7. Aspects of Costs and Enforcement

Question 1

What is a Part 46 order?

Answer 1

When a 3rd party is ordered to pay the costs

Question 2

What procedurally must occur before a third party can be ordered to pay costs?

Answer 2

They must be attended as a party to proceedings

Also, may attend the hearing when the court determines the issue of costs

Question 3

In what way must the judge be satisfied before a Part 46 order?

Answer 3

That the non-party was the real party interested in the litigation, or were responsible for bringing the proceedings

Question 4

What is the purpose of a Part 25 order?

Answer 4

To provide security on claimant’s assets in the event they lose and are unwilling or unable to pay the costs order

Question 5

What are the two elements which must be satisfied for a Part 25 order to be granted?

Answer 5

1. The court must be satisfied that it is just to make such and order, and
2. One or more of the conditions in Part 25 must apply

Question 6

What are some of the conditions in Part 25?

Answer 6

Claimant is a resident outside a 2005 Hague Convention State

Claimant is an impecunious company

Claimant has taken steps to make enforcement difficult

Question 7

What factors would a court consider in order to establish whether they are satisfied that it is just to make the order under Part 25?

Answer 7

Strength of claim and defence
Claimant’s ability to provide security
Causes of the claimant’s impecuniosity
Property within the jurisdiction
Timing of the application

Question 8

Why may a court be unwilling to order a Part 25 security, if the claimant have a reasonable prospect of success and do not have the ability to provide the security?

Answer 8

As this may stifle the claim - i.e. claimant can’t provide the security so withdraw the claim

Question 9

What is the procedure for a defendant requesting a Part 25 security?

Answer 9

First, write to claimant and ask for it voluntarily

Then, submit notice of application to court with witness statement in court

Question 10

If the court agree to grant a Part 25 security, what will it also dictate?

Answer 10

Amount of security, date by which claimant must provide it, and form it will take

Question 11

What is a Part 36 offer?

Answer 11

An offer to settle a claim, by either claimant or defendant

Question 12

What is the key difference between a Part 36 offer and a Tomlin Order?

Answer 12

A Tomlin has the schedule, which is private between the parties, whereas information in a Part 36 is public

Question 13

What are the relevant formalities for a Part 36 offer?

Answer 13

In writing
Made clear it is pursuant to Part 36
Specifies a period of not less than 21 days during which (if accepted) the defendant will pay the claimant’s cost
State whether it relates to the whole of the claim or to a part of it (and whether it takes into account any counterclaim)

Question 14

When is a Part 36 offer deemed served?

Answer 14

Email/ personal service - on that day, or next business day if after 4.30pm

First class post/ DX - second day after posted if that is a business day, or if not then following business day

Question 15

If the Part 36 offer is accepted within the relevant period, how long does the defendant have to pay the sum?

Answer 15

14 days

Question 16

If a Part 36 offer is accepted by the claimant after the relevant period, what will the courts normally order?

Answer 16

Defendant pays claimant’s costs up to the date on which the relevant period has expired, and then claimant pay’s defendant’s costs thereafter until the date of acceptance

Question 17

If a Part 36 offer has been made and accepted pre-action and no proceedings have been issued, how will costs be paid?

Answer 17

On a standard basis - if cannot be agreed then can issue proceedings for court to determine amount of costs

Question 18

What are the consequences of a claimant failing to obtain a judgment more advantageous than a defendant’s Part 36 offer?

Answer 18

Defendant will pay claimant’s costs on a standard basis up to the day the relevant period expired

Claimant will pay defendant’s costs on a standard basis from the day after the relevant period expired (with interest on this costs, at usual commercial rate)

Question 19

What are the consequences of a claimant failing to establish liability at trial, and so not obtaining a judgment more advantageous than defendant’s Part 36 offer?

Answer 19

Claimant pays defendant’s costs on standard basis from when incurred by defendant up to judgement, along with interest (unless unjust to do so)

Question 20

What are the consequences of a claimant obtaining a judgment at least as advantageous as its own Part 36 offer?

Answer 20

In relevant period - costs on standard basis, damages and usual interest due

After relevant period - costs on indemnity basis (which includes interest of up to 10%), enhanced rate of interest on damages up to 10% (discretionary)

Additional amount on damages - 10% on damages up to £500,000; 5% over £500,000 up to maximum of £75,000

Question 21

What is the consequence of a claimant obtaining a judgment more advantageous than defendant’s Part 36 offer but not as advantageous as their own?

