Debt Collection Laws in France

The rules of the game stay the same in the case where your debtor resides outside of France.

Jurisdictional issues are typically resolved within the contract itself. The competent court in case of disputes should be designated within the contract’s jurisdiction clause.

If you find however that this is not the case, the competent court will be that of your debtor’s country of domicile.

The process for identifying the applicable law in contractual agreements takes a similar pattern to that of jurisdictional issues. Choice of law continues to be the overriding principle for governing contractual obligations.

The applicable law should be stated clearly in your contract. If a contractual provision exist defining the governing law of your contract, the applicable law will bet that rightly stated.

However, if this is still not the case, the default rules will be those found in the Rome I Regulation. If the parties to a contract do not choose a governing law for their contract will be governed by the law of the country with which it is most closely connected.

A few exceptions detail this general provision for employment, consumer, and insurance contracts:

Employment contracts: An employment contract is governed by the applicable law of the country from which the employee habitually carried out their work.

Consumer contracts: A consumer contract is governed by the applicable law of the country in which the consumer has their habitual residence.

Insurance contracts: An insurance contract is governed by the applicable law of the country in which the risk is situated at the time of the contract’s conclusion.

The process for identifying the applicable law in contractual agreements takes a similar pattern to that of jurisdictional issues. Choice of law continues to be the overriding principle for governing contractual obligations.

The applicable law should be stated clearly in your contract. If a contractual provision exist defining the governing law of your contract, the applicable law will bet that rightly stated.

However, if this is still not the case, the default rules will be those found in the Rome I Regulation. If the parties to a contract do not choose a governing law for their contract will be governed by the law of the country with which it is most closely connected.

A few exceptions detail this general provision for employment, consumer, and insurance contracts:

Employment contracts: An employment contract is governed by the applicable law of the country from which the employee habitually carried out their work.

Consumer contracts: A consumer contract is governed by the applicable law of the country in which the consumer has their habitual residence.

Insurance contracts: An insurance contract is governed by the applicable law of the country in which the risk is situated at the time of the contract’s conclusion.

Debt collection in France is governed by a two-step process:

For further details see Novlaw’s Practical Guide to Debt Collection in France

It is important to remember that in France you must always start with an attempt at amicable settlement of your dispute.

First, Send out a formal demand letter. In France, this represents both the final reminder for payment and the formal warning needed in order to have your lawyer pursue legal actions.

Second, Attempt an amicable settlement before entering into judicial proceedings. Have your lawyer organize a mediated encounter between both parties. In the case that fails legal proceedings can be threatened.

Third, Request an Interim Injunction Order with the Courts. An interim injunction order or a ‘freezing order’ is a provisional action taken before judicial proceedings. It represents a form of guarantee for the creditor doubting the solvability of the debtor (freezing order or ‘saisie conservatoire’) pending the trial’s final judgement. The procedure involves freezing the debtor’s assets, without warning, in order to avoid the debtor’s attempt to restructure and avoid paying unpaid dues.

Fourth, Evaluate your options in judicial proceedings.

Fifth, if your claim is unlikely to be contested by your debtor, the cheapest solution is to file for an Order for Payment Proceedings. Your debt collection lawyer will file for an immediate payment of the unpaid debt in this efficient and simplified judicial procedure.

Six, if your claim is likely to be contested by your debtor, your lawyer will be brought to file for Summary Proceedings. These proceedings are based on elements of urgency and allow the judge to issue expedited decisions and bypass the lengthy hearings typical to the French judicial system.

Seventh, alternatively to the above-mentioned Summary Proceedings Ordinary, your lawyer may instead file for Ordinary Civil Proceedings wherein the judge is made to rule on all procedural and legal aspects of your case. If the judge rules in the favour of the creditor, a writ of summons on the payment notification will be issued.

Summary Proceedings remain the simplest method to recover your unpaid debts under French debt collection laws.

In order to secure your debts from defaulting debtors in France you may file for an interim injunction order. This procedure will allow the creditor to freeze the debtor’s assets, without warning, and avoid an unfair restructuring. This creates a temporary security for the creditor.

If your debtor contests your claim you will have to enter into either Summary Proceedings, if your claim is found to have elements of urgency, or Ordinary Civil Proceedings.

The general rule on this issue is that court proceedings in France are to be undertaken in French. However, in recent years there has been a notable push towards a certain level of accommodation for international disputes.

The International Chambers of both the Paris and Nanterre Commercial Courts allow for parties to submit their exhibits in English. These courts also allow for foreign parties to express themselves in English in front of the courts of which all ten judges are fluent in English.