Grozdana Šijanski* and Jimmy Barber**
E-government initiatives are increasingly gaining ground among local, national, European and international institutions and authorities. Many areas of public administration can no longer be imagined without electronic data processing. Meanwhile, to alleviate its workload, the judiciary has been increasingly orienting itself towards the automation of its working routines. This article is concerned with one of the largest and most successful automation projects of the Federal Republic of Germany: the automated procedure of the handling of orders for payment.
I. Function and Scope
In the Federal Republic of Germany the respective issues of the mass recovery of outstanding but often uncontested debts and of small claims litigation are addressed within the framework and structure of the procedural system. The seventh book of the German Code of Civil Procedure (ZPO)1 outlines the special summary proceeding (Mahnverfahren)2, an integral part of the procedural legislation. This order for payment procedure3 provides a cheap, rapid and efficient way for a creditor to enforce a pecuniary claim by an ex parte court order for payment. The underlying idea is to avoid costly and time-consuming lawsuits, and especially to avoid court hearings in cases where debtors are aware of their obligation but are either unwilling or unable to pay.
Usually the procedure consists of two stages, affording the respondent two opportunities to block the issuance of an enforceable court order4 and instead effect a transition to an ordinary civil proceeding. In the first stage, the claimant must file an application to the court containing the details of the claim. The presentation of documentary evidence by the claimant is not required here as the application is processed by a computerized examination program and the merits of the case are not examined; i.e., the court’s computer does not consider whether the facts which the claimant might produce would substantiate and validate his claim or not. This program works on the presumption that dealing with applications in the order for payment procedure is a highly standardized legal procedure that does not (at least, not in most cases) require human supervision5. Following the processing of the application, the court issues an order for payment to be sent to the respondent, who may object to the order6. In the absence of an objection, the second stage is initiated, in which the claimant is permitted to apply for an enforcement order. If the respondent declines to raise an objection7 this second time, the order will become incontestable. Thus in most instances the procedure precludes the need for a court hearing.
Indeed, manual operations of any form are made redundant by automated handling, except in those exceptional cases mentioned below (infra, V.). The steps of the process are executed in an entirely continuous, autonomous manner, which begins once the application is submitted to the computer system. From this point onwards, the computer deals with both the processing of the claim and all further interaction with the parties. This fully automated checking of applications not only relieves the court’s staff of time-consuming routine work but also considerably enhances the quality and accuracy of the procedure.
II. Implementation of automated handling
§ 689 I clause 2 ZPO sanctions the automated handling of the order for payment procedure. Since 1982, thirteen of the sixteen Länder8 have adopted a standardized and fully automated handling of the order for payment procedure, which was primarily developed in Baden-Württemberg as a means of automating and rationalizing administrative work. The Ministries of Justice of the Länder are responsible for the computer-led processing of applications and for ensuring that the individual computerized examination programs’ functions comply with the legal regulations of the ZPO. The central coordination for the automated handling system is located at the Ministry of Justice of Baden-Württemberg9.
As the automated handling of the order for payment procedure has been introduced with the view to replace the quite laborious system of manual processing by an effective, cost-efficient and – perhaps most pertinently – extremely fast procedure, § 689 I ZPO stipulates that in automated handling cases, submissions should have been dealt with no later than by the first business day after the day of filing.
Jurisdiction as to the subject matter: The order for payment procedure falls within the jurisdiction of local district courts10. Where an application is submitted to a court lacking the necessary competence, it may be referred to one that is competent; this is important as the application has no legal effect until it has been presented to the competent court.
Local jurisdiction: In the German order for payment procedure the competency of a court ratione loci depends on the place of abode or the place of business of the claimant11. A specific competency is given when the claimant has no general legal venue in Germany because his place of abode or the place of business is abroad. In this case, the local district court Schöneberg (Berlin) has exclusive jurisdiction (§ 689 II clause 2 ZPO). If the claimant lodges a monetary claim that is based on the law of ownership of property and the right of permanent residence12 the court’s competency depends on the location of the property.
The contact details of all courts and public prosecutors’ offices in Germany can be ascertained with the assistance of a countrywide online address database that has been made available by order of the North-Rhine Westphalia Ministry of Justice13. In this database, every locally competent local district, district and higher regional court as well as the competent district public prosecution authority for every part of the Federal Republic of Germany is identifiable. It should be noted however that due to the law of civil procedure and the matter in dispute, another court may have exclusive local competence.
The governments of the Länder are empowered to assign the order for payment procedure cases arising in the district of one or several local district courts to one local district court (§ 689 III ZPO), and those participating in automated handling have thus done so14. Furthermore they are free to agree among themselves to confer jurisdiction on one local district court beyond their boundaries (§ 689 III clause 4 ZPO). Rhineland-Palatinate and Saarland on the one hand and Mecklenburg-Western Pomerania and Hamburg on the other hand have recently made use of this possibility15.
Functional competency: At the competent local district court, the order for payment procedure is a matter within the (functional) competency of the Rechtspfleger16, i.e., a senior court officer exercising a wide range of functions and who has a legal education, but who is not a judge. The Rechtspfleger is responsible in particular for handling non-electronic data-processing cases17, i.e. those which have to be processed manually either because they are a priori unsuitable for automated handling18, or because obstacles have arisen during the course of the automated procedure, preventing the computer program from proceeding. Irrespective of whether an application for an order for payment is processed manually or automatically, the Rechtspfleger remains in charge of the proceedings and at any point during the procedure may request the machine-processed case to be printed out in physical form19.
The course of the German order for payment procedure shall be described below, emphasizing the particulars of the automated handling. These are usually more or less uniform in all of the participating Länder.
Proceedings begin with an application by the claimant, whose representation by a lawyer is not mandatory in this procedure. In applying for an order for payment, the claimant must provide all of the relevant details, including a clear indication of the parties involved in the dispute, a definite statement of the performance demanded within the claim, and the court which is to have jurisdiction should an ordinary civil proceeding be called. Furthermore the claimant must declare that the claim does not depend on a counter-performance etc. (§ 690 I No. 5 ZPO).
