e.g. England) no compensation is paid to the enforcement agent in case the State is the creditor. In other countries (e.g. Netherlands) in such cases a “discount” on the enforcement fees may be given by the enforcement agent to the creditor.

3.5. Performance fee

The definition as given by CEPEJ95, has different aspects:

• The performance fee is supposed to be paid by the claimant;• CEPEJ 2009 under Guideline 60 enables a legislator to introduce negotiable fees.

Personally (and what also seems most common in European countries, see part II; question 30), CEPEJ is too rigorous to define that the performance fee needs to be paid by the claimant. Such system might be useful in a well-developed economy. However, in practice, I have seen that the introduction of payment of the performance fee by the claimant, causes difficulties and severe discussions in, especially, transition countries.

The fact that this definition enables states to develop a system of negotiable fees between the enforcement agent and the claimant, for such countries, is also one bridge too far and seems to focus too much on countries with a well-developed economy and legal system. In many

95 CEPEJ 2009 Guidelines under 60 and Glossary


other countries, introduction of such negotiable fees to be paid by the claimant emphasizes too much on the entrepreneurship skills of the enforcement agent rather than their function as a public servant within the legal system.

The focus on the performance fee, as an incentive for the enforcement agent, has become more popular during recent years, also under influence of IMF and World Bank. A good example in that respect is the recent reform in Portugal. Here the Portuguese authorities, in close cooperation with the Chamber of enforcement agents (solicitadores) implemented a reform in the field of enforcement. The incentives for enforcement agents were changed linking results in the enforcement process with a performance fee structure. However here we have to bear in mind that the new fee structure that with the incentivizing performance also serious legal and organizational changes in the enforcement process were introduced. For example:

• Portuguese enforcement agents got an increased power;• An IT based system that encompasses all bank accounts in Portugal (accessible to

enforcement agents) was introduced;96

• A special mechanism (Pepex) was introduced. Pepex is a cheap procedure enabling creditors to verify whether debtors have assets, and on that basis, whether it makes sense to pursue enforcement or to terminate the procedure. The procedure applies to claim up to € 10,000.97

Most common, the performance fee is set up as a percentage of the collected sum, or as a set amount, irrespective of the amount collected. The latter is normally also used for non-monetary claims.

In case the performance fee is a certain percentage, it is recommended to introduce a minimum and maximum fee. The minimum fee is economically useful for small claims because if not, the performance fees are not an incentive to enforce such small claims. Introduction of a maximum fee should protect the claimant who must pay. Such maximum should be applied for big cases only.

3.6. Advanced payment of fees

In most countries, it is common that (part of the) fees are paid in advance by the creditor. Advanced payment avoids pre-financing of such fees by the enforcement agent. Especially in countries with a self-employed enforcement system such pre-financing might lead to financial risks for the enforcement agent.

96 Reforming the legal and Institutional framework for the enforcement of civil and commercial claims in Portugal;

Sebastiaan Pompe and Wolfgang Bergthaler, IMF Working Paper WP/15/279 International Monetary Fund,

Washington, DC (2015), page 32-3497 Pepex Law 233/2014 (November 2014)


Summarizing the system of pre-payment of fees in various countries we see the following trends:

a. Prepayment is based on the cost price principle; there is no profit motive: expenses need to be limited to the costs actually made by the enforcement agent;

b. Prepayment includes the so called “out of pocket” costs, those expenses that may influence the liquidity of the office (such as court fees, third party services);

c. Prepayment does not refer to the time spent by the enforcement agent or his staff on a certain enforcement case;

d. In certain countries (e.g. Portugal and Bulgaria), the prepayment of the enforcement fee follows the timeline development of the enforcement case. For example Portugal introduced some years ago a prepayment per phase in the enforcement process (see also paragraph 3.9);

e. Financially vulnerable creditors should be exempted from prepayment of fees;

3.7. Legal aid in enforcement cases

In paragraph 2.7 I already emphasized on the importance of legal aid in enforcement cases for financially vulnerable creditors. To guarantee access to justice, legal aid should be available for those creditors that are unable to pay the (advanced) enforcement fees.

3.8. Indexation of fees

Indexation of enforcement fees is necessary, following e.g. the inflation rate or a similar indicator. Revision of fees should be done on a periodic base (e.g. annually).

3.9. Different approaches regarding to fees

An enforcement fee system serves various purposes. One is obviously to affect the behaviour of the different players in the enforcement process:

• for defendants/debtors to comply voluntarily and quickly avoiding enforcement costs;• for claimants/creditors to refrain from using the system in “hopeless” cases;• for all parties at least trying to keep the costs within reasonable limits;• for the enforcement agent to be guided by appropriate enforcement behaviour.


The purposes are various and so will be the thoughts on the structure of such system. In this respect, several options are possible:

1. A simple system of fixed fees

Advantage: The enforcement agent treats small cases with exactly the same interest as high value cases. After all: for each action, the same fee is generated, disregarding the value or interests of the case.

Danger: There is a risk that difficult, time-consuming cases will not be treated with the additional attention and energy that they may require; and since difficult cases frequently tend to be high value-cases (in which the debtor may be willing to spend resources to evade judgment or hide its assets), the result is that the most economically important cases are often not adequately handled under this fee structure.

2. A proportional fee

The enforcement agent receives a percentage of the amount collected.

Advantage:More attention will be given to high value cases: the enforcement agent will receive a higher compensation in those cases.

Danger:Low value cases become less interesting for the enforcement agent, and possibly are completely unprofitable. The debtor has no incentive to actively participate in the enforcement process, since the fees charged to the debtor remain unchanged, whether the debtor cooperates or not. There will be no compensation for the enforcement agent in case of unsuccessful enforcement.

3. A fixed fee combined with a proportional fee

This means an initial (fixed) fee to handle the immediate costs of opening a case or certain activities and, in addition, proportional fees for example as a performance fee.

Advantage:This structure solves several of the problems which characterize options 1 and 2: • Low value cases may become profitable (or at least cost covering) for the enforcement

agent, • The debtor to reduce its costs to some degree by earlier compliance, • It provides the enforcement agent with incentive to handle difficult, time-consuming

cases effectively.


This therefore seems like quite a reasonable solution. However also with this structure some problems arise. It is important that the structure is well-balanced. If not, though low-value cases seem more profitable, such cases may still be a less remunerative use of the enforcement agent’s time than high value cases. Further: a maximum for proportional fees should be introduced to avoid excessive fees.

4. Fees based on the phases in the enforcement process

This system is in use for example in Portugal. In other countries, the introduction of such system is under discussion. The fee structure can still be based on fixed fees (e.g. per phase) in combination with proportional fees (e.g. as a performance fee).

An example of the division in phases is the following:

• Phase 1, which starts with the examination of the enforcement request by the enforcement agent. This stage includes the actions related to the analysis and verification of the correctness of the enforcement title, the initiation of the procedure, the registration and archiving of the file, the analysis of the enforcement title, the calculation of interests and penalties and other amounts resulting from the enforceable document;

• Phase 2 includes the issue and dispatch of the parties in the execution procedure of the conclusion on the initiation of the enforcement procedure, the parties' quote and the appearance before the enforcement agent, informing the defendant and the claimant about the likely size of the execution costs.

• Phase 3 includes the summons to the debtor in order to identify the assets that can be seized, searching for information in the registers and databases on assets that can be seized, other methods of searching for assets that can be seized. Phase 3 ends with informing the creditor of the outcome of these searches, and if the assets that can be seized have been identified or other precautionary measures can be implemented, a request to the claimant to advance Stage 4 expenditures.

• Phase 4 includes the organization of the seizure, the seizure and other enforcement procedures if these are required or necessary as a result of the nature of the enforcement;

• Phase 5 includes the organization of the sale, announcement of the sale and the sale under the Enforcement Law (or e.g. the Law on Pledges or the Law on Mortgages), transfer of the assets, liquidation and payment procedures, drafting of the minutes of the sale, the request for confirmation of the sale by the court, and transfer of the property to the buyer the registration of the property and ends with termination of the enforcement procedure.


98 COMONEX article 21 and CEPEJ 2009 Guidelines under 34

4. SECONDARY ACTIVITIES

Both Comonex and CEPEJ 2009 Guidelines98 enable the enforcement agent to carry out secondary activities (see paragraph 1.2.2.2). In case enforcement agents are allowed to pursue such secondary activities, compatible with their position, the compensation for such activities (e.g. amicable collection of debts) should also be regulated in the same manner as enforcement fees.


PART III

ANALYSES OF CURRENT FEE SYSTEMS



5. ANALYSES OF CURRENT FEE SYSTEMS

5.1. Introduction

In the course of 2017 a survey was done among the members of UIHJ. We have gathered opinions of the UIHJ members by means of a questionnaire in 2 languages (English and French). The survey was carries out over 6 months. Closing of the survey was 15 September 2017. From 88 member countries, in total 27 countries responded to the questionnaire. In addition, 5 questionnaires were incomplete and for this reason left outside statistics.

The countries that responded were:

• In Europe: Belgium, Bulgaria, Czech Republic, England and Wales, Estonia, FYROM, Georgia, Germany, Greece, Latvia, Luxemburg, Moldova, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovenia, Spain, Sweden;

• In Africa: Congo, Niger, Togo, Uganda;• In Asia: Kazakhstan.

In the questionnaire, we used the following terms to distinguish the various components:

• Enforcement costs: the overall costs in enforcement proceedings. The enforcement costs consist of following components:

• The fee for initiation of proceedings;• The enforcement expenses (= enforcement fees);• The expenses of third persons (e.g. storage, travel, public announcement of sales, moving

company, locksmith);• The performance bonus (= performance fees) paid by the claimant or defendant to the

enforcement agent in the form of fees in the event of satisfaction.

The purpose of the survey was to collect information on the various systems of enforcement costs as they are in use in the UIHJ member countries. The intention of the survey was to get a more detailed in the methods for calculation of fees as they are used in the various UIHJ member countries.

No amounts are mentioned. It is difficult to compare amounts within various enforcement systems. This would be complicated since there are structural differences between the various enforcement systems. The role of the enforcement agent is different per country. Not only in case we speak about a civil servant based system versus the self-employed enforcement agent; even within the various systems of self-employed enforcement agents there are substantial differences. For example: in some countries (Netherlands, Belgium) the enforcement agent is also involved in amicable debt recovery, access to information is regulated differently, in some countries enforcement agents are involved in the service of documents (by post or physical service). Further: the enforcement fee may depend (to a large or minor extend) on the


success in enforcement. Finally, the economic circumstances (and thus e.g. salaries and office expenses) differ. It would be comparing apples with oranges.

