Although legal collections in France tend to be expensive for a creditor, they can result in a judgment far in advance of the time required in the United States to secure a similar remedy.
To begin with, it should be noted that the statute of limitations on B2B claims is five years, whether there is an existing contract or not. It should also be noted that in the absence of a contractual provision, the statutory interest rate in France is 10%. However, the good news here is that virtually all legal proceedings in France, do not require a witness to appear and written statements and affidavits are entirely admissible.
There are three types of proceedings that are available:
- «Injonction de payer» (order to pay): ex-parte proceedings (i.e. in the absence of debtor), basically for monetary claims based on contract or statute, or bills of exchange, or specific assignment of claims, to be filed with the chairman of the commercial court where debtor is located. This is a cheap and fast procedure (few weeks). However, if debtor objects within one month from service of the order by a bailiff or one month after the first enforcement measure when the order was not notified in person, or one month after the notification in person, the case is referred to the commercial court, on the merits of the claim.
- «Référé provision» (summary proceedings): These are adversarial proceedings (i.e. this time in presence of debtor) which are only eligible for non-disputed claims, and which are brought before the chairman of the commercial court where debtor is located. This is a fast procedure (few weeks).
- «Procédure au fond» (proceedings on the merits): These are adversarial proceedings (i.e. in presence of debtor) which are brought before the commercial court where debtor is located, when the claim is disputed. The approximate length of such proceedings is 1 to 2 years.
(The cost required for the above proceedings ranges from €130 to €170 plus baliff’s fees.)
As in most countries, the underlying documents supporting a case must be translated in to the local language which can add to the cost, however, a creditor is not required to post a bond when bringing proceedings in France.
In summary, although the time associated with litigation is relatively short, the costs can be prohibitive depending on the value of the claim. For this reason, Commercial Collection Consultants has specialized in recovering bad debt through our extensive international network while avoiding litigation wherever possible.
Compliments of Commercial Collection Consultants Inc. a member of the EACCNY