A judicial order for a default action is a civil court procedure for the enforcement of pecuniary claims against a defaulting debtor, which is governed by § 688 ZPO. It thus offers an alternative to the legal action procedure. However, it does not require a detailed statement of claim and, moreover, it is conducted without the need for evidence and oral proceedings.

In the judicial order for default actions, the issuance of a payment order is requested. It is of particular practical importance because the service of a payment order suspends the limitation period for the claim (§ 204 (1) No. 3 BGB). Furthermore, the creditor can obtain a legally binding title for the enforcement of the claim through the dunning procedure with the enforcement order.

When is it Advisable to initiate Default Action?

If it can be assumed that the debtor will not object, a default action promises to achieve the enforcement of a pecuniary claim faster and more effectively than by bringing a legal action. All that is needed is to fill in and submit an application form, which can also be done online. Moreover, the costs are lower than those of legal action.

On the other hand, if you expect the debtor to object to the order for payment, you should consider taking legal action instead of a default action. This is because it is more cumbersome to first initiate a judicial order for default action and then, in the event of an objection, to convert it into civil proceedings than to bring an action immediately.

Furthermore, when deciding whether a judicial order for default action should be initiated, it is important to consider whether the exact address of the debtor is known. If this is not the case, it is not advisable to initiate an order for payment procedure. This is because it does not take place if the order for payment would have to be served by public notice (§ 688 (2) No. 3 ZPO). However, in the case of legal proceedings, public service is affected in this case.

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What are the Requirements for a Judicial Order of Default Action?

The central prerequisite for a judicial order for default action is, first of all, that the filing of an application is aimed at enforcing a claim for payment of a certain sum of money in euros (§ 688 (1) ZPO). In the case of a claim for payment of a monetary debt in a foreign currency, conversion into euros is possible (BGH, judgement of 5.5.1988, Az. VII ZR 119/87). In the case of a cross-border default action, the claim may also involve the payment of a sum of money in a foreign currency (§ 32 (1) sentence 2 AVAG).

This is because the order for default action is also admissible if the order for payment would have to be served abroad. However, it only includes service in the EU states, Iceland, Norway, Switzerland and Israel (§ 32 in conjunction with § 2 & § 1 AVAG). Furthermore, the applicant’s claim may not be dependent on any consideration not yet provided (§ 688 (2) No. 2 of the Code of Civil Procedure). If the admissibility requirements of § 688 ZPO are not met, the default action procedure is rejected (§ 691 (1) sentence 1 no. 1 ZPO)

What is the Procedure for a Judicial Order for Default Action?

Application for a Default Summons

The default summons is initiated by submitting the creditor’s application for a judicial order for default action at the competent local court (§ 690 ZPO). If it concerns claims for which the labour courts are responsible, the application for the default action takes place there (§ 46a ArbGG).

In the application for a reminder, the applicant must state the exact amount of money, with main and subsidiary claims specified separately and individually, and the reason for the claim. A justification of the claim does not have to be given. Furthermore, the application must indicate, among other things, the parties and, if applicable, their legal representatives or attorneys of record. Finally, a handwritten signature is required.

The application for a reminder may also include the application to conduct the disputed proceedings if the defendant objects in due time (§ 696 (1) ZPO). There are different procedures for applying. It can be done by filling out official forms or via the Internet by using an online application.

Issue of a Default Summons

The admissibility of the default summons is checked. A limited check is made about whether the requested payment of the amount of money can be justified by the stated claim (Schüler, in MüKo ZPO, 5th edition 2016, § 691 Rn. 15). However, it is not examined whether the claimant is actually entitled to the claim (§ 692 (1) no. 2 ZPO).

Finally, the fee for the procedure may already have been paid (§ 12 (3) GKG). If all the conditions are met, the court will issue and then serve a payment order ex officio. The defendant is requested to either settle the alleged monetary claim or to lodge an objection within two weeks of service if the claim is deemed unfounded (§ 692 (1) No. 3 ZPO).

Opposition to the Default Summons

The debtor may object to the default summons in writing per § 694 ZPO. The objection period is two weeks starting with the service of the order for payment (§ 692 (1) No. 3 ZPO). In the case of service abroad, the period is one month (§ 32 (3) AVAG). However, a timely objection can still be raised after the deadline has expired if no enforcement order has yet been issued (Dörndorfer, in: BeckOK ZPO, 37 Ed. 1.7.2020, § 694 marginal no. 4). The respondent may object to the entire claim asserted or only part of it.

If an objection is raised in due time, an enforcement order may not be issued. At the request of one of the parties, the order for default action is then transferred to ordinary court proceedings (§§ 696 (1) sentence 1, 697 ZPO). In this case, the applicant must substantiate their claim within two weeks in a form that corresponds to the statement of claim. Only in the civil proceedings is it examined whether the claim asserted actually exists. A late objection is not rejected but is treated as an objection to the enforcement order.

Writ of Execution and Enforcement

If no objection has been lodged in due time, the court will issue a writ of execution based on the order for payment upon application (§ 699 (1) sentence 1 ZPO). The enforcement order is equivalent to a judgment by default declared provisionally enforceable (§ 700 (1) ZPO). It, therefore, constitutes an enforcement order (§ 794 (1) No. 4 ZPO). It thus serves as a basis for enforcement, which the creditor can apply for from the competent enforcement body.

The application for a writ of execution can only be made after the expiry of the opposition period. It must be filed within six months of service of the order for payment. The debtor can object to it within two weeks of service, which will automatically transfer to ordinary court proceedings (§ 700(3) ZPO). Enforceability remains despite the admissible objection, but the court may, upon application, order the temporary suspension of enforcement per §§ 719 (1), 707 ZPO.

If no objection is lodged and no application is made to issue the enforcement order, the order for payment loses its effect (§ 701  ZPO).

Legal advice in Cases of Judicial Orders for Default Actions

If you find yourself in a situation where your debtor does not meet their payment obligations or a default action has been initiated against you, please contact us. At Schlun & Elseven, we are a full-service law firm based in Germany, with offices in Aachen, Cologne and Düsseldorf and conference rooms in Berlin, Frankfurt, Stuttgart, Munich and Hamburg, we are available nationwide. Our expert lawyers will provide you with reliable and leading advice in all matters relating to court orders for default actions and, in general, debt collection and enforcement law. Just give us a call on +49 241 4757140, send us a message by e-mail at info@se-legal.de or use our online contact form. Our lawyers are ready when you are.