How they work:
Debt Collector in France
Most of you (and even all of you) know that the French legal system is a civil law structure, as opposed to the common law system seen in the United Kingdom and the United States in particular. One of the notable distinctions in these two systems is that procedural law is of utmost significance in civil law countries: it is also the primary basis of legislation.
Therefore, many French laws were codified in separate languages, the most famous being the Civil Code adopted in 1804, and revised through the years. Statutes extend in the country of France, because France is not a federal entity.
Despite not being the first source of law, case law is nevertheless relevant. French courts are not bound by the rule of legal precedents, as in common law countries, but rulings, in particular those of the Supreme Court ("Cour de Cassation"), bear significant weight, as the "Cour de Cassation" considers only questions of law and not questions of reality.
Debt settlements in a foreign jurisdiction around the world present the following main concerns in particular: who are the experts in the recovery process? What details would you use on the debtor? How does the justice mechanism work if the creditor wants to launch court action against his debtor? What are the expenses involved? How will this be applied against the debtor when a money verdict is obtained?
Collection experts The representations of debts in France are primarily managed by collection firms, prosecutors and bailiffs ("huissiers de justice").
1. Collection agencies
1.1. Collection agencies are grouped mainly through a group, i.e. the "Syndicat National des Cabinets of Recouvrement of Créances et de Renseignements Commerciaux" (A.N.C.R.). It can be remembered that this organization also issued ethics regulations.
1.2. Collection department operations are governed by different laws and in particular by a Decree dated 18 December 1996.
1.3. This Decree specifies, inter alia, that collection companies shall carry out qualified liability insurance, (ii) open a trust account for the assets of their customers, and (iii) submit a formal statement to the general prosecutor specifying that these conditions are fulfilled before participating in any collection operations. Violation of certain rules can lead to criminal penalties.
1.4. In fact, collection companies may enter into a written contract with their customers, in their capacities as agents, covering all specified aspects (e.g. remuneration estimate, payout to the recipient of the recovered funds, professional liability insurance, etc.).
1.5. This is worth noting that nice recovery charges are generally to be paid by the creditor, and can not be transferred to the debtor pursuant to legal requirements.
2. Attorneys specialized in debt collection
2.1. Attorneys licensed to practice in France at law ("Avocats") must be accredited with one of the French bar associations. They are allowed to provide legal advice and to make written and oral evidence to all first-instance courts and appellate courts in France (although there are certain peculiarities with respect to presence before the "Tribunal de Grande Instance" and the appeals courts).
2.2. Lawyers are not entitled to operate exclusively on the grounds of a contingency agreement (i.e. the result of the case will not be dependent on any of the remuneration). Usually lawyers work daily, but we also see other compensation agreements (fixed cost, mixed rate, restricted compensation, match charge, etc.), which can be paid in addition to a contingency fee.
2.3. Every lawyer is protected for misuse under a community scheme subscribed by the court for the transfer of funds and for misuse. On top of this, taking out extra policies is good and standard procedure for a corporate law firm.
3.1. Bailiffs ("huissiers de justice") benefit from a judicial immunity over disciplinary procedures and corrective steps (e.g. emergency bank account attachments).
3.2. We do have the freedom to participate in collecting events. In fact, they are permitted to access information about bank statements under some circumstances.
3.3. Preliminary inquiry on the debtor It is best to conduct basic research on the French debtor before beginning the proceedings. Nonetheless, it is necessary to know precisely the debtor's position (is it a corporate entity? an individual? a sole proprietorship? etc.), because a decision would be unenforceable, for instance against a sole proprietor, if the debtor is in fact a corporate body.
3.4. In this respect, whether the debtor becomes a corporation or a sole proprietorship, some specific facts can be easily accessed from the various trade registries in France (e.g. key debtor details: this is the so-called "Kbis sample," the opening or not of a bankruptcy proceeding, the last financial statements, the debtor's obligations and liens, etc.). French databases do exist to provide these information.
3.5. It is worth remembering that France does not have a formal property register, thus the challenge in collecting details on whether the debtor holds immovable properties.
3.6. Specific information can also be collected from other registries (e.g. Associations and Foundations Registry, National Institute of Industrial Property Registry, Movable Pledges Register, etc.) and from private investigators.
4. Dispute Settlement Framework
4.1. The French legal system is split into two major categories: civil and judiciary. Conflicts of jurisdiction between these two sets of tribunals are determined by a special tribunal, the "Tribunal des Conflits."
4.2. Regulatory tribunals hear cases concerning the government's executive branch's regulatory and operational departments, other tax cases and lawsuits of administrative decisions.
