Litigation
What is a litigation process?
A litigation process, or contentious procedure, is a legal proceeding used to resolve disputes between two parties in court. It begins when a debtor contests a creditor’s claim or objects to a payment order.
During the process, both parties present arguments and evidence before the court, which evaluates the facts and issues a binding judgment. This process allows debtors to defend themselves against unjustified claims.
How does litigation differ from a payment order process?
Payment order process
Purpose: A quick and cost-effective way to collect undisputed claims.
Procedure:
The creditor applies for a payment order from the court.
The debtor has 14 days to file an objection.
If no objection is filed, the creditor can request an enforcement order.
Features: Formal, no oral hearing, no court appointment.
Litigation process
Purpose: Resolving disputed claims through a court decision.
Procedure:
Initiated when the debtor objects to the payment order.
A lawsuit is filed with the competent court.
Both parties present arguments and evidence.
The court decides after an oral hearing.
Features: Comprehensive legal examination, oral hearing, judicial ruling.
Key differences
Type of procedure: The payment order process is simplified, while litigation involves a detailed court examination.
Duration: The payment order process is faster due to the absence of oral hearings. Litigation takes longer because of thorough examination and hearings.
Costs: Litigation is typically more expensive due to court and attorney fees.
The payment order process is suitable for undisputed claims, whereas litigation is necessary when disputes arise between creditors and debtors.
What are the steps in a litigation process?
Objection to a payment order
The debtor files an objection within 14 days, converting the process into a litigation case.
Filing a lawsuit
The creditor files a lawsuit with the competent court, including detailed claims and supporting arguments.
Service of the lawsuit
The lawsuit is served to the debtor, who then has the opportunity to respond.
Written submissions
Both parties exchange written statements outlining their positions and submitting evidence.
Preparation for the oral hearing
The court sets a date for the hearing and reviews the submitted documents in preparation.
Oral hearing
Both parties present their arguments and evidence before the court. Witnesses may be heard, and evidence examined.
Court ruling
After the hearing, the court issues a binding judgment determining the validity of the claim and any payment arrangements.
Appeal (optional)
If dissatisfied with the ruling, a party can file an appeal to seek further legal review.
These steps ensure both parties have a fair opportunity to present their case, leading to a well-founded court decision.
What are the costs of a litigation process?
Court costs
Court fees: Based on the claim's value; higher claim amounts incur higher fees.
Procedural costs: Include preparation and conduct of the trial, including the oral hearing.
Attorney fees
Legal representation: Fees depend on the claim's value and the regulations under the Attorney Remuneration Act (RVG).
Evidence-related costs
Witness fees: Compensation for witnesses appearing in court.
Expert fees: Costs for expert witnesses called to provide evidence.
Other costs
Travel expenses: Costs for travel to court, including transportation and allowances.
Document fees: Charges for procuring and copying documents needed for the case.
Cost distribution
The losing party typically bears the costs of the litigation, including court fees, attorney fees, and other expenses. The court's judgment determines the exact cost allocation.
Exact costs vary depending on the case and progression of the proceedings. It’s advisable to assess potential costs in advance and consider applying for legal aid if financial resources are insufficient.