5.2. Survey: general questions

Question 1:

When enforcing a Title or Judgment, are Enforcement Agents entitled to receive any costs for enforcing such activities? Lorsqu’ils exécutent un titre ou un jugement, est-ce que les agents d’exécution sont autorisés à percevoir des frais pour l’exercice de cette activité d’exécution ?

Question 2:

What is the nature of the renummeration for the enforcement agent?Quelle est la nature des honoraires ou rémunérations perçus par l’agent d’exécution ?


Question 3:

Does an enforcement agent receive a fee for every single action undertaken for the enforcement activity? (ex. for the delivery of a document, for the statement of facts, for the search of the debtor’s assets)?Est-ce qu’un agent d’exécution reçoit des honoraires pour chaque action entreprise dans le cadre d’une procédure d’exécution ? (Ex pour la remise d’un document, pour un constat, pour la recherche des actifs du débiteur)

Question 4:

Is the creditor informed in advance on the likely costs of the fees involved : Est-ce que le créancier est informé à l’avance des frais susceptibles d’être facturés :


5.3. Survey: advanced payment of fees

Question 5:

Are the fees/expenses you charge to the creditor during the enforcement procedure reimburse from the debtor when the debtor pays in full?Est-ce que les honoraires/frais que vous facturez au créancier pendant la procédure sont remboursés par le débiteur quand il paie en totalité ?

5.4. Survey: exemption of payment of fees

Question 6:

Can a Debtor obtain an exemption from the enforcement fees/expenses payment obligation?Est-ce qu’un débiteur peut obtenir une exemption de son obligation de payer les frais/honoraires d’exécution ?


Question 7:

If the Debtor can obtain the exemption from the enforcement fees/expenses payment obligation, who is obliged to cover these fees/expenses?Si le débiteur peut obtenir l’exemption de son obligation de payer les frais/honoraires d’exécution, qui est tenu de couvrir ces frais / dépenses ?

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

Question 8:

In your country, does the State receive your services free of charge, with your fees being earned from the debtor? Dans votre pays, est-ce que vos services sont gratuits pour l’État et que vos honoraires sont payés par le débiteur ?


Question 9:

In the instance where the State is the creditor :Dans le cas dans lequel l’État est le créancier :

Question 10:

In case where the State is a debtor, will they be obligated to pay your fees? Dans l’hypothèse où l’État est le débiteur, sont-ils obligés de payer vos honoraires ?

5.6. Survey: unsuccessful enforcement

Question 11:

In your country will the debtor pay any of your fees?Dans votre pays, le débiteur paye-t-il certains de vos honoraires ?


Question 12:

If the debtor is insolvent (in case of an ineffective (unsuccessful enforcement), who covers the unpaid debtor enforcement fees:Si le débiteur est insolvable (en cas d’échec de l’exécution) qui paie les frais de recouvrement du débiteur:

5.7. Survey: negotiable fees

Question 13:

Is it possible to change the amount of the enforcement fees/expenses that the judicial officer is entitled to receive, according to the legal regulations?Selon la loi, est-il possible de changer le montant des frais d’exécution/honoraires que l’huissier est autorisé à percevoir ?


Question 14:

Are certain fees or enforcement expenses according to the law negotiable with the creditor?Est-ce que certains honoraires ou frais d’exécution peuvent, selon la loi, être négociés avec le créancier ?

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

Question 15:

Is there a legal obligation to give the debtor a grace period before commencing enforcement? Est-ce qu’il y a une obligation légale de donner au débiteur un délai de grâce avant de commencer la procédure d’exécution?


Question 16:

In case of payment before the expiry term for voluntary fulfillment: are you entitled to:En cas de paiement volontaire avant l’expiration du terme: à quoi avez-vous droit :

5.9. Survey: fee per phase in the enforcement process

Question 17:

With regard to the calculation of the fees, some countries have divided the enforcement process in different phases and the payment of fees is depending on the phase in the enforcement process. Does your country divide the enforcement process in various phases?Concernant le calcul des frais, certains pays ont divisé la procédure d’exécution en plusieurs phases et le paiement des honoraires dépend de la phase d’exécution. Est-ce que votre pays a divisé la procédure d’exécution en plusieurs phases ?


Question 18:

In case your country divides the enforcement process in various phases: is there a remuneration of administrative fees?Si votre pays a divisé la procédure d’exécution en plusieurs phases: existe-t-il une rémunération des frais administratifs?

Question 19:

In case your country divides the enforcement process in various phases: is there a remuneration of enforcement fees?Si votre pays a divisé la procédure d’exécution en plusieurs phases: existe-t-il une rémunération des frais d’exécution?


Question 20:

In case your country divides the enforcement process in various phases: is there a remuneration of performance fees?Si votre pays a divisé la procédure d’exécution en plusieurs phases: existe-t-il une rémunération des honoraires de résultat ?

5.10. Survey: fee for the initiation of proceedings

Question 21:

Is there a fee for initiating a file? Is it:Existe-t-il des frais d’ouverture de dossier ? :


5.11. Survey: enforcement expenses

Question 22:

The compensation for the enforcement expenses, is it:La compensation pour les dépenses d’exécution est

Question 23:

When does an enforcement agent receives the reimbursement of his/her expenses? :Dans quels cas un agent d’exécution reçoit-il le paiement de ses dépenses?


Question 24:

With regard to auctions: Is the debtor charged a fee for the use of the auction room within the framework of enforcement proceedings?Concernant les ventes aux enchères : Est-ce que le débiteur est facturé pour l’utilisation de la salle des ventes dans la grille tarifaire des procédures d’exécution?

5.12. Survey: expenses from third parties

Question 25:

An enforcement agent receives the reimbursement of the expenses of third parties:Un agent d’exécution reçoit le remboursement des dépenses effectuées par des tiers:


Question 26:

An enforcement agent informs the creditor prior to the enforcement activity on the likely expenses of third parties:Un agent d’exécution informe le créancier des dépenses à engager auprès de tiers avant de commencer la procédure d’exécution:

5.13. Survey: performance fee

Question 27:

As an enforcement agent will you receive a proportional fee (in either fixed or percentage terms) from the debtor if you recover part of the debt but not all of the debt? En tant qu’agent d’exécution recevez-vous des honoraires proportionnels (soit au forfait, soit en pourcentage) de la part du débiteur si vous recouvrez une partie de la dette, mais pas son intégralité ?


Question 28:

Is an enforcement agent entitled to receive so called „ extra remuneration”, depending on the result of the enforcement that has been carried out, which conditions are fixed in the contract signed between the creditor and the enforcement agent ?Est-ce qu’un agent d’exécution est autorisé à recevoir une rémunération supplémentaire, liée au résultat de l’exécution qui a été menée et dont les conditions seraient fixées dans un contrat entre le créancier et l’agent d’exécution ?

Question 29:

If a percentage fee is payable, on a pro-rata basis, part payment of the debt, is there an upper limit?Si un pourcentage des honoraires est payable au pro rata et qu’une partie de la dette est payée, existe-t-il une limite maximale ?

Question 30:

If there is such a percentage fee is it recovered from the debtor or the creditor?Lorsqu’il existe des honoraires proportionnels, sont-ils payés par le débiteur ou le créancier ?


5.14. Survey: fees for amicable debt recovery

Question 31:

In your country, can the enforcement agent exert the activity of debt collecting?Dans votre pays, est-ce que l’agent d’exécution peut exercer l’activité de recouvrement de créances ?

Question 32:

Is this activity:Est-ce que cette activité :

Question 33:

In the framework of the amicable debt collecting without an enforceable title, can the enforcement agent charge his fees on the debtor?Dans le processus du recouvrement amiable de créances sans titre exécutoire, est-ce que l’agent d’exécution peut facturer ses honoraires au débiteur ?


Question 34:

In the framework of the amicable debt collecting with an enforceable title, can the enforcement agent charge his fees on the debtor?Dans le processus du recouvrement amiable de créances avec titre exécutoire, est-ce que l’agent d’exécution peut facturer ses honoraires au débiteur ?

Question 35:

Are the fees for amicable debt recovery based on legislation?Est-ce que les frais de recouvrement amiable sont fixés par la loi ?

Question 36:

When carrying out amicable debt recovery, is the enforcement agent in competition with private debt collecting agencies?Concernant le recouvrement amiable, est-ce que l’agent d’exécution est en compétition avec des sociétés de recouvrement privées ?



PART IV

THE METHODOLOGY



6. METHODOLOGY FOR THE DEVELOPMENT OF AN ENFORCEMENT FEE SCHEDULE

6.1. Some experiences with current fee schedules

As we have seen in chapter 2, enforcement fees should be fixed, predictable, transparent and reasonable.99 What does this mean in practice?

There is the requirement of transparency. Some countries have regulated fees in different legislative documents (e.g. partly in the Enforcement Code, partially in the Law on Enforcement Agents, partially in a bylaw. Such fragmented regulation of fees will not contribute to its transparency which, as we have seen in chapter 2, is considered an international standard. Fees are supposed to be known in advance (CEPEJ Guideline 53). The Portuguese system is an excellent example how this can be organised in practice. Yet in a number of countries this is not a common practice. The fact that in order to have an overview of the fee structure several legal documents need to be consulted, also is not an invitation to the creditor (or debtor) to obtain knowledge on the fees to be charged.

In several countries in which I have been active as an enforcement expert, I noticed (considerable) differences in the application of the Fee Schedule. To a certain extend this could be explained by the structure of the Fee Schedule. The Fee Schedule consists of a large number of small fees (e.g. for making copies, a fee for each letter to be sent, for archiving, for initiation of the case). Practice is not unified and the Fee Schedule allows for different interpretations. This not only causes unclarity, but there is also the danger of misusing the regulation and distorting the calculation of fees.

Overcharging of a fee should be avoided. This means that a limitation to the number of letters or the number of times a repeated action can be charged is necessary. Even better is the introduction of a lump sum, one amount, irrespective of the number of letters sent or an action is repeated. The introduction of such simple fee (for example for the initiation of the case), could avoid misuse and will set limits to for example to the number of times one can take a simple action, or the number of letters one can send.

