Enforcement of judgements - Germany

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TABLE OF CONTENTS 1. What does enforcement mean in civil and commercial matters?  2. What are the conditions under which an enforceable title or decision may be issued?  2.1. The procedure  2.2. The substantive conditions  3. Object and nature of enforcement measures  3.1. What types of assets can be subject to enforcement?  3.2. What are the effects of enforcement measures?  3.3. What is the validity of such measures? Is there a limited period of time provided by law or stated in the court’s order?  4. Is there a possibility of appeal against the decision granting such a measure?

 

1. What does enforcement mean in civil and commercial matters?

Enforcement is a procedural concept involving the use of public coercion to secure a material claim. The power to enforce lies solely with the State, which enjoys a monopoly of sovereign power exercised through its various bodies.

Inventory of enforcement measures which may compel the defendant to do something, to refrain from doing something or to pay something

- Attachment of goods

- Attachment of claims and other assets (in particular earned income)

- Sworn statement of assets

- Injunction to act or to refrain from acting

- Compulsory seizure of property and resale at auction

- Distraint order and interlocutory injunction

2. What are the conditions under which an enforceable title or decision may be issued?

2.1. The procedure

- Are both judicial and non-judicial decisions enforceable?

Yes. Final judgments that are already or provisionally enforceable are covered (Section 704 of the Code of Civil Procedure (“ZPO”) ) as are the other enforceable instruments listed in Section 794 of the ZPO; these include not only court orders but also judicial and out-of-court settlements and notarial deeds.

- Is it necessary to apply for a court order authorising the enforcement?

A court order is necessary for the attachment of the debtor’s claims and assets, the enforcement of injunctions and the seizure of real property under the provisions for compulsory purchase and resale at auction.

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- What is the court competent for ordering enforcement?

For the attachment of claims: The district court for the place where the debtor lives.

For the enforcement of injunctions: The trial court at first instance.

For the seizure of real property: The district court for the place where the property is situated.

- Enforcement agents’ status, role, responsibilities and powers

Enforcement is by a bailiff, a Land official of the courts administration who is hierarchically answerable to the director at the district court. He is independent in the exercise of his profession.

He is responsible for enforcing judgments in civil matters under Book 8 of the ZPO. The focus has shifted in recent times from attachments of goods to attachment of the debtor’s claims. Here the bailiff is empowered in particular to allow the debtor to pay in instalments and is responsible for ensuring that the enforcement procedure is brought to a timely and effective conclusion. One of his primary duties is to take from the debtor a sworn statement of assets that provides the creditor with the valuable record of the debtor’s assets. Other tasks include:

- Disposal of movable and immovable property (eviction)

- Overruling the debtor’s objections to transactions that he is required to accept

- The direct service of documents required for the enforcement process

- The enforcement of distraint orders and interlocutory injunctions (except for matters that the court itself handles)

- The enforcement of arrest warrants.

- Should the application for enforcement be made through a lawyer or any other legal profession?

Decisions on enforcement applications are generally taken by the district court as the enforcement court; legal representation is not compulsory.

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The application for an order for enforcement of an injunction, on the other hand, must be made to the trial court at first instance, which may in certain circumstances be a higher court (regional court) , where legal representation is basically compulsory.

Scale of costs for each type of enforcement measure:

The law provides for different possibilities for enforcement, depending on the claim to be secured, and the costs vary also:

a) Attachment of goods:

Where the right to payment of specific sum of money is acknowledged, the creditor will generally ask the bailiff to secure payment. A fee of €20 is payable for the attachment of the debtor’s movable assets by the bailiff. If the attached property is to be auctioned or sold (i.e. the attached property is realised) , there is a further fee of €40. The bailiff’s costs will also be charged.

b) Attachment of claims:

An order to pay a sum of money can also be secured by an application to the judicial authorities for attachment of the debtor’s claims (e.g. to payment of earnings) and assignment of the claim to the creditor (Sections 829 and 835 ZPO). A fee of €15 is payable; costs (in particular the costs of service of the court order) are reckoned in addition.

c) Sworn statement of assets:

If the creditor has not received full satisfaction from the attachment and realisation, the debtor can be obliged on application from the creditor to provide the bailiff with a sworn statement of his assets. The bailiff will charge a fee of €30 for taking the statement.

d) Seizure of real property:

Enforcement against the debtor’s real property takes the form of a mortgage registered to secure the claim, compulsory purchase and resale by auction or a receivership order on the property.

