European Payment Order and Consumer Protection

The European Order for Payment (EOP) is an efficient tool against recalcitrant debtors. The conditions for the order’s issuance are listed exhaustively in the EOP Regulation (1896/2006). Or so you thought. The judgment by the CJEU of 19 December 2019 in Bondora (Joined Cases C-453/18 and C-494/18) has effectively added a new requirement for consumer cases: the submission of the contract underlying the claim.

In both of the joined cases, a creditor sought repayment of a loan from a consumer and applied for a payment order. The Spanish tribunal demanded to see the underlying contract to exercise ex officio control for unfair terms, as is required under the Unfair Terms Directive 93/13/EEC (see to this effect the 2009 judgment of the Court of Justice in Pannon GSM, para 32). The creditor refused, arguing that the contract giving rise to the claim does not feature among the conditions listed in Article 7(2) of the EOP Regulation and the implementing Spanish national legislation.

The CJEU disagreed with the creditor and ruled that the tribunal can request additional information relating to the terms of the agreement. Beside the principle of consumer protection as enshrined in Art 38 of the Charter of Fundamental Rights, it referred to the form annexed to the EOP Regulation in which the creditor may provide additional information about the claim (Bondora, para 48).

But a ‘may’ is not a ‘must’. Rather, the Court has prioritised consumer protection under the Unfair Terms Directive over the efficient enforcement of claims under the EOP Regulation. The mandatory control for unfair terms will delay the issuance of a payment order. As a matter of practice, the tribunal will always have to ask for the contractual documents in consumer cases. A procedure under the Brussels I bis Regulation will hardly be any speedier because the tribunal will have to exercise the same unfair terms control before rendering its judgment.