In many countries (especially those countries that recently reformed their enforcement system and introduced the self-employed enforcement agent), the financial management of the office is underestimated. When asked an enforcement agent, they will know the number and type of cases they work on, but not the amount of the claim, the level of expenses for their operation, the fees collected or the percentage of loss taken by for example the non-performance of the State. Financial management is important. Also for small offices!

99 Article 5 Comonex


Financial calculations (including fees!) should be possible at any moment in the enforcement process. Here I recommend the use of IT. Further the supervisory authorities over the profession (in most countries the Ministry of Justice and the Chamber), for purposes of clarity and efficiency, should, obligatory, introduce the debt calculation document as an inseparable element of the case folder. This way, any party in the enforcement process is able to see and determine at each moment the amount of the claim, the incurred costs, the fees charged and the potential difference remaining to be charged.

Another point of discussion are the advanced fees. Such obligation to pay fees in advance is very debatable. Major creditors claim that advancing fees is a burden which only slows down the enforcement process and makes it less efficient. The advanced payment should not imply full payment of all fees. In such case the enforcement agent will lose interest in the case. For payment of the advanced fee, some countries have introduced an advanced payment per phase in the enforcement process (see also paragraph 3.9). Other countries, such as the Netherlands do not require an advance fee, with the exception of the so-called "out of pocket expenses", the expenses the enforcement agent has to pay for external services. An obligation to charge advanced fees is recommended depending on the economic position of the enforcement agent. Pre-financing of the costs of enforcement cases by the enforcement agent can be a substantial burden for the enforcement agent and might lead (I have seen it happening several times) to financial loses and even the bankruptcy of a self-employed enforcement agent.

The performance fees are another sensitive and debatable topic. Indeed, especially in countries with a self-employed enforcement system, the introduction of the performance fee can be an incentive to performance. In a number of countries such performance fee is already the most significant share of income for the enforcement agent. However, reducing the statutory fees and making fees more dependent on recovery also has a certain risk. The advantage is that reducing the enforcement costs brings down the break-even point (where recovery costs exceed the claim value). This might be a benefit for small and medium sized business (as was the case in e.g. Portugal).100 However there is also another risk: the risk that the consequences a bad functioning economy are shifted on the enforcement agent. In this respect, I consider it important that the enforcement fee is set on such a level that it covers the expenses of the enforcement process. Introduction of the negotiable performance fee should also not result in financial risks for the enforcement agent. The introduction of a floor and ceiling in the Tariff is an option to protect financial risks for the enforcement agent.

In this respect, I recommend a thorough analysis of the work flow and cost structures of the office of the enforcement agent. Such cost price analysis was also carried out in the Netherlands and Bulgaria. Standard times and procedures and their respective costs helped to

100 Reforming the legal and Institutional framework for the enforcement of civil and commercial claims in Portugal;

Sebastiaan Pompe and Wolfgang Bergthaler, IMF Working Paper WP/15/279 International Monetary Fund,

Washington, DC (2015), page 32-34


justify the level of fees and costs per step in the enforcement process. Costs heavily depend on the office organization and efficiencies in the individual case. As a first step towards such cost price analysis, a survey can be made to calculate the typical expenses 9operational costs) for an enforcement office (see paragraph 8.2).

The monitoring of the application of the fees is important. This will also lead to a unified interpretation and a correct use of fees among enforcement agents.

Lowering the cost of enforcement is best achieved through looking for efficiencies, rather than simply cutting enforcement fees. On the one hand this means encouraging the enforcement agents to lower their costs through efficiency-enhancing investments (IT!). On the other hand, this will also demand cooperation with government authorities (for example by reducing the costs by technological enhancements: electronic exchange of data, electronic access to registers, introduction of a debtors register, introduction of e-auction, electronic attachment on bank accounts). Such technological enhancements, will reduce the time costs, expenses, office storage costs, etc., otherwise required for enforcement.

6.2. Example for a cost price calculation of enforcement fees

6.2.1. Introduction

This example is based on the cost price analysis of enforcement fees in the Netherlands. The adoption of a new Law on Private Enforcement Agents, was the reason for an overall revision of the Dutch Fee Schedule. A special commission with representatives from both the Ministry of Justice and the Royal Dutch Chamber of Private Enforcement Agents (KBvG) was requested to contribute to the review of the fee system. In its review, the commission needed to take following objectives into consideration:

• There is a division between the official and non-official tasks of the enforcement agent. The fees for the official tasks should be defined per enforcement action;

• A complete cost price calculation of the costs connected with the enforcement actions under the official tasks of an enforcement agent.

To achieve the first objective the Dutch Chamber of enforcement agents requested an external accountancy firm to perform an analysis of the workflow processes connected with the various enforcement actions. This analysis resulted in a description of the work processes per enforcement action and, on a broader scale, different categories of enforcement actions.

Based on the outcomes of the first objective, for the second objective (the cost price analysis) another certified accountant was requested to calculate, on the basis of a representative set of efficient functioning enforcement agents’ offices, the full cost of the (different) official actions. The cost price calculation was supposed to include a surcharge that can be considered


reasonable as a profit and a compensation for the business) risk. The complete cost price calculation should be transparent. The certified accountant further was supposed to draft a proposal for indexation, i.e. an annual adjustment of the fees.

The next paragraphs describe the process for cost price calculation as it was used to determine the fees for enforcement actions in the Netherlands. It is a good example how, in a justified manner, fees can be determined.

6.2.2. Methodology

For the cost price analysis, the following steps were taken:

1. Selection of the offices Offices should be representative for the overall profession. This means that factors such as office size (small, medium sized and large offices need to represented), domicile of the office (rural area or major cities) need to be taken into consideration;

2. Preparation of the cost price calculation at the individual offices3. Calculation of the integrated cost price of actions by:

• Measuring all measurable activities relating to a certain action;• Determination of a reasonable salary for the different functions/ people involved in

those activities (a staff member will have a lower salary than e.g. the enforcement agent);• Attribution of a proportional overheads component to the enforcement action;• Determination of a reasonable margin for profit and entrepreneur risk;

4. Determination of a method of indexation for the annual adaption of the fees in relation with the general cost development in the Netherlands.

6.2.3. The time registration

Defining the process descriptions and defining the enforcement actions

As a first step the process descriptions and the enforcement actions need to be defined. With the process descriptions, we mean the various activities that need to be carried out within a certain enforcement action. The activities need to be defined in such a way that they can be measured as cost-causing elements of the official enforcement action.

Those process descriptions and defined enforcement actions are the basis for measuring the time research.


Table:Columns: Official actions

Lines: Processes

Or in more detail:

PROCESS DESCRIPTION ENFORCEMENT ACTIONSEnforcement Actione.g. Seizure movables

Enforcement Actione.g. Attachment on the bank account

Et cetera

PROCESS 1: HANDLE INCOMING FILES1 Acquiring the file1 Register the file

PROCESS 2: PROCESSING THE FILEPROVISION OF SERVICES

2 Services during proceedings2 Debt collection2 Legal advises2 Service of documents

and drawing up of official documents

2 Control of the debtors’ records (assets)PROCESSES REGARDING AMICABLE DEBT RECOVERY

2 Summoning2 Correspondence2 Monitoring2 Supplying information2 Advice regarding legal steps2 Administer payments in the

amicable phasePROCESSES REGARDING THE LEGAL PHASE

2 Formulation of the writ of summons

2 Service of the writ of summons

2 Administering the documents in proceedings

2 Formulation of the documents in proceedings

2 Services during proceedings


2 Study the judgment and legal advice

2 Monitoring the legal phase2 Administer payments during

the legal phase2 Supplying information2 Correspondence

PROCESSES IN THE ENFORCEMENT PHASE2 Formulation of the

documents2 Service of the documents2 Administering the

enforcement documents2 Correspondence in

enforcement2 Preparation of the

enforcement2 Enforcement2 Monitoring in the

enforcement phase2 Administer payment in the

enforcement phase2 Supplying information2 Enforcement proceedings

PROCESS 3: CLOSING THE FILE3 Control of the file3 Correspondence on the file3 Archiving3 Return of the documents to

the principal3 Payment of the money

received to the principal

PROCESS 4: NON FILE ORIENTATED TASKS4 Services in court4 Services during auctions

PROCESS 5: CHAMBER RELATED ISSUES5 Financial reporting5 Payment of membership

fees5 Correspondence in

professional matters5 Carrying out instructions

and regulations5 Capacity at disposal5 Information supply


The time registration

To measure the time for certain processes, various methods can be used. Most common:1. Determination of a standard time on the basis of experience (indications);2. Defining the standard time for certain processes, based on (manual) time measurement In this case 2 methods can be used:

• 2A Time registration by the employees themselves; • 2B Time registration by observation through external evaluators

It is obvious that time registration through external evaluators will have a higher degree of reliability.

How was this method used in the cost price analysis in the Netherlands?

In the Dutch analysis, the external evaluators worked in two tranches of three weeks visiting each 5 different offices.

The time registration was based on following principles:• The office management was actively involved. For example, the management was

responsible for a clear communication with their staff on the purposes of the time registration and the planning;

• The office management put their office and the employees at the disposal of the external evaluators;

• The time registration by employees (method 2A) started synchronous during the three weeks of the measuring period;

• During those three weeks, an external evaluator parallel also administered time registration;• The evaluator is also measuring the steps in the processes and in this respect, can observe

different employees per day; • The coordinators of the time measurement study discussed the interim results of the time

registration study with the office management.

The results of the observational study (method 2B) were compared with the results of the time writing research (method 2A). Any discrepancies between the results were discussed with the management of the selected offices.


The observation method

Per observation the following information was registered: • The start and end of the observation• The number of files / cases that were dealt with within this period;• The action; • The duration of any interruptions (e.g. an incoming call) • Whether or not the activity was completed; • Indirect activities (e.g. internal consultation, consultation with a client) • Other activities (e.g. illness, leave etc.) • Any comments (for example, a specification of the travel time to certain operations).

Time registration by the employees themselves

During three weeks in each office at least five employees were asked to participate with the time registration project.

These employees have registered their activities using the same method as the observers. The results of the time registration were processed in a spreadsheet program. Any incomplete registrations were not included.

Based on the processed data per office the average working hours per staff member and per type of action could be calculated.

Example of an observation form to be used for time registration by the employees:

Date:Name employee:Function:

Office:Observer:

Page

Time registrationProduct Code

Process Step

Process Step description

Start End Total Time

Activity Finished

Par. Employee

Remarks

.. .... ..


