EUROPEAN ACCOUNT PRESERVATION ORDER
03 Aug, 2011
SHOULD THE UK OPT IN? The Ministry of Justice has today launched a six week consultation on the position the UK should take regarding a proposed European Regulation creating a European Account Preservation Order (EAPO).
The proposal aims to establish a self-standing European procedure to freeze the bank accounts of debtors,and help recover debt in cross-border civil and commercial disputes.
The EAPO would operate in cases where a creditor can prove to a court that they have a claim but there is a concern that the defendant might remove, dispose of or conceal assets in his/her bank account.
Orders can be requested prior to the initiation of, and at various stages during, the proceedings and would temporarily freeze a debtor’s bank account up to the amount of a claim or judgment plus any interest and costs.
Justice Minister Crispin Blunt (pictured)said: “The Government supports measures which make it easier for both businesses and citizens to resolve disputes and enforce judgments across borders. Legal certainty and effective dispute resolution procedures are essential to ensure the internal market works properly. Therefore the Government welcomes, in principle, the Commission’s proposal to create an EAPO. In particular we are pleased to see that the Commission’s proposal is meant to be an additional tool and is not intended to replace existing domestic procedures.
“However the Government recognises that in any such procedure there needs to be a very careful balance between the rights of creditors to recover debts and the provision of adequate protection for defendants. We are also aware of the need to limit any additional burdens on banks and other financial institutions. We are therefore interested to hear views on whether the Commission’s proposal strikes the right balance in these areas.”
The Government is particularly keen to hear views from:
· the judiciary;
· the legal profession;
· financial institutions holding bank accounts etc. which may be frozen by an order;
· Businesses or individuals likely to make use of the procedure.