18. Enforcement of Money Judgments

Question 1

What is the annual interest rate of High Court judgments, from when does interest begin to accrue, and what is this interest in addition to?

Answer 1

8%, from the date of judgment, in addition to the any punitive interest the court may award on the value of the claim

Question 2

What is the monetary threshold in County Court, under which interest will not be payable, and what is the exception to this?

Answer 2

£5,000, except for when the dispute is based in contract, and the contract provides for interest.

• except in B2B contracts for sale of goods and service (Late Payment of Commercial Debts (Interest) Act 1998) where this is an implied term.

Question 3

What is the interest rate on County Court judgments above the £5,000 threshold?

Answer 3

8%, the same as the High Court

Question 4

What is the lower limit for a County Court judgment to be enforceable in the High Court (writ of control)?

Answer 4

£600

• need to apply to HC if over £5,000

Question 5

Within what period must a judgment creditor (successful party) serve a court order on a judgment debtor (losing party), for a hearing to examine the debtors means and assets?

Answer 5

14 days

Question 6

What is the lower limit for a High Court enforcement officer to enforce a High Court judgment?

Answer 6

£600 or more
- otherwise less than that is in the county court

Question 7

What is a writ of control?

Answer 7

A document issued by the High Court where a judgment creditor has requested to execute a judgment, which is forwarded to the High Court enforcement officer

Question 8

What is a warrant of control?

Answer 8

Basically the same as a writ of control, but in the County Court

• provides for the seizure and if required, the removal and sale of the debtor’s goods.

Question 9

If the creditor wishes to take control of debtor’s goods, how much notice must they give?

Answer 9

Seven days

Question 10

If the creditor wishes to take control of debtor’s goods, within what period of serving must they do so?

Answer 10

12 months

Question 11

Where only can the creditor’s agent enter, and what must they do regarding goods seized?

Answer 11

Can only enter the address stated, and must provide an inventory of the goods.

Then must sell them within 7 days and use the proceeds to discharge the debt and enforcement costs.

Question 12

What two categories of items can the creditor not seize?

Answer 12

1. Equipment for use in the debtor’s trade
2. Household items necessary for basic domestic needs

Question 13

What is a controlled goods agreement?

Answer 13

An agreement whereby the debtor retains custody of the goods on the understanding that the enforcement officer is taking control, but the debtor agrees not to dispose of them before the debt is paid.
* agree to a repayment plan.

Question 14

What is a charging order on land?

Answer 14

Where the debtor has an interest in land (even if this is a joint interest), a creditor may obtain a charge on the property which will rank as an equitable mortgage and gives the creditor the right to apply for an order for sale

Question 15

What is an attachment of earnings order?

Answer 15

Where the debtor is in regular employment, the order compels an employer to make regular deductions from the earnings and pay them into court.

• debt owed = more than £50

Question 16

In what court only and against what type of party only is an attachment of earnings order available?

Answer 16

County Court. Individuals.

Question 17

Whilst there is generally nothing preventing a party from utilising multiple enforcement methods, what is required to enforce a judgment by taking control of goods when an attachment of earnings order is already in place?

Answer 17

Court permission

Question 18

Where a defendant wishes to appeal a decision made by a lower court regarding the payment of debt, how long do they have to appeal?

Answer 18

21 days from judgement, but money order can be enforced even if they are considering an appeal.

Question 19

What are the five methods to enforce money judgements?

Answer 19

1) Taking control of goods
2) Third-party debt order
3) Charging order
4) Attachment to earning order
5) Insolvency proceedings

Question 20

When can insolvency proceedings be initiated?

Answer 20

For individuals, judgement creditor must be owed a debt exceeding £5,000.

For companies, judgement creditor must be owed a debt exceeding £750.

Question 21

What are the downsides of a charging order?

Answer 21

Paymentmay be realised after asset is sold - not instantaneous (namely if concerned with real estate).

Subject to other proprietary charges and rank beneath against pre-existing secured charges.

Difficult to exercise power of sale, namely where debtor is an individual and property charged is a family home.
* Lengthy process.

Question 22

When might a charging order be appropriate?

Answer 22

where defendant is cash-poor, but asset rich.

Question 23

What are the downsides of an attachment to earning order?

Answer 23

where debtor changes jobs, claimant will need to start afresh.

Question 24

What are the upsides of an attachment to earnings order?

Answer 24

• where a debtor does not have substantial assets but does earn a salary from employment.
• Since order is served on employer, higher likelihood that payment will be made as required.

Question 25

What are the upsides of third-party debt order?

Answer 25

Where the defendant is owed money by third-party, which includes payment due under a supply contract.

Question 26

When is an oral examination appropriate?

Answer 26

• First step to gage which enforcement procedure is most suitable where defendant’s financial position (i.e. assets it owns) is unclear,