Assignment of a claim: notification of the debtor
Is it mandatory to notify the debtor? Pursuant to Article 509 of the Civil Code, ‘A creditor may, without the debtor’s consent, transfer a claim to a third party (assignment), unless this would be contrary to the law, a contractual reservation or the nature of the obligation.’. The debtor is therefore not a party to the contract, and their consent is not, in principle, required for the assignment of the claim, except in situations where they have reserved such a right (to give consent). The creditor should notify the debtor of the assignment, but is under no obligation to do so. It is worth noting, however, that until such notification is given, the debtor may continue to repay the debt to the existing bank account, rather than to the assignee.
Assignment of debt
If the parties enter into an agreement to assign a claim that is already the subject of court proceedings, the first thing to note is the date of service of the claim. This is because if the claim has already been served, the assignment of the claim will not affect the further course of the proceedings. The assignee may only step into the shoes of the assignor after obtaining the consent of the opposing party. Whilst the debtor’s consent is not required for the act of assignment itself, if court proceedings have already been initiated, the debtor must consent to the change of the claimant. It is worth noting in passing that the assignor’s consent will also be required. Although consent may be implied, it is definitely better to obtain it in writing. The best solution is to submit a letter to the court in which the purchaser requests permission to join the proceedings in place of the assignor, whilst enclosing a statement from the assignor expressing consent to this action.
Assignment of claims – debtor’s consent
What if the Defendant does not give their consent? In such a situation, it is worth making use of the institution of third-party intervention or joinder. In that case, the rights of the purchaser of the claim will be protected, and they will be able to pursue their claims. It should be remembered, however, that such changes in the parties are not permitted in summary proceedings.
In summary, the assignment of a claim during court proceedings (after service of the claim) has no effect on the parties. The assignee may, however, make use of the legal mechanisms provided for and join the proceedings, either in place of the assignor or as an intervener. If, however, the assignment took place before the statement of claim was served, the claimant loses their standing. The assignee may join the proceedings upon obtaining the consent of both parties. It is advisable for the assignee to make use of the legal options available for enforcing the debt.
If you require advice on assignment or legal support in any other area, please contact HWW Hewelt Wojnowski Lindner i Wspólnicy.
Frequently asked questions
Is the debtor’s consent required to conclude an assignment of claims agreement?
The debtor’s consent is not required for the conclusion of the assignment agreement itself, unless the parties have previously reserved the right to express such consent. The debtor is not a party to this agreement, and the creditor may transfer the claim to a third party without the debtor’s consent. During court proceedings, this situation may change.
Do I have to notify the debtor about the sale of the debt?
There is no obligation to notify the debtor, although it is advisable to do so for practical reasons. Until notification, the debtor may legally repay the debt to the existing bank account, which may hinder enforcement by the new creditor. However, the lack of notification does not invalidate the assignment itself.
What happens to court proceedings if I sell the claim after service of the statement of claim?
The disposal of a claim after service of the statement of claim does not automatically affect the further course of the case. However, the assignee does not step into the assignor’s place by operation of law, but requires the consent of the opposing party. The safest approach is to file a motion for permission to enter the proceedings, attaching a statement of consent from the assignor.
How can I defend my rights as an assignee if the debtor does not consent to the change of party in the proceedings?
In case of the debtor’s refusal to consent to the change of party, the assignee may use the institution of intervention or third-party notice. This way, their rights will be protected, and they will be able to pursue their claims in the course of the ongoing dispute. These solutions are not admissible in simplified proceedings.
What will happen to the lawsuit if the claim is sold before service of the statement of claim?
If the disposal of the claim occurs before service of the statement of claim, there is no pending dispute yet, so the mechanism of the assignee’s entry with the consent of the opposing party (Article 192 point 3 of the Code of Civil Procedure) does not apply. The lawsuit filed by the assignor is then subject to dismissal due to lack of procedural standing. The assignee’s entry with the consent of the opposing party concerns disposal during the case, i.e., after service of the statement of claim.
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HWW Hewelt Wojnowski Lindner i Wspólnicy is a Warsaw law firm advising businesses and public entities. We combine experience in commercial law, energy, tax, data protection and litigation to deliver solutions tailored to our clients’ business realities.
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