Enforcement

Question 1

What are enforcement proceedings?

Answer 1

The steps taken post judgment by the successful party in order to obtain payment from the unsuccessful party, who can now be described as the judgment debtor.

Question 2

What are post judgment searches?

Answer 2

Searches and investigations carried out before an action commenced and as it progresses can be carried out agains to investigate opponent’s means.

• conduct a company search
• applied for official copies from land registry
• searched against other relevant registers
• instructed an enquiry agent to report

Judgment creditor can also apply to the court for an order to obtain information from judgement debtor.

Question 3

What is an order to obtain information from judgement debtor?

Answer 3

A judgment creditor may apply for an order requiring:

• a judgment debtor; or
• an officer of that body (if company);

to attend court to provide information about the judgment debtor’s means or any matter about which information is needed to enforce a judgment or order. Will answer questions under oath.

Known as ‘oral examination of a debtor.’

Question 4

What form is the order to obtain information from judgement debtor?

Answer 4

For an individual: N316

For a company: N316A

Must contain a penal notice - will be held in contempt of court, imprisoned, fined, or assets seized.

Can include reference to documents.

Question 5

When must an order to obtain information from judgement debtor be served on the person ordered to attend court?

Answer 5

Not less than 14 days before the hearing.

Question 6

Who will carry out the questioning of the person subject to the order to obtain information from judgement debtor?

Answer 6

An officer of the court or judge using standard procedures and questionnaires.

Question 7

What are the main methods of enforcement of money judgments?

Answer 7

• Writs/warrants of control
• Third party debt orders
• Charging orders; and
• Attachment of earnings orders

Question 8

Can you enforce money judgements in any court?

Answer 8

No. You may need to have the proceedings transferred to a different court for the purposes of enforcement.

E.g.
- Attachment of earnings orders are only available in the County Court

• Sums of £5000 or more MUST be enforced in the High Court
• Sum is less than £600 or arises out of an agreement regulated by the Consumer Credit Act it must be enforced in the County Court
• Sums between £600 and £5000 can be enforced in either court

Question 9

Where must sums of £5000 or more be enforced?

Answer 9

High Court

Sums between £600 and £5000 can be enforced in either court

Question 10

Where must sums of £600 or less be enforced?

Answer 10

County Court

Question 11

What are enquiry agents?

Answer 11

Private investigators who are able to procure extensive information on individuals or companies upon request.

Be careful - any misconduct will be imputed to the solicitor

Question 12

What will a company search tell you?

Answer 12

Will reveal extensive financial information about:
- company’s general solvency
- company’s assets
- whether those assets are charged

Question 13

What will the Land Charges Registry tell you?

Answer 13

Records restrictions or prohibitions on the use of a property and any charges against it. You might use information from this to work out if there is any equity in a property owned by the debtor and whether an order for sale would be possible.

Question 14

What will an individual insolvency register tell you?

Answer 14

Lists people who have been made bankrupt or who have Debt Relief Orders or Individual Voluntary Arrangements in place.

Such orders and arrangements restrict how the debtor’s assets can be distributed so will impact the enforcement methods that will be effective.

Question 15

What is an attachment of earnings order index?

Answer 15

Index shows the debtors against whom there are attachment of earnings orders in force.

Question 16

What is the register of judgments, orders and fines?

Answer 16

A register where all County Court and High Court (not family or tech and construction courts) judgments are registered for 6 year.

However, if judgment was satisfied within one month, entry may be cancelled at debtor’s request.

Will be able to see if debtor already has any unsatisfied judgments registered.

Question 17

How do you prevent a dissipation of assets?

Answer 17

Freezing injunction.

Question 18

What do you do if the judgment debtor has assets which are abroad?

Answer 18

May be necessary or desirable to take steps to enforce a judgment of the English court in a foreign jurisdiction.

Question 19

What do you do if the judgement creditor has a judgment from a foreign court to enforce against assets in England?

