Business to Business Debt Collection in France: The Judge

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At the French commercial courts the judges are not professionals but volunteers.

They are traders, storekeepers and manager of companies and they are elected from their local peers. To have a chance to be elected the candidate has to fulfil the following requirements

Age = 30 years old

French citizen

Having never faced a bankruptcy procedure

Registered during the 5 last years at the Chamber of Commerce

Having during 5 years be running a store or company as a general manager or chairman or owner.

Very surprisingly they are 3 categories of persons which are also able to be elected as commercial court judges

The spouses of the shop owners having been supporting their husband in the business with no other Job

The ship and airplane captains (and this is not a joke).

The elections are hold one time a year in October.

The voting persons are the elected and retired commercial judges.

During his first election the judge is elected for 2 years, during the second for 4 years and he can be re-elected 2 more times so that in the end he will be Judge for 14 years.

The first year the commercial judge is obliged to follow a 5 months training at the National School for Judges were the professional judges are trained during 31 one months.

All over France they are 3200 commercial judges.

When you start a litigation procedure before a French commercial court you should be aware of this specificity.

There is an exception in a geographical area called Alsace Moselle the commercial court judges are professionals and not volunteers.

On the second level (appeal) the judges are all professionals.

Georges Vonfelt

www.gevo.fr

Unpaid Invoice: the French summary proceeding called „ référé-provison“

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The référé –provision is a legal proceeding through which a creditor summons a debtor in front of a judge to be sentenced to pay the amount he owes.

The sentence arise in more or less 30 days, and if then the debtor still don’t pay the invoice, the creditor is enabled to seize his assets without having to wait for an appeal decision.

When is it possible to start a Référé Provision proceeding?

The goal of the proceeding is to get the payment of an overdue amount.

In opposition to other summary proceedings you don’t have to prove an urgency to act.

You cannot use this proceeding if

The customer is bankrupt

The customer has his head office abroad and no firm in France

The unpaid amount is related to an unpaid Scheck

You cannot use this proceeding if there is a documented dispute, the creditor has the obligation to prove the reality of the debt. If not the Judge declares himself as not competent.

A debt is considered as really disputed if

The debtor contacted the creditor explaining that he don’t pay due of damages to the delivered goods, or due to the fact that the mission is not fulfilled.

To make a decision it’s necessary to check the validity of the contractual agreement

A paragraph of the contract gets another interpretation for one of the parties.

The creditor hast to make the debt credible for the judge.

He has to prove that he realized his tasks

What are the differences between référé provision and the injunction procedure?

The injunction procedure is made without the hearing of the debtor. There is a higher influence level on the judge during an injunction proceeding because he hears only the arguments of the creditor.

For this reason the debtor has the possibility to make an opposition toward the injunction.

During the référé provision there is a hearing of the debtor he can present his arguments. If the judge despite of those arguments sentence the debtor there is more or less no way to skip the payment.

If the debtor raises appeal toward the judge’s decision his chances to get a different decision before the appeal Court are very low due to the fact that more or less the appeals judges always confirm the first decision.

Uber’s influence on the payment behaviour

anglais, News, Unpaid debt

In France we are talking about an „ uberisation“ of the society due to the important and fast  evolution of the consumer habits.

The evolution is very quick in big urbanisation areas like Paris.

Due of those facts all the leading superstores or hypermarkets announced officially that they will reduce the size of their markets and exclude all the products which are big sellers on Internet.

In the meantime thousands of small companies which are in competition with the Internet start a bankruptcy procedure.

In 2016 in Paris and his suburbs the number of bankruptcies for Fashion retailers, Shoe retailers, small Hotels, small Transport and Taxi Companies raised about 20 % in comparison to 2015.

The suppliers of those companies have to adapt their credit management to this evolution.

In France all the laws and fines issued in the last years couldn’t stop the negative payment delays evolution. One of the major reason is the difficult relationship between the small companies and their Banks.

New ideas are raising coming from the involved professionals ( lawyer, judges, bankruptcy receivers and so on ) one of them is that if a small company goes bankrupt due of the late payment of one of his customers this one will have to pay all the debts of the bankrupt company.