If you’re the claimant in a business dispute, a default judgment may be a tactical mechanism available to you for two reasons: it could result in the early determination of your claim, or it could prompt the defendant to apply to have the judgment set aside.
On the flip side, you may be a defendant in receipt of a default judgment and be looking for some information as to what the process is all about. This article aims to provide you with a high-level overview of how a default judgment works in straightforward claims involving you and one other party.
A default judgment can feel like a shock, whether you’re chasing a debt or facing a claim you didn’t expect. We cut through the confusion and deliver clear, practical advice to protect your business and get results fast. Contact our business dispute solicitors today.
Jump to:
- When can a business owner apply for a default judgment?
- Are there any circumstances where a default judgment cannot be obtained?
- When are we allowed to apply for a default judgment?
- How do we apply for a default judgment?
- Can we apply for a default judgment against an overseas defendant?
- What happens after a default judgment is issued?
- How much does it cost to apply for a default judgment?
- Can you claim interest on the judgment amount?
- How long does a default judgment take?
- Summary
When can a business owner apply for a default judgment?
As a business owner, you can apply for a default judgment if you’ve issued (started) a formal claim in court against another business and if they’ve failed to file either an acknowledgment of service of the claim or a defence to it, which includes a defence to a counterclaim, within the time limits set by the Civil Procedure Rules (CPR) – which we’ll discuss in more detail in the section ‘When are we allowed to apply for a default judgment?’ below. In these circumstances, you’re known in legal terms as the claimant and the other party is known as the defendant.
One important point to highlight is that if the defendant does file a defence, even if it’s brief or turns out to be without any merit, it doesn’t matter because the very filing of a defence in some shape or form completely prevents you from applying for a default judgment.
Are there any circumstances where a default judgment cannot be obtained?
Sometimes there are circumstances in place which mean you’re unable to obtain a default judgment in a business dispute. Some of the main ones are set out below:
- If you’ve issued the claim using the procedure prescribed in Part 8 of the CPR (an alternative, more streamlined procedure than a Part 7 claim).
- If the claim is for delivery of goods in accordance with an agreement that’s regulated by the Consumer Credit Act 1974.
- If the defendant has satisfied the whole of the claim, including any claim for costs.
- If the defendant has filed an acknowledgment of service and is disputing the jurisdiction (i.e. they are challenging the court’s power to deal with the claim for some reason).
- If the defendant has an application for summary judgment or striking out your claim in the court’s pipeline.
- If the defendant has filed or served any admission to pay the full sum owing to you with an accompanying request for time to pay, if your claim is one for money.
When are we allowed to apply for a default judgment?
As with all types of litigation, there are specific timeframes set by the CPR that dictate when you’re allowed to take certain steps and the same applies to applying for a default judgment, as well as other factors to bear in mind. Some common questions that arise for our business disputes solicitors include:
After how many days can we apply when a defendant doesn’t respond?
The general rule, which is subject to certain exceptions, is that the defendant has 14 days from the date upon which your particulars of claim are ‘served’ on them to file either an acknowledgment of service or a defence. If neither is filed after this 14-day limit, a default judgment can be entered.
If you serve your claim form and this states that your particulars of claim are to follow, the general rule that applies to the defendant filing an acknowledgment of service is that they have 14 days after you serve your particulars of claim to do this and in any other case, 14 days after service of the claim form. If the defendant files this acknowledgment, they must file a defence within 28 days of service of the particulars of claim. If they fail to do so, you can apply for a default judgment.
How can we check if the defendant has filed a defence or acknowledgement?
The defendant will possibly send you a copy of the acknowledgment of service when they send it to the court and if they don’t, the court must let you know and should send you a copy of it.
When it comes to a defence, the defendant is obliged to serve this on you or your solicitor, if you have legal representation.
You can of course contact the court to double check the status of an acknowledgment of service or defence if you haven’t heard anything within the timeframes permitted for each document, if you wish to do so before applying for a default judgment.
Can we apply even if the defendant has said they’ll respond informally?