Answer 19

Will be necessary to use the English Courts to facilitate this.

Question 20

How do you effect valid enforcement in another jurisdiction?

Answer 20

UK is signatory to conventions and treaties which facilitate enforcement of judgments abroad. Generally reciprocal.

Different regimes for each company.

If no regime, position is covered by common law.

Enforcement will be much more difficult.

Question 21

How do you enforce abroad where there are no relevant regimes?

Answer 21

Common law.

Enforcing an English judgment abroad - governed by law of country in which you are seeking to enforce, will need to seek local counsel.

Enforcing foreign judgment in England and Wales: will need to obtain judgment in English or Welsh court (usually as non-payment of debt proceedings).

Question 22

What is the procedure for enforcing an English judgment in a foreign jurisdiction?

Answer 22

1. judgement creditor must apply for certified copy of judgment. (can be without notice)
2. Application must be supported by written evidence exhibiting the claim form, statements of case and evidence served on defendant.

Evidence must:
- identify grounds on which judgment was obtained
- state whether defendant objected to jurisdiction
- show defendant has been served
- state appeal details on the date which the time for appealing expired
-state whether interest is recoverable on judgement

3. Certificate of judgment will be issued.
4. Follow procedure in application regime or common law to enforce abroad.

Question 23

When is the best time to first consider/investigate an opponent’s means?

Answer 23

Before commencing proceedings.

You need to investigate this at the outset – it is a pre-action consideration. To consider / investigate this only after commencing proceedings is too late, because by that time, your client is bound into proceedings.

Question 24

What are methods of enforcement?

Answer 24

• Taking control of goods
• Charging orders
• Third party debt orders
• Attachment of earnings orders
• Insolvency proceedings

Question 25

What is Taking Control of Goods?

Answer 25

Allows an enforcement officer to seize a judgment debtor’s goods and sell them in order to use proceeds of sale to satisfy the judgment debt and expenses.

Introduced on 6 April 2014 - replaced common law process of execution against goods.

Question 26

What are the advantages of taking goods orders

Answer 26

Should be quick and simple as long as judgment debtor has goods which can be taken and sold off.

Goods must be owned by debtor (with no third party claims)

Question 27

How are taking control of goods applications made?

Answer 27

Standard interim application procedure (as modified by CPR)

Question 28

What are the exempt goods from taking control of goods?

Answer 28

Most important:

• Tools of the judgment debtor’s trade, only to an aggregate value of £1,350
• Basic domestic items, clothing, bedding, furniture etc.

Question 29

In which court can you apply for a TCG?

Answer 29

Up to £600 - Must use County Court
£600-£5000 - either court
More than £5000 - Must use High Court

Question 30

How do you apply for TCG?

Answer 30

Judgment credit commences process of TCG by requesting the issue of (and paying fee):

High Court: Writ of control

County Court: Warrant of control

Write or warrant is addressed to the enforcement officer, and is the document that entitles them to seize and sell the judgment debtor’s goods to raise funds to satisfy the judgment debtor’s goods to satisfy the debt.

Question 31

What is contained in a writ or warrant of control?

Answer 31

• Necessary details and amount of the outstanding debt to be recovered
• A fixed amount for the costs of TCG will be added which includes the court fee

EO is also able to take their own charges out of the proceeds of the goods sold and seized. It is advisable to give EO any info about debtor’s goods and whereabouts.

Question 32

What are the three stages of TCG?

Answer 32

1. Giving notice to the judgment debtor of enforcement
2. Entering premises and securing the goods
3. Sale of the goods

Question 33

How long before taking control of goods must the EO write to the judgment debtor?

Answer 33

At least 7 clear days before taking control of any goods.

Question 34

How long after giving notice does the EO have to take control of the judgment debtor’s goods?

Answer 34

12 months

Question 35

What time of day can an EO take control of goods?

Answer 35

Generally must not take control of goods before 6am or after 9pm on any day

Question 36

How can the EO enter premises?

