Eamon Gilmore (Dún Laoghaire, Labour)
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This issue concerns a scam that was the subject of an article by Neil Callanan in The Sunday Business Post on 30 January 2005. The scam is operated by an outfit called European City Guide, based in Spain. European City Guide sends a form to unsuspecting small businesses, such as professionals, charities, galleries and schools. The form appears to be one that requests an update of contact information, such as current address, telephone and e-mail. When the unsuspecting recipient signs the form and returns it, European City Guide claims this represents an order for an advertisement on a CD-ROM guide and relies on small print on the form to support this claim. The victim of the scam cannot withdraw from the so-called order and European City Guide uses debt collectors to demand payment. Initially this sum is for €800-1,000 but increases as time goes by. I understand some victims have bills for several thousand euro.

The scam is operating on a European basis. European City Guide used to operate from Barcelona before the Catalan authorities, acting on 3,500 complaints from Europe, prosecuted the company and fined it €300,000 in 2002. It now operates from Valencia and has engaged debt collectors called Premium Recovery, based in Switzerland. A web-based campaign against European City Guide has, until now, advised victims not to pay. However, the Ministers for Justice, Equality and Law Reform and Enterprise, Trade and Employment must give their urgent attention to a new development. Debt collectors for European City Guide are now threatening victims that they will use provisions of the European enforcement order legislation, in effect since November 2005, to force victims to pay. The European enforcement order legislation allows court orders made in one member state to be legally enforced in another.

The advice to victims has changed somewhat since this development. European City Guide can apply to the court in Spain and, if the case is not defended, easily obtain a certificate stating the company is owed a debt. This is sent to the High Court Registry in Ireland and I understand the Master of the High Court may be obliged to enforce the order. Small businesses faced with demands for extortionate payment from the company may find that an order granted in Spain may be enforced in Irish courts.

For victims of the scam, the alternative is to instruct a solicitor and defend the case but this costs a considerable amount. The European enforcement order was never intended to allow scamming companies to engage in cross-border fraud to extract money from small businesses. European legislation offers no protection to businesses and we need new or amended legislation to stop European City Guide operating and to protect its victims.

Hundreds of small businesses and professionals may have already been stung. Until now, they did not have to pay but the European enforcement order legislation may have changed this. I ask the Ministers concerned to see how this can be addressed. I will return to this subject when the Ministers have had the opportunity to examine the case fully.

Frank Fahey (Galway West, Fianna Fail)
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I am taking this debate on behalf of my colleague, the Minister for Justice, Equality and Law Reform. On his behalf, I take the opportunity to outline the main features of the instrument which has been referred to by Deputy Gilmore. It should become apparent that the instrument has a particular and laudable purpose and it is regrettable if that purpose is being misused. However, if individuals or companies believe they are being subjected to demands for money which are potentially criminal in nature, they have the right, as have all citizens, to make a complaint to the appropriate law enforcement authorities who are best placed to take this matter further should this be warranted.

The reference is to Council Regulation No. 805/2004 which created a European enforcement order for uncontested claims. Being a regulation, the instrument is binding in its entirety and directly applicable. It has applied fully in this jurisdiction from 21 October 2005. A statutory instrument, SI No. 648 of 2005, also came into operation on that date with the aim of ensuring that the necessary provisions for the good administration of the regulation were put in place. Rules of court were also brought into operation in the Superior Courts, the Circuit Court and the District Court.

The key premise upon which the regulation is built is that by creating a European enforcement order for uncontested claims, judgments in respect of such claims, provided they satisfy certain minimum standards, should be directly enforceable in all member states, Denmark being excluded, without any intermediate proceedings, such as a declaration of enforceability, being required. Thus, if an Irish judgment for an uncontested claim is certified as an EEO, should it be necessary to enforce the judgment in, for example, Germany, the creditor will be able to avail immediately of the enforcement mechanisms which are available in that country. Equally, a German creditor in equivalent circumstances will be able to have immediate recourse to Irish enforcement mechanisms, such as the system of execution offered by the sheriffs or county registrars.

It must be emphasised that the EEO comes in at the end of a process. It does not have a life of its own which is independent from the judgment which is given by a court of competent jurisdiction.

Against that background, the regulation applies to judgments given in respect of uncontested claims where the claim in question is for the payment of a specific sum of money that has fallen due. For the purposes of the regulation, a claim is regarded as uncontested where the debtor has expressly agreed to it by admission; the debtor has not objected to it during the course of the relevant court proceedings, or notwithstanding an initial objection, the debtor has subsequently failed to enter an appearance.

For a judgment to be capable of being certified as an EEO it must be enforceable in the member state where it has been granted, it must comply with certain minimum standards and it must not conflict with certain jurisdiction roles. There is also a special provision to safeguard the right of a consumer debtor to be sued in their member state of domicile.

The minimum standards necessary for a judgment to be certified as an EEO fall under two broad headings, those relating to service and those relating to procedural guarantees concerning the provision of basic information about the claim and the steps necessary to contest it.

The regulation admits of two types of service, service with proof of receipt by the debtor, which would include personal service and service without such proof, which would include postal service where the debtor has an address in the member state where the judgment is being given. Because the latter category of service is seen as having less certainty attached to it than the former, a judgment given following this kind of service can only be certified as an EEO if there is a mechanism in place under national law which permits a defendant to apply for a review of the judgment in certain exceptional circumstances which are set out clearly in the regulation.

On the question of procedural guarantees, the regulation specifies the information which must be provided at the time the relevant court proceedings in respect of the initial claim are instituted, for example, the amount of the claim and an indication as to why the claim is being made. Certain additional information, such as the time of the court hearing and the possibility that judgment may be entered for the creditor if an appearance is not entered or the claim is not contested, must also be provided.

The regulation allows for the fact that, in certain circumstances, it may be necessary to rectify or withdraw an EEO which has already been issued. Furthermore, a judgment certified as an EEO may be challenged on the basis of the review mechanism which has been referred to earlier.

From the above, it should be clear that the regulation contains a number of safeguards which are intended to ensure that it does not operate in an unjust fashion and in itself is not a catalyst for the activities highlighted by the Deputy. While the Deputy's highlighting of the issue to which he referred is to be welcomed, it remains the case that the activities instanced may well be ones which need to be brought to the attention of the appropriate law enforcement authorities who are best placed to deal with any follow-up action.