Enforcement of money judgements

Question 1

Who is the judgement creditor & judgement debtor?

Answer 1

Judgement creditor = winning party

Judgement debtor = losing party

Question 2

What are the 2 methods for obtaining further information about the judgement debtor’s financial circumstances?

Answer 2

Method 1: Instruct an enquiry agent (expensive)

Method 2: Apply to court for order to obtain information from debtor

Question 3

What is the procedure for applying to the court for an order to obtain information from the debtor?

Answer 3

Judgement creditor files notice of application at court

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Order personally served on debtor (who can request payment of reasonable travel expenses within 7 days)

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Hearing takes place (usually in County Court hearing centre): debtor is questioned under oath about their finances by an officer of the court (or judge if requested by creditor)

If debtor fails to attend, judge may make committal order

Question 4

What are the 4 most common methods of enforcement?

Answer 4

Taking control of goods

Charging order

Third party debt order

Attachment of earnings order

Question 5

Who seizes a debtor’s goods?

Answer 5

High Court Enforcement Officer (HC) or enforcement officer (CC)

• Cannot force entry into debtor’s home
• Can use reasonable force to enter business premises

Question 6

What goods cannot be seized under taking control of goods?

Answer 6

Necessary items exemption
(includes work tools, computers, vehicles etc necessary to debtor personally for work or study up to max aggregate value £1,350)

Goods belonging solely to another

Question 7

If a judgement sum is less than £600, which court enforces taking control of goods?

Answer 7

County Court (warrant of control)

Question 8

If a judgement sum is between £600 & £5,000, which court enforces taking control of goods?

Answer 8

Either County Court (warrant of control) or High Court (writ of control)

Question 9

If a judgement sum is for £5,000 or more, which court enforces taking control of goods?

Answer 9

High Court with writ of control

Except for proceedings under Consumer Credit Act 1974

Question 10

Advantages & disadvantages of taking control of goods?

Answer 10

Advantages:

• HCEOs usually paid on results
• In High Court, interest continues to accrue on debt

Disadvantages:

• Limits to powers of HCEOs & enforcement officers (can’t force entry into home)
• Relatively low resale value of goods seized

Question 11

What can a charging order be placed over?

Answer 11

A debtor’s land or securities

Question 12

What are the 3 stages to a charging order?

Answer 12

Stage 1: Interim Charging Order (ICO)
Creditor files application notice & draft ICO - dealt with by court officer without hearing

• ICO & application notice must be served on debtor within 21 days
• Debtor then has 14 days to request review of decision by judge

Stage 2: Final Charging Order
If any person objects to making FCO, must file & serve written evidence within 28 days of service of ICO

Stage 3: Order for sale
Creditor can enforce FCO by commencing fresh proceedings for order for sale

Question 13

Advantages & disadvantages of charging orders

Answer 13

Advantages:
- Useful against debtors lacking liquid assets
- interest continues to accrue

Disadvantages:
- Not appropriate where significant other prior charges/mortgages over property, or where debtor has no beneficial interest
- Payment may not be received for many years if application for order of sale unsuccessful

Question 14

What is a third party debt order?

Answer 14

Requires a third party who owes money to the debtor to pay it directy to the creditor

Question 15

What is the procedure for obtaining a third party debt order?

Answer 15

Must be issued in court that made order being enforced

• Creditor applies to court without notice to debtor
• Judge makes interim order which freezes bank account/funds held by TP
• Hearing no less than 28 days later - will consider any objections & make order final

Question 16

Advantages & disadvantages of third party debt order

Answer 16

Advantage: element of surprise

Disadvantages:

• If account not in credit on day order served, will be ineffective
• Application fails if account held in joint names

Question 17

What is an attachment of earnings order?

Answer 17

Requires debtor’s employer to make deductions from debtor’s earnings & pay them to creditor

Question 18

What is the procedure for obtaining an attachment of earnings order?

Answer 18

Creditor applies to County Court Money Claims Centre
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Court informs debtor of application - must pay sum due or file statement of means
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On receipt of info, court makes attachment of earnings order, specifying normal deduction rate + protected earnings rate
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Order sent to parties & debtor’s employer
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If either party objects, can apply for matter to be reconsidered by district judge at a hearing

Question 19

Advantages & disadvantages of attachment of earnings order

Answer 19

Advantage: effective means of obtaining payment where debtor in work (& not self-employed)

Disadvantages:

• If debtor loses job payments cease
• If debtor changes job must repeat process
• Court may order very low value instalment

Question 20

Can money judgements be enforced in Scotland & Northern Ireland?

Answer 20

Creditor must:

1. Obtain certificate confirming judgement details
2. Make application to court in Scotland / NI to register judgement within 6 months

Question 21

Can money judgements be enforced in commonwealth countries?

Answer 21

Yes

Administration of Justice Act 1920 (High Court judgements): must be final & registered within 12 months

Foreign Judgements Act 1933 (County Court): must be final & registered within 6 years

Question 22

Can money judgements be enforced in other (ie. non-commonwealth) countries?

Answer 22

If Hague Convention applies (ie. parties have exclusive choice of court agreement): judgement enforced & recognised in that country

If Hague Convention does not apply: ability to enforce determined by national law of that country