Disputes - Enforcement (Post-Trial) 17 Flashcards
How are damages and cost orders enforced?
Enforcement: Damages and cost orders are not automatically enforced by the court. However, receiving parties (judgment creditors) can apply to court to enforce orders against paying parties (judgment debtors) for non-payment (after 14 days).
(1) Investigation: It is usually prudent to assess whether a debtor has the means to pay the debt. Whilst this is more appropriate in pre-action, it can also occur post-judgment and prior to seeking enforcement.
(2) Enforcement: There are a number of enforcement orders a court can make. This will differ by the type of asset, the value of the debt, and various other factors.
How are judgment debtors investigated?
Investigation: Judgment creditors should investigate the means of the judgment debtor to pay damages and costs. This will inform the enforcement methods available to the creditor. There are two primary methods.
Enquiry Agent
Enquiry Agent: A professional enquiry agent may be instructed to locate assets and qualify wealth and income of a debtor. This is usually costly and time-consuming.
Information Hearing
Information Hearing: Alternatively, creditors may apply for the court to conduct an oral hearing, in which the debtor or an authorised officer of the debtor is questioned by a court officer or judge (CPR 71).
(1) Notice of Application: Creditors must file a notice of application at court, setting out the debtor’s name, address, judgment order, and evidence in support. A hearing will be granted if deemed appropriate.
(2) Service on Debtor: Notice of the hearing must be served on the debtor, who can request reasonable travel expenses within 7 days.
(3) Oral Hearing: The hearing will occur at the debtor’s local county court centre. An officer or judge will examine them using standard questions, and specific questions on request. A written record is made, read to the debtor, and signed as confirmation.
(4) Non-Attendance: Non-attendance by the debtor can result in a committal order, effectively threatening the debtor with imprisonment for contempt of court unless they comply with the judgment order.
What are writs and warrants of control?
Writs and Warrants of Control: Creditors can apply to court for a writ or warrant of control to seize the debtor’s goods and sell them at public auction (CPR 83).
What is a charging order?
Charging Order: Creditors can take charges over the debtor’s securable assets. This is practical for assets that are jointly-owned (CPR 73).
(1) Securable Assets: Generally land, stocks, and shares (including dividends and interest).
(2) Effect: The creditor is a quasi-mortgagee. The debtor pays off the debt to remove the charge, or the creditor is paid when the asset is sold.
Application
Application: For land, the procedure is such. Debts must exceed £5,000 to exercise this procedure.
(1) Notice of Application: Creditor files a notice of application to the High Court or CC Money Claims Centre, setting out the judgment, and the names and addresses of the debtor, other parties interested in the asset, and any other charge holders. They must also provide a draft interim charging order.
(2) Interim Charging Order: A court officer will make an interim charging order without a hearing. The interim order and notice of application must then be served on the debtor within 21 days, who has 14 days to request that a Judge reviews the court officer’s order.
(3) Objections Hearing: If any party objects to the interim order becoming a final order, they have 28 days to file and serve written evidence stating the grounds of objction following service of the ICO. A hearing will take place to decide the necessary next steps.
(4) Final Charging Order: If the court orders a final charging order, the creditor is granted a formal charge over the asset, and can exercise power of sale in respect of it.
Power of Sale: Fresh hearings are required to exercise the power of sale, and is usually refused if the property is occupied by other parties.
What is a third party debt order?
Third-Party Debt Order: Creditors can redirect money that is owed solely to the debtor. This is practical for bank account funds which are not jointly owned (CPR 72).
Application
Application: Creditors must apply to court.
(1) Application Without Notice: Creditor applies to the original trial court without notice to the debtor, specifying the name and address of the debtor, and the branch and account number in which money is held.
(2) Interim Order: The court will make an interim order, freezing funds. A hearing is listed to occur within 28 days.
(3) Final Order: The court will entertain any objections at the hearing. Unless there is good reason not to, it will make a final order over the account to be paid to the creditor.
What is an attachment of earnings order?
Attachment of Earnings Order: Creditors can redirect the salaried earnings of the debtor directly from an employer - this does not apply to self-employment earnings (CPR 89).
Application and Procedure
Application and Procedure: Creditors must apply to court.
(1) County Court Application: Applications can only be made to the County Court Money Claims Centre. Judgments originally made in the High Court must be transferred.
(2) Notice to Debtor: The court will notify the debtor of the application, requiring payment. If this is infeasible, a statement of income and outgoings must be supplied.
(3) Court Order: The court will make the order on receipt of the statement. It will fix the sum and rate earnings to be paid, and payment dates. These figures account for a ‘Normal Deduction Rate’ and a ‘Protected Earnings’ figure.
Normal Deduction Rate: This is the rate at which earnings will be deducted on each date.
Protected Earnings: This is a figure below which earnings cannot fall. If they do, no deductions are made.
(4) Service: The order is served on the debtor and their employer, instructing them on the relevant figures. Employers can retain a sum of earnings to cover any administrative costs involved.
(5) Objections: Parties can apply to have the order reconsidered by a District Judge in the County Court.
What is an extrajudicial enforcement order?
Extrajurisdictional Enforcement: Enforcing judgment outside of England and Wales comprises different forms.
(1) Scotland and Northern Ireland: Creditors can obtain a Certificate of Judgment. If they present this to a Scottish/Northern Irish court within 6 months, they can enforce using local methods.
(2) Commonwealth: Creditors can enforce judgment in the Commonwealth by application to a local court.
High Court: Judgment must be registered within 12 months (AJA 1920).
County Court: Judgment must be registered within 6 years (FJA 1933).
(3) Hague States: Hague States recognise and enforce English and Welsh judgments. Methods differ.
(4) Other States: All other states require new proceedings to be issued, and often the instruction of local lawyers under the laws of that state. This is costly and difficult. It should be a pre-action consideration.
What are the requirements for writs and warrants of control?
Requirements
Requirements: Only tangible assets can be seized, subject to the following exceptions:
(1) Necessary Items: Items necessary for basic living, such as clothing or bedding, cannot be seized.
>Expensive versions may be seized and replaced.
(2) Tools of the Trade: Items used for business cannot be seized (below an aggregate value of £1,350).
(3) Non-Owned: Items not solely owned by the debtor, or subject to hire purchase, cannot be seized.
What is the application process for a writ or warrant of control?
Application
Application: Creditors must apply to court. This will differ by the original trial court.
(1) High Court Judgment: Seizure and sale order must be enforced in High Court.
(2) County Court Judgment: Seizure and sale order will differ by value of original judgment.
>£600: County Court.
£600-£4,999: Either.
£5,000+: High Court (other than Consumer Credit Act proceedings).
(3) Order: The High Court will issue a Writ of Control, and the County Court a Warrant of Control.
What is the procedure for a writ or warrant of control?
Procedure
Procedure: The debt is enforced by officers of the court (which varies by court).
(1) Enforcement Officer: A High Court Enforcement Officer, or County Court Bailiff, will seize the goods of the debtor. They cannot enter homes without permission, but can use reasonable force to enter business premises.
(2) Controlled Goods Agreement: Debtors may enter a ‘CGA’ on seizure. This acknowledges the creditor’s right of sale, and provides them additional time to pay. If they do not, the goods are sold at auction to meet the debt.