Individualization of the claim: The claim must be distinguishable from all others through its specific designation, in order to be the grounds of an enforceable title20. It must be possible hereafter for the debtor to judge whether he would like to defend himself against the claim or not21. A catalogue of 46 standard types of claim (Hauptforderungs-Katalog) is listed in the notes on how to fill out an application for an order for payment; each of these has a set catalogue number, and this is all that the claimant must cite on the application form – for instance, a claim for repayment of a loan is catalogued under No. 4. The only point at which the claimant must explain the substance of the claim in words is if the claim is not found within this catalogue of standard claims22.
A claimant can apply for an order for payment by way of several methods:
a) Conventional, paper-based application
For those applications not filed electronically, conventional paper-based applications and declarations may be presented to a clerk of the court of the registry (Urkundsbeamter) who makes a note of the application by giving the designation of the court and the date of reception of the application or declaration (§§ 702 I, 129 ZPO).
Form of the application: Special (official) printed and machine-readable forms (§ 703c I No.1 ZPO), introduced to simplify the automated order for payment procedure, must nevertheless be used by claimants who file paper-based applications (§ 703c II ZPO). The same applies to all of his other necessary requests and declarations during the complete order for payment procedure. The forms are supplemented by information on their completion and are available for purchase in every stationery store in Germany. If the claimant does not make use of these compulsory forms, e.g. if he lodges his application via fax or if he uses the pre-printed form for the non-automated procedure or perhaps just a photocopy, the court will reject his application as inadmissible. The data within applications that are lodged in this conventional written form are then transferred into the court’s electronic data-processing program for further processing.
b) Electronic data exchange (EDE)
Besides the aforementioned mandatory printed form there are alternative, electronic methods to present an application. Only if it appears to the court that the record is suitable for machine processing may it be entered in the form of a machine-readable record (§ 690 III ZPO). In this case the otherwise mandatory handwritten signature is unnecessary if it is ensured that the application is transmitted with the consent of the claimant.
The so-called electronic data exchange encompasses applications submitted in several machine-readable forms: the lodging of applications by a data carrier exchange23, by remote data transmission, or online. Typically this method suits claimants with regular computer access. At the claimant’s request, all correspondence may be conducted electronically, providing that is that the initial application for an order for payment was submitted electronically; such correspondence may include, for example, the notice about the transfer of the order for payment procedure to an ordinary civil procedure in case of objection24. Nevertheless the court sends the claimant the enforcement order in a conventional printed form regardless as it is considered that an enforcement order must simultaneously exist in physical form.
The Länder themselves determine the extent to which their competent courts make use of the possibilities of electronic data exchange25; what is noteworthy is that in the territories of some of the Länder, the competent local district courts permit only the electronic data exchange26. At the central court for order for payment proceedings for the two Länder Rhineland-Palatinate and Saarland (at the local district court Mayen27), the electronic data exchange is mainly effected in two ways: by floppy disk and by remote data transmission. The difference in practice between these two alternatives of data transfer is evident: the former represents a physical data exchange medium whereas the latter is a non-physical data exchange via the Internet. Nonetheless the subsequent automated handling is not affected by the means by which the data entered the court’s electronic data-processing system.
- Participation in the EDE, assignment of code numbersUpon request of the claimant, the court determines whether participation in the electronic data exchange is permissible28. Admission to participate requires first that the test procedure was successful, and second that authorization for direct debit has been given; the absence of this authorization prohibits participation in the electronic data exchange.Furthermore, the participation in the electronic data exchange requires the use of code numbers. These code numbers are assigned to claimants and to their legal representatives and allow for an “encryption” of all personal and relevant information pertaining to the claimant (name, address, legal representative, legal form of companies, details about direct debit authorization for the benefit of the court etc.) to be recorded. This system avoids both the repeated requests for and recording of the same data (at least for that data which is permanently fixed) and the unnecessary transmission and data storage of information already available in the system. Once a code number has been assigned to the claimant, he need only refer to this number later on; the court uses the data “behind” these code numbers for the issuance of an order for payment or an enforcement order, as well as for the addresses on the envelopes. The issuance of a code number can be applied for informally at the court, without incurring additional costs for the claimant.
In conjunction with the automated handling of the order for payment procedure, there are special commercial software products that facilitate the data entry of applications for an order for payment and thereby reduce sources of error (e.g. plausibility errors) that often surface with the completion of an application form. Normally, these software programmes are equipped with a standardized interface for use with the court’s electronic data-processing program. Using such software thus allows for the filing of applications so that the repeated entry of the same data into the court’s system is not necessary, thereby curbing the risk of potential entry errors.
aa) Data carrier exchange
The data carrier exchange (physical data processing media) has been applied successfully now for a long time in the automated handling of the order for payment procedure at the courts, and represents a remarkably cost-effective and comfortable option for those claimants who participate regularly or extensively in this procedure.
According to the standardized criteria for the participation in the electronic data exchange29, the claimant can submit his application using data carriers such as magnetic tapes30, magnetic tape cassettes or, most commonly, floppy disks31. All disks must be provided and marked by the claimant. After transferring all data from the floppy disks to its electronic data-processing system, the court sends these back to the claimant together with “processing minutes”, and saves its notices on the disks and sends them to the claimant together with “accompanying minutes”. In case of discrepancies between the marked disks and the accompanying minutes, which the claimant must sign and enclose too, the court returns all the data carriers immediately. This minimizes the risk of error.
bb) Remote data transmission
Remote data transmission using digital signatures is admissible in most of the competent courts32. Data sets created using the special software packages mentioned above may be transmitted via the Internet to a server allocated to the respective court, from which judicial notices can be electronically received. This method in particular highlights the advantages of the electronic data exchange: applying for an order for payment in this way enables much faster data transmission to the court.
As with the data carrier exchange, there are set requirements for participation in the remote data transmission procedure, including specific safety requirements (§ 690 III clause 2 ZPO), in particular concerning authenticity (e.g. use of digital signatures and encryption technologies). In order to ensure both the identity of the sender and the integrity of the data transmitted via the Internet, some local district courts33 provide the participants of this procedure with a “private key”. The participant can however obtain and use a private key issued by a certificate authority34 too.
