Litigation Speed Read: Luxembourg Litigation Reform

• Modernization of the Luxembourg civil and commercial judicial rules.
• Revaluations of the court thresholds.  The lower courts (“juge de paix”) have jurisdiction in civil and commercial cases for up to EUR 15,000.
• Restrictions on appeal.  All judgments below EUR 2,000 are non-appealable.
• Procedural changes.  Appeals from the lower courts will follow the rules of commercial procedures, that is to say oral pleadings will take place without a need for being represented by a fully qualified member of the Luxembourg Bar.
• Debt recovery for uncontested debt.  The deadline for opposing uncontested debt claims (“ordonnance de paiement”) is extend to 30 days and, thereafter, a judgment is deemed to be fully enforceable, however, subject to an appeal (for judgments over EUR 2,000).
• Written court procedures in the District Court (“Tribunal d’arrondissement”).
  • Simplified pre-trial proceedings.  For matters below EUR 100,000 where there are only two parties, i.e. plaintiff and defendant, in principle, strict time limits will apply and only in exceptional circumstances the judge could approve a single, one-time, extension for submission of written pleadings.
  • Pleadings’ contents.  The first written submission must contain the jurisdictional objections and case for non-admissibility.  In addition, unless unknown at the date of the notification of the first written submission, counterclaims have to be set in that first written submission. Note that the pre-trial judge has jurisdiction over these jurisdictional objections.
  • Oral pleadings in a written procedure.  Oral pleadings are no longer obligatory, unless one party requests a final oral submission.
• Written court procedures for the District Court and Court of Appeal.  An obligation to provide a synthesis of the pleadings restating all the means and facts of the case in the final written submission, and a failure to state any such facts or means deems them to be considered as waived.  Note that this rule does not apply to the simplified pre-trial procedure mentioned above.
• Harmonization of time limits for appearance.  Defendants in civil commercial matters have 15 days to appear after the notifications of proceedings by the plaintiff.  Note that additional time limits apply to foreign defendants.
• Summary judgment.  Summary judgments are now fully executable, however, at the risk of the creditor if the decision is reversed.
• Introduction of new procedures.
  • Introduction of a procedure for error and omissions rectification by an introduction of a summons (“Requête”) or by order of the judge.
  • Introduction of a procedure for interpretation of the judgment.  This procedure is reserved for a judgment that lacks clarity and is introduced by way of a summons (“Requête”) or by order of the judge.

Practical implication and considerations:

• We take the view that it is an attempt to increase the efficiency of the Luxembourg courts by setting limits on small claims and claims from EUR 15,000 to 100,000, and thereby relieving the pressure of the various jurisdictions and thus providing the time resources required for larger cases.  It remains to be seen if this will be the result.

• We believe that the measures introduced for written synthesis at the end of the proceedings render the procedure more technical and entail more risks in terms of completion of technical requirements for written procedure and, consequently, the cost of litigation may increase.

• Although an appeal from the lower courts can now be handled by a non-lawyer, the technical challenges of an appeal remain the same and, therefore, engaging an experienced counsel is recommended.

Our experience:

RJ Gaito is celebrating 10 years in business, our firm has acted for and against major corporations, entrepreneurs, as well as private clients in the various jurisdictional degrees of the Luxembourg courts system commencing in the lower courts up to the Luxembourg Supreme Court (“la cour de cassation”).

Our firm has obtained freezing orders over various asset classes, acted in emergency proceedings and enforced foreign judgments in Luxembourg.  We assisted equity investors, debtors and creditors in complex distressed debt matters and, over the years, we were successful in multi-million Euro/United States Dollar recoveries for creditors and equity investors.