Time registration per day by employeeDay/date:Name employee:Par. Employee:

Function Employee:Office:

PROCESS DESCRIPTION ENFORCEMENT ACTIONSEnforcement Actione.g. Seizure movablesREGISTRATION IN MINUTES

Enforcement Actione.g. Attachment on the bank accountREGISTRATION IN MINUTES

START END REMARKS START END REMARKSPROCESS 1: HANDLE INCOMING FILES

1 Acquiring the file1 Register the file

PROCESS 2: PROCESSING THE FILEPROVISION OF SERVICES


2 Debt collection2 Legal advises2 Service of documents

and drawing up of official documents

2 Control of the debtors’ records (assets)PROCESSES REGARDING AMICABLE DEBT RECOVERY

2 Summoning2 Correspondence2 Monitoring2 Supplying information2 Advice regarding legal

steps2 Administer payments in

the amicable phasePROCESSES REGARDING THE LEGAL PHASE

2 Formulation of the writ of summons

2 Service of the writ of summons

2 Administering the documents in proceedings


2 Formulation of the documents in proceedings


2 Study the judgment and legal advice

2 Monitoring the legal phase2 Administer payments

during the legal phase2 Supplying information2 Correspondence

PROCESSES IN THE ENFORCEMENT PHASE2 Formulation of the

documents2 Service of the documents2 Administering the

enforcement documents2 Correspondence in

enforcement2 Preparation of the

enforcement2 Enforcement2 Monitoring in the

enforcement phase2 Administer payment in the

enforcement phase2 Supplying information2 Enforcement proceedings

PROCESS 3: CLOSING THE FILE3 Control of the file3 Correspondence on the

file3 Archiving3 Return of the documents

to the principal3 Payment of the money

received to the principalPROCESS 4: NON FILE ORIENTATED TASKS

4 Services in court4 Services during auctions


PROCESS 5: CHAMBER RELATED ISSUES5 Financial reporting5 Payment of membership

fees5 Correspondence in

professional matters5 Carrying out instructions

and regulations5 Capacity at disposal5 Information supply

6.2.4. The financial study

To determine the fee for a certain enforcement action, it is necessary to know the total costs of all operations of a certain action. The data of the time registration in this respect are also used for the financial analysis.

1. Costs per man-hour work

In the financial audit, the costs of the hour's work for the various types of employees are calculated:

• Cost of the process step = Cost of the hour's work (hourly rate) * duration of a process step

The calculation is based on the visits to the offices. Salaries of staff in the office are different. For this reason a distinction needs to be made to the various functions of the staff in the office. The Dutch survey considered following functions of staff and enforcement agents within the office:

1. As Employees: • Administrative staff; • Assistant enforcement agents;

2. As Employers:• Enforcement agents


The cost of an hour's work of the office staff are the basis for the time per process step / enforcement action in the measurement study:

Ad 1: employees

The direct costs of a productive working hour for employees are the result of the gross annual salary divided by the number of productive hours (both calculated based on a full week or full employment).

In this respect, the following costs need to be calculated or approximated: a. The gross annual salary; b. The number of productive hours.

Ad a Gross annual salary In the Dutch survey, the gross annual salary was based on the information as received from the visited offices (the annual financial reports). The product pricing is calculated according to the values found for hourly rates (and overhead) per process step per office calculated. Per office it is calculated to which costs per activity those salary costs might lead.

Ad b Productive hours

To calculate the hourly rate, the gross annual salary needs to be divided by the number of productive hours per type of staff.

Alternatively, as it was done in the Dutch survey (since there were no reliable historical productivity figures available within the offices), the number of productive hours was calculated based on available general data for administrative and civil servant staff. For the offices of the enforcement agents this led to the following calculation of the number of productive hours per full time staff member:

1 Number of workable days per year : 260 days2 Number of public holidays: -/- 63 full-time employment 254

4 Scope of employment hours: 2032 5 Holiday hours: -/- 2406 hours ill: -/-102 7 Number of present day: 1690 8 Number of unproductive hours: -/- 1699 Number of productive hours 1521 hours


Remarks: 1: The starting point is 52 weeks * 5 days = 260 working days; 2: The number of official holidays in 2000 was 6 days; 3: This results in an employment of 260 - / - 6 = 254 days; 4: Based on a 40-hour week, this amounts to 254 * 8 = 2032 hours; 5: The starting point is a total of 30 recordable days used;6: The starting point is an illness of 5% of service used; 7: The number of service hours = - / - (health + Friday recordable hours);8: A benchmark is 10% non-productivity on the total number of available hours used (training,

working, personnel matters, personal care, etc.); 9: The present number of productive hours = hours - / - unproductive hours.

Based on this information the (average) hourly rates per job can be calculated: • Hourly rate per staff type = gross annual salary / productive hours.

Ad 2: Employers (enforcement agents)

The costs of the productive working hours for the enforcement agent/ employer should be based on the annual earnings of the enforcement agent.

The following costs need to be calculated or approximated:

1. The annual fair ; 2. The number of productive hours.

Ad 1 The annual fair; Reasonable income

The income of the enforcement agent is derived from the profits of the office. It is I portant to determine in how far the actual profits are applicable to the domain of official tasks. Not in each country this will be 100%. To achieve an appropriate calculation analogy, it is necessary to determine the reference features. The official tasks or the activities connected with the official tasks of the enforcement agent have the following characteristics: • The activity has an official status;• Regarding training: the trainings can be determined as university level;• The agent has full (final) responsibility for the outcome of the work; • The agent leads the office that creates the results; • To reach the result the agent takes deliberate risks and has external contacts to cover.


Identical characteristics also apply for (certain) civil servants. This means that a gross annual salary can be calculated/ estimated.

Ad 2 Productive hours

1 Number of workable days per year : 260 days2 Number of public holidays: -/- 63 full-time employment 254

4 Scope of employment hours: 20325 Holiday hours: -/- 2406 hours ill: -/-1027 Number of present day: 1690 8 Number of unproductive hours: -/- 3389 Number of productive hours 1352 hours

The hourly rate of the enforcement agents may analogous to the employees be calculated using the following formula:

• Hourly rate enforcement agents = reasonable annual income/number of productive hours

2. Overhead costs

Another cost component in the hourly rate of the directly productive employees is the overhead component.

The overhead costs consist of costs that an office has to perform their official tasks but that are not directly attributable to an action or a category of actions (office operations, debt collection practice, or other products). These include housing, automation costs, costs of operating vehicles, and labor costs of non-directly productive employees.

In the Dutch survey these costs were based on the annual financial reports of the offices and included in the productive hour rate:• overhead costs per office divided by the total number of productive hours

3. Travelling

In the Netherlands, under the previous system the travelling fee was based on the distance from the office to the enforcement place. The commission considered certain disadvantages of such a a cost structure:


• The system leads to legal inequality: the travelling fee depends on the place where the debtor is living. There is not an equal fee for each enforcement action;

• In practice, the system leads to arbitrariness. The fee depends on the chosen route and the number of enforcement actions (operations) within this route. The effect of the tariff system could in practice lead at different times to different rates for the same debtor.

• The system leads to relatively high administrative costs. • The system lacks transparency in relation to the debtor. • The system does not contribute to a uniform pricing.

The Dutch Commission suggested a new pricing based on the objective to establish a system with uniform rates and a reduction of the number of case-related surcharges. As the travel rate determining factor in the cost price calculation, the Commission decided to use the average travel time from the offices.

4. Reasonable profit

In order to determine a reasonable compensation for the costs of entrepreneurship (profit and business risk) two factors need to be considered:1. The cost which is inextricably linked to entrepreneurship. 2. The (potential) costs associated with the risk that the enforcement agent runs as an

entrepreneur.

Business costs for the enforcement agents consist of overhead costs (housing and office costs, membership contribution to the Chamber, allowance for social insurance, etc.). These costs (see point 1-3) are already included in the calculation of the attributable overhead and the setting of a reasonable income of the enforcement agent. They are as such already included in the costs of productive hours. They are not part of a reasonable profit.

However, the business costs also consist of costs associated with the risk that the enforcement agent runs as an entrepreneur. Those costs should be part of a reasonable profit:

• The risk of non-payment of amounts owed by the debtor of the enforcement agent;• The risk of making human and material investment in the professional practice;• The costs involved in maintaining a buffer in the staffing office for timely actions to be

carried out.

In the Netherlands, the commission suggests a reasonable profit of 7.69%, based on the following argumentation: the official tasks of the enforcement agents can finally be considered “products from the government on the private market”. They are “sold” privately and there is no alternative available since the enforcement agent has a monopoly. The Ministry of Finance uses a profit after tax of 5%. Assuming an income tax of 35% in the fee, a profit of (5% / (100% - 35%)) = 7.69% is reasonable.



PART V

SOME EXAMPLES



7. SOME EXAMPLES OF FEE SYSTEMS

7.1. Belgium

In Belgium, the private enforcement agent has the monopoly on enforcement, including tax cases on a national, regional or local level. All services carried out by the private enforcement agents need to be paid. For services carried out on behalf of tax authorities or other State authorities, the same system of fees applies as for any other (private) creditor. There is, in line with the CEPEJ Guidelines, no discrimination on fees.

With regard to enforcement cases, all fees need to be paid by the debtor. If enforcement can not be effected successfully, the fees are to be paid by the creditor (also in case the State is the creditor). Any deviation from the fee system, such as the principle “No cure – no pay” is strictly forbidden. Neither can fees be negotiated with the creditors. The tariff is set up by the Law and must be respected in any case.

There is only exception on this rule; in case of amicable or extra-judicial debt collection no costs can be charged to the debtor.

Fees in enforcement proceedings

Regarding enforcement, all fees are regulated and mandatory for each enforcement agent. The fees are indexed every year per 1 January. The enforcement costs consist of various components:

1. A fee connected with the value of the claim2. A fee for transportation3. An administrative fee4. A collection fee5. The enforcement expenses Ad 1 The fee connected with the value of the claim

This fee will be paid every time the enforcement agent visits the debtor’s premises to carry out enforcement. So, for example, in case the debtor is visited 5 times in one case the fee is multiplied with 5.