The claimant has to digitally sign and encrypt the data of his application for an order for payment before sending it to the court. At its server the court certifies the exact date and time of entry of the data sets; this is considered to be the time at which the data transfer is complete. An electronic receipt stamp takes the place of the conventional receipt stamp. Independent from the time of entry, several “receiving controls” are automatically initiated to identify any errors (e.g. incorrect signature, encryption, data name etc.); if this is the case, the participant will be informed immediately by e-mail.
The incoming applications are forwarded daily to the court’s central server of the automated order for payment procedure for a qualified examination. As a general rule it can be said that all applications that are registered on the court’s server before 11.00 a.m. are processed the same day.
cc) Online application
By means of an “online application program”35 the claimant has access to the order for payment procedure via the Internet too. Such applications are effective in law and enable processing time to be reduced to just a few hours, saving the claimant both costs and time. This procedure is therefore particularly appropriate for those claimants who perhaps only occasionally submit an application, or who do not possess any of the special software programs, or for those who have never yet taken part in the electronic data exchange procedure. However, these data sets can (by professional claimants) also be produced by software designed for the data carrier exchange.36
The online application form, leads the claimant step-by-step through the entry of the data of his application, simultaneously examining each entry for procedural errors, and helping the claimant to avoid mistakes that would lead the court to reject the application. Following the data entry stage, the application is again automatically checked against more than 2000 permutations in total. Afterwards the application data may either be printed out on an official form, to be signed and sent as a paper application by letter to the court, or may be submitted electronically; with a click of the mouse the entered data can be encrypted and sent to the court, using a digital signature enabled by use of a chip card in the place of the traditional signature. In this way, the reciprocal electronic data exchange with the competent court can take place securely.
2. Examination of application, complaint (Monierung)
The application for the issuance of an order for payment is subject to a tripartite automated examination by the court, or more precisely, by the court’s electronic data-processing system running in the “background”. First, there is an examination to determine whether the general procedural prerequisites (e.g., the proper statutory representation) and the special prerequisites for the admissibility of the order for payment procedure (e.g., the monetary claim is specified in euro and not in another currency) have been met. Second, the court which received the application must check its jurisdiction to process the claim. Third and finally there is an examination of whether the application fulfils the statutory requirements regarding form and content.
The automated examination guarantees that the application is in accord with legal requirements: the court’s electronic data-processing system examines whether the information provided meets the required standards. To a certain extent the program allows for an examination of the accuracy and substance of the claim; for example, German law restricts interest rates, and if the interest rate claimed in the application exceeds the limit prescribed by law, the system will terminate the test and deny the issuance of an order for payment. Moreover, the program is able to consider critical values, i.e. it considers the sums in the claim that are above the average value and are therefore to be reviewed by the Rechtspfleger. Similarly, in other cases, e.g., when the program detects other serious inconsistencies, the automated handling is terminated and the matter is submitted to a member of the court’s judicial staff.
In many cases the inadmissibility of an application for an order for payment occurs because it is incomplete or incorrect, for example in relation to whether the claimant has appointed the competent court to hear the case, should the automated order for payment procedure pass over to an ordinary civil procedure. Often no response to this question is made at all, or the type of claim precludes the competence of the appointed court37. Although in such cases the court may reject the application, the claimant must always be heard beforehand (§ 691 I No. 2 clause 2 ZPO) to give him the chance to correct or amend the statements in his application.
As already mentioned above, the court’s electronic data-processing system interacts insofar with the parties as it not only receives information from the parties, but also plays an active part in the communication during the entire order for payment procedure. Upon discovery of reparable defects (behebbare Mängel) which make the application incorrect or incomplete, the electronic data-processing system creates a letter, the so-called Monierung, in which the claimant is notified of the identified defects (Mängel) in his application. At the same time the program issues a form for the claimant to use for his answer. The court sends the claimant its complaint letter together with a pre-printed form for a response, the so-called Monierungsantwort, and asks him to revise and complete or correct his declarations within a specified period of time. The proceeding is continued only once the claimant has dealt with this request. If the application then does not exhibit any defects, an order for payment will be issued and served on the respondent.
3. Order for payment (Mahnbescheid)
Provided that all the requirements are fulfilled – as the case may be in reply to a complaint (Monierung) – the court will grant the order for payment as applied for ex parte, i.e. without any prior possibility for the respondent to participate. In the automated procedure the executed copies (vollstreckbare Ausfertigung) of the order for payment are furnished with the seal of the court; the order for payment is provided with a stamp mark which corresponds to and is a substitute for a signature (§ 703 b I ZPO).
The order for payment contains several important items: first, the reminder that the court has not examined whether the asserted claim is due to the claimant; second, the request for the respondent either to pay or to make an objection against the claim, within two weeks after the service of the order for payment (§ 691 I ZPO); third, the reminder for the respondent that a corresponding enforcement order may be issued, by virtue of which the claimant can effect a compulsory execution if the respondent does not raise an objection within the given two-week time limit; fourth, a prepared form is provided for the respondent for such an objection. This form is also available at any local district court (§ 702 I ZPO).
If the order for payment cannot be served on the respondent, the court gives notice to the claimant together with a pre-printed form for an application regarding a renewed service of the order for payment. The claimant has to use this form whatever the case. Together with the notice about the (successful) service of the order for payment (§ 693 II ZPO) the claimant receives a form for the application of an enforcement order. Again, it is mandatory for the claimant to use this special form; however he need not repeat that which is declared within the application for an order for payment.
4. Objection to the order for payment (Widerspruch)
Upon receiving an order for payment the respondent may be inclined to fulfill his obligation. In this case the procedure will not progress any further, because the claimant will certainly not apply for the issuance of an enforcement order. However, in cases in which the respondent is passive, i.e. simply does nothing, the procedure will continue and the claimant will as a rule submit an application for the issuance of an enforcement order after the deadline for the respondent to object to the order for payment – two weeks from the date of service – has expired.
