We are specialised in collection procedures. We handle claims both on businesses and on individuals. Our office provides the possibility of agreement on a fixed fee for our services in collection procedures.
If a claimant instructs us to collect a debt they have usually already sent demands for payment and attempted to obtain settlement themselves. Many debts are paid as soon as the debtor receives a demand from a lawyer. The debtor realises that the creditor has taken the step of commissioning a lawyer and that a court case will follow if they do not pay up. In a letter of summons we demand payment within 14 days. This is a legally required deadline in the Netherlands (art. 6:96 Dutch Civil Code). The creditor also has the right to compensation for the legal costs of the summons.
A creditor with a substantial claim can instruct his lawyer to sequestrate the debtor’s assets, such as bank account, real estate or trading stock. A judge can grant permission in a short written procedure in which the debtor is not summonsed to be heard. Sequestration is an effective measure that should be used with caution; it is not suitable for all situations. There is also a cross-border European variant of sequestration. The lawsuit must be brought immediately following sequestration.
The normal legal procedure for collection of debts is carried out in the Netherlands by the law court (if the financial interest is more than € 25.000) or the cantonal court (for amounts up to € 25.000). The normal course of proceedings consists of a writ or petition, a rebuttal or counterclaim, and a hearing followed by a judgement. The entire procedure can exceptionally be carried out in writing, with an extra written round. The judgement can be final or intermediate, wherein a part of the dispute is settled or an intermediate step is taken such as requirement of proof if certain facts that are crucial to the decision are not absolutely certain.
In the Netherlands summary proceedings are a popular option because this type of lawsuit is much faster than substantive proceedings. Summary proceedings can also be used to obtain payment of debts. However, they are not suitable if the debtor can raise relevant objections. In that case it is advisable to opt for substantive proceedings.
Voluntary payment following judgement
On many occasions once a judgement has been handed down payment follows without the need of enforcement, especially when the claim has been refuted and the debtor is solid and in a position to make payment. If the debtor has a liquidity problem and has multiple other creditors, then it follows that no voluntary payment can be expected and further steps will have to be taken.
If the debtor does not pay following judgement, enforcement measures can be taken. The claimant’s lawyer engages a bailiff for this purpose. The bailiff can, for example, sequester the bank account or assets of a debtor. A further step could be sale of assets by public auction if payment is still not made. In some cases it is better to apply for bankruptcy of the debtor, either for strategic reasons or to save costs. The threat of bankruptcy works to increase pressure for payment.
Enforceability and appeal
Under Dutch law an appeal has a suspensory effect, preventing execution of the judgement. However, most judgements are declared “immediately enforceable” at the request of the claimant. Such judgements can be executed regardless of whether the debtor intends to appeal. This option does however create a risk for the claimant; in theory the judgement can always be overturned by the high court. If there is a weighty appeal it can sometimes be wiser to delay collection or to place the amount collected temporarily in the third party account of the lawyer.
Costs of a collection procedure
In the Netherlands a successful claimant is compensated to a great extent, but not entirely, for his legal costs and the court costs. If a letter of summons has been sent with a final deadline of 14 days for payment, the creditor has a right to reimbursement of the extrajudicial costs (legal costs preceding the court procedure). This compensation is a percentage of the claim. The judge will also in most cases declare the losing party liable for the court costs. This liability comprises a partial, flat-rate allowance for the legal costs and payment of the court fees. This payment is independent of the financial agreements that the claimant has made with his lawyer. Our office provides the possibility of agreement on a fixed fee for our services in collection procedures.
We are specialized in civil litigation in The Netherlands. Read more about the Dutch judiciary…