“Efficient and effective enforcement, a fundamental right under the Rule of Law“

Jos Uitdehaag

European payment index

2011: written off debt increased 4% or Euro 312 billion (or in the period 2007-2011 a massive Euro 1,300 billion)

2010: some 600 companies per day went into liquidation, amounting total 220,000

Negative impact on the development of economics:

Ability of companies to stay liquid;

Investments in R&DEmploymentTax receipts

Article 6 ECHR• The fundamental right to a fair trial as guaranteed by this article 6 also

includes the enforcement of court decisions within a reasonable time. Fair trial is an illusion if there is no effective enforcement system.

• ECHR, 19 March 1997 (Hornsby vs. Greece): the right of access to a court “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”.

• Based on these principles on 9 September 2003 the Committee of Ministers at the 851st meeting of the Ministers’ Deputies of the Council of Europe, adopted Recommendation Rec (2003)17 on enforcement.

• December 2009 these were followed by a set of CEPEJ Guidelines

Reasons for Rec 17/2003 and the 2009 Guidelines

• The principles of the rule of law• Article 6 and the fair trial principle

• Need for greater efficiency and fairness in enforcement

• To avoid private justice

Definition of an enforcement agent:Rec 1B: enforcement agent

“Enforcement agent” :

a person authorized by the state to carry out the enforcement process irrespective of whether that person

is employed by the state or not;

The Council of Europe in the above mentioned Recommendation did not take a formal position on the professional and institutional status of the enforcement

agents.

Typology of enforcement systems

Court oriented system of enforcement

implementation of court judgements in the hands of judges

Civil servantsImplementation by state agencies, executive and civil servants (e.g. Ministry of Finance or Justice)

EntrepreneurshipBailiffs as enforcement agents (high or low level of regulation).

Scandinavian countriesRussia

Germany

FranceBelgium, Netherlands

Great BritainSlovakia

AustriaCroatia

European trends

• There seems to be a trend towards the liberal status in recent decades.

• What is the reason of this popularity of the enforcement agent as a self-employed person?

• Does it meet with the requirements of the principles of the “Rule of Law” and Council of Europe Recommandation Rec (2003) 17?

Private enforcement agents versus civil servants

• The Council of Europe in the above mentioned Recommendation did not take a formal position on the professional and institutional status of the enforcement agents.

• This seems logic: – national legal systems differ from each other and – it would be impossible for one of these legal systems

to be the benchmark for all the other systems.

Figure Status of enforcement agents

Advantages and disadvantages

Court Executive Bailiffs

Advantages

ProfessionalismHigh standardsLevel of debtor protection.

Fast.FlexibleLess expensive for State budget

RapidEfficientInexpensive for State budgetProfessional quality.

Disadvantages

ExpensiveSlowRigidOver-formalised

Lack of qualityLack of independenceOpportunity for corruption

Costly for consumersDifficult to changeNeed for control

The enforcement agent as a civil servant

• Division of the work: more intellectual aspects of enforcement (Germany: Rechtspfleger) and the “foot soldiers” who effect the practical work (Germany: Gerichtsvollzieher).

• The enforcement agent as a civil servant is NOT an enforcement specialist: legal knowledge and practical skills are divided into different professions/persons. Enforcement agents have limited competences.

• In the absence of competition, the quality of the work is driven by targets and budgets in stead of the interests of the individual creditors.

The enforcement agent as a civil servant II

• In most cases the organization is rather bureaucratic and hierarchic. The work of the civil servant in most cases is employer orientated and not client orientated.

• In some countries, e.g. Sweden, tax collection is the base. Enforcement of other judgments seems to be a smaller part of the duties.

• Contrary to their independent colleagues lobbying in most cases is not developed and other legal professions might have a greater input into e.g. legislative proposals

The enforcement agent as an independent professional

• Being independent the enforcement agent will be market orientated.

• The independent professional will look for an extension of the range of activities, e.g. by amicable debt recovery.

• However this is just one side of the story. Although the independent professional is market orientated this should never undermine the respect for ethics and the demands of the system of justice.

Changing the system

• State point of view: law reform• Profession point of view: mentality• Market point of view: profit and wealth versus

fairness and efficiency

Advantages• In a market based system the costs of

enforcement are no longer supported by the State budget

• In a market based system efficiency and flexibility is at its best

Best choice?• Does this mean that the trend towards the

independent professional based system is the best choice?

• It could be:However especially in such a system it is

necessary to find a balance between the authority that has been given to the private enforcement agent on the one hand and on the other hand

the control over the way that power is used.

Best choice?

• Legal knowledge and training• Appointment criteria• Organization• Professional and ethical standards• Monitoring and control• Liability

Conclusion • In recent years several EU countries had a reform

of their enforcement system. Not just the ten new EU members but also in other countries

• In almost 100% of those countries a change was made towards the liberal profession.

• Not as a coincidence it seems. The independent profession seems to be the best system available. As we have seen it is much more efficient and it is cost saving for the State.

Trends in enforcement

• 35. 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.

Trends in enforcement II• 34. Enforcement agents may also be authorized to perform

secondary activities […]. These may be, among others:debt recovery; voluntary sale of moveable or immoveable property at public

auction; seizure of goods; recording and reporting of evidence; serving as court ushers;provision of legal advice;bankruptcy procedures;performing tasks assigned to them by the courts; representing parties in the courts;drawing up private deeds and documents; teaching.

Trends in enforcement III• Cooperation, establishment of networks• Use of IT

• Cross border enforcement: EU and South East Europe initiatives

• The developments in EU: one judicial area• A harmonized status for the enforcement

agent?