Should the respondent wish to contest the claim within the order for payment, he must submit an objection against the order for payment, the so-called Widerspruch. Though as mentioned above the respondent receives a pre-printed form together with the order for payment, the use of which is recommended in the interests of swift handling (§ 692 I No.5 ZPO) in objecting to the claim, this form is not mandatory and is not an official requirement for the admissibility of his objection. The respondent is permitted to use another form, to have the objection recorded at the court (§ 129a ZPO read in conjunction with § 702 I ZPO), or simply to write a letter outlining his opposition to the claim (§ 694 I ZPO).
On receiving an objection against the claim that is the subject of the order for payment, the court informs the claimant about this objection and the time of its entry (§ 695 ZPO), as well as all other written statements made by the respondent. Besides this, the notice sent to the claimant specifies the court competent for the ordinary civil procedure and contains a note requesting payment of the outstanding court fees. A prepared printed form for this payment is enclosed regardless of whether the claimant has provided a bank collection authorization as is usually the case.
5. Enforcement order (Vollstreckungsbescheid)
In the event that the respondent neither makes payment nor makes an objection within two weeks of the serving of the order for payment, the claimant may then apply for an enforceable title, the so-called Vollstreckungsbescheid (enforcement order). To be effective, this must be applied for within the statutory time-limit of six months within the date of service of the order for payment on the respondent (§ 701 ZPO), though not before the expiration of the allowed time period for the respondent’s reply. Furthermore the claimant’s application must contain a declaration as to whether payments have been made on the order for payment, and if so, the amount of such payments.
The court will issue the enforcement order only if the claimant has already paid all the fees and expenses of the court; these are all the costs of the procedure that have arisen thus far, including the costs of legal representation by a lawyer (see below regarding costs for the order for payment procedure under VI.).
The enforcement order is served on the respondent ex officio, unless, in accordance with party autonomy38 (§ 699 IV ZPO), the claimant reserves the right to effect the service of the enforcement order by himself. In this circumstance he receives two executed copies (Ausfertigungen) of the enforcement order: one with the imprint “executed copy for the claimant” and the other with the imprint “executed copy for the respondent”. Under normal circumstances, i.e. where the service of the enforcement order is effected ex officio, the court sends just the one executed copy of the enforcement order to the claimant. In either instance, together with the executed copies of the enforcement order (single or duplicate) the claimant receives information such as the respondent’s new address (inasmuch that the court effected the enforcement order ex officio).
If the enforcement order could not be served on the respondent, the court gives notice to the claimant. The consequences here are the same as those where the notification of the order for payment has been unsuccessful: together with this notification the claimant receives a pre-printed application form for the renewed service of the enforcement order, the use of which is mandatory if the claimant wishes to try again.
As there are no printed “original” documents in the automated order for payment procedure, the conventional notation on the executed copy affirming congruity of the executed copy with the “original”39 is not necessary. The executed copy of the enforcement order contains (just) a pre-printed official seal as well as a reference to the fact that it is issued automatically and is valid without a signature (§ 703 b I ZPO).
6. Objection to the enforcement order (Einspruch)
The respondent is entitled to object to the enforcement order by means of the so-called Einspruch. As with the objection to the order for payment, there is a two-week time limit for the objection to the enforcement order, which begins to run from the service of the enforcement order upon the respondent. Once more, the respondent receives a prepared form with which to make an objection, though again the use of this form is not mandatory for the respondent.
If the respondent does object to the enforcement order, the order for payment procedure will be transferred to an ordinary civil procedure, irrespective of the claimant’s wishes. If the respondent does not object within this prescribed period of time, the enforcement order will (with certain exceptions) no longer be subject to an appeal, i.e. the order will be deemed equivalent to a default judgement that has been declared provisionally executable (§ 700 I ZPO).
7. Transfer to an ordinary civil proceeding
In the event that the respondent registered an objection after receiving the order for payment (Widerspruch), the order for payment procedure will only be transferred to an ordinary civil procedure on application of either the claimant or the respondent (§ 696 I ZPO)40.
The court that issued the order for payment will then transfer the case to the competent court as designated by the claimant in the application process, and notify the parties of the transferral, though the court to which the case has been transferred reserves its right to examine its jurisdiction. The ensuing ordinary civil procedure in the event of an objection (Widerspruch or Einspruch) takes place at the court having jurisdiction, according to the general principles of jurisdiction41. In the event that the same court deals with the order for payment procedure and the contentious ordinary civil procedure, the provisions regarding case transferral are applied analogically (§ 698 ZPO). Furthermore the claimant must have paid already the court fee for the order for payment procedure as well as the “second part of the costs of the proceeding”42.
If the respondent files an objection within two weeks after service of the enforcement order (Einspruch) the court which issued the enforcement order transfers the order for payment procedure to an ordinary civil procedure ex officio, irrespective of the payments of the claimant.
Both parties are informed about the designated court that is to take over the procedure in a notice, this notice containing the date of the transfer and whether the respondent made an objection after receiving the order for payment (Mahnbescheid) or after receiving the enforcement order (Vollstreckungsbescheid), as well as the date of receipt of this objection.
On transferral to an ordinary civil procedure, the court produces a hard copy of all electronically saved data (§ 696 II ZPO) for the court dealing with the case in the ordinary civil procedure. The first part of this hard copy contains the decision of the court, i.e. either the order for payment or the enforcement order that is subject to the respondent’s objection. The second part chronologically documents the whole course of the order for payment procedure. The hard copy does not have to contain any original documents; as an official document, it has evidentiary value (§ 696 II clause 2 ZPO); if the respondent made an objection without using the provided pre-printed form, however, this informal objection must also be attached to the hard copy.
The action shall be deemed as pending before the court on arrival of these documents. The court then promptly instructs the claimant to substantiate his claim within two weeks in a form corresponding to a statement of claim (§ 697 I ZPO). The procedure on receipt of the substantiating reasons for the claim is then the same as for the receipt of an “ordinary” complaint (§ 700 IV ZPO).