Value of the claim (in Euros) Fee (In Euros)0,1 – 124,99 21,84125 – 369,99 36,29370 – 619,99 50,80620 – 1859,99 58,081860 – 3719,99 72,583720 – 12399,99 87,0412400 – 37199,99 101,6037200 – … 130,61

Ad 2 A fee for transportation

Every time, you must go to debtor’s home, a transportation fee can be added to the fee as mentioned under (1). The amount for transport depends on the size of the territory of your district.

Ad 3 Some administrative fees

When the case is opened, a fee of 14,61 Euro is charged.For each copy that must be certified as exact, there’s a fee of 3,43 Euro per page that is charge. For control of the address of the debtor in the relevant population register, a fee of 7,33 Euro can be charged.

Ad 4 A collection fee in case of payment in instalments

In case the debtor pays the claim in instalments, a fee can be charged per periodic payment:

Value of the instalment (in Euros) Fee (In Euros)0,1 – 24,99 2,4625 – 124,99 4,12125 – 249,99 6,80250 – 494,99 11,94495 – 744,99 25,53745 – … 33,83

A global collection fee will be charged at the end of the procedure> This fee is 1 % of the recovered amount with a minimum of 11,94 Euros and a maximum fee of 118,40 Euros

Ad 5 Reimbursement of expenses

All expenses (“out of pocket” expenses) will be reimbursed from the debtor, or, in case of unsuccessful enforcement, from the creditor. No deviation from this obligation is possible.


Fees for additional services In case of amicable or extra-judicial debt collection no costs can be charged to the debtor. In such case the collection fee needs to be charged to the creditor. Since the fee for amicable debt recovery is not regulated, such fee needs to be negotiated with the creditor. In general a fee 7,5 and 15 % is common (in case the amicable debt collection was successful) and no fee (or just a small administrative fee) is charged in case the amicable debt recovery was unsuccessful.

Also regarding the Statement of Facts, the fee is freely negotiable. A normal fee for the statement of facts is Euros 250 – for the first hour and additional Euros 150 –, per additional hour.

6.2. Bulgaria

According to the Bulgarian Law on Private Enforcement Agents (here after : BLPEA)101, enforcement fees can be collected for the performance of enforcement activities and the performance of other activities (article 78 BLPEA). The fee is specified in the Tariff102 of the Council of Ministers upon proposal of the Minister of Justice after coordination with the Bulgarian Chamber of private enforcement agents. The private enforcement agents may negotiate additional compensation. Such higher amounts are not regarded as enforcement expenses and will not be charged on the debtor.

For each action the private enforcement agent shall be paid an advance fee in (article 80 BLPEA). The advance enforcement fees for collecting of support obligations, and those for employment salary, are paid from the budget of the respective District Court (article 81 BLPEA). Once received from the debtor, the subsidized fee is restored to the court’s budget.

The enforcement costs have different components:

1. The ordinary enforcement charges2. The proportional enforcement fees3. The supplementary foreclosure fees

101 Bulgarian Law on Private Enforcement Agents (here after: BLPEA), May 2005102 Tariff of fees and costs to the Law on Private Enforcement Agents, adopted via Decree of the Council of Ministers

№ 92 of 19.04.2006, promulgated in State Gazette, issue 35 of 28 April 2006, as amended and supplemented.


Ad 1 The ordinary enforcement charges

The ordinary enforcement charges which are collected only for actions that are explicitly specified in the Tariff and which do not depend on the material interest (article 82 BLPEA).

Action Fee (In BGN; 1 BGN is on average 0,50 Euro)Initiation of enforcement proceedings 20study of a debtor’s property standing, obtaining of data, documents and other papers, and to determine the manner of performance by the private enforcement agent (PEA)

50

To make a reference check of the debtor and its property

5

To serve by mail a summons, a copy of complaint, a notification and any other papers

10

For the preparation and service by the enforcement agent or his/her employee of a call, a summons, a copy of complaint, a notification or any other papers, including the service of a statement by the claimant pursuant to Article 517, paragraph 2 and paragraph 3 of the Civil Procedure Code (CPC)

20

To issue a certificate 5To issue a copy of a document drawn up by an enforcement agent

2 (and in case more than one page BGN 1

To make a copy of an enforcement case 10To prepare a copy of an enforcement case and submit it to the competent court

20

For imposing a distraint without making an inventory, including on the part of the company pursuant to Article 517, paragraph 1 of the Civil Procedure Code (CPC)

15

To impose an electronic distraint on account receivables (including bank accounts)

15

Regarding a request by the enforcement judge to enter or release a distraint

15

Regarding accession of a creditor 50Regarding the billing of debt by a private enforcement agent

30

Regarding the preparation and presentation of debt breakdown

30

To authorize the creditor pursuant to Article 517, paragraph 2 and paragraph 3 of the Civil Procedure Code to bring an action for dissolution of a company

20

Regarding sales of book-entry securities 100to perform a certain action as set forth in Chapter 48 (forty-eight) of the Civil Procedure Code (CPC)

50

Enforcing access and handover of a child 50


To grant and assign a claim for collection or instead of payment

20

To implement security measures the fees specified for the relevant actions in this section shall apply.

To produce documents and information regarding a public sale or a sale under the Special Pledges Act (SPA)

20

Ad 2 The proportional enforcement fees

The proportional enforcement fees which are collected as a percentage in accordance with the material interest and shall have a set minimal and maximal amount (article 83 BLPEA).

Action Fee (In % or BGN)To perform an inventory of movable and immovable property, including of securities available

(Transfer of enforcement proceedings from one set of assets onto another set of assets, regardless of whether movable or immovable, a new fee shall not be charged if no inventory was made.)

1.5 % of the smaller amount of the cost of inventory property / securities and the cash receivable, but not less than BGN 50

In the event of an inventory of assets Pursuant to Article 557 of the Civil Procedure Code (CPC)

An inventory of assets within the period for voluntary payment

no fee shall be collected.

Foreclosure and transfer of movable property, including pledged property under the Special Pledges Act

2 % on the value of assets, but not less than BGN 50.Remark: After completed public sale or sale, the fee shall be paid by the buyer

To enter into possession of a property 1 % of the purchase cost, but not less than BGN 200.Remark: The fee for taking possession of an asset after public sale shall be paid by the buyer

To enter into possession of a family home 50 BGNTo prepare a decree on assignment of immovable property

1.5 % of the purchase cost, but not less than BGN 50 and not more than BGN 3000Remark. The fee shall be paid by the buyer.

To perform a public sale of partitionable property or pledged property under the Special Pledges Act (SPA) or the Civil Procedure Code (CPC)

2 % of the sale cost, but not less than BGN 50.


To take care of a property after inventory or which is pledged as security

a) wherever the property does not generate any income - from BGN 50 to BGN 100 per calendar month;b) wherever in addition to taking care of the property it is also subject to management - 20 percent of the gross monthly income from the property for the duration of taking care, but not less than BGN 50.

To enforce security measures other than in the cases under Section I

The fees specified for the relevant actions in this section shall apply

* Wherever the cost of an asset is not mentioned in the writ of execution, the fee shall be collected on the basis of its tax value under the Local Taxes and Fees Act.** The maximum amount of pro-rata fees shall not exceed:1. one-tenth of the claim - in the cases under paragraph 20 and paragraph 26;2. one-tenth of the cost of property / possessions - in the cases under paragraphs 21 to 24

inclusive.

The performance fee:Amount of claim for payment up to... BGN

Rate of performance fee in BGN

100 10100 – 1.000 BGN 10 + 10% on the excess amount over 100 BGN1.000 – 10.000 BGN 100 + 8% on the excess amount over BGN 1.00010.000 – 50.000 BGN 820 + 6% on the excess amount over BGN 1000050.000 – 100.000 BGN 3.220 + 4% on the excess amount over BGN 50.000100.000 – BGN 5.220 + 2% on the excess amount over BGN 100.000

Remarks:

1. In the event of partial debt recovery, the fee is chargeable on the entire debt, but only the part corresponding to the amount recovered is collected. The tax collected in partial payments must be equal to the fee calculated on the total amount recovered.

2. In executing receivables for periodic payments, including support allowance, the fee is collected as one-off payment chargeable on the sum of the amounts paid every 6 (six) months, except in the case of repayment of past dues.

3. The fee on amounts received in the event of accession of creditors is collected only by the enforcement agent who has collected the amount from the acceded creditors.

4. The amount of monetary claim does not include upfront fees.

5. All pro-rata fees charged to the debtor or the creditor in excess of one-tenth of the claim are deductible from the fee for enforcement of a monetary claim.


On 27 October 2017, amendments were adopted to the Civil Procedure Code.103 These (rather complicated) amendments meant that the amounts of the proportional fee and the performance fee were adjusted and supplemented. In short following changes were made:

1. The percentage of the proportional fee in the enforcement cases decreases with increasing interest, the fee not exceeding the maximum amount specified in the tariff under par. 3.

2. The proportional inventory fee shall be charged on the lower amount of the price of the item described and of the cash receivable. A proportional inventory fee shall be deducted from the charge for execution of a cash claim, which may not exceed by more than one second the amount of the inventory fee determined at the moment the inventory is executed.

3. The sum of all proportional fees at the expense of the debtor or the creditor in one enforcement procedure may not exceed one tenth of the obligation except where their minimum amount specified in the tariff exceeds that amount. For an obligation in excess of forty-five minimum wages, this sum may not exceed one fifteenth of the obligation but not less than three minimum wages.104

4. The aggregate of all performance fees borne by the debtor in one enforcement proceeding may not exceed the following:

• 1. up to 10 per cent of the minimum wage - 30 per cent of the minimum wage;• 2. from 10 to 20 percent of the minimum wage - 40 percent of the minimum wage;• 3. from 20 to 50 per cent of the minimum wage - 50 per cent of the minimum wage;• 4. from 50 per cent to one minimum wage - 70 per cent of the minimum wage;• 5. one to two minimum wages - 80 per cent of the minimum wage;• 6. from two to three minimum wages - 90 per cent of the minimum wage.

5. The total sum of the enforcement fees shall not include the fees in connection with the administration of complaints against actions of the bailiff, as well as notification and accession of accredited applicants.

6. In cases when the total amount of the fees under 1 and the creditor requests new enforcement actions, the fees for them are at his expense and are not due by the debtor.