4.3. Judicial courts are split into (in a broad sense) civil courts and criminal tribunals.
4.4. The civil justice system is a two-tier structure of no jury: I first-instance courts (i.e. "Tribunal de Grande Instance" and "Tribunal d'Instance" and separate courts for merchants, labour, social welfare and agricultural matters) and (ii) courts of appeal of jurisdiction over first-instance court cases.
4.5. The highest echelon is the Supreme Court ("Cour de Cassation"), which is generally limited to the study of legal issues. The civil court system (and more specifically the commercial courts) is of interest when it comes to commercial collections. Business courts are composed of entrepreneurs who are chosen by their colleagues.
4.6. Criminal tribunals are usually useless for private records.
5. Procedural model
5.1. Proceedings undertaken at a French court by a claimant begin with a writ of summons ("assignment") issued by a bailiff on the defendant. When bringing a case before a commercial court, international creditors must nominate the address for service in France.
5.2. When the writ of summons is filed with the court clerk, it takes several months before the judge adjudicates the case. The parties must share their written statements and testimony during this time, and eventually deliver their oral arguments at the court hearing. The court points out the various dates at which the parties would be expected to present their written statements and oral arguments to supply evidence.
5.3. In France, investigation procedures are not identical to those held in the common law system. Parties are not obligated, because collection is optional, to disclose the records in their hands. However, the court could require the other party to provide specific documentary evidence after a request from one party.
5.4. It is worth remembering that all documents submitted before a French court in a foreign language have to be translated by a sworn interpreter into French. As regards records, it is also necessary for a creditor to bear in mind that successful and timely recovery relies on the creditor presenting his counsel with a brief description of the debt's "history" and all related papers, emails, contracts, checks, invoices, etc. If sending copies of invoices to the court, they shall contain the following handwritten words, "certifiée conforme à l'original" (true and authorized copy), along with the creditor's signature and seal (if any).
5.5. Bearing in mind the aforementioned context, it is also important to note that summary trials ("reféré") occur in France and are helpful where a debt can not be contested seriously. In such cases, an order can be issued within a few days from the court (in fact, from the presiding judge). These hearings are processes of adversarial type.
5.6. In fact, the judge can procure an injunction to pay ("injonction de payer") according to an ex-parte claim being made by the creditor. Unless the claimant refuses to pay such an order, the case will be trialed on the merits as a normal practice mentioned above.
5.7. The complainant does not need security reserves for bringing a lawsuit. However, if the court orders enforcement of the judgment pending an appeal (this is the so-called "execution provisoire" or temporary implementation of the decision), the court may demand a security deposit.
5.8. It can also be remembered that there are interim protections in France that can be sought in ex-parte cases under such circumstances (i.e. additions, conditional judicial leases, or pledges). Such temporary remedies can be valuable for international investors who seek to protect their claim.
6. Judicial decisions enforcement
6.1. A French court decision is not enforceable automatically. First, a bailiff must deliver it on the defendant. The verdict will then only be applied only if it is no longer appealable or, only though a contest against it has been filed, in the case of provisional implementation of the ruling. A verdict in summary trials will still be upheld even though an appeal is filed.
6.2. The compliance of decisions lies with bailiffs, who can seek support from public officials in certain cases. Essentially, the bailiff may seize or garnish all the debtor's properties, whether mobile or immovable, even if certain properties (e.g. wages) may not be entirely confiscated.
7. Recognition and enforcement of international decisions
7.1. If such formalities are met, an international judgment can not be applied in France. In this respect, compliance is either based on conventions, if any, or on the laws of the French Civil Code and the Civil Procedure Code.
7.2. There are several conventions and legislation on the implementation of international decisions, the most relevant of which is the European Council Directive on Civil and Commercial Decisions of 22 December 2000, in effect with Member States of the European Union.
7.3. In general, this law sets out a streamlined process for acknowledgment and compliance whereby implementation in France of a decision made by another Member State is achieved by making an ex-parte application to the French civil court clerk. Resources can be filed against the court's clerk's decision to accept or deny the demand for approval, either before the court of appeal or before the civil court's presiding judge.
7.4. Traditionally, the reasons for this redress are the conformity or non-compliance of the foreign judgment with the laws of French international public policy, and/or the presence or non-existence of another decision that is incompatible with the foreign decision.
7.5. Global rulings, in the absence of a convention, are generally enforceable by a supreme court ("Tribunal de Grande Instance") decision ("exequatur"), received in the form of an adversarial action. To grant an exequatur warrant, the French judge reviews I whether the foreign court has jurisdiction; (ii) whether the foreign decision complies with the laws of French international legal policy and due process of law; (iii) if there is no infringement ("infringement à la loi").