V. Cases without computerised support
The manual management of cases continues to be necessary in a few instances, such as where an application is a priori unsuitable for automated handling, or is revealed as being so during the course of the procedure. Once the application is dealt with manually, all notices and messages of the court from this point onwards are issued in writing. For these cases the registrar (Rechtspfleger) opens a conventional file. Whether an order for payment is being processed automatically or conventionally can be inferred from its reference number43 .
According to § 688 III ZPO, in the event that the service of the order of payment would have to be effected abroad, the German order for payment procedure may only take place to the extent for which the Act on the Procedure for Recognition and Enforcement44 allows. In general the order for payment procedure is not processed automatically in such instances, or when the respondent is serving in armed forces based in Germany45. If and when the order for payment must be served abroad, the competency of the court does not depend on the place of abode or the place of business of the claimant46; rather, the competent court for such procedures is the respective Local District Court that would be competent in the case of the order for payment having to be transferred to an ordinary civil procedure (§ 703 d II ZPO). Providing that this is a court in the Federal Republic of Germany, the order for payment has to be applied for at this court.
As this type of order for payment procedure is not processed automatically, all the particulars of automated processing remain out of consideration. Instead, the following must be considered: first, that the pre-printed forms for the automated processing do not have to be used but may be (the pre-printed forms for the conventional order for payment procedure47 can be used in the same way); second, the claimant continues to be obliged to pay the court fees in advance. Furthermore he must pay all costs arising from the need to translate or from expenses for the service of documents abroad.
The court fee for the order for payment procedure is due on the court’s reception of the application for the order for payment48. Thus the fee is levied even if the application is withdrawn or if for other reasons the procedure does not lead to an order for payment.
In German civil procedures, the amount of court fees depends on the amount in dispute, i.e. the total amount of all principal claims. As a rule, the interest and ancillary claims are not taken into consideration. This fee encompasses the whole of the procedure; however lawyers’ fees, and fees which arise if the case is disputed, i.e. where the respondent has objected to the order for payment or to the enforcement order, are not included. In order to file a “normal” action at the civil court. i.e. in the case of an ordinary civil procedure, the claimant must pay three times the court fee which is prescribed by law; in an order for payment procedure, however, the relevant fee is only half the prescribed court fee. In the event of the transfer to an ordinary civil procedure, this half court fee already paid by the claimant is set off against the outstanding costs for the succeeding civil procedure. An online cost calculator is available to calculate the concrete costs arising out of an order for payment procedure49.
Currently, the minimum amount of a court fee for an order for payment procedure is 18 euro; this minimum is due to increase to 23 euro on 1.7.2006. Moreover, from the eleventh notification onwards the charges for the notification are imposed separately from the costs that have actually arisen from the notification50. On issuing the order for payment, the court concurrently issues the bill of costs for the claimant and attaches a prepared form for the payment51. This bill contains the courts’ fees and expenses and provides the claimant with other information, e.g. the reference number of the case etc. If the order for payment however for whatever reason cannot be issued, after approximately three months the claimant receives a special bill of costs in addition to a prepared bank transfer sheet.
Presently, the minimum amount of a lawyer’s fee in an order for payment procedure is 10 euro52. The court costs and lawyers’ remuneration for the order for payment procedure are calculated by the court automatically and are included in the respective orders. Thus in automated handling cases the claimant is not obliged to compute these costs and to record them in his application; in contrast to the conventional (i.e. non-automated) order for payment procedure, for the application for the issuance of an order for payment under the automated procedure there is no prerequisite of paying the court costs in advance53.
Since its inception in 1982, the order for payment procedure (Mahnverfahren) has played a significant role in Germany, and has proven itself to be a very valuable tool in ensuring the rapid and cost-effective collection of claims that are not subject to legal controversy. As one of the most extensive computer-supported legal procedures in the German legal system – in 2003 over 90% of nearly 9.5 million orders for payment in Germany were processed automatically54 – it represents a highly successful and well-regarded expansion of modern, user-friendly e-government initiatives. Two of the most important goals of automation have thereby been achieved: first, the empowerment of citizens to better protect their rights, and second, to introduce a faster and more accurate legal process.
The rights of both parties are fiercely protected by the procedure: despite the lack of an evidence-based examination of the merits of the case, the respondent’s rights are taken as seriously as those of the claimant. A respondent wishing to contest the claim is explicitly informed of his right to object to the order for payment and has to do no more than to submit an objection, without even needing to provide grounds. If out of negligence the respondent fails to submit an objection against the order for payment, he has yet another chance to fight the claim by his right to object to the enforcement order.
Furthermore the speed and accuracy of the procedure has been greatly enhanced by automated handling. Instead of taking several weeks, even paper-based applications can today be handled in three to five days, and this is reduced to just one or two days where the electronic data exchanged is used. The further advantages of the electronic data exchange are obvious e.g. reduction of costs for pre-printed forms and printouts, time saving, reduction of the error rate that comes along with a repeated data entry or with the completion of pre-printed forms, and so on.
Despite the goals that have been achieved already, the procedure is constantly being developed to increase its effectiveness and with a view to its eventual across all the Länder. Even those Länder that have not yet introduced automated handling of the order for payment procedure – currently Brandenburg, Saxony and Thuringia – have recently been considering its adoption55. At the end of 2005, Berlin and Brandenburg signed a treaty whereby from 01.07.2006, the Local District Court Berlin-Wedding should become the central competent court for the automated order for payment procedure for both Länder56. According to information from the Saxony Ministry of Justice, it is currently testing the transference of the Saxony order for payment procedure across to the automated handling of another Land, pursuant to § 689 III ZPO. The Land of Thuringia expects its order for payment procedure will be automated from 01.01.2007, and will operate in conjunction with the Länder of Saxony and Saxony-Anhalt.
VIII. The European order for payment procedure from the German perspective
Sujecki has addressed the issue of automation possibilities of the future European order for payment procedure; his comments on the subject will be referred to here57.
