🗣️DR 7: Aspects of Costs and Enforcement(incpart36) Flashcards
When can the court order that a non party meet the costs and what must happen before an order can be made?
Has discretionary power but only used in exceptional circumstances where their interest was NOT only personal
Must be satisfied:
a. They were the real party interested in the litigation
b. OR were responsible for bringing proceedings
(not that their interest was just personal)
Before an order can be made:
* 3rd party must be added as a party to proceedings
* May attend hearing when court determines costs
Must the court find that a 3rd party acted improperly before making an order that they pay costs?
No
When does the court have discretionary power to make an order for security for costs?
(a) it is satisfied, having regard to all the circumstances of the case, it is just to make such an order
(b) AND a condition in Part 25 applies:
1. C resident outside a 2005 Hague Convention State
2. C is an impecunious company (will be unable to pay)
3. C has taken steps to make enforcement difficult
Who can apply for security for costs?
Only defendants
What will the court consider when deciding if its just to make an order for security for costs?
□ Strength of claim/ defence (less likely to win, less justified in seeking security)
□ Cs ability to provide security: if C has reasonable prospect of success, courts will be reluctant to make order for security which they cant comply with as effect is to stifle claim
□ Causes of Cs impecuniosity-if C can show their poor finances are caused/contributed by D
□Property not in the jurisdiction (EU)
If proceedings are settled prior to issue of proceedings, what cant be recovered?
Legal costs unless agreed
If proceedings are settled after litigation is started, what should be done?
Terms should be recorded in Tomlin/consent order to ensure enforcement proceedings may be issued to recover money due under agreement (inc costs)
What is a Part 36 offer
Type of settlement offer where theres significant penalties if relevant party rejects an offer the court subsequently deems suitable
Formalities for Part 36 to be valid
- In writing
- Make clear its a Part 36
- Specify a ‘relevant period’ of not less than 21 days during which, if the offer is accepted, the D will pay the C costs
- State whether it relates to the whole of the claim/ part of it/
- state whether it takes into account any counterclaim
When is a part 36 offer deemed made?
when served on other party (rules of deemed service apply)
Is a part 36 offer without prejudice?
Yes save for costs
when can a part 36 offer be accepted?
Anytime unless notice of withdrawal given in writing
What happens if a part 36 offer is accepted within the relevant period?
□ Can recover cost of proceedings up to date notice of acceptance is served on D
□ Must be paid to C within 14d or C can enter judgement
If a part 36 offer is accepted within the relevant period and parties cant agree on costs, what happens?
Fast/intermediate: fixed recoverable costs
Multi: judge will assess on standard basis
What happens if a claimant accepts a defendants part 36 after expiry of relevant period and vice versa
C ACCEPTS DS:
*D pays Cs costs up to the expiry of the relevant period
*C pays Ds costs thereafter until date of acceptance
D ACCEPTS Cs:
D generally pays all Cs costs up until the date of acceptance
BOTH: Proceedings stayed to allow for the sum offered and costs (whether fixed/summarily assessed) to be paid)
Effect of not accepting a part 36 offer
If don’t accept what was actually a good offer, significant penalties can be imposed for wasting courts time from day 22
Applies unless court rules it would be unjust to do so
In deciding whether to make an order to impose penalties for non acceptance of a part 36 what will the judge take into account?
All circumstances inc:
*Terms of offer
*When it was made
*How close to trial
* Info available to parties at the time
*Conduct
*Whether it was a genuine attempt to settle proceedings
What are the 3 situations a non accepted part 36 will have effect?
- C offer: wins, award above
- D offer: C wins but awarded less (split costs order)
- D offer: C looses (C interest from day22)
Part 36 offer by CLAIMANT: What happens if the claimant wins at trial and is awarded a sum equal or above the offer?
D pays
1. normal damages and interest
- ALSO for damages:
*damages £500k=10% extra
*damages £500k-£1million-10% on first £500k and 5% after to a max of £75k - ALSO for interest: Enhanced interest on damages from day 22 (not over 10% above base rate)
- ALSO for costs:
* Multi: indemnity basis from day 22
* Fast/intermediate: enhanced fixed costs ( 35% of difference between fixed costs for the stage applicable when the relevant period for their Part 36 offer expired and the stage applicable at date of judgement )
Part 36 offer by CLAIMANT: What happens if the claimant wins at trial but is awarded less than their own offer?
