If you have secured a money judgment against another party as a result of a business dispute, you may be wondering, what next? You may also be looking for some practical guidance on which method of enforcement might be right for your situation. This overview has been designed with just that in mind, and we will take a look at the following topics so that you are left in a position to make a well-informed decision about where to go from receipt of the judgment onwards.
- Obtaining a money judgment: preliminary matters
- Is the judgment debt due and enforceable?
- Timings and payment
- Has the judgment debtor been served with the money judgment?
- Do you need to act quickly in enforcing the judgment?
- What do you need to know about the judgment debtor’s assets?
- How can you get the information you need about these assets?
- What if there’s a concern that the judgment debtor will dissipate their assets?
- The main methods of enforcing a money judgment
- A note on enforcements
Obtaining a money judgment: preliminary matters
There are a few preliminary matters that you need to consider before embarking on enforcement itself, because obtaining a money judgment is only the first step towards getting what you’re entitled to. It’s important to highlight that whilst the court has granted judgment in your favour, it will not automatically enforce it for you – the onus is on you to do this.
Is the judgment debt due and enforceable?
Before some methods of enforcement can be actioned, the judgment debtor (the terminology used to describe the person who owes you the money) must have been given the opportunity to pay you what they owe you (the judgment debt). This may be the full amount, or an instalment that was formalised as part of an order in the terms of the judgment itself.
The position is slightly different for charging orders. This is because a charging order can still technically be made by the court even if the debtor has been making payment by instalments, if required to do so.
Timings and payment
The key points to note with regard to timings and payment are as follows:
- A money judgment takes effect from the date when it is given or made unless a later date is specified by the court.
- If the judgment or order doesn’t specify a time for payment, the general rule is that the judgment debtor has 14 days from the date of the judgment to pay you. Bear in mind that the court does, however, have discretion to change this 14-day period for payment if the debtor can persuade them to do so.
- It is open to the court to make an order for the debtor to repay you in instalments, even if this is not something you requested in the first place. In this instance, you are prohibited from taking steps to enforce the money judgment as long as the debtor remains up to date with paying the instalments on time.
- The court also has the power to suspend a money judgment or order against a party.
Has the judgment debtor been served with the money judgment?
This may sound rather obvious, but it’s an important factor. The Civil Procedure Rules (CPR) state that you – as the party with the benefit of the judgment (the judgment creditor) – should ensure that the party subject to the judgment is served with it, whether that’s by personally taking responsibility for getting a copy to them or asking the court to do so.
Do you need to act quickly in enforcing the judgment?
Whilst a delay of some form in enforcing the money judgment that you have the benefit of is not necessarily fatal, it’s advisable to act quickly when it comes to certain types of enforcement methods. This is because delay can have serious consequences – for example, it could give the judgment debtor the opportunity to move or divest themselves of assets. Delay may also affect your entitlement to interest on the debt.
In relation to issuing a writ or warrant of control and other writs of execution on a judgment more than six years old, the court’s permission is required.
What do you need to know about the judgment debtor’s assets?
Before you decide to go ahead with enforcing a judgment debt, you should consider what assets the judgment debtor actually has before deciding if it’s worth doing so. Certainly, this is something you should bear in mind when contemplating court proceedings in the first place. If the debtor doesn’t have any assets, then it follows that it’s unlikely to be viable for you to throw money away without a purpose.
If the judgment debtor does have assets, then consider what they are and where they are, because those factors will be paramount in your decision as to which enforcement method best suits your circumstances.
How can you get the information you need about these assets?
There are several different ways in which you can obtain information about a judgment debtor’s assets:
- Ask the judgment debtor outright. This may prompt a voluntary response. If not, you can apply for an order to obtain information from them under CPR 71 using Form N316 (in the case of an individual debtor) or Form N316A (if dealing with an officer of a company or corporation). This order will compel the debtor to give answers orally on oath to a court officer, with non-compliance leading to judicial intervention.
