The penalty payment: how is it fixed and liquidated?

The judge has the means to force any debtor to perform his obligations regardless of the recovery procedure: It is the penalty.

The penalty is a penalty, distinct and independent of damages (L.131-2 of the Code of Civil Enforcement Procedures). It corresponds to a sum of money that the debtor will have to pay if he does not respect the judgment.

It is first set by a judge: It is the temporary penalty. If the judgment is executed, the penalty payment disappears and there is nothing to pay.

But in the event of non-performance, the penalty payment will become final and it will have to be paid: It is the liquidation of the penalty payment.

More than a means of pressure, the penalty is a sword of Damocles that should be understood to avoid it.

Who can set the penalty payment?

Article L.131-1 of the Code of Enforcement Procedures allows both the trial judge (the one who decides the dispute) and the pre-trial judge (the one who checks the progress of the case before judgment), or the execution judge (JEX) to set a penalty to ensure the execution of its decision.

This possibility allows the judge who has rendered a decision relating to a long or complex case to keep control of all the execution difficulties raised by his decision (construction, real estate, infringement, etc.).

To note :

The execution judge (JEX) can add a penalty to a decision that does not have one, or modify an existing penalty in his liquidation decision “if the circumstances show the need for it” (article L.131-1 paragraph 2 of the Code of Civil Enforcement Procedures).

Fixing the penalty

The penalty is generally provided for in a judgment which condemns a debtor to an obligation to do, or not to do.

At this stage, the penalty is temporary.

Concretely, the judge will fix a sum of money which, in the event of non-execution, will have to be paid either:

• per day of delay, if it is an obligation to do (destroy a building, free a passage ...)
• by observed infringement, if it is an obligation not to do (prohibit the sale of a counterfeit, etc.)
• if the debtor has not complied with the expiry of a period imposed by the judge

The provisional fine is insufficient to oblige the debtor to perform it, that is to say to pay it.

The judge will have to make the final penalty to settle it (article R.131-3 of the code of civil enforcement procedures).

Liquidation of the penalty payment

The creditor must apply to the judge to liquidate the penalty payment and demonstrate that the debtor has not respected the obligations imposed on him.

In principle, the liquidation of the penalty payment falls within the sole competence of the JEX, unless the trial judge expressly reserved this right in his decision (article L.131-1 of the code of civil enforcement procedures), or if the case is still ongoing.

The amount of the final penalty

The judge is not bound by the amount of the temporary penalty. He may change the amount of the penalty payment at the time of liquidation to adapt it to the circumstances and to the behavior of the debtor.

Article L.131-4 of the Code of Civil Enforcement Procedures, specifies that the liquidation must take into account "the behavior of the person to whom the injunction was addressed and the difficulties he encountered in executing it" .

The case law recently specified that the behavior of the debtor should be assessed from the decision pronouncing the injunction (Cass. Civ., 2nd of March 17, 2016 n ° 15-13.122)

The judge can fix the amount he wants, moderate it or increase it, for an amount ranging from zero to a maximum that he determines according to the circumstances. (Cass. Civ., 3rd of April 29, 2009, n ° 08-12.952).

But once it has become final, the penalty payment can no longer be changed.

The liquidation judgment is the enforceable title with which the creditor will compel his debtor to pay the penalty payment.

Payment of the penalty payment

It is up to the judge to set the time limit at which the penalty payment takes effect (article R.131-1 of the code of civil enforcement procedures).

In the absence of precision, it runs from the date of notification of the decision to liquidate the penalty payment.

In the event of an appeal, the decision liquidating the penalty payment will only apply from the day on which the confirmatory judgment is rendered.

Unless the decision is accompanied by provisional execution, in which case it will apply immediately.

The remedies for penalty payments

The remedies will follow those of the court which liquidated the penalty payment and the amount of the initial request (it does not include the sums paid under Article 700 of the Code of Civil Procedure, nor the costs, etc.).

Civil courts (Tribunal d'Instance - Tribunal de Grande Instance), commercial, labor courts, etc.

• If the request is greater than 4 euros, the decision is still subject to appeal.
• If the request is less than 4 euros, the decision is rendered as a last resort, only the cassation appeal is possible, but it will only rule on an error of law and will not rule on the merits.

The execution judge

The decision of the JEX is subject to appeal within 15 days of notification of the liquidation (articles R.121-19 and R.121-20 of the Code of Civil Enforcement Procedures).

According to Article R.131-4 of the Code of Civil Enforcement Procedures, the judge's decision is automatically enforceable by provision.

The abolition of the penalty

Article L.131-4 paragraph 3 of the Code of Civil Enforcement Procedures authorizes the cancellation of the penalty "in whole or in part, if it is established that the non-performance or delay in the performance of the judge's injunction comes, in whole or in part, from a foreign cause ”.

The foreign cause is a circumstance beyond the control of the debtor which prevents him from fulfilling his obligations. Thus, the demolition of the corner of a house, proving to be impossible, amounted to "an impossibility of execution" (Cass. Civ., 2nd of February 12, 2004, n ° 02-13.016).

This notion of "foreign cause" is more extensive than force majeure. It may be the act of a third party, the fault of the victim, the loss of the thing ... These circumstances must be unforeseeable and insurmountable for the debtor.

The abolition of the penalty payment can take place both at the provisional and final phase.