Enforcing Judgments

It is a popular misconception that once the Court has ruled in your favour, and you have obtained judgment, the money owed to you will be paid by your opponent right away.

While this is certainly the expectation, steps may need to be taken to enforce the terms of the judgment, and often a judgment debtor (the entity against whom the judgment has been made) will delay making payment until enforcement steps are taken.

The court sets out various methods of enforcing a money judgment. Sometimes, (rules permitting) different enforcement methods are used, either simultaneously, or consecutively.

Before Enforcement

There are some points to note before enforcing:

  • The judgment debtor (the person who owes the money) must have been allowed the opportunity to pay and then subsequently failed to pay either the full amount or an instalment (should the judgment set out terms for instalment payments);
  • Unless the judgment states a different period, the judgment debtor has 14 days from the date of judgment to pay;
  • Enforcement cannot be carried out if the court has ordered a stay or suspension of the judgment on the application of the judgment debtor; and
  • Interest may accrue on the judgment debt at the rate set out under section 17 of the Judgments Act 1838 (currently set at 8%).

What assets does the judgment debtor have?

It is important to ascertain what assets the debtor has. Enforcement steps cost money, which will be wasted if the judgment debtor has no assets/funds to pay the judgment in any event (this is also a consideration to be made before commencing a claim).

Information can be obtained about assets in multiple ways.

Methods of enforcement

  1. Taking control of goods by writ or warrant of control;
  2. Third-party debt order;
  3. Charging orders;
  4. Attachment of earnings; and
  5. Insolvency proceedings: bankruptcy and company liquidation

Effect of insolvency on enforcement

If a judgment debtor becomes insolvent during enforcement proceedings, this can pose a risk.

If preliminary enquiries show that a judgment debtor is (or is likely to become) insolvent, it may not be worth taking steps to enforce.

If the debtor goes into some form of insolvency procedure (such as administration, liquidation or bankruptcy) and the judgment creditor is not a secured creditor, the debt will only rank alongside other unsecured creditors in insolvency. That is, behind preferential payments, the expenses of winding up and the debts of secured creditors. A creditor is therefore unlikely to get back the full amount of the judgment debt, and a view will need to be taken on whether to start or continue enforcement of the judgment as this could lead to wasted time and costs.

There are also statutory restrictions on pursuing claims against insolvent debtors.

Costs

There are court fees for various methods of enforcement through the courts. High court enforcement officers and County Court bailiffs will also charge for their fees and expenses, and there are also fees for using insolvency as a method of enforcement. However, it may be possible to recover some of the fees from the judgment debtor.

If successful in enforcement proceedings, some of the costs may be recovered in addition to the judgment debt and interest, such as the fees paid to enforce, and a fixed amount towards legal costs.

Weighing the risks of enforcement action

There is no guarantee that taking enforcement action will successfully recover the money owed. When deciding whether to enforce a judgment (or to pursue a claim at all) a balancing exercise will need to be undertaken between the court fees and legal costs and the risk that no recovery will be made if enforcement is unsuccessful.

Although delay should be avoided, taking enforcement action through the courts should be a last resort, after attempts to obtain payment from the judgment debtor voluntarily have failed.


Griffin Law is a dispute resolution firm comprising innovative, proactive, tenacious and commercially-minded lawyers. We pride ourselves on our close client relationships, which are uniquely enhanced by our transparent fee guarantee and a commitment to share the risks of litigation.  For more details of our services please email justice@griffin.law or call 01732 52 59 23.

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Nothing in this document constitutes any form of legal advice upon which any person can place any form of reliance of any kind whatsoever. We expressly disclaim, and you hereby irrevocably agree to waive, all or any liability of any kind whatsoever, whether in contract, tort or otherwise, to you or any other person who may read or otherwise come to learn of anything covered or referred to in this document. In the event that you wish to take any action in connection with the subject matter of this document, you should obtain legal advice before doing so.

By |2024-05-11T17:17:26+01:00May 11th, 2024|Uncategorised|Comments Off on Enforcing Judgments

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