103 Law amending and supplementing the Civil Procedure Code (OG, SG No. 59/2007) last amended SG86 of 27

October 2017104 Regarding point 1-3: until 27 October 2017 this provision had following text: The proportion of the proportional

fee in the enforcement cases shall decrease with increasing interest, the fee not exceeding the maximum amount

specified in the tariff under par. 3. Proportional inventory fee shall be charged on the lower amount of the price of

the item described and of the cash receivable. The sum of all proportional fees at the expense of the debtor or the

creditor in one enforcement procedure may not exceed one tenth of the obligation except where their minimum

amount specified in the tariff exceeds that amount.


Ad 3 The supplementary foreclosure fees

The supplementary foreclosure fees which are owed for individual enforcement actions, in non-working hours or during off days or bank holidays (article 84 BLPEA).

According to the Tariff, to perform certain actions beyond the regular working hours, on weekends or holidays, the private enforcement agent may charge a surcharge of 50 % of the fee for the relevant action.

Additional expenses

Additional expenses are borne by the debtor wherever there is a document issued pursuant to the Accounting Act. As additional expenses can be considered expenses

• To obtain information and documents related to the debtor and/or the debtor’s property standing;

• Bank fees and commissions;• To ensure access by opening and closing of premises;• Transport, handling and security of seized property;• Experts;• Guards;• Translators and interpreters;• Removal, destruction and sealing of property and possessions;• Transport of the private enforcement agent (PEA) outside the whereabouts of his/her law

office - BGN 0.50 per kilometer but no more than BGN 30 per action, whether it consists of one or more visits;

• Costs of postage and/or courier services.

6.3. Estonia

The fee system in Estonia is regulated in the Bailiffs Act (here after : EBA).105 According to article 28 EBA, a fee can be charged for the professional actions of the enforcement agent. All fees are subject to VAT (article 32 paragraph 3 EBA). No fees, other than those mentioned in EBA can be charged. The enforcement agent is not allowed to enter into agreements to alter the rates of fees or the procedure for the charging of fees as provided in EBA. The fee is collected based on a decision of the enforcement agent 9article 31 EBA). The decision can be appealed in accordance with the provisions of the Estonian Code of Enforcement Procedure (article 52 EBA).

105 Bailiffs Act, passed 9 December 2009; RT I 2009,68,463 (entry into force: 1 January 2010) Here after: EBA. See:

https://www.riigiteataja.ee/en/eli/ee/Riigikogu/act/526062017005/consolide


Advanced payment is allowed in cases and to the extent provided for in law. An advance payment cannot be requested from a person who files a support payment claim subject to enforcement. According to article 33 EBA, in case a claimant fails to make an advance payment, the enforcement agent is permitted not to commence enforcement proceedings and to return the enforcement instrument to the claimant. If the enforcement agent commences enforcement proceedings without requiring an advance payment or regardless of the claimant's failure to make an advance payment, the enforcement agent has no right to demand the advance payment later. If the fees have been collected from the debtor in full, the enforcement agent returns the advance payment to the claimant within one month from the collection of the fee. If enforcement proceedings are terminated without satisfying the claim, the advance payment is not returned to the claimant.

There are different types of fees (article 29 paragraph 1 EBA):

1. the fee for commencement of proceedings,2. the basic fee of proceedings 3. the additional fee for enforcement actions.

Unless otherwise provided by law, the fee for commencement of proceedings and the basic fee of proceedings is paid by the person who requests the performance of a professional act (article 30 paragraph 1 and 2 EBA). Such fee is to be paid by the debtor, unless otherwise provided by law.

Ad 1 Fee for commencement of enforcement proceedings

This fee becomes collectable upon commencement of proceedings (article 32 paragraph 1 EBA).

In case the debtor complies with the enforceable document before expiry of the term prescribed for voluntary compliance the debtor is only required to pay the fee for commencement of enforcement proceedings.

The enforcement notice specifies the fee for commencement of enforcement proceedings and the total amount of basic fee together with VAT and the amount that needs to be paid in case of voluntary compliance.

The fee for commencement of enforcement proceedings depends on the amount of claim and the expenses incurred upon delivery of the enforcement notice to the debtor (article 34 EBA).

If the enforcement notice can be delivered to the debtor with reasonable effort via the address or telecommunications data entered in the population register or via the seat or contact data entered in the commercial register or the non-profit associations and foundations register or via the debtor’s address specified in the enforcement instrument, the fee for


commencement of enforcement proceedings, per 1 January 2017 is:

1) 15 euros in case of non-proprietary claim;2) 15 euros in case of a claim up to 51 euros;3) 30 euros in case of a claim from 51 to 5000 euros;4) 60 euros in case of a claim over 5000 euros.

If the enforcement notice cannot be delivered to the debtor with reasonable effort the fee for commencement of enforcement proceedings is, per 1 January 2017:

1) 30 euros in case of a non-proprietary claim;2) 30 euros in case of a claim up to 51 euros;3) 60 euros in case of a claim from 51 to 5000 euros;4) 120 euros in case of a claim over 5000 euros.

Ad 2 The basic fee

In case of fulfilment of financial claims, this fee becomes collectable upon delivery of the enforcement notice on the debtor. In case of fulfilment of non-financial claims and the performance of other enforcement actions, the basic fee becomes collectable upon termination of enforcement actions. (article 32 paragraph 2 EBA).

If a monetary claim is paid only partially, the enforcement agent may collect, as his or her basic fee, only an amount proportional to the collected sum of the claim (article 32 paragraph 5 EBA).


Depending on the amount of the claim the following rules apply (article 35-36 EBA):As a basic fee for claims up to Euros 3.200, – the following table applies:Amount of claim for payment up

to... eurosRate of bailiff ’s basic fee

in eurosAdvance payment of bailiff ’s fee

in euros 35 15,50

65 25,50130 38 6200 55,50 7,50260 69 9,50320 83 10400 95,50 10,50500 109,50 12550 122,50 12,50600 132 13700 140,50 14

1000 201 191300 256,50 23,501600 305 25,501900 347 31,502600 442 44,503200 519 57,50

As a basic fee for amounts above Euros 3.200, –:Amount of claim for payment up

to... euros% of the amount of the claim But not more than

(in euros)3201 – 3900 14,75 5273901 – 4500 13,75 5484501 – 5100 12,25 5755101 – 5800 11,25 6035801 – 6400 10,5 607

6401 – 13 000 9,5 1 18213 001 – 25 500 9,25 2 30025 501 – 38 400 9 3 35538 401 – 51 200 8,75 4 34551 201 – 63 900 8,5 5 112

63 901 – 127 800 8 9 586127 801 – 191 800 7,5 13 900191 801 – 255 700 7,25 16 617255 701 – 319 600 6,5 17 575319 601 – 383 500 5,5 18 214383 501 – 447 400 4,75 20 132447 401 – 511 300 4,5 20 451511 301 – 575 000 4more than 575 000 23 008 + 0,5% 0ver the amount

exceeding 575 000 euros


However, for certain cases there is a fixed basic fee (article 36 EBA):

Enforcement action Basic fee (in euros) Advanced fee1) reclamation of a movable; 140 922) return of an immovable (eviction);

140 92

3) return of a child and grant of access to a child;

140 92

4) organising an auction among co-owners;

278

5) recording and valuation of immovable under expropriation;

*(1)

6) compliance with an order to assume or transfer possession of immovable under expropriation;

*(2)

7) compliance with a court decision whereby a person is required to perform other acts.

140 92

*(1) the fee for recording and valuation of an expropriated immovable is a half of the rate of fee which corresponds to the value of the recorded immovable according to the valuation report;

*(2) the fee for compliance with an order to assume or transfer the possession of an expropriated immovable is one third of the rate of fee which corresponds to the size of the determined expropriation payment.

In case enforcement can be effected within 3 days after sending an electronic request to the electronic seizure system, the basic fee shall be 16 euros (article 401 EBA).

Ad 3 The additional fee

The enforcement agent is entitled to an additional fee (article 43 EBA) if an enforcement action is technically or legally complex or time-consuming. The additional fee is determined in the form of a fixed sum or hourly fee (28 euro per hour, from the second hour, article 47 EBA) and is added to the basic fee. The enforcement agent is entitled to request payment of such fee only if the debtor has failed to fulfil the claim during the term for voluntary compliance and the enforcement agent has performed an enforcement action for which he or she is entitled to receive an additional fee.

The decision to order payment of additional fee is issued to the debtor after performance of the enforcement action. Besides the standard data, this decision also mentions the content and the time and place of performance of the enforcement action and the reasons for the request of an additional fee. The additional fee is collected together with the basic fee, unless otherwise provided by law.


EBA further mentions following additional fees:

• For the service of documents (article 48 EBA): 30- 60 euros, depending on the method of service of the documents;

• For the making of an inventory of estate in succession proceedings: 0.1% of the total value of rights belonging into the property entered in the inventory of estate but not less than 35 euros and not more than 3336 euros (article 49 EBA);

• For conducting an official auction: a fee of 3 % of the sales price of the property for the organisation and conduct of an auction.

Special provisions apply in case of maintenance support (artic le 37 EBA). The fee is a lump-sum amount which corresponds to the minimum rate of support established by law. The fee for commencement of proceedings is collected together with the first monthly payment. If the debtor pays only a part of the first monthly support payment, the bailiff collects the fee for commencement of proceedings which is in proportion to the amount claimed.

6.4. Latvia

Fees are regulated in the Law on Enforcement Agents (article 80). The further details can be found in Cabinet Regulation No. 451 from 26 June 2012 and went into force 1 September 2012. Some amendments have been made in 2016 (e.g. adding the fee for seizure on ships, Euros 266,35 and attachment on immovables, Euros 133,32) and for mediation, Euros 100 per hour).

In case of recovery, in each enforcement file, following amounts can be charged (Regulation 451, paragraph 3):

Par. Sum to be recovered (Euros) Professional Remuneration (Euros)3.1. less than 71 35,573.2. 72 – 142 56,913.3. 143 – 711 85,373.4. 712 – 4 269 113,833.5. 4 270 – 14 229 170,743.6. 14 230 – 142 287 227,663.7. more than 142 287 284,57

4 If within the framework of an execution file in cases of recovery inventory of movable property is performed, professional remuneration envisaged by sub-paragraphs 7.9 and 7.10 is payable in addition to the professional remuneration envisaged by paragraph 3 herein.

