Harper James advises UK businesses on commercial disputes under the laws of England and Wales, including applications to set aside default judgment. A default judgment is entered when a defendant fails to file an acknowledgment of service or defence within the required deadline.
Under Civil Procedure Rules (CPR) Part 13, the court must set aside a default judgment in certain circumstances. This applies where the judgment was wrongly entered, such as when the defendant filed an acknowledgment of service or defence in time, the claim was served incorrectly, or the deadline for responding had not expired.
The court also has discretion to set aside a judgment where the defendant has a real prospect of successfully defending the claim, or where there is another good reason to do so. The defendant must act promptly. Delay reduces the prospects of success, even where there is an arguable defence. The court also considers the reason for the missed deadline, the conduct of both parties and the effect of setting aside the judgment on the proceedings.
The defendant normally applies using form N244 and supports the application with a witness statement. The evidence should explain why the deadline was missed, identify the proposed defence and attach relevant documents, such as the contract, correspondence, invoices or evidence concerning service. A draft defence is usually included. The application should ask the court to set aside the judgment and give directions for filing the defence.
The court can decide the application at a hearing or, in some cases, without a hearing. Until the judgment is set aside, the claimant can take enforcement steps. The defendant should therefore address enforcement in the application and request a stay where appropriate. If enforcement has started, the defendant should identify the measures taken, such as a warrant, third-party debt order or charging order.
The application does not decide the underlying dispute. If the judgment is set aside, the claim normally continues and the defendant must comply with the timetable for filing a defence. The court can impose conditions, including payment of money into court or payment of the claimant’s costs. A business should preserve its records, identify the person responsible for handling the claim and establish whether service was received at the registered office or another address. Promptly assembling the proposed defence and evidence is usually more effective than relying on an explanation based only on an internal administrative error.