Executory attachments - the new information obligation of banks

21 Jun 2021
Cathalijne van der Plas

Imagine: you have purchased and received a batch of mouthguards for a considerable sum of money, but these mouthguards turn out to be faulty. You successfully sue the supplier before the Dutch court, which grants the claim for repayment of the purchase price. The supplier does not appeal, but also does not proceed to voluntary payment. You are only aware of the account number to which you transferred the purchase price. What now?

Until recently, the bailiff could do little else but levy an executory third-party attachment, with the judgement in hand, against a number of banks established in the Netherlands (the so-called 'multibank attachments'), in the hope that the debtor maintains an account with (one or more of) these banks with a positive balance. In the worst case, none of these attachments would be successful even though attachment costs have been incurred, and you would have to look for other assets.

With the (phased) entry into force of the Dutch Law on the Review of Attachment and Execution (Wet herziening beslag- en executierecht), the executory third-party attachments against banks has become much more efficient and simpler. This Act introduces the new article 475aa of the Dutch Code of Civil Procedure, on the basis of which the bailiff is granted two powers. In the first place the bailiff can ask the debtor where he banks. Although the debtor is legally obliged to answer this question, there is no special sanction for failure to do so. As a result, this obligation, just like the long-standing obligation to declare sources of income (art. 475g paragraph 1 DCCP), risks being an empty shell. Moreover, if you want to keep the debtor unaware of your enforcement efforts (you can enforce the Dutch judgment for 20 years), it is not a good idea to ask the debtor for information anyway. He might get the idea to park the available bank funds elsewhere. What is more interesting, therefore, is the bailiff's authority to ask a bank whether the debtor holds an account with it before levy of execution. The bank must respond to the bailiff's request without delay and may not notify the debtor of the request for information until an actual attachment has been made. It is true that if the bank answers in the affirmative, you will not yet know for sure whether the bank account in question has a positive balance, but you will avoid unnecessary seizure from a bank where the debtor does not even bank. Please note that the bailiff is not entitled to these powers in the event of a prejudgment attachment, i.e. at the stage when there is no final judgement (for example because the period for appeal has not yet expired or an appeal is pending).

It is also possible that your debtor maintains bank accounts abroad. If you have reason to suspect that he banks in an EU member state (other than Denmark), Regulation (EU) No 655/2014 on the European Account Preservation Order procedure offers perspective. This Regulation (which came into force in 2017) not only allows you to attach various bank accounts in different Member States with one request to a single court, it also provides for an information obligation similar to the new article 457aa DCCP. You can then ask the court to whom you want to submit an application for an European Account Preservation Order to have the information authority (in the Netherlands the bailiff) of the Member State concerned obtain the information that makes it possible to identify the bank or banks and the debtor's account or accounts. The possibility to do so is even somewhat broader than article 475aa DCCP: you can also request the account information if the judgement has not yet become final, and therefore you do not yet have an enforceable title. In that case, however, the amount to be seized must be substantial in view of the circumstances. In addition, you must provide sufficient evidence to satisfy the court that there is an urgent need for account information because there is a risk that, without such information, the subsequent enforcement of your claim against the debtor is likely to be jeopardised and that this could consequently lead to a substantial deterioration of your financial situation.

In short, by now both Dutch law and EU law offer you as a creditor in the enforcement phase opportunities to find out where your debtor is banking. This is no guarantee of success, but it is a great improvement.

Questions on this blog, the Dutch Law on the Review of Attachment and Execution or the EU Regulation on the European Account Preservation Order procedure? Please contact Cathalijne van der Plas.

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