You’re within your rights legally to apply for a default judgment if the defendant has said they’ll respond informally, because they must respond formally to your claim in the timeframes set out above to prevent you from being able to apply. It’s a good idea to let them know of your intention to apply, to demonstrate that you’re behaving fairly and doing so could minimise the chances of them successfully applying to set the default judgment aside at a later date, should they decide to do this.
How do we apply for a default judgment?
Applying for a default judgment takes active steps on your part. Depending on the circumstances of your dispute, you’ll have to file a request or make an application to the court but crucially, it’s important to note that you must file a certificate of service after you’ve served the particulars of claim on the defendant in order to satisfy the court that they’ve not met the relevant time limit if you wish to request or apply for a default judgment.
What documents must we submit?
The documents (court forms) you’ll need to submit will vary according to your situation. The different forms and criteria are set out in the table below:
| Form | Criteria |
| Form N225 | Your claim is for a specified amount of money, or for the delivery up of goods where a defendant will be offered the alternative of paying a specified sum representing their value or is for fixed costs only. |
| Form N227 | Your claim is for an amount of money to be decided by the court – including an amount representing the value of goods. |
| Form N244 or Form N244 (CC) for the Commercial Court | Your claim is for (or includes a claim for) any other remedy than money or delivery of goods, or for other types of claims outside the scope of this article. |
If you’re making a request for a default judgment using either Form 225 or 227, simply fill out the form with the relevant information – both are very straightforward and also, you don’t have to give the defendant any notice of making your request.
If you’re applying for a default judgment using Form 244 or Form 244 (CC), you’ll be expected to complete the form with all of the essential details as to why the court should enter into a default judgment, and this may mean you need to attach a witness statement or affidavit. The court will also expect you to attach a draft of the order you’re seeking, and you’ll need to pay the fee for the application, as well as providing notice to the defendant that you’re making it.
Can we apply for a default judgment against an overseas defendant?
It’s possible to apply for a default judgment against an overseas defendant, but the claim must have been validly served against them according to the relevant rule or rules in the CPR and any local rules or international conventions that are applicable, these will differ according to which country the defendant is based in and must be adhered to strictly. As a general rule, the defendant will be given longer to reply to the initial claim, so you must ensure that the correct timeframe has passed before making an application.
Can we serve claim forms abroad and still apply for a default judgment in England and Wales?
A default judgment can be applied for in England and Wales if the claim form has been served abroad, as mentioned above. The key point is to comply with all of the rules and time limits before applying, which will largely be dictated by exactly where the defendant is based abroad. It’s advisable to seek legal advice from a business disputes solicitor on the proper service of your claim form abroad and how long you’ll have to wait before you can apply for a default judgment.
What steps are required to ensure valid international service?
Checking whether you need permission from the court to serve the claim form outside of the jurisdiction of England and Wales is the first step in ensuring valid international service. If permission isn’t required, or if you’ve already received permission, the next step is to serve the claim form in accordance with Section IV of Part 6 of the CPR within six months of the date of issue. (Section IV of Part 6 of the CPR covers service of documents outside of the jurisdiction, so it is a key rule to be aware of here.) You’ll need to take into account any laws and conventions governing the country that you’re serving the claim form in, as well as making sure it’s properly served on the defendant according to the local processes for this.
After allowing the specified amount of time for service and responses to the claim form (again, which will vary depending on the country), you’ll be expected to provide a certificate of service as a minimum to satisfy the court of valid service before you move to apply for or request a default judgment.
Once entered, can we enforce a default judgment overseas?
Broadly speaking, it’s possible to enforce a default judgment overseas when it has been entered by the court. You should tread carefully because the correct rules and procedures for enforcing will differ depending on the country in question and the first point to note is that the judgment must be recognised by the country you’re intending to enforce it in. After you’ve identified the regime that applies, the next step is to apply to register the judgment in accordance with that regime and once this happens, you can investigate which methods of enforcement are available in that country are best suited to your dispute.
It's worth noting that if no enforcement regime applies in the country you’re concerned with, the local law of the country effectively comes into play for enforcement purposes.
