Romania: Debts of up to EUR 10,000 now easier to collect

By increasing the threshold value for what qualifies as a "small claim" from approximately EUR 2,000 to EUR 10,000, Romania is significantly expanding the coverage of its most expedient debt collection court action. The small claims procedure offers claimants a time- and cost-efficient alternative to standard (common law) debt collection procedures, which are often lengthy, costly and burdensome for the parties involved.

This legislative amendment seeks to accelerate debt collection processes and reduce the courts' workload. Initially introduced as a temporary measure to support businesses during the COVID-19 pandemic, the increased threshold value of EUR 10,000 for small claims proved effective, leading to its recent reinstatement.

When can you use the small claims procedure?

This debt collection option applies exclusively to civil and commercial disputes involving monetary claims with a value of up to EUR 10,000, excluding interest, costs and other accessories of the claim as of the date the court action is filed. The procedure does not apply to matters related to tax, customs or administrative matters, or to disputes involving employment law, arbitration, insurance and similar areas.

How does it work?

The procedure is conducted in writing and typically takes place without the parties appearing in court, except in special cases, such as when the court deems it necessary or upon request of a party. The claimant is required to fill out a standard form and submit supporting documents. Similar requirements apply to the defendant's answer. The procedure also allows the defendant to file a counterclaim.

The stamp duty is capped at approximately EUR 40, thus considerably reducing debt collection costs. Comparatively, in a standard debt collection court procedure, the value of the stamp duty is calculated pro-rata to the value of the claim. Therefore, for a claim of EUR 10,000, it would amount to approximately EUR 420.

While the decision of the first procedural court is subject to appeal, it is enforceable regardless of any appeal filed against it. Enforcement of the decision may be suspended upon justified grounds, provided bail amounting to 10 % of the contested value is deposited.

Another factor contributing to the efficiency of the small claims procedure is that it is not subject to a second appeal, unlike debt collection court proceedings under common law.

The European small claims procedure

The Romanian small claims procedure is largely similar to the European framework established by EU Regulation No. 861/2007 on the European Small Claims Procedure. The European procedure refers to cross-border cases where at least one of the parties is domiciled or habitually resident in a Member State other than that of the court where the claim is filed.

Since the national and European procedures are alternative, the claimant can choose the Romanian small claims procedure even in cross-border cases, provided that national courts have jurisdiction to settle the claim. With the European procedure's current threshold set at EUR 5,000, the new threshold in the Romanian small claims procedure offers a more wide-ranging alternative in such cases.

What's next?

The law introducing the new threshold in the Romanian small claims procedure will enter into force after its promulgation and publication in the Official Gazette of Romania. It will be applicable to claims filed after it comes into effect.

authors: Andrea Gal, Marcel Mamaliga