Referring to the European order for payment procedure as one of the most important undertakings that is currently being discussed within the European law of civil procedure, the Head of the Civil Law Directorate of the German Federal Ministry of Justice, Dr Birgit Grundmann, took the opportunity at the “Justice for all Conference – Practical approaches to solving cross-border civil and family disputes” in Edinburgh (24.10-26.10.2005) to clarify some German reflections concerning the European order for payment procedure and to outline the German perspective. The salient details of this analysis, with which the authors are in full agreement, are presented in summary form here.
Germany has “shifted position” quite considerably as regards the European order for payment procedure, since in Germany there were doubts as to the actual necessity for the development of a European procedure of this kind. Dr Grundmann has emphasized that in Germany, a large proportion of all civil-law claims are enforced by means of the existing German order for payment procedure which annually proves its worth millions of times over in terms of its efficiency, speed and economical value. Changing this procedure would not only lead to a considerable increase in costs but would probably have immeasurable consequences to national procedural law as a whole. Nonetheless Germany remains interested in regulations which would entail real progress and which would establish a reliable system that is applicable across the whole of Europe. However as a Regulation restricted to cross-border cases alone would suffice to achieve this goal, Germany firmly rejected a European order for payment procedure which would also apply to domestic cases. On the one hand a pan-European Regulation for cases which only take place in one country is neither recognized as “necessary” within the meaning of Article 65 of the EC Treaty, nor is the introduction of such a Regulation justified in the case that a Member State does not yet provide for the possibility of enforcing a claim in such a summary proceeding. This decision is, and should remain, primarily a matter for the national legislator.
Besides the disputed question of competence derived from Article 65 of the EC Treaty, i.e. the Regulation’s scope of application, Germany would have much preferred a Directive on the European order for payment procedure rather than the Regulation currently under discussion. Whereas the implementation of a Directive in the respective legal system of each Member State, i.e. in their laws of civil procedure as self-contained systems, means that there will be two sets of procedural rules to be obeyed by the courts and parties, the introduction of a Regulation would require integration in the existing set of procedural rules. If there were to be therefore two procedural rules dealing with the same kind of legal dispute and serving the same purpose, existing side by side, these would have to be clearly distinguished from each other for reasons of legal certainty. That is to say the “cross-border nature” of the matter must be narrowly defined and should not already be affirmed when in the core it is a national case with a merely theoretical reference to another Member State or merely theoretical cross-border consequence of the legal dispute58.
On 12 October 2005 the Council of Interior and Justice Ministers clarified two important cornerstone principles regarding the European order for payment procedure. First, this procedure shall indeed only be feasible for cross-border cases. Second, standard regulations are to be introduced for the taking of evidence in order to allow for an automation of the procedure such as the “key feature” of the German order for payment procedure. From the German point of view this decision of the Council was a proper and workable compromise, and finally represents a breakthrough. The challenge is, that a precise definition of “cross-border” as the immanent characteristic of the internal market still needs to be established, for it will not make much sense to limit the Regulation’s scope of application to cross-border matters having a broad or even ambiguous definition of this crucial feature.
On 21 February 2006 the European Council of Ministers of Justice finally decided upon a Regulation to introduce a European order for payment procedure for its member states59, to become operative after an implementation period of two years. This European order for payment procedure should give citizens and businesses within the EU the opportunity to pursue pecuniary claims quickly, effectively and efficiently in cross-border cases. Brigitte Zypries, the German Federal Minister of Justice, emphasized that this new instrument fills the gap left by such cross-border cases.
Germany has therefore been successful in Brussels in ensuring that the new procedure will be obligatory only for cross-border cases, and that for the enforcement of monetary claims within Germany, the established and very efficient German order for payment procedure can continue to be used. Similar to the German procedure, the issuance of an order for payment should be applied for using a machine-readable form, which will be able to be processed electronically.
It remains to be seen whether this Regulation will lead to the introduction of a European order for payment procedure that is clearly defined, effective and citizen-friendly. The important question therefore remains how an automated handling procedure will be realized so that it proves its worth as a useful supplementary procedure alongside those already available within domestic legal systems.
* Grozdana Šijanski is Research assistant at the Chair for Civil Law, Law of Civil Procedure and Legal Philosophy of Prof. Dr. Dr. hc. Helmut Rüßmann at the University of the Saarland.
** Jimmy Barber is LLB European (German) / Magister student at the University of Exeter and the University of the Saarland.
1 §§ 688 et seq. German Code of Civil Procedure (Zivilprozessordnung = ZPO)
The German Code of Civil Procedure has been issued in English:
• “The German Commercial Code and the Code of Civil Procedure”, Oceana Publications, Inc., Dobbs Ferry, New York, 2001 (translated by Charles E. Stewart).
• “The Code of Civil Procedure Rules of the Federal Republic of Germany of January 30, 1877 and The Introductory Act for the Code of Civil Procedure Rules of January 30, 1877as of January 1988 (translated and with an introduction by Simon L. Goren), Fred B. Rothman & Co., Littleton, CO 80127 USA, 1990 / Distributor: Kluwer Law and Taxation Publishers, Staverenstraat 32015, P.O.Box 23, 7400 GA Deventer, The Netherlands
NB: As the books are from 1990 and 2001 some parts may therefore be outdated or some paragraphs might have since been amended.
The “German Law Archive” (http://www.iuscomp.org/gla/index.html) publishes a wide range of cases, statutes, literature and bibliographies on German law in English language. Moreover the Internet Project Saarbrücken contains selected German (civil) law statutes and law resources in English too ( http://www.jura.uni-sb.de/) .
2 For an abstract summarising the German order for payment procedure see: Dagmar Coester-Waltjen in Walter H. Rechberger and Georg E. Kodek (eds.), Orders for Payment in the European Union, 149-164 (160) [Civil Procedure in Europe, Volume 4, published by Kluwer Law International, The Hague· London · New York.]
3 The translation of the German term Mahnverfahren into “order for payment procedure” is chosen following the diction for a Regulation of the European Parliament and of the Council creating a European order for payment procedure, cf. the interinstitutional file: 2004/0055 (COD), http://register.consilium.eu.int/pdf/en/06/st06/st06164.en06.pdf, 01.03.2006.