- Instruct an enquiry agent/agency. There are many such agencies that operate within the confines of the law. Ensure that you research prospective agencies carefully to satisfy yourself that their methods are above board and meticulous.
- Check the Insolvency Register. You can visit the Insolvency Service website in order to search the bankruptcy and insolvency register, to check whether the judgment debtor is bankrupt or subject to an individual voluntary arrangement (IVA), debt relief order or any bankruptcy restriction order and undertaking.
- Conduct a Land Registry search. This should uncover whether the address you have for the debtor is for a property owned by them or not. You can also inspect the charges register for the property, which will provide you with information on who already has charges on the property in the event that the debtor owns it. You can access the Land Registry’s website here.
- Request a check of the Attachment of Earnings Index to establish whether the debtor has any such orders against them already.
- Check the Register of Judgments, orders and fines for England and Wales via Trust Online. This will flag up any outstanding County Court and High Court judgments currently in place against the debtor.
- If your debtor is a company or limited liability partnership, then you can conduct a search via the Companies House website.
- Again, in the case of a company, you can investigate whether any insolvency proceedings are live in respect of the debtor’s business by searching the Insolvency courts, Companies House (using the WebCheck service) and the London Gazette.
What if there’s a concern that the judgment debtor will dissipate their assets?
If you have a genuine suspicion that the judgment debtor is likely to move quickly to dissipate their assets following receipt of the money judgment, then it’s imperative to take rapid steps to try and prevent this from happening. Whilst it’s best to seek legal advice in this scenario because the situation can get quite technical, here you can see a brief menu of potential options that might be available to you:
- Applying for a freezing order. The effect of this order would be to prevent the debtor from either removing assets located in the jurisdiction (England and Wales), or dealing with any assets – whether located in the jurisdiction or not.
- Applying for an order for the preservation, detention or custody of the assets in question, depending on what they actually are.
- Obtaining a stop notice or a stop order.
Whilst a detailed explanation of the effects of possible insolvency on the part of the judgment debtor are extremely technical and beyond the scope of this overview, it’s always vital to be mindful of this risk, because it could severely impair your chances of making a successful recovery.
The main methods of enforcing a money judgment
There are various methods of enforcing a money judgment or order, and we have listed the most used ones below. You are free to use any method available, and – if appropriate – can use more than one at the same time. However, this is all subject to whether the CPR, a Practice Direction or statute prevents you from doing so.
|Method of enforcing a money judgment||Details|
|Writs & warrants of control||These avenues of enforcement are popular due to the relative speediness with which they can bear fruit. You will need a court document (a writ of control from the High Court or a warrant of control from the County Court). Following this, an enforcement officer or a bailiff can seize goods of sufficient value from the debtor with a view to selling them, so that funds can be raised to satisfy the judgment debt.|
|Attachment of earnings order||An attachment of earnings order works by way of an amount of the debtor’s earnings being deducted from their wages by their employer, until such time that your debt is satisfied. This is of course only possible if the debtor is employed.|
|Charging order||This method of enforcement is most effective when the judgment debtor is the sole owner of the property and there is substantial equity in it. Once a charge is secured on your behalf, you would either need to wait until the debtor voluntarily sells the property (in order for funds to be released to satisfy your debt), or you would need to apply for an order for sale.|
|Third party debt order||A third party debt order has the effect of freezing and seizing assets of the debtor’s that are in the possession of a third party – for example, funds in a bank account.|
|Insolvency proceedings||In the event that the judgment debtor is a company, you can apply for the company to be wound up if it owes you more than £750. The threshold for applying for the bankruptcy of an individual is a debt of £5,000.|
A note on enforcements
The position in respect of the Covid-19 pandemic in relation to enforcements is that judgment creditors can still enforce judgments and orders largely as before. However, you should bear in mind that processes are likely to be subject to some delay at this time, and some methods have been affected by coronavirus-specific legislation – particularly in relation to insolvency proceedings. Seek advice from one of our experienced dispute resolution solicitors if you are in need of some further guidance about this, or any of the other methods of enforcement mentioned in this overview.