Enforcement of a default (or any kind of) judgment overseas is a technically complex area and it’s recommended that legal support is enlisted with navigating this.
What are the extra time, costs and legal risks in cross‑border cases?
There’s no getting away from the fact that enforcing a judgment outside of the jurisdiction of the courts of England and Wales is not as straightforward as enforcing within the jurisdiction. This is partly because it will inevitably take longer to go through the service of the claim form to start with before the judgment is registered and enforceable overseas due to the timeframes set by the CPR and any foreign rules and conventions, so it’s not unusual for it to take upwards of six months and potentially over a year to reach the enforcement stage.
Other factors to take into account are the costs involved with potentially translating the legal proceedings, dealing with foreign lawyers whose help you’ll likely need with the local laws, and any local court fees that are payable, as well as challenges connected with locating and seizing foreign assets.
The key takeaway here is that you’ll need to think carefully about whether pursuing, then enforcing, a judgment outside of the jurisdiction is commercially worthwhile before you invest your time, money and resources into doing so.
What happens after a default judgment is issued?
After a default judgment is issued, the next step is to enforce the judgment so that you can hopefully recover the money or goods at the heart of the dispute.
What enforcement methods are available?
There are several different methods of enforcing a judgment and it’s wise to give some thought to which might be the most appropriate for your situation. Some of these methods include:
- Instructing bailiffs/High Court Enforcement Officers (which one you instruct will depend on the size of the debt, i.e. a Hight Court Enforcement Officer would be utilised for debts over £600)
- Charging Order (against the defendant’s – now judgment debtor’s – property or assets)
- Third-Party Debt Order (against, for example, a bank account)
- Liquidation or bankruptcy
- Attachment of Earnings Order (against an employed individual)
You can read more about the various methods of enforcement in our article, How to enforce a County Court Judgment (CCJ).
How quickly can enforcement start once judgment is entered?
Setting the wheels in motion with enforcement action can start immediately after a default judgment has been entered, unless the defendant applies to set the judgment aside. It is advisable to allow a short period of time to pass in case receipt of the judgment prompts payment or otherwise voluntarily.
Can we add interest, court fees and enforcement costs to the judgment?
Any costs you’re awarded by the court will include the fixed costs of commencing the claim, entering judgment and any court fees you’ve incurred. Interest can also be awarded if you’ve included a claim for interest in the original particulars of claim. You should include a calculation of the interest being claimed when requesting or applying for the judgment if this is the case.
When you come to enforce the judgment, you’ll be entitled to recover the reasonable costs of the enforcement action you’re taking too. This is likely to take the form of fixed costs as set out in CPR 45 and its Practice Direction, and which potentially includes reasonable disbursements if permitted by the court.
How much does it cost to apply for a default judgment?
There’s no court fee to pay if you’re making a request for a default judgment using Form N225 or 227. If you’re making an application for a default judgment using Form N244, this is classed as a ‘general application’ and currently costs £313 or £123, depending on whether or not notice of the application has to be given to the other party.
If you’ve instructed a solicitor to help you with applying for a default judgment, you’ll also have to factor in their legal fees when working out how much it’s going to cost you to apply.
Can you claim interest on the judgment amount?
Interest can be claimed on the judgment amount – either statutory interest (8% under the County Courts Act 1984) or contractual interest, if this is stated in the original contract between you and the other party. It’s very important that you include all calculations, along with any post-judgment interest you’re seeking until payment is made, in your particulars of claim and subsequent request or application for a default judgment.
How long does a default judgment take?
Obtaining a default judgment after you’ve made a request or an application can range from around a fortnight for a request, to a number of months for an application, taking into account court backlogs, especially if a hearing is required in cases where the defendant applies to set the judgment aside and even longer if the defendant is overseas.
Summary
Requesting or making an application for a default judgment can, in theory, be a very straightforward route towards recovering money or goods that are owed to you. Our experienced team of business disputes solicitors are well equipped to guide you through the whole process, and are able to help with determining the right method of enforcement once judgment has been obtained.
