Will the fight against late payments be more effective?

Will the fight against late payments be more effective?

New competences for the justices of the peace and the commercial courts

The justices of the peace and the commercial courts have new competences as from 1 July 2014.

1. The commercial court

The major change is the fact that the commercial court has jurisdiction for all disputes between companies, irrespective of the amount, provided they do not fall within the exclusive jurisdiction of other courts (labour law and social security law).

The expression "company" has been defined by law as follows: "all persons who pursue economic purposes in a sustainable manner."

This is a much broader definition of "company".

The earlier terms "traders", "commercial transactions", "corporation" have been removed or replaced.

The commercial court has now jurisdiction over all disputes between companies even those whose claim amount is less than € 1,860. Before the legislation change, these matters were under the jurisdiction of the justices of the peace. The commercial courts only had to handle these disputes as a judge of appeal against the decisions of the justices of the peace.
The justice of the peace remains competent for disputes which an amount less than € 1,860 (2.500 EUR from 1 September 2014) is claimed if the defendant is an individual, even if he is sued by a company.

This change was made for the following reasons:

- The main objective was to unburden the more general courts and to charge specialized courts, such as the commercial court, with the disputes which fall within its area of expertise and which they can easily take on. Through this judicial reform, the legislator intends that disputes are submitted before the court who is the best qualified to hear them in order to garantee fast and high-quality decisions.
Moreover, the commercial courts stated that they did not have to contend with arrears.

- The principle is that the jurisdiction of a dispute should primarily be determined by the nature of the dispute rather than by other criteria such as the quality of the parties or the amount in dispute.

By doing so, the legislator aimed to facilitate the fight against late payments.

Commercial courts will also have a better view on the late payments. The existence of a large number of small unpaid bills can highlight that the enterprise concerned is in trouble, allowing the commercial court to intervene more quickly.

2. The justice of the peace

The justices of the peace are now responsible for all disputes between the utility companies and individuals, irrespective of the amount in dispute.

Utility companies are suppliers of electricity, gas, heating, water or persons providing a public electronic communications network, a service of the radio or television and radio broadcasting.

Proceedings set up by public utility companies are required to be brought before the jurisdiction of the defendant's residence when it is a natural person.

3. Some practical examples

Ivan Verougstraete and Jean-Philippe Lebeau are of the opinion in their article in the DRC-TBH, published under the title "Transfer of competences: the commercial court is the natural judge of the company", that it is not possible to establish an 'a priori' list, with absolute certainty, of the companies which fall now under the competence of the commercial court, because the form or status under which an operator exists becomes secondary. However, these will serrve as a presumption in order to determine the competence of the commercial court.

Subject to all reservations, they give the following list:

a. commercial enterprises, civil partnerships with a commercial form, and agricultural companies:
- real estate civil companies;
- craft companies, mine and quarry companies;
- corporate social housing unless they have a pure societal or social
purpose beyond market purposes;
- companies operating a medical or paramedical activity (doctors, veterinarians, dentists, physiotherapists, etc.).
- companies operating number activity (accountants, register accountants, auditors);
- companies operating a business of architect or geomatics engineers;

b. legal entities of public law if it concerns an economic activity that can be separated from the exercise of public authority;

c. professions exercised by physical persons: accountants, auditors, architects, surveyors, doctors, dentists, physical therapists, veterinarians, ...

d. bailiffs, notaries and lawyers are excluded from the concept “company”;

e. liberal professions exerced by physical persons (beyond a company): real estate agents, medical laboratories, ambulance, nursing, administration of residential, engineering and engineering control activities, interior decoration, home care, legal advice, tax advice, artists who exploit their works, authors' associations;

f. bodies of legal persons, mandate holders in various administrative bodies;

g. NPIs and foundations: Clinical and Hospital wares, teaching and nursing homes dependent of their social purpose;

h. health maintenance organizations: the European Court of Justice held that the health maintenance organizations don’t have an economic activity, but on the contrary the health insurance funds have economic activity insofar as they offer other services such as complementary insurances.

The jurisprudence will determine the "companies" which fall within the competence of the commercial court following the new definition.

4. Entrance into force of the Act and transitional rules

The law will be in force on 1 July 2014.

Disputes which were covered, before the entry into force of this Act, remain pending before that court.