Answer 36

Can use reasonable force if necessary.

Question 37

What is a controlled goods agreement?

Answer 37

An alternative to removing goods. EO enters into a controlled goods agreement with the judgment debtor.

Judgment debtor retains custody of goods, despite EO taking control of them, pending payment of debt.

“last chance”.

Question 38

How does the EO sell goods TCG?

Answer 38

EO must sell goods for the best price. Usually done by public auction.

Sum specified in writ/warrant will be paid to judgment creditor out of proceeds. Any surplus is paid back to debtor.

Question 39

What is a third party debt order?

Answer 39

Used where a debt is due to a judgment debtor by a third party within the jurisdiction.

Judgment creditor applies, court makes an order requiring a third party to pay some or all of debt owed to judgment debtor to judgment creditor (+ costs of application).

Kind of like intercepting a debt.

Question 40

What is a charging order on land or securities?

Answer 40

Form of charge taken over land which secures a judgment debt.

Does not in itself produce money.

Charge generally remains in place until property is sold, at which point the dent will be paid using sale proceeds. Subject to any prior mortgages and charges and any overriding rights.

Question 41

What is the procedure for a third party debt order?

Answer 41

1. Form N349. Interim order to be made without notice to judgment debtor. This is served on the third party first and prevents the third party from making any payment to the judgment debtor until further order.
2. Interim order is then served on judgment debtor. This will be followed by an on notice hearing where judgment debtor (and third party if they want) will be heard.
3. Court then decided whether to make final order to may the dent to judgment creditor or discharge the interim order.

Can also make an application for an order of sale instead of waiting for funds to be realised.

Question 42

How do you apply for a charging order over land or securities?

Answer 42

Two stages:

1. interim charging order
2. final charging order

Question 43

What is an attachment of earnings orders

Answer 43

Only in county court.

Debt must be not less than £50.

The judgment debtor’s salary will have deductions made from it by their employer.

These deductions will be paid into court for onward transmission directly to the judgment creditor.

Option where debtor does not have substantial assets but has a job.

Question 44

What is the procedure for attachment of earnings?

Answer 44

1. Judgment creditor applies by filing an application in a standard form, certifying the amount of the judgment outstanding and paying a fee.
2. Application and a reply form is served on the debtor who should complete and return the reply form to the court
3. Court may then make an order attaching a proportion of the judgment debtor’s earnings.
4. Order is served on the debtor and judgment debtor’s employer who is required to make the appropriate deduction from the debtor’s earnings and pay it to court for onward transmission to the judgment creditor.

Question 45

What are the drawbacks of attachment of earnings?

Answer 45

Debtor could change jobs and will have to start all over again.

Delay if doesn’t serve reply form.

Question 46

When can a petition for bankruptcy against an individual be issued?

Answer 46

When the judgment debt against them is more than £5000.

Question 47

When can a petition to wind up a company be issued?

Answer 47

When the judgment debt is more then £750.

Question 48

What is the insolvency procedure?

Answer 48

• Petition is issued and presented to the judgment debtor’s local court
• Once petition is issued it is served on the judgment debtor
• Court fixes hearing for petition and debtor will be notified of court date for hearing of whether a bankruptcy order or winding-up order should be made against them
• If don’t attend to oppose, order will likely be made
• Debtor’s assets will be distributed to creditors according to specific rules

Question 49

What is a statutory demand?

Answer 49

A precursor to insolvency proceedings. Might be served on debtor prior to petition being issued.

It is a demand in simple standard form. Very low cost and simple step that is highly effective.

Question 50

How long is the statutory demand period.

Answer 50

Debtor has 21 days after service of the demand to pay.

If not risks the court assuming that he/it is unable to pay its debts and is therefore insolvent.

Question 51

What is Insolvency?

Answer 51

Extremely effective method of getting payment if there is money available. Clients tends to prefer this method because the threat of being made bankrupt or wound up provides a strong incentive to the judgment debtor to settle the judgment debt.