It is enough to make your blood boil: when someone owes you money, or you are caught up in a dispute over a product or service. But have you considered all the legal options, including one that is designed to be easy and cheap, and where you do not have to have a lawyer?
Many people do not know it, but numerous countries in Europe have what is known as a small claims procedure, for disputes involving limited amounts ranging from 2,000 to 10,000 euros. There is also a European small claims procedure for cross-border disputes, and there are plans to make that even simpler.
In a country like Hungary, tens of thousands of people make use of the small claims process every year. But in fact it is not just for consumers, businesses can also benefit from it. And in these tough financial times, this could be particularly interesting for small companies chasing up unpaid bills.
Right On travelled to a wine company, 150 kilometres south of Budapest. The owner knows only too well what it means for a company when money owed is not paid. After a bad experience some years ago, this family business was forced to get tough on how it deals with customers, some of whom are outside Hungary.
“We issued an invoice to a buyer and he didn’t pay,” said the winemaker Mihaly Endre Fekete. “He disappeared for a while, and it seemed likely he would never pay for the order. So we spent a lot of time finding the middle man who originally put us in touch, and he forced the buyer to pay, but it was a huge problem at the time.
“Ever since we had this experience we demand the money upfront, so the buyer pays before the wine leaves the vineyard. When the customer buys and we get paid, that’s the ultimate moment, it’s why we do what we do. And when it becomes uncertain if this moment will arrive, it really wears you down.”
At the moment in Hungary there are less than 100 cases of cross-border small claims every year. Officials say the procedure is not that well known, and people have other options they can use. We spoke to a judge who says from his experience there is great demand for a quick delivery of judgements.
“This is true for private individuals and small companies alike: most of them cannot afford not to have at their disposal even a small amount of money for many months, let alone years,” Supreme Court judge Andras Osztovits told Euronews. “The member states and the European Union have to provide quick and effective legal instruments for their citizens and their companies in this legal area.”
There is a lot of work to be done in raising awareness about the small claims process, which experts say could increasingly move towards application forms being filled in online. And part of the push towards giving citizens more of a chance to achieve justice in monetary disputes is a planned reform of the European procedures.
For example, how small is small? Brussels has been reviewing whether or not the 2,000 euro limit on cross-border claims should be substantially raised. And that is not all.
Right On’s Seamus Kearney reported: “To simply even further the small claims process, and to encourage more people to use it, several issues have been reexamined: for example, whether the application fee is too high; what documents should be provided; and whether more guidance is needed in filling in the forms.”
Proposals are due to be announced soon, and it is hoped they could also inspire similar changes to national procedures. But even if a judge rules in our favour, actually recovering the money that is owed is not that easy; and more expense and legal action might be required.
Matyas Kapa, a lawyer specialised in civil procedures, told Euronews: “If people have a claim they tend to think that by getting a court judgement the problem will be solved. But in fact they have to think ahead to enforcement problems.
“Because having a judgement doesn’t necessarily mean they will get their money back, enforcement can raise a lot of problems too. There can be two kinds of serious problems concerning a claim: either a debtor does not want to pay, or cannot pay.”
Winemaker Mihaly Endre Fekete concluded by saying: “It’s really aggravating and depressing, and it ruins your momentum. You can no longer work with the same enthusiasm, when there are doubts over whether your work will produce a result. It takes a lot of discipline to start again after a failure, when there’s a chance of such a fiasco happening. It’s very difficult to start to work again and do a good job.”
Of course a good outcome in a financial dispute is never guaranteed; but experts say taking the time to explore our legal options will greatly increase the chances of success.