Members' Research Service By / June 19, 2018

Law applicable to the third-party effects of assignments of claims [EU Legislation in Progress]

In contract law, a claim gives a person (the creditor) the right to request from another person (the debtor) the performance of an obligation, such as the payment of a sum of money.

© Christian Delbert / Fotolia

Written by Angelos Delivorias (2nd edition, updated on 20.09.2022).

The assignment of a claim refers to a situation where a creditor (the assignor) transfers the right to claim a debt from the debtor to another person (the assignee) who then becomes a creditor vis-a-vis the debtor (replacing in this role the original creditor). This mechanism is used by companies to obtain liquidity and access credit. At the moment, there is no legal certainty as to which national law applies when determining who owns a claim after it has been assigned in a cross-border case.

The new rules proposed by the Commission will clarify which national law is applicable for the resolution of such disputes. As a general rule, the law of the country where assignors have their habitual residence applies, regardless of which Member State’s courts or authorities examine the case. This proposal will promote cross-border investment and access to cheaper credit, and prevent systemic risks.

Both Parliament and Council have adopted their positions, and the proposal is currently the subject of trilogue negotiations.


Proposal for a Regulation of the European Parliament and of the Council on the law applicable to the third-party effects of assignments of claims
Committee responsible: Economic and Monetary Affairs (ECON) COM(2018) 96
Rapporteur: Jiří Pospíšil (EPP, Czechia) 2018/0044(COD)
Shadow rapporteurs: René Repasi (S&D, Germany)

Adrián Vázquez Lázara (Renew, Spain)

Marie Toussaint (Greens/EFA, France)

Gunnar Beck (ID, Germany)

Raffaele Stancanelli (ECR, Italy)

Emmanuel Maurel (The Left, France)

Ordinary legislative procedure (COD) (Parliament and Council on equal footing – formerly ‘co-decision’)
Next steps expected: Continuing trilogue negotiations

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