Amending the Law to Make Payment Orders More Comprehensive!

Regarding Professor Chung-Jau Wu's op-ed published in Apple Daily yesterday (the 26th) offering various comments on the amendment of the payment order provisions passed recently (on the 25th), as a member of the JRF's Payment Order Amendment Lawyers' Group, I believe a clarification is necessary and have written this article in response.

1. The legislative reasoning of the draft bill is indeed based on relevant literature and is not misleading out of thin air!
   Professor Wu mentioned in his article that 'the legislative reasoning unexpectedly begins with: referring to the payment orders in Germany and Japan, which do not have res judicata effect! Such a serious misleading of the public's legal knowledge and legislative quality.' However, this allegation is likely untrue. When the lawyers' group drafted this amendment, we referred to many domestic scholars and seminar publications to ensure the quality of the amendment.
   For example, regarding German law, we referred to an article written by Professor Shen Kuan-Ling of the National Taiwan University College of Law, titled "The Payment Order System in Violation of the Right to Judicial Protection." The article states, "Germany also has a urging procedure similar to our country's, but when the debtor fails to raise an objection within the statutory period, the effect of the payment order only allows the creditor to apply for an enforcement order. If the creditor fails to apply for an enforcement order within 6 months after the service of the payment order, the payment order will automatically become invalid; and the effect of the enforcement order is only equivalent to a default judgment that may be provisionally executed, still lacking res judicata effect." This clearly shows that German payment orders indeed do not have res judicata effect. As for Japanese law, it is based on a written report submitted by former Judicial Yuan Secretary-General and Judge Wang Chia-Yi at the 122nd Civil Procedure Law Research Meeting on March 16, 2014. The report states that after Japan amended its law in 1998, since judges were no longer the entity issuing payment orders, once a payment order became final, it only produced enforceability and did not possess res judicata effect.
   Therefore, the statement in the reasoning of the current amendment draft—referring to the fact that payment orders in Germany and Japan do not have res judicata effect—is well-founded, and further highlights that our country's payment orders still possessing res judicata effect lag behind the Japanese legal system by as long as 15 years, making it imperative to amend the law to catch up with international trends!
   
2. The German enforcement order adopts a two-stage procedure before acquiring res judicata effect, whereas Taiwan's payment order has only a single-stage procedure and naturally should not have res judicata effect.
   In fact, under German law, aside from the creditor needing to first obtain a payment order before applying for the issuance of an enforcement order, an enforcement order at the time of issuance only possesses enforceability; it is only when the debtor fails to raise an objection (sometimes called an appeal) within the statutory period that the enforcement order acquires formal finality. As for the enforcement order, it must still wait until the debtor has exhausted the litigation procedures before acquiring substantive finality, which is res judicata effect. This model of "enforceability first, res judicata effect second" is the full picture of the two-stage process mentioned by Professor Wu in his article, where he states "emulating German law requires two stages in order to acquire res judicata effect." However, Taiwan's current payment order system dictates that after a creditor applies for the issuance of a payment order and the debtor fails to raise an objection within the statutory period, res judicata effect is generated directly. Comparing the two, Taiwan's current payment order system is not as rigorous as German law, yet carries the same effect. If Professor Wu believes that payment orders must emulate Germany's two-stage process to acquire res judicata effect in order to be appropriate, why can he endorse Taiwan's current single-stage process—where payment orders directly acquire res judicata effect after becoming final?
   
3. The amendment to remove res judicata effect from payment orders is essentially a mildly tweaked version of the German two-stage system.
   Under the draft bill passed in preliminary review recently, payment orders do not have res judicata effect and only possess enforceability; if debtors have disputes, they may file a separate lawsuit. If debtors do not owe money and win the lawsuit, creditors naturally cannot attach their property; but if creditors have grounds, not only can they attach property, they can also use the winning judgment as an alternative basis for the payment order to attain res judicata effect. This amendment direction of "enforceability first, res judicata effect second" shares, to a certain extent, the same underlying rationale as the aforementioned German two-stage system. Since Professor Wu can accept Germany's two-stage system, he should surely be able to understand and endorse this amendment after comprehending it! Therefore, this amendment is not about using a stone to demolish an entire castle, but rather about rectifying and re-leveling a system that was originally excessively tilted in favor of creditors!