4 According to § 700 I ZPO the enforcement order is an executory title that is equal to a default judgement declared provisionally executable.
5 The Head of the Civil Law Unit in the Ministry of Justice of the Land of Baden Wuerttemberg, Mr Klaus Ehmann took the opportunity at the “Justice for all Conference -Practical approaches to solving cross- border civil and family disputes” in Edinburgh on 26.10.2005 to present the German order for payment procedure.
6 The so-called Widerspruch.
7 The so-called Einspruch.
8 The Länder Baden-Württemberg, Bavaria, Berlin, Bremen, Hamburg, Hesse, Lower Saxony, Mecklenburg-Western Pomerania, North Rhine-Westphalia, Rhineland-Palatinate and Saarland, Saxony-Anhalt, Schleswig-Holstein have already implemented the automation. The remaining Länder of Brandenburg, Saxony and Thuringia have not yet done so. All courts in the participating States do effect the processes on their own server platforms.
9 The central technical support and the further development of the automated handling of the order for payment procedures is carried out by the data processing unit of the Higher Regional Court in Stuttgart.
10 Labour courts have jurisdiction for claims arising out of employment contracts. Therefore, in labour law cases the order for payment procedure falls within the jurisdiction of labour courts too.
11 Apart from some exceptions, as a matter of principle, according to § 689 II ZPO the jurisdiction in most cases is the ratione loci. For those exceptions, see the cases without computerized support (infra, V.).
12 “Gesetz über das Wohnungseigentum und das Dauerwohnrecht“, see: Bundesgesetzblatt (Federal Law Gazette) BGBl. I 1951, 175, 209
13 A database containing information about courts is available at: http://www.justizadressen.nrw.de/og.php. For information purposes, several courts do provide a database (a floppy-disk or CD-ROM) that contains the contacts details of all courts and public prosecutors’ offices in Germany and that is available for purchase e.g. the local district court Mayen provides a 3,5″ floppy-disk for € 50,-
14 For a list of the appointed Local Courts in all participating Länder see the brochure: “Die maschinelle Bearbeitung der gerichtlichen Mahnverfahren” (a publication of the state judicial authorities, coordination site for the machine processing of the order for payment procedures at the Ministry of Justice of Baden-Wuerttemberg), http://www.jum.baden-wuerttemberg.de/servlet/PB/menu/1153559/, 01.03.2006
15 Thus, as from April 2005 it is the Local Court Mayen (Rhineland-Palatinate) that is competent for all order for payment procedures that are performed in the territories of the Länder Rhineland-Palatinate and Saarland. On 1 November 2005, the Local District Court of Hamburg became the central court for the order for payment procedure for both Hamburg and the Land of Mecklenburg-Western Pomerania.
16 § 20 No. 1 “Rechtspflegergesetz“, see: Bundesgesetzblatt (Federal Law Gazette) BGBl. I 1969, 2065
17 The so-called “Nicht-EDV-Fälle“.
18 e.g. for instances of non-standard claims, which are not listed in the catalogue attached to the instructions for filling out application for an order for payment (see below, IV. 1)
19 See: Dr. Rolf Keller “Die Automation des Mahnverfahrens”, NJW 1981, 1184ff. (1185)
20 But also for the interruption of the period of limitation.
21 Bundesgerichtshof (Federal Court of Justice), decision of 30.11.1999, case number: VI ZR 207/98, in: Neue Juristische Wochenschrift (NJW) 19/2000, p. 1420 f.
22 For the catalogue of claims see the brochure: “Die maschinelle Bearbeitung der gerichtlichen Mahnverfahren” (a publication of the state judicial authorities, coordination site for the machine processing of the order for payment procedures at the Ministry of Justice of Baden-Wuerttemberg), http://www.jum.baden-wuerttemberg.de/servlet/PB/menu/1153559/, 01.03.2006, p. 17.
23 Predominantly, diskettes are used. Data carrier exchange using magnetic tape(s) (cassettes) is possible but this is much less frequent.
24 Thus, by means of electronic data exchange the court can transmit for example the bill of charges, the notice about successful or unsuccessful service, the complaint, the notice about an objection and the notice about the transfer to an ordinary civil procedure etc. too.
25 Details – in particular about the conditions for the electronic data exchange – are available from the respective administrations of Justice of the Länder or at the competent courts directly.
26 e.g.: For at least one of its Higher Regional Court districts (Oldenburg), Lower Saxony only allows for an electronic data exchange, by all of the aforementioned methods. Whereas at other Higher Regional Court districts, such as Braunschweig and Celle, the (conventional) written form is admissible too.
27 At present about 63% of all applications are submitted via the electronic data exchange at this central court.
28 Individuals who are interested in the electronic data exchange may ask for the corresponding conditions for participation at the competent courts.
29 The courts provide information and the conditions.
30 With a density of 1.6000 to 6.250 bpi.
31 Format: 3,5”, 1,44 MB; files generated by means of DOS-based systems.
32 e.g. at the local district courts in Euskirchen, Hagen, Hannover, Mayen and Stuttgart.
33 e.g. the Local Court Mayen (for the Länder Rhineland-Palatinate and Saarland) allows for the security software PGP (Pretty Good Privacy) or GnuPG (GNU Privacy Guard, Open PGP Standard) which provides an “electronic signature”.
34 e.g. Deutsche Post AG/SunTrust, Fa. DATEV/Gerva or similar.
35 For this application point-and-click / mouse click see: www.online-mahnantrag.de, 01.03.2006.
36 § 690 III clause 2 ZPO, Security requirements for electronic data exchange: encryption of the data and use of the digital signature. Aside from a PC with internet access, for the participation in the procedure, a signature card edited by a trust centre which is accredited by the Authority for Telecommunication and Post and a card-reader are necessary.
37 For instance in employment cases.
38 Institution and conduct of proceedings determined by the parties of a civil procedure.
39 In the non-automated German order for payment procedure, the notation on the executed copy that affirms the congruity of the executed copy with the “original” continues to be necessary.