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A fee is charged for the registration of a mortgage in accordance with the Court Costs Act (Kostenordnung - KostO) in line with the value of the claim to be secured. A table of fees and values up to €1 million is given in Annex 1.

A fee of €50 is payable for the decision on the application for an enforcement order. There are further fees – generally at the rate of 0.5% – for the procedure, for holding the auction, for concluding the sale and for distributing the proceeds. The fees for the procedure in general and holding the auction depend on the value of the property; the fees for concluding the sale and distributing the proceeds depend on the highest bid received. A table of fees and values up to €500 000 Euro is given in Annex 2. In addition to the fees, the costs of the procedure will be charged, in particular the costs of the survey as to the resale value of the property.

A fee of €50 is payable for the application for an enforcement order. A fee of 0.5% is payable for the procedure on the basis of the aggregate profit derived from it.

e) Enforcement of disposal order, injunction enforcement order:

If the debtor has been ordered by the court to dispose of movable property, the decision can be enforced by the bailiff on application by the creditor. A fee of €20 is payable for setting the process in motion. If the debtor is required to dispose of land or a dwelling, there is an eviction fee of €75. The bailiff’s costs will also be charged, in particular for the necessary third parties (e.g. transport, locksmith, etc.). If the process takes more than three hours, a fee of €15 per hour is payable for each subsequent hour or part thereof.

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In proceedings before the enforcement court to order the debtor to do, accept or refrain from a particular act, a fee of €15 is payable.

2.2. The substantive conditions

The creditor must hold an enforcement order to prove his claim. This can be a final judgment that is already or provisionally enforceable (Section 704 ZPO) or one of the instruments listed in Section 794 ZPO (e.g. judicial and out-of-court settlements and notarial deeds).

There are no specific requirements on the debtor’s side.

There are specific requirements as regards distraint orders and interlocutory injunctions. These enforcement measures are taken to secure a claim before a court order has been given in the principal proceedings.

3. Object and nature of enforcement measures

3.1. What types of assets can be subject to enforcement?

The debtor’s movable assets, claims and other property rights and his real property can be subject to enforcement.

Section 811 ZPO specifies the movable assets that cannot be attached; the aim is to allow the debtor and his household to enjoy a minimum volume of objects that are essential for personal or professional use.

These restrictions also apply to the debtor’s earned income. Sections 850 ff. ZPO provide for amounts that cannot be attached as the debtor needs them to cover his subsistence expenses.

3.2. What are the effects of enforcement measures?

- In relation to the debtor

Enforcement rarely succeeds if the debtor has no assets that can be attached. But the creditor can resume enforcement against the debtor if he becomes aware of hitherto concealed assets or newly acquired assets of the debtor.

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The creditor is entitled to enforce an enforceable instrument for up to 30 years. As long as the creditor does not take actual enforcement measures, the debtor is free to dispose of his property.

A debtor who has provided a sworn statement of assets or who has been arrested for refusal to do so may be entered in the register of debtors at the enforcement court in which the enforcement proceedings are taken. Data from the register of debtors may be supplied to third parties in certain circumstances.

- In relation to third parties

On data-protection grounds the banks are under no obligation to supply either the creditor or the courts and bailiffs with information concerning the debtor, in particular his assets.

Where the debtor’s assets are attached or his claims on a third party are assigned, the third party may no longer pay the debtor; he may only pay sums required to cover the creditor’s claim to the creditor. A third party who violates this obligation faces the risk of an action for damages.

3.3. What is the validity of such measures? Is there a limited period of time provided by law or stated in the court’s order?

Claims that have acquired legal status and claims under enforceable settlements or instruments are subject to a 30-year limitation period under Section 197 of the Civil Code (BGB). The creditor can commence enforcement proceedings at any time during that period.

4. Is there a possibility of appeal against the decision granting such a measure?

The creditor may immediately appeal against the refusal to make an enforcement order.

The debtor has the following legal remedies against an enforcement order:

- Immediate challenge if there has been a prior court hearing;

- Reminder if there has been no prior court hearing.

The reminder, to which no time limit applies, must be lodged with the district court; the immediate challenge must be lodged within two weeks at the district court or the Regional Court as review court.

The application for such a remedy has no immediate impact on the pursuit of the enforcement proceedings; there is no suspensory effect.

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Last update: 23-05-2006