No extra penalty on either party
(C was right to make offer, it was just too high and D right to turn it down)
Part 36 offer by CLAIMANT: What happens if the claimant looses?
Part 36 has no effect
Part 36 offer by DEFENDANT: What happens if the claimant wins at trial and is awarded a sum equal or above offer?
Part 36 has no effect ( they were justified in refusal bc offer was too low)
Part 36 offer by DEFENDANT: what happens if claimant wins but is awarded less than the offer
Split costs order:
1. D pays Cs costs as normal until day 21
2. C pays Ds costs on standard basis (multi) or fixed (fast/intermediate) from expiry of relevant period (day 22) until judgement PLUS interest (generally commercial rate of 1/2% above base rate)
Part 36 offer by DEFENDANT: what happens of the claimant looses
- C pays Ds costs as usual
- ALSO pay interest on costs from Day 22 until judgement (generally commercial rate of 1/2% above base rate)
Will the court automatically enforce judgement?
No is up to the successful party to peruse
What are they ways of investigating a judgement debtors means?
- Instruct an enquiry agent (will need to pay)
- Apply for court order requiring debtor to attend before an officer of the court to be questioned on oath about finances of them/co where they’re an officer)
What is the procedure for applying for an order for obtaining information from a judgement debtor?
- Judgement creditor files notice of application inc:
a.name/address of debtor
b. Judgement seeking to enforce
c. Amount owed
d. List specific docs creditor wants produced at hearing - Order normally personally served on
- debtor can (within 7d) request payment of reasonable travelling expenses to/from court
- Hearing
- If debtor fails to attend court judge may make committal order against them (usually suspended provided debtor complies)
Hearing for obtaining information from a judgement debtor: where does it take place, who carries it out and what happens?
Where: County Court hearing centre for area debtor resides/carries on business
Who: Examination conducted by officer of the court OR judge if requested by creditor
What: Standard questions asked but creditor can request additional ones
*Officer will make written record of responses given by debtor who’ll be invited to read/sign it
What are the 4 methods for enforcing a judgement?
- Taking control of goods
- Charging order
- 3rd party debt order
- attachement of earnings order
Who takes control of goods to enforce a judgement?
HC- High Court Enforcement Officer (HCEO)
CC-enforcement officers (aka. Bailiffs)
What powers do enforcement officers have/not have when taking control of goods?
*CANT force entry to debtors home
*CAN use reasonable force to enter business premises if they believe the debtors goods are inside
What goods can be seized to enforce a judgement?
Usual contents of a home/business (inc. cars, computers, banknotes, boats, securities’ such as share certifs)
What goods CANT be siezed to enforce a judgement?
Necessary exemption (Applies to individuals not business) =CANT take:
1. things reasonably required for basic needs of debtor/family (clothes, bedding, furniture, household equipment)
2.things debtor personally needs for work or study subject to max aggregate value of £1350(tools, equipment, computers, vehicles)
3. Goods belonging solely to another (eg. Family or on hire/hire purchase agreement)
How are disputes about co-owners entitlement to share of sale proceeds resolved when siezing goods resolved
by court
Taking control of goods: if the judgement is obtained in the County Court VS High Court, which court do you apply to enforce the judgement?
JUDGEMENT IN CC
* Judment less than £600: warrent of control in County Court
* Judgement £600-£5000: either
* Judgement sum over £5k: writ of control in HC
JUDGEMENT IN HC
issue writ of control in High Court regardless of amount enforced
Taking control of goods: What is the procedure if the HC is enforcing the judgement?
- Judgement creditor delivers to court office:
*a precipice (request)
*2 copies of writ of control
*Judgement - Court seals the writ and returns 1 copy to creditor
- Creditor forwards this to HCEO for the county where the debtor resides/carries on business for writ to be executed
Taking control of goods: What is the procedure if the CC is enforcing the judgement?
- Creditor files form of request for warrant of control at CC hearing centre serving the address where the goods are to be seized
- Warrant is executed by the enforcement officer for the district where the debtor resides or carried on business
What is a controlled goods agreement?
