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Interim and precautionary measures are measures which the courts are empowered by statute to order to settle temporarily a conflict situation between parties until a final solution has been reached following full trial of the issue.
They have been defined by the Court of Justice of the European Communities as measures taken to safeguard rights that a trial court is being asked to recognise, while preserving the status quo in both fact and law.
These are, therefore, measures to prevent the deterioration of a situation.
In practice, they enable a creditor to protect against the risk of going unpaid by one of two means: either the debtor is prevented from disposing of his assets or the assets are subject to a charge that enables the creditor to pursue his claim on them when they change hands.
Examples of interim measures:
A distinction is made between:
In most cases, interim measures must be ordered by a court, usually by the President of the District Court or a judge appointed to act in his stead.
In exceptional cases a party make take interim measures, but then must immediately report them for ratification by the court. For example, a creditor who has a document conferring a valid claim as provided by the law (e.g. a notarial deed) can seize assets belonging to the debtor held by a third party. The assets seized will then be frozen, though still held by the third party, who
cannot dispose of them, and a forced sale can be ordered only with the approval of the court.
As has been seen, the court’s authorisation may in some cases be obtained by simple application with supporting documents and explanations. The court’s order will be made on the basis of the information supplied to it unilaterally.
The rules on jurisdiction are usually determined by the statutory provision empowering the court to order an interim measure. There is no general rule of jurisdiction except that the power to order interim measures usually lies with the President of the court trying the case on the merits.
There are many specific statutory provisions organising interim measures applicable in specific matters (e.g. in regard to leases, co-ownership of an estate, joint ownership of property, succession, matrimonial property regimes etc.).
Where no specific procedure is provided for, a party wishing a measure to be ordered must apply to the urgent applications court. Depending on the amount at stake, this will mean the cantonal court (juge de paix – up to €10 000) or the urgent applications judge at the district court. They have general jurisdiction to order interim or precautionary measures either to preclude imminent degradation of assets or to bring a halt to a manifestly unlawful breach of order (section 933 of the New Code of Civil Procedure).
In general, it is not mandatory to be represented by a lawyer. But there are exceptional procedures, often highly technical, in which a lawyer will be essential.
Very often the enforcement of an interim measure ordered by the court will entail calling on an intermediary. Where the court has ordered assets to be attached, for instance, the order will have to be enforced by a bailiff.
Certain interim measures consist of entrusting the object of the proceedings to an impartial third party for safekeeping. The court might, for example, designate a receiver to hold property in which several persons claim ownership or designate an administrator to manage a company that is paralysed by a dispute between shareholders.
The cost of interim measures varies widely.
For example, a seizure of goods actually costs no more than a hundred or so euros. But there are all sorts of additional costs (e.g. when the bailiff has to undertake searches) , storage costs if the attached goods have to be stored, costs of translating and serving documents if the debtor lives abroad, and the cost of authorisation procedures. In practice, the bailiff’s costs for a seizure an easily run to €700 or €800.
If the court designates a receiver or an administrator, it will probably call on highly qualified people charging correspondingly high fees.
The costs of the interim measure are usually advanced by the party applying for it.
Storage costs are to be regarded as procedural costs that will have to be defrayed by the losing party. But the party applying for the measure bears the cost until final judgment is given.
The court can usually adopt interim measures only if there is a real need or urgency, as assessed by the court. There are very few interim measures that can be applied for without specified grounds (e.g. applications for premises to be sealed after a death).
Where a creditor applies for authorisation to seize assets, the court must check whether the claim looks potentially valid on the basis of the documents and explanations given to it.
Interim measures can relate to a person’s entire movable assets. Only certain goods considered essential for daily existence are exempt.
Luxembourg law allows wages and salaries and subsidiary incomes (rental income, unemployment benefits etc.) to be seized. But there is a portion corresponding to what is considered to be essential for subsistence purposes that is always exempt.
The creditor cannot, however, seize immovable assets (real estate). Such seizures require an enforceable court decision.
In most cases, the court itself will determine the effects of the measure which it orders. It can confine the validity in time or confine its order to specific assets or acts.
Where a court authorises seizures on a unilateral application from one of the parties, the law prescribes time-limits within which an application for validation must be made to the court. If validation is not applied for in that time, the seizure is automatically void.
An appeal lies against orders made by an urgent applications court following an adversarial hearing. The time allowed for an appeal is 15 days following service of the decision.
There is no appeal against decisions taken in response to a unilateral application. But a party who believes the measure was taken wrongfully has a right of redress under section 66 of the New Code of Civil Procedure. The urgent applications court can be asked to order a new interim measure suspending the effects of the original measure taken in response to a unilateral application.
Last update: 24-05-2006