How contractors can take legal action in Belgium

It was caveated as a last resort, but our recommendation to an unpaid contractor that he should take legal action in Belgium through the Belgian courts was advice that is much easier said than done, writes Adam Home of debt recovery specialists Safe Collections.

Unfortunately, it won’t be just that single ContractorUK reader who is forced to consider issuing proceedings in Belgium to get money that is owed. So in collaboration with our Belgian affiliate, we have prepared the following guide to help contractors navigate Belgium’s legal system and its not insignificant hurdles.

Belgium’s legal system - introduction

The legal system in Belgium is essentially broken down into three parts; the Civil Code (Code Civil/Burgerlijk Wetboek), the Commercial Code (Code de Commerce/Wetboek van Koophandel) and the Judicial Code (Code Judiciare/Gerechtelijk Wetboek). Note, in cases of insolvency proceedings, these are governed by specific legislation in the Commercial Code.

The Belgian legal system operates in a similar fashion to the courts in the UK, with different courts handling claims for different amounts:

  • Claims for amounts less than €1,860 (£1,360) are handled by the Justice of the Peace
  • Claims for amounts more than €1,860 are handled by the Commercial Court

In most cases, creditors of business will find their cases heard in the Commercial Court nearest to the debtors registered offices.

Necessary Documents

To start legal action in Belgium you will need:

  • Copies of the invoices
  • Copy of the terms and conditions, contract or agreement

If the case is disputed by the debtor, it is recommended that a creditor produce copies of any correspondence sent to the debtor, plus proof of orders, proof of delivery or any other documentation between the parties in support of the claim.

In addition, a power of attorney must be supplied for each individual claim and this must be signed by your local counsel and submitted to the court.  In the majority of cases, this will be supplied to the creditor by the lawyer as a matter of course.

Procedures

When a claim is submitted it is considered by the court and if they are in a position to make a summary decision they will do so, although this is quite rare. Ordinarily, a further date is set and if no further information is submitted, judgment is issued one month later. In disputed cases the court will arrange the exchange of written arguments between the parties and a new court date is set. The court will consider the exchanged arguments and make a decision on this date, with judgment being issued one month later.

Appeals

Debtors are allowed to appeal the decisions of the courts but in practice most do not due to the costs involved.

Costs

As with all legal action, costs are payable both to the courts and to your chosen legal representative.

Legal costs in most cases are in the region of €250 and this covers the summons and general court fees. In most cases, these costs are added to the value of the debt unless the court directs otherwise.

Legal representation is charged separately and will vary on the complexity of the case and its duration. Generally-speaking, costs for legal representation are not included in any subsequent award and are borne by the creditor.

Enforcement and execution costs such as instructing the court bailiff are always charged to the debtor, but the creditor is liable for these costs in cases when the debtor does not pay.  These fees vary depending on the amount of visits and action taken by the bailiff in recovery of the judgment and are provided on a case-by-case basis.

Most commercial claims that are free from dispute will be resolved by the courts in approximately four months or less, but contested or appealed cases may take several years to reach the point of securing judgment. This makes it crucial to explore all non-legal recovery methods in the event of a dispute.

Enforcement

When judgment is secured a debtor has 30 days to lodge an appeal. If this is not done and no payment is made, the bailiff is instructed. Bailiffs have a number of options for enforcement, but the most common are:

  • Seizure of movable goods

This is the standard procedure where the bailiff visits the debtor to remove goods that can be sold to pay the creditor. When goods are seized the bailiff organises an auction but in most cases a debtor will make payment or agree a proposal in order to avoid this.  Timeframe for these cases is generally around 12 months from start to finish.

  • Seizure of immovable goods

If the debtor owns property or land, the bailiff can theoretically seize and dispose of these assets to pay the creditor. However this process is very expensive and not without its own risks. Debtors often have other secured creditors with preferential claims or mortgages over these assets and any such claim is always paid out of the proceeds of sale before any payment is made to unsecured creditors. Timeframe for these cases is impossible to accurately predict as it varies depending on the case specifics, the court and any potential buyers.

Language

One final hurdle to English-speaking claimants can be the language of the courts. Documents used as evidence in the Commercial Court, for example, would need to be translated into either French or Dutch prior to submission. Court documents and directions are also issued in these languages. Similarly, if an award is secured but no payment is made and the creditor engages the court bailiff, any instruction has to be submitted in either Dutch or French and subsequent reports are also supplied in these languages.

Editor’s Note: Related Reading –

IT contracting in Belgium- Money & Tax

IT contracting in Belgium – Living & Working

Overseas compliance for contractors is a game of carrot and stick

Wednesday 8th April 2015