Enforcement of money judgements Flashcards
Who is the judgement creditor & judgement debtor?
Judgement creditor = winning party
Judgement debtor = losing party
What are the 2 methods for obtaining further information about the judgement debtor’s financial circumstances?
Method 1: Instruct an enquiry agent (expensive)
Method 2: Apply to court for order to obtain information from debtor
What is the procedure for applying to the court for an order to obtain information from the debtor?
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
What are the 4 most common methods of enforcement?
Taking control of goods
Charging order
Third party debt order
Attachment of earnings order
Who seizes a debtor’s goods?
High Court Enforcement Officer (HC) or enforcement officer (CC)
- Cannot force entry into debtor’s home
- Can use reasonable force to enter business premises
What goods cannot be seized under taking control of goods?
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
If a judgement sum is less than £600, which court enforces taking control of goods?
County Court (warrant of control)
If a judgement sum is between £600 & £5,000, which court enforces taking control of goods?
Either County Court (warrant of control) or High Court (writ of control)
If a judgement sum is for £5,000 or more, which court enforces taking control of goods?
High Court with writ of control
Except for proceedings under Consumer Credit Act 1974
Advantages & disadvantages of taking control of goods?
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
What can a charging order be placed over?
A debtor’s land or securities
What are the 3 stages to a charging order?
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
Advantages & disadvantages of charging orders
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
What is a third party debt order?
Requires a third party who owes money to the debtor to pay it directy to the creditor
What is the procedure for obtaining a third party debt order?
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
Advantages & disadvantages of third party debt order
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
What is an attachment of earnings order?
Requires debtor’s employer to make deductions from debtor’s earnings & pay them to creditor
What is the procedure for obtaining an attachment of earnings order?
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
Advantages & disadvantages of attachment of earnings order
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
Can money judgements be enforced in Scotland & Northern Ireland?
Creditor must:
- Obtain certificate confirming judgement details
- Make application to court in Scotland / NI to register judgement within 6 months
Can money judgements be enforced in commonwealth countries?
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
Can money judgements be enforced in other (ie. non-commonwealth) countries?
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