Performance fee: in addition to the remuneration as envisaged by the above table and costs of performing executive activities, the enforcement agent receives professional remuneration


from calculated in percent from the sum recovered in the following amount: (Regulation 451, paragraph 5):

Par. Sum to be recovered (Euros) Professional Remuneration from the sum actually recovered

5.1. Less than 4 269 15 %5.2. From 4 270 to 14 229 Euros 640,35 Euros plus 10 % from the sum actually

recovered that exceeds the sum of 4 269 Euros

5.3. From 14 230 to 142 287 Euros 1 636,35 Euros plus five % from the sum actually recovered that exceeds the sum of 14 229 Euros

5.4. From 142 288 to 711 436 Euros 8 039 25 Euros plus three % from the sum actually recovered that exceeds the sum of 142 287 Euros

5.5. From 711 437 to 1 422 872 Euros: 25 113,72 Euros plus two % from the sum actually recovered that exceeds the sum of 711 436 Euros

5.6. In case the sum recovered exceeds 1 422 872 Euros

39 342,44 Euros plus one % from the sum actually recovered that exceeds the sum of 1 422 872 Euros

6 In cases when it can be considered that an auction of real estate has not happened and unsecured creditor wants to keep the real estate, the professional remuneration envisaged by paragraph 5 herein is multiplied by coefficient 0.3


For the professional activities performed by the enforcement agent, following amounts can be charged (Regulation 451, paragraph 7):

Par. Sum to be recovered (Euros) Professional Remuneration (Euros)7.1. Drawing up a statement for the decision which

impose a duty on a debtor to fulfil certain activities

36,99

7.2. Drawing up an application for non-fulfilment of the decision which imposes a duty on a debtor to perform certain activities and submitting this application to court

36,99

7.3. Execution of securing a claim on pledging financial resources in credit institutions or at the third persons

66,73

7.4. Execution of securing a claim on prohibition imposed on the respondent to perform certain activities

36,99

7.5. Handing over the objects indicated in the decision to the enforcer of the debt by drawing up a respective statement

66,73

7.6. Eviction of persons and possessions from a dwelling or putting them in real estate possession (without inventory of property) if it is related to handing the premises over to the enforcer of the debt

133,32

7.7. Transportation of a child back to the country which is the place of his/her residence

133,32

7.8. Execution of a decision in cases of custody or communication rights

133,32

7.9. Drawing up the statement on inventory of property for the purpose of securing a claim or division of joint property on the basis of a number of positions listed

7.9.1. up to 10 positions 36,997.9.2. from 11 to 50 positions 66,737.9.3. from 51 to 100 positions 133,327.9.4. more than 100 positions 266,657.10. exchange of a holder of real estate 36,997.11. confiscation of financial resources 36,997.12. Movable property or real estate: remuneration determined in accordance with paragraphs 3, 4

and 5 herein7.13. Performing activities envisaged by regulatory enactments when administering the processes

of taking over and selling of escheat property: 284.57 Euros and professional remuneration calculated in percent from the sum obtained from selling escheat property corresponding to the amount laid down in paragraph 5 herein.


For other professional activities performed by the enforcement agent, following amounts can be charged (Regulation 451, paragraph 8):

Par. Sum to be recovered (Euros) Professional Remuneration (Euros)8.1. Delivery of a court summon or any other

documents36,99 (for one address)

8.2. Recording a fact: In cases when recording a fact lasts more than for one hour, the following is applied additionally:

66,73

8.2.1. In cases when recording a fact lasts more than one hour but does not exceed two hours

Coefficient 1.2

8.2.2. In cases when recording a fact lasts more than two hours but does not exceed three hours

Coefficient 1.4

8.2.3. In cases when recording a fact lasts more than three hours but does not exceed four hours

Coefficient 1.6

8.2.4. In cases when recording a fact lasts more than five hours

Coefficient 2

8.2.5. In cases when recording a fact lasts more than one hour but does not exceed two hours

Coefficient 1.2

8.3. drawing up an inventory of inherited property in inheritance cases

66,73

8.4. organising a public auction disregarding the result of an auction

The following rates are applied additionally depending on sales price and in cases when the auction has not happened – depending on initial price

133,32

8.4.1 up to 4 269 Euros coefficient 18.4.2 from 4 270 to 14 229 Euros coefficient 28.4.3 from 14 230 to 142 287 Euros coefficient 38.4.4 more than 142 287 Euros coefficient 58.5. Drawing up a statement on inventory in the cases of inheritance custody: remuneration

determined in accordance with sub-paragraph 7.9 herein8.6. Preparation and confirmation of a transcript,

excerpt or a copy of a document (disregarding the total number of pages of a document)

2,85

8.7. Preparation and issuing of an informative notice on the activities performed within the framework of executive case

36,99

9 In case an enforcement agent performs the activities for which remuneration is determined in accordance with paragraph 8 herein pursuant to the request of a person, the remuneration for such activities is paid by the person requesting the respective activities.


Urgency:If according to a written request made by the enforcer of a debt, in compliance with the requirements laid down in Civil Procedure Law, the activities envisaged by paragraphs 7 and 8 herein are performed as a matter of urgency (professional activities are started or, depending on the character of activity, they are performed within 24 hours), the coefficient “3” is applied to the professional remuneration for the activities performed. The difference in price between the basic rate and the rate for which the coefficient of urgency is applied shall be covered by the enforcer of the debt (Regulation 451, paragraph 8).

Financially vulnerable persons:An enforcement agent has the right to decrease the rate of professional remuneration by application of coefficient 0.5 in cases when a person has been acknowledged as a person of low income in accordance with regulatory enactments; in cases when a person has been granted a status of a person who has suffered from political repressions, the sworn bailiff shall have a duty to decrease the rate of professional remuneration by application of a coefficient 0.5 (Regulation 451, paragraph 11).

Value Added Taxes:In case when a sworn bailiff is included in the register of persons subjected to Value Added Tax of the State Revenue Service, the Value Added Tax shall be added to the professional remuneration of a sworn bailiff envisaged by this Regulation (Regulation 451, paragraph 12)

6.5. Lithuania

The enforcement agent‘s fee in Lithuania comprises the administrative fee and remuneration for the work performed.

The administrative fee consists of general and additional expenses:• General expenses are a fixed amount, depending on the amount of the recoverable debt.

The amount is advanced by the creditor upon submittance of the case to the enforcement agent. The general expenses cover following costs:• preparation of resolution to initiate an executive case; • initiation of an enforcement case; • preparation of offer or proposal to pay the debt and enforcement agent fee; • preparation of resolution to terminate the executive case and • storage, archive and destruction of the executive case.

• Additional expenses are paid for particular operations performed by the enforcement agent, such as inquiries to state registers and data bases regarding debtor ‘s property or income, preparation of resolution to arrest account capital, organizing an auction, preparation of estimation of enforcement agent fee, etc. However, in small cases the amount of additional expenses cannot exceed stipulated amount.


Remuneration for the work performed in small cases is a fixed amount. In bigger cases (above 290 euros) a fixed minimal remuneration is stipulated.

For example, in case the recoverable amount is approx. 300 Euros, the general expenses substitute approx. 20 Euros and the remuneration for the work performed is 19 per cent from the total recovered amount, but not less than approx. 60 Euros. Furthermore, additional expenses have to be paid as well.

The creditor is required to pay the general expenses (advanced payment) in advance (article 610 Civil Procedure Code106). In order to recover the costs from the debtor, the enforcement agent files an application with the court.

Recoverable amount (in Euros) General expenses (in Euros) Remuneration (Euros)Up to 2,9 12 8 Euros2,9 – 14,48 16 20 Euros14,48 – 57,92 20 40 Euros57,92 – 289,62 24 79,99 Euros289,62 – 579,24 28 19 % of the total recovered

amount, but not less than 79,99 Euros

579,24 – 868,86 32 18 % of the total recovered amount, but not less than 110,06 Euros

868,86 – 1 158,48 36 17 % of the total recovered amount, but not less than 156,39 Euros

1.158,48 – 1.448,1 40 16 % of the total recovered amount, but not less than 196,94 Euros

1 448,1 – 2 027,34 48 15 % of the total recovered amount, but not less than 231,7 Euros

2 027,34 – 2 606,58 56 14 % of the total recovered amount, but not less than 304,1 Euros

2 606,58 – 3 185,82 63,99 13 % of the total recovered amount, but not less than 364,92 Euros



106 Code of Civil Procedure of the Republic of Lithuania, approved by decree No. IX-743, 2002 (came into power

January 1st, 2003


8 688,6 – 14 481 139,99 8 % of the total recovered amount, but not less than 868,86 Euros

14 481 – 28 962 239,98 6 % of the total recovered amount, but not less than 1 158,48 Euros

From 28 962 399,97 4 % of the total recovered amount, but not less than 1 737,72 Euros

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

With regard to the activities of the enforcement agent in the Netherlands it is important to realize that the Dutch enforcement agent is, in line with CEPEJ Guideline 34, involved in amicable debt recovery, is allowed to do civil proceedings up to an amount of Euro 25,000, – and carries out enforcement. Consequently, the costs the Dutch enforcement agent can charge consists of different components:

1. the costs of extra judicial debt recovery2. the costs of proceedings3. the costs of enforcement

The costs for extra judicial debt recovery, the costs of proceedings and the enforcement costs are to be paid by the creditor.

Ad 1: the costs for extra judicial (amicable) debt recovery

The fee for amicable debt recovery can be recovered from the debtor. Most creditors use Conditions or Terms of Delivery and Payment. According to these conditions, the costs for extra judicial recovery shall be borne by the debtor. From 1 July 2012 the costs for extra judicial debt recovery are to a large extend regulated by law107:

Claim until (In Euros) Percentage Maximum (In Euros)2 500 15 % Minimum Euro 40, –Maximum Euro 375, – 5 000 Euro 375, – + 10 % on the claim -/- 2 500 Maximum Euro 625, –10 000 Euro 625, – + 5 % on the claim -/- 5 000,– Maximum Euro 875, –200 000 Euro 875, – + 1 % over the claim -/- 10 000 Maximum Euro 2 775, –> 200 000 Euro 2 775,– + 0,5 % over claim -/- 200 000 Maximum Euro 6 775, –

107 Law Standards for Costs for Extra Judicial Debt Recovery (Wet Normering Buitengerechtelijke Incassokosten)


Ad 2 Costs of court proceedings

The costs for civil proceedings in general, consist of following components (all regulated by law):A. Court feesB. Service of writ of summonsC. Lawyers (or enforcement agent) fees

Ad A Court fees

Court fees are the administrative fee the creditor has to pay to court for the initiation of proceedings. The amount of court fees depends on the type of claim and the amount of the claim. Court fees in Netherlands are rather high, especially in comparison with other countries. For example, per 1 January 2017:

Claim until (In Euros) Court fee for not natural person

Court fee for a natural person

Court fee for financial vulnerable persons

Euro 500, – Euro 117, – Euro 78, – Euro 78, –Between Euro 500, – and Euro 12 500, –

Euro 470, – Euro 223, – Euro 78, –

Higher than Euro 12 500, –

Euro 939, – Euro 470, – Euro 78, –

Until Euro 100 000, – Euro 1 924, – Euro 883, – Euro 78, –Above 100 000, – Euro 3 894, – Euro 1 545, – Euro 78, –

Ad B Service of the writ of summons

Service of the writ of summons is done by the enforcement agent, based on a fixed fee. Per 1 January 2017 such fee is Euro 80,42 (excluding VAT).