◊ May be entered if debtor needs time to pay
◊ Debtor acknowledges that enforcement agent has taken control of the goods and, further, that they will not remove or dispose of them before the debt is paid
◊ Effect=goods remain on premises for a few days to allow debtor one final opp to pay
◊ If payment still not received, goods seized and sold at public auction (Judgment amount and costs deducted from proceeds and surplus returned to debtor (and any co owner))
What is a charing order?
Similar to mortgage
Charging order will sit on asset until creditor thinks its worth applying for an order for sale
Judgment satisfied out of proceeds of sale
What can a charging order be made over?
- Land (inc co owned)-should register at LR/LCD
- Securities such as stocks/shares (Over debtors beneficial interest in certain specified securities inc UK gov stock, shares and unit trusts inc. dividends)
Steps in procedure for paying a judgement out of a charging order?
- Interim charging order (ICO)
- Final charging order (FCO)
- Order for sale
How is an interim charging order obtained?
◊Creditor files:
1. app notice including (Details of judgement, Land to charge, Names/addresses of other people affected (ie prior chargors)
2. Draft ICO
◊App normally dealt with by court officer without hearing-will make ICO or refer to judge
◊ Within 21d the creditor must serve on the debtor:
1. ICO
2. Application notice
3. Any docs filed in support
◊ Debtor has 14d to request decision reviewed by judge
How is a final charging order obtained
◊ Anyone who objects to making of FCO must file and serve written evidence with grounds of objection within 28d service of ICO
◊ If objection received, court will transfer app back to debtors home court for hearing
◊ At hearing, court can:
*Make FCO
*Discharge ICO
*Direct trial of any issues in dispute
When is a charging order not good?
*Debtors who lack liquid assets
*Already significant charges/mortgages over prop
*Where might not be granted for ages bc of eg children in house will be severely affected by sale
What is a 3rd party debt order?
Court can order 3rd party to satisfty judgement if debtor owed money by 3rd party eg. bank/BS acc in credit or trade debts from business
What is a condition for making a 3rd party debt order ?
Debt must belong solely and beneficially to judgment debtor (eg. NOT joint bank acc)
Where should you issue an applicatin for a 3rd party debt order?
To court that made the order being enforced, unless the proceedings have subsequently been transferred to a different court
Procedure for applying for a 3rd party debt order?
- Creditor applies to court without notice to debtor (inc.bank deets)
- Judge makes interim order freezeing funds
- Hearing listed for at least 28d later
- At hearing, court considers objections and unless there’s a good reason not to, order made final (3rd party must pay money to creditor)
Advantages and disadvantages of 3rd party debt order?
A: Element of surprise
D: *If account not in credit the day the order is served its ineffective
*Informed debtor may remove funds as soon as judgement made
* If bank account not in the sole name of the debtor application will fail
What is an attachment of earnings order?
Is an order that compels the debtor’s employer to make regular deductions from the debtor’s earnings and pay them into court
Disadvantages of an attachment of earnings order?
*Debtor must be employed (fails if self employed)
* Will cease if debtor looses job
*Creditor needs to repeat process if debtor moves employment
*small installments may mean it takes ages to satisfy judgement
Where to make an application for an attachment of earnings order?
*County court
High Court has NO POWER to make
* Apply to Civil National Business Centre.
Procedure for an attachment of earnings order?
- Court informs debtor of app and requires them to pay OR file statement of means (income and outgoings)
- court officer will make an attachment of earnings order, fixing repayment rate by applying certain guidelines
OR If insufficient info, will transfer to judge - order sent to parties and employer
- If either party objects-can apply for the matter to be reconsidered by district judge at hearing
What will an attachment of earnings order specify?
*Normal deduction rate
* Protected earnings rate (amount court considers reasonable for the debtor to live on=if their earnings are equal to or less than this, the creditor will receive nothing that week)
For an attachment of earnings order, what must/can the employer do?
- deduct amount ordered from debtors pay and send to court
- can also deduct small sum for admin costs
Who can apply for secutiry of costs?
Defendant not C
How to enforce a judgement out of the jurisdiction
Apply within 6mo to register the judgement in that jurisdiction
Can a charging order be made without notice to interested parties?
Yes
