Clifford Chance
European Asset Protection Orders: the good, the bad and the costly
10 August 2011
The European Commission has published a proposal for a "European Account Preservation Order". This will allow courts in one EU member state to freeze a defendant's bank accounts (both cash and securities) in another EU member state pending a decision on the substance of the dispute. The aim of the Order is to assist in the recovery of cross-border debts by ensuring that the defendant's assets remain available to satisfy a judgment - assuming, of course, that the claimant is successful. Whether the Commission's plans will achieve its laudable aim is doubtful. It is, however, beyond doubt that the Commission's plans will impose considerable burdens on banks, the courts and on the UK Government. Are the supposed gains sufficient to justify the costs? The Government will have to weigh the benefits and burdens quickly because the UK has three months to decide whether to opt in to the Commission's proposal or to stand aside.
