Debt Recovery in France

An Expert's View about Law and Compliance in France

Posted on: 15 Jun 2010

In a country that is traditionally less litigious in nature than the U.S., a letter from an 'avocat' notifying a French debtor of a claim has considerable weight.

DEBT RECOVERY IN FRANCE By Haywood M. Wise Attorney at the Paris, New York and New Jersey bars 32 rue des Bas Rogers 92800 Puteaux, France Internet address : wise.haywood@wanadoo.fr Phone : (33) 1 47 72 31 69 With the collaboration of Aaron N. Wise, Partner Gallet Dreyer &Berkey, LLP th 845 Third Avenue, 8 Floor New York, NY 10022-6601 Tel: +212-935-3131 Fax: 212-935-4514 Email: anw@gdblaw.com Web: www.gdblaw.com where the underlying claim has no relationship to Whether your debtor is a French citizen, a French France. Even, for example, for order and delivery of foreign resident or even a U.S. citizen residing in products taking place exclusively in the United France (take my case, for example, an American States, the counterpart of the above-mentioned expatriate with real property and income in France), archiac privilege of French jurisdiction provides it often makes more sense to pursue the outstanding that a French citizen is always amenable to French debt in France. This of course will also depend on jurisdiction and has no claim of lack jurisdiction the nature of the debt, and in particular whether a before a French court. jurisdiction clause in a contract provides for the exclusive jurisdiction of a U.S. court or otherwise. Once the decision has been made to pursue the claim in France, the question arises as to who you, Unfortunate multiplication of collection costs may the creditor or the collection agency, should arise when a U.S. collector pursues his claim contact. If the entity pursuing the claim is an against a French party in a U.S. court. Most often, intermediary, such as a U.S. collection agency or unless the French party has an ongoing business or attorney, you should verify that your mandate gives assets in France or is concerned about his U.S. you sufficient authority to pursue the claim in credit rating, he will fail to appear and have a France, either via hiring of a French collection default judgment issued against him. Such a final agency or the hiring of a French attorney (avocat). judgment on the merits may serve little use, or will require additional time and costs for hiring of The hiring of an attorney is a more aggressive and French counsel and obtaining sworn translations of expedient solution, the former being inefficient for the U.S. judgment to obtain recognition of the U.S. individual claims. Indeed, the regulation of the judgment (exequatur) before a French court. While collection agency ?profession? in France provides French exequatur proceedings generally do not only for direct mailings, strictly prohibits any involve a review of the merits of the claim, the threats of litigation, and in most cases requires the French court must nonetheless establish its own hiring of an attorney or process server before any jurisdiction over the matter and independently further action can be taken. establish that the U.S. court had territorial jurisdiction (and service of process) over the French In a country that is traditionally less litigious in person. An archaic remnant of chauvinism in nature than the U.S., a letter from an avocat French law provides that unless a French citizen notifying a French debtor of a claim has expressly waives his privilege to French considerable weight. Such a letter, sent by jurisdiction, he may not be subject to suit in any registered mail, is deemed to constitute legal other jurisdiction (hence precluding enforcement of notification of the claim (mise en demeure), and no the foreign judgment in France). further delivery is required before commencement of suit. The contents of this letter are subject to Hence, it is often a much better solution to pursue regulation, and invite the debtor to appoint counsel the claim directly in France. This is even the case and to contact the creditor?s lawyer. * In my experience, French commercial debtors with claims against them in France are likely to be Haywood Martin Wise is an American-born alerted by the mise en demeure and will quickly attorney (member of the New York ('97), New contact the creditor?s lawyer to seek a settlement or Jersey ('96) and Paris bars ('98) and graduate of write a letter to dispute the claim. Brooklyn Law School ('95) and Panthéon-Sorbonne (masters (D.E.A.) in French Business and The French have a tradition of soft negotiation, as Economic Law) and has been consulting U.S. and opposed to the aggressive and coercive litigation foreign businesses in the development of their tactics in the U.S. Once a claim is the subject of French business since 1996. He has authored discussion between two lawyers, usually both numerous articles on French and American business parties attempt to negotiate a settlement in good law and French and American immigration law. faith. However, if the debtor is unwilling to offer a Mr. Wise has a close working relationship with the reasonable settlement, litigation is often expedient New York City law firm, Gallet Dreyer & Berkey, and at the cost of the losing party (at the court?s LLP, of which his father, Aaron N. Wise, is a discretion). Partner. wise.haywood@wanadoo.fr The French attorney has a number of litigation tools Phone : (33) 1 47 72 31 69 at his disposal. If the claim is not subject to serious dispute and is a matter of urgency, he may file a unilateral action for an injunction to pay before the Aaron N. Wise is a partner of the New York City summary court judge, who may enjoin the debtor to law firm, Gallet Dreyer & Berkey, LLP. Mr. Wise's make provisional payment, subject to accrual of areas of expertise include international business interest and penalties for late payment. transactions, corporate, commercial and contract Furthermore, summary procedures allow for law, taxation, intellectual property law. He holds seizures of assets and garnishment of wages. law degrees from Boston College Law School, New York University Law School and the University of Legal fees can generally be kept at a minimum, Paris (France). and is listed in Who?s Who in limited to the drafting of the mise en demeure letter, America, Who?s Who in the World, and Who's Who the negotiation of a short-form settlement in American Law. He has many years of experience agreement and some disbursements. French representing companies and individuals active in a attorneys are averse to contingency fees, and wide variety of industries. Mr. Wise is proficient in professional bar rules prevent attorneys from billing French, German, Italian, Spanish, Portuguese, clients purely via success fees. However, should the Russian and Japanese, and has a basic working claim require litigation, the attorney can establish a knowledge of several other languages. billing relationship based both on hours spent and recovery. * *
Posted: 15 June 2010

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