In Finland, enforcement is divided into separate and general enforcement.
Separate enforcement includes the recovery of judgement debts. Where necessary, the individual obligation imposed in a court judgement or other ground for enforcement is carried out compulsorily, by way of enforcement.
General enforcement or insolvency procedures include the debt adjustment of a private individual, company reorganisation and bankruptcy. They apply, in principle, to all the debts and assets of the debtor. Only separate enforcement, i.e. the recovery of judgement debts, is discussed here. See also Bankruptcy - Finland
In practice, the most important type of enforcement in civil and commercial matters is the enforcement of a judgement debt. It includes the distraint of the assets of the debtor; the sale of assets, where necessary; and the remittance of the accrued funds to the creditor. Assets are distrained for the amount that is necessary to remit the debt to the creditor. In cases where enforcement has been requested by several creditors or the distrained assets are subject to collateral rights, the funds are divided amongst the creditors in order of priority.
Another important type of enforcement in practice is eviction. In it, for example, the tenant is evicted from a property or residence upon termination of the tenancy relationship. In addition, the obligation to transfer certain assets (the transfer obligation) , the obligation to do something (the obligation to act) as well as the prohibition to do something and the obligation to allow another person to do something (the prohibition obligation) can be enforced. The means employed in these types of enforcement are usually either coercive measures or periodic penalty payments, depending on the situation. The seizure imposed by a court or other preventive measure can also be carried out by way of enforcement. Only the enforcement of a judgement debt is discussed in detail below.
In Finland, bailiffs usually act as enforcement authorities. In practice, deputy bailiffs normally carry out the enforcement tasks. Bailiffs are independent and impartial administrators of justice of the State, who are to proceed appropriately in their tasks. Bailiffs must carry out the enforcement tasks expeditiously, efficiently and appropriately, without inflicting on the defendant or a third party more damage than required by the purpose of enforcement. Bailiffs have effective powers, for example, to seek the assets of the debtor.
Initiating an enforcement action requires that the creditor has a court judgement or other ground for enforcement establishing the receivable. However, no separate enforcement order by a court is usually needed.
In civil and commercial matters, the ground for enforcement is generally a judgement or other decision by a general court of law. General courts of law include the District Courts as courts of first instance and the Courts of Appeal and, finally, the Supreme Court as appellate courts. In addition, an arbitral award can provide the ground for enforcement. A child support agreement verified by the relevant municipal authority is an important ground for enforcement in practice. In contrast, documents made only between private individuals cannot serve as grounds for enforcement in Finland.
A judgement by a foreign court or an equivalent document qualifies as the ground for enforcement in Finland only if expressly provided for in law, now mostly in Community law.
The creditor must file an enforcement request, accompanied with the ground for enforcement, with any local bailiff. The creditor may request regular, full enforcement or limited enforcement (see section 3. 1. ). The creditor may also enter the debt as a passive debt under the supervision of the enforcement service for two years, if recovery is, for the moment, impossible. Employing an advocate or any other lawyer is not necessary in enforcement.
The enforcement fees to the State are mainly collected from the debtor. The creditor is liable to pay a disbursement fee amounting to 0. 5 per cent of the disbursed amount, within an upper limit of EUR 200. If recovery fails, a small processing fee is collected from the creditor.
The validity of the creditor’s claim is investigated by a court in a civil procedure, before it issues a judgement qualifying as the ground for enforcement. In practice, the majority of decisions are default judgements. A default judgement is based on the passivity of the opposing party, when the opposing party has failed to answer the summons or to make an appearance in court, without a detailed investigation into the validity of the claim. The creditor can thus easily and quickly obtain the ground for enforcement for an undisputed debt. See also Simplified and accelerated procedures –Finland
The bailiff in enforcement follows the court judgement or other ground for enforcement and cannot investigate its validity. Instead, the bailiff makes sure that the debt has not been terminated after the judgement by disbursement has been issued due to having been paid or the limitation of statues having expired, etc.
In principle, all types of assets belonging to the debtor and with a property value can be distrained. In practice, funds from the debtor’s bank account, tax refunds, wages, salaries, employment pensions or other regular income can be garnished. In addition, other moveable assets or effects or real property can be distrained. However, if the creditor has requested limited enforcement, distraint measures can be directed only at assets, ascertainable from registers, that do not require liquidation.
Nevertheless, the law prohibits certain types of assets from being distrained, based on social and other grounds. Various social benefits, for example, cannot be garnished. The debtor also enjoys a so-called separation advantage, which means that the debtor’s ordinary household effects or necessary tools, for example, cannot be distrained.
To guarantee a reasonable livelihood to the debtor and his or her family, the garnishment of wages, salaries and employment pensions is subject to quantitative restrictions. As a general rule, one third of the debtor’s net wage and salary can be garnished. The debtor is always guaranteed a protected portion.
If the distrained assets require liquidation, they are usually sold by public auction.
After distraint, the debtor may not destroy or dispose of the distrained assets to the detriment of the creditor or otherwise decide on it. Any measure contrary to the prohibition is ineffective. However, a third party may enjoy bona fide protection in exceptional cases. Receiving distrained assets is a criminal offence.
The bailiff has comprehensive access to information not only from the debtor but also from third parties, such as banks. Once a bank has been informed of a withholding notice concerning the distraint of funds on a bank account, it may only disburse funds to the bailiff. Paying a receivable or a wage or salary contrary to the withholding notice is a criminal offence.
A court judgement or other ground for enforcement can no longer be enforced, if the right referred to therein has subsequently lapsed because of disbursement, expiry or some other reason. After issuing the judgement, the receivable is usually subject to a period of limitation of five years, which the creditor may interrupt.
The enforceability of certain grounds for enforcement is now subject to a time limit in Finland. Such grounds include those where a natural person has been ordered to pay a monetary debt. The purpose is to prevent enforcement of unreasonably long duration. Such grounds for enforcement are usually enforceable for 15 years, in some cases for 20 years. The creditor may not interrupt the time limit. There is currently a transition period, after which the oldest grounds for enforcement will become prescribed from 1 March 2008.
Enforcement measures as such do not usually have specific time limits. The bailiff must carry out the enforcement tasks expeditiously and without unnecessary delay.
The enforcement measure or decision by a bailiff may be appealed by anyone whose interests are affected by said measure or decision. The appeal is filed in a general court of law, with a District Court as the court of first instance. The time limit for filing the appeal is three weeks, which usually begins at the issue of the decision or the date when the person is notified of the decision.
In general, filing an appeal does not suspend enforcement, unless otherwise ruled by the court. If the appeal is admitted, the court will overrule the bailiff’s decision or amend it. The bailiffs themselves may, under certain conditions, correct obvious errors.
If solving an argument or claim presented in connection with enforcement requires taking oral evidence, it may have to be decided as a civil matter in a court of law (an enforcement dispute).
Last update: 07-11-2006