Answer 21

Part 36 has no effect - claimant receive damages, interest at court’s discretion, costs on standard basis until judgment

Question 22

How would further information be obtained about the judgment debtor?

Answer 22

Apply to the court for a Part 71 order - the debtor / company officer will be required to attend the court to answer questions and provide documentation

Question 23

What are the 4 methods of enforcement for a debt?

Answer 23

Taking control of goods
Charging order
Third party debt order (this includes order against bank account of paying company)
Attachment of earnings order

Question 24

What is the purpose of Part 83?

Answer 24

Governs taking control of goods

Question 25

What items are exempt from being taken by a HCEO / bailiff?

Answer 25

Clothing, bedding, furniture and household equipment, work tools (subject to a maximum aggregate value of £1,350), goods belonging to another or subject to a HP agreement

Question 26

What is a “controlled goods agreement”?

Answer 26

An agreement between debtor and enforcement officer in which, in consideration of goods not being removed immediately, debtor agrees not to dispose of them nor permit them to be removed

Question 27

If the judgment sum is less than £600, which court enforces this and what document is required?

Answer 27

County Court
Warrant of control

Question 28

If the judgment sum is more than £600 but less than £5,000, which court enforces this and what document is required?

Answer 28

County or High Court
Warrant or writ of control (depending on court)

Question 29

If the judgment sum is more than £5,000, which court enforces this and what document is required?

Answer 29

High Court
Writ of control

Question 30

What can a charging order be made on, under Part 73?

Answer 30

Either on land, or on debtor’s beneficial interest in certain specified securities such as stocks and shares

Question 31

What is the effect of a charging order?

Answer 31

It will sit on the asset until it is worth the creditor applying for an order for sale

Question 32

When is a charging order available?

Answer 32

On debts of more than £5,000

Question 33

Which court can application for a charging order be made to?

Answer 33

Either County Court Money Claims Centre, or High Court

Question 34

What is an ICO?

Answer 34

Interim charging order

Question 35

How many days following service of ICO, application notice and supporting document on debtor, do they have to request review of the decision?

Answer 35

14 days

Question 36

Within how many days following service of ICO must any persons wishing to object file and serve evidence?

Answer 36

28 days

Question 37

How would a creditor enforce a charge on debtor’s land over which they hold a charging order?

Answer 37

By commencing fresh proceedings

Question 38

How can money owed to a debtor by a third party be recovered by the creditor?

Answer 38

Under a Part 72 order requiring the third party to pay the creditor sufficient of the monies to satisfy the judgment debts and costs

Question 39

When making an application to the court for a third party debt order (TPDO), must the debtor or third party be given any notice?

Answer 39

No - must be made without advance notice

Question 40

What is the effect of an application for a third party debt order?

Answer 40

Judge will make an interim order and a hearing will be listed no less than 28 days later at which the court will consider any objections

Third-party will be served with the interim TPDO which freezes the assets

Question 41

What is an attachment of earnings order?

Answer 41

An order that compels debtor’s employer to make regular deductions from debtor’s earnings and pay them into court

Question 42

What court must be applied to for an attachment of earnings order under Part 89?

Answer 42

County Court Money Claims Centre

I.e. NOT available through High Court

Question 43

As attachment of earnings orders can only be made by County Court, are the not available through the High Court in any way?

Answer 43

No the method can still be used, but proceedings must first be transferred to the County Court

Question 44

Is there a minimum amount to be deducted from salary on an attachment of earnings order?

Answer 44

No - amount to be deducted from the debtor’s pay may be very low, in which case the judgment would take a considerable time to satisfy

Question 45

Can deductions for an attachment of earnings order be transferred between jobs, or can it be deducted from social security benefits?

Answer 45

No

Question 46

How can an order be enforced in Scotland or Northern Ireland?

Answer 46

Under Part 74, creditor is required to obtain certificate of judgment and make application to national court to register judgment within 6 months

Question 47

How can an order be enforced in The Commonwealth?

Answer 47

Administration of Justice Act 1920 for High Court - judgments must be final and registered within 12 months

Foreign Judgments (Reciprocal Enforcement) Act 1933 for County Court - judgments must be final and registered within 6 years

Question 48

How can an order be enforced in 2005 Hague Convention states?

Answer 48

Judgment will be enforced and recognised in that country

Question 49

How can an order be enforced in countries which are not 2005 Hague Convention states?

Answer 49

Common law rules will apply – determined by national law of particular country where enforcement is sought