Ad C The fee for the lawyer or enforcement agent

The fee depends on the amount of the claim and the number of phases within the civil process. In case the debtor does not appear in court proceedings (default judgment), the fee is restricted to one point only. In case the debtor appears in court to object the claim, the creditor’s representative is entitled to more points.

Claim Including interest and extra judicial costs) Until

(In Euros)

Fee per point(in Euros)

Maximum number of points

250 30 3500 60 4

1 250 100 5


2 500 150 53 750 175 55 000 200 6

10 000 250 620 000 300 740 000 400 10

100 000 600 10200 000 700 No maximum400 000 800 No maximum

1 000 000 1 000 No maximummore 1 200 No maximum

Ad 3 enforcement costs

Netherlands has a system of fixed fees. This system applies to the costs payable by the debtor for the official duties of the enforcement agent. In case of unsuccessful enforcement, the enforcement costs need to be paid by the creditor. In the relationship enforcement agent and creditor, the fees are negotiable. When the fee system was introduced (2001) the Dutch legislator intended to stimulate market working (competition) among enforcement agents. Negotiable fees with the creditors fit in such policy.

The fixed fees are based on a cost price calculation (see paragraph 7.2). For service and seizures outside normal office hours the enforcement agent may ask an extra (negotiable) fee to the claimant. The “out of pocket expenses (e.g. costs of access to registers, removal and storage, the costs of a locksmith) need to be added to the fixed fees.

Also, the performance fee is a matter of negotiation between the enforcement agent and the creditor. The Dutch law does not have any provisions regarding such fee. In such case the “success fee” can be charged (to the creditor) based on a contractual agreement between the enforcement agent and the creditor. In general, a fee between 4% (for claims up to 5.000 euro), to 1.5% (for claims up to 200.000 euros) are considered reasonable. However, it needs to be mentioned: in case the activities of the enforcement agent are limited to official duties only, such fee cannot be charged. In such case, the enforcement agent is only entitled to the fixed fee:

Article Enforcement action 2016 20172A service writ of summons or inventory 79,81 80,422B service of judgment 76,81 77,392C service of request to appear in court 63,14 63,622D service of other documents 67,58 68,092E attachment on movables 104,98 105,782F attachment on movables in use by a third party 140,98 142,052G attachment on shares or other 207,76 209,342H attachment shares in limited company or public company 228,05 229,78


2I attachment on bearer shares or attachment under third party, not being an attachment on periodic payments

167,29 168,56

2J attachment under third party relating to periodic paymentse.g. income, salary, unless under 2K

119,07 119,97

2K attachment alimony or maintenance case 101,69 102,462L attachment under the creditor 139,29 140,352M attachment non-monetary claim handing over certain

goods242,33 2443,17

2N attachment non-monetary claim, debtor has to deliver certain goods

104,21 105, --

2O attachment immovables and planes registered in the Netherlands

144,25 145,35

2P termination attachment on immovables 51,47 51,862Q attachment on ships or planes not registered in the

Netherlands317,96 320,37

2R legal custody 216,36 218,002S announcement public sale 78,98 79,582T public sale movables 276,38 278,482U service of document priority creditor taking over

enforcement74,23 74,79

2V eviction 206,49 208,062W arrest 240,01 241,833A administrative fee in case only one attachment on income

(per payment)10,17 12,31

3B in case two attachments on income (per payment) 16,18 16,303C from the third attachment, per attachment 9per payment) 6,01 6,066A witness in actions under 2 e/f/g/n 19,48 19,636B witness in act ion under 2 m/o/q/v/w 19,85 20, --7 in case the action:

a. as meant in 2, under e, f, g, h en n, lasts longer than 1,5 hours or

b. as meant in 2, under m, q, r, t, v en w, lasts longer than 3 hours

the fee is raised withfor every 15 minutes the action took longer than 1,5 respectively 3 hours andfor every 15 minutes the witness has been present longer than 1,5 resp. 3 hours

19,48

11,56

19,63

11,65

8 Service of documents to a next address 34,56 24,75attempt attachment movable, nobody at home 49,46 49,84unsuccessful arrest 96,75 97,48

Fixed enforcement fees in the Netherlands per 1 January 2016 and 1 January 2017 (all amounts excluding 21% VAT)


6.7. Portugal

The Fee system in Portugal is based on the Decree Law number 282/2013108.

With regard to Portugal I want to point at the division in phases. The enforcement process is divided in 4 different phases. For each phase, the enforcement agent is entitled to a certain compensation. In addition, the phases are also used for the advanced payment of the enforcement fee by the creditor.

Following phases can be distinguished:

• Phase 1 (preliminary phase), which starts with the sending of the enforcement request to the enforcement agent and includes prior summons of the debtor party, the actions needed to verify the regularity of executive title, consultation of the computer record of enforcement and databases of direct online consultation to identify attachable property, and ends with notification of the creditor of the result of these inquiries; and, where attachable assets exist, payment of the provision for the fees of phase 2 and/or phase 3; or, if no attachable assets are available, to indicate assets to be pledged.

• Phase 2 (summons), which starts with the payment of the respective provision and includes consultation of the computer record of enforcement and the databases subject to direct online consultation to identify attachable property, and ends with notification to the creditor of the result of these inquiries; and, if attachable property exists, payment of the provision for the fees of phase 2 or phase 3; or, if no attachable property is available, to identify the assets to be pledged.

• Phase 3 (attachment), which starts with payment of the respective provision and includes the attachment procedures.

• Phase 4 (Settlement), which starts with payment of the respective provision and includes sale, liquidation and payment procedures, and ends with the closure of the process.

The Portuguese enforcement agents have a simulator in use. This simulator enables parties to check the amount of enforcement costs (the amounts mentioned are excluding 23% VAT!):109

108 Decree Law number 282/2013, Portuguese Republic’s Journal, 1st Series number 166, 29 August 2013109 See: http://www.novocpc.org/honoraacuterios-2013.html



Portuguese enforcement agents use the following fees (In the following tables, UC means Unidades de Conta, or Account Units). Currently 1 UC equals 102 Euros.

Attachment VI Provision (amount under the existent legal VAT Tax):

Attachment VII The fixed remuneration (amount under the existent legal VAT Tax):



Attachment VII The additional remuneration (amount under the existent legal VAT Tax):



LIST OF LITERATUREAND SOURCES



Council of Europe principles

Resolution No 3 on "General approach and means of achieving effective enforcement of judicial decisions" as adopted by the Ministers participating in the 24th Conference of European Ministers of Justice (Moscow, October 2001)

Recommendation Rec (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)

Recommendation Rec (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

European Commission on the efficiency of justice (CEPEJ), Guidelines for a better implementation of the existing Council of Europe’s Recommendation on enforcement CEPEJ (2009) 11 REV

Reports, Books, Handbooks, Strategies and Project Descriptions

Case study on the functioning of enforcement proceedings relating to judicial decisions in Member States; Directorate-General for Justice, Consumers and Gender Equality, European Commission, February 2015

Global Code of Enforcement (Code Mondial de l’execution); UIHJ Publishing; (3rd edition, 2016)

Enforcement of Court Decisions in Europe, European Commission for the Efficiency of Justice / CEPEJ (2008), Report prepared by the Research Team on enforcement of court decisions (University Nancy (France) / Swiss Institute of comparative law) and discussed by the CEPEJ-GT-EVAL at their 8th meeting

European Judicial Systems, edition 2014 (data 2012), efficiency and quality of justice; European Commission for the efficiency of justice (CEPEJ); Brussels, October 2014

Le droit à l’exécution et le droit de la notification et de la signification dans la jurisprudence Européenne ; cour européenne des droits de l’homme, cour de justice de l’Union européenne 1980-2014 ; Natalie Fricero and Guillaume Payan ; UIHJ Publishing (2014)

Efficacité de l’exécution des décisions de justice dans le monde ; rapport sur l’exécution dans les pays membres de l’UIHJ ; second edition, November 2017


Reforming the legal and Institutional framework for the enforcement of civil and commercial claims in Portugal; Sebastiaan Pompe and Wolfgang Bergthaler, IMF Working Paper WP/15/279 International Monetary Fund, Washington, DC (2015);

Study No. JAI/A3/2002/02 on making more efficient the enforcement of judicial decisions within the European Union: transparency of a debtor’s assets, attachment of bank accounts, provisional enforcement and protective measures, Burkhard Hess (2004)

The Right to a fair trial, a guide to the implementation of Article 6 of the European Convention on Human Rights; Nuala Mole and Catharina Harby, Human Rights Handbooks, no. 3, Council of Europe Directorate General of Human Rights


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Déjà paru :Juris-Union n° 1 – Novembre 2007 : Le titre exécutoire européenJuris-Union n° 2 – Février 2009 : L’harmonisation de la profession d’huissier de justice

dans le mondeJuris-Union n° 3 – Septembre 2009 : L’introduction de l’instance : maillon faible de l’espace

judiciaire européenJuris-Union n° 4 – Septembre 2010 : L’harmonisation de la profession d’huissier de justice

en Afrique : enjeux et perspectivesJuris-Union n° 5 – Février 2011 : Les Lignes directrices de la CEPEJ sur l’exécution :

un modèle pour le monde ?Juris-Union n° 6 – Septembre 2012 : L’exécution en Afrique, en Amérique et en Europe :

un Pont entre les continentsJuris-Union n° 7 – Septembre 2013 : Juris-Union spécial 20 ans de l'Ohada L'UIHJ : 20 ans aux côtés de l'Ohada

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