40 By checking the corresponding box on his application, the claimant can make an advance request for the procedure to be transferred to an ordinary civil procedure, should the respondent object.
41 §§ 12 et seq. of the German Code of Civil Procedure deal with the jurisdiction in general.
42 According to §§ 11, 65 I Gerichtskostengesetz=GKG (Court Costs Law), No. 1210 Kostenverordnung.
43 e.g. at the Local Court in Mayen the reference number of an order for payment procedure that is not processed automatically contains the character “N”.
44 “Anerkennungs- und Vollstreckungsausführungsgesetz” as from February 19, 2001, see: Bundesgesetzblatt (Federal Law Gazette), BGBl. I at 288.
Independent of the issue of jurisdiction, the order for payment procedure only takes place with service of the order for payment abroad, when the respondent is resident or has his registered office in one of the following countries: Belgium, Denmark, Estonia, Finland, France, Greece, Ireland, Iceland, Israel, Italy, Latvia, Lithuania, Luxemburg, Malta, the Netherlands, Norway, Austria, Poland, Portugal, Sweden, Switzerland, Slovakia, Slovenia, Spain, Czech Republic, Hungary, United Kingdom, Cyprus.
45 i.e. when the order for payment is to be served under Art. 32 of the Supplementary Agreement of August 3, 1959, with respect to the Status of NATO Forces, see: Bundesgesetzblatt (Federal Law Gazette), BGBl. II, pp. 1183, 1218.
46 For this is the “normal” case according to § 689 II ZPO.
47 Still practised for example in Brandenburg (at least until end of June 2006), Saxony and Thuringia.
48 The denotation for the procedural fee for the order for payment procedure is “KV 1110”, see: §§ 11 Gerichtskostengesetz=GKG (Court Costs Law) + part 1 I. No. 1110 of the annex to the GKG , the “Kostenverzeichnis” (schedule of fees)
49 See: http://www.mahnverfahren.nrw.de/service/kosten/gebuehr2004.php, 01.03.2006.
50 According to KV (Kostenverordnung) 9002. Formerly the expenses for the service would only be levied where the amount was or exceeded 50 Euro. For the processing of the issuance of a second executed copy a fee of 15 euros is levied (KV 2110).
51 For the paying-in process the claimant should use this accompanying pre-printed transfer form that can be processed by an optical character recognition programme, or at least at the transfer should quote the designation that is given under the reason for payment.
52 The lawyers fees in the order for payment procedure in Germany are based on the following regulations: §§ 13, 17 No. 2 of the “Rechtsanwaltsvergütungsgesetz“=RVG (Law about the remuneration of lawyers) read in conjunction with annex 2 to § 13 I, and part 3, section 3, subsection 2, No. 3305-3308 (“Mahnverfahren“) of the “Vergütungsverzeichnis-RVG” (remuneration schedule). For a schedule of lawyers fees see.: http://www.rvg-rechner.de/rvg-tabellen, 01.03.2006.
53 See: 12 III Gerichtskostengesetz=GKG (Court Costs Law).
There are therefore no fee stamps to be affixed to the application for an issuance for an order for payment; also no filled out checks for the court costs should be attached to the application. Regarding the procedure where direct debit is authorized, i.e. when the claimant provides the court with a bank collection authorization: participants in the electronic data exchange process, receive weekly collection invoices.
54 In 2003 in the Federal Republic of Germany there were 9 472 611 of these procedures and approximately 4/5 of all orders for payment were processed automatically, source: Statistisches Bundesamt Deutschland (Federal Statistical Office): Justizstatistik der Zivilgerichte Fachserie 10 Reihe 2.1 – 2003, see: http://www.destatis.de, 01.03.2006.
In the Land Rhineland-Palatinate there were 407 658 orders for payment in 2004, of which 380 172 (~93%) were processed using computerised support. 3 221 of the orders were processed conventionally, 24 265 of the orders were excluded from the automated processing because of technical, conceptual or other reasons, information provided by the ministry of justice of Rhineland-Palatinate.
55 Information provided by the Ministries of Justice of Saxony, Brandenburg and Thuringia, February 2006.
56 The treaty between the two Länder still requires the approval of both of the respective parliaments.
57 See: Sujecki, Bartosz: “Elektronisches Europäisches Mahnverfahren – bald Realität oder doch in ferner Zukunft?”, in: MMR Heft 1/2005, p. XXV – XXVI; “Erste Überlegungen zum Europäischen elektronischen Mahnverfahren”, in: MMR 2005, p. 213 – 217; “Die Probleme der elektronischen Durchführung des Europäischen Mahnverfahrens” in: Schweighofer E. et.al. (ed.), Effizienz von e-Lösungen in Staat und Gesellschaft, Aktuelle Fragen der Rechtsinformatik, Stuttgart et al. 2005, p. 307 – 314. To the European order for payment procedure in general see: Sujecki, Bartosz: “Europäisches Mahnverfahren nach dem Verordnungsvorschlag der Europäischen Kommission”, in: EuZW 2005, p. 45 – 49; – “Europäisches Mahnverfahren: Die Notwendigkeit einer ausschließlichen Gerichtsstandsregelung! – Erwiderung auf /Einhaus/, EuZW 2005, 165”, in: EuZW 2005, p. 358 – 360; “Europäisches Mahnverfahren”, in: ZEuP 1/2006, p. 124 – 148.
58 From the point of view of Dr Birgit Grundmann, the Head of the Civil Law Directorate of the German Federal Ministry of Justice, the only scenario that can ensure that the European order for payment procedure will have “added value” from a German perspective is one in which one party lives in country X and the other in country Y. But if both parties live in Germany, and if the debtor owns real estate on the island of Majorca, it is not possible to classify the dispute as “cross-border” by employing the argument that at a later stage this property may serve as the subject-matter of enforcement.
59 cf.: http://register.consilium.eu.int/pdf/en/06/st06/st06164.en06.pdf, 01.03.2006.
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