Guide to Enforcement
Litigation can be expensive, time-consuming, and stressful. As such, it is important to be realistic whether your claim has a strong chance of success, and if it is successful, is the company or individual that you are pursuing even able to pay your damages and legal costs?
Generally speaking, if there is an insurance company identified, then there should be no problem in enforcing a court judgment order to recover the damages and costs awarded by the court or agreed by a negotiated settlement between the parties.
However, problems can arise when the defendant does not have an insurance policy, or they are withholding information regarding their finances. We will, therefore, need to be certain that the defendant has the means to satisfy a legal judgment. Checks and enquiries may be needed to ensure the potential defendant has the assets to ensure payment. If the defendant has little or no assets, then it may be pointless to pursue the action as although you may be successful with your claim, the judgment ordering the at-fault party to pay may be worthless.
In this guide, we examine the various methods of enforcement to give you an idea of your legal rights after judgment.
Instructing a bailiff is probably the most common and well-known method to enforce a judgment. After it is established that the defendant is not going to pay the court order, the claimant can instruct a county court bailiff.
The claimant (creditor) can apply to the court for a warrant of execution for which there is a small court fee payable. Bailiffs typically deal with debts up to £600.00. Once the warrant has been delivered, the bailiff can attempt to execute the court order. Normally the first contact will be via a letter informing the defendant that they must pay the debt. If the defendant ignores the letter and doesn’t pay, the bailiff will call at the last known address of the defendant to seek to recover the amounts owed.
Bailiffs cannot force entry into a building or premises. If invited onto premises they can remove goods. They can also gain entry via an open window or door without consent. Threatening behaviour by the bailiff is a criminal offence.
The bailiff can take possession of most goods once he/she has entered the premises. The bailiff cannot take goods associated with the livelihood of the defendant, e.g. tools, laptop, computer etc. It will be at the discretion of the bailiff whether to remove goods from the premises at this point; generally, they will allow the defendant (debtor) time to consider their position and to meet the demands of the court order. Normally a period of 14 — 21 days will be provided to the defendant to raise funds, failing which a demand will be issued to seize the goods, which will be sent to auction for disposal and sale.
Instructing a bailiff is not without its downfalls. The defendant can choose not to respond to the bailiff demands and requests. Even if the bailiff makes contact, there may be insufficient funds in the defendant’s (debtors) possession to meet the demands in the judgment order.
If unsuccessful, then the fee from the warrant of execution cannot be recovered. If, however, the claimant (creditor) is successful, the warrant fee and bailiff’s fees can be recovered.
High Court enforcement officers
High court enforcement officers are generally instructed to recover debts arising from an order to pay. They can only be instructed to recover the debts exceeding £600.00.
You must obtain a ‘Writ of Fi Fa’ from the High Court, for which there is a court fee payable. The Writ then becomes a court order addressed to the High Court Enforcement Officer, formerly known as a ‘Sheriff’. The order entitles the officer to seize goods and enforce the court order.
The High Court Enforcement Officer can charge the defendant (debtor) for their services, by adding their fees to the judgment and seeking to recover it in addition to the initial enforcement action. If they are not successful, they do not get paid. However, you should bear in mind that High Court Enforcement Officers are able to recover their fees before reimbursing the claimant; this can cause problems if the claimant receives only part payment of the debt from the defendant. High Court Enforcement Officers are more expensive than bailiffs.
Most High Court Enforcement Officers undertake instructions on a no recovery no fee basis, so no up-front fees are payable.
Enforcement of an offer to settle
Formal part-36 offer
If the offer made by the defendant is a part-36 offer (Civil Procedure Rules offer pursuant to part 36), the claimant can enforce the offer by using the method in CPR 36.11.(7).
A part 36 offer must be paid within 14 days of acceptance. If it is not, then the claimant can at that stage issue an application to the court for a summary judgment ordering the defendant to pay. Once judgment is made, if the defendant does not pay, then enforcement action can be taken to recover the debts.
To enforce a non-part-36 offer (i.e. an offer to pay/settle a claim), the claimant may simply issue a county court claim for breach of contract for failing to pay. Once the claim is issued and served, if no response is forthcoming by the defendant to acknowledge the claim or to file a defence to the claim, then the claimant is entitled to request judgment be entered.
Enforcement of terms of a consent order
Most claims are settled without going to court. If the parties agree a settlement and the matter is litigated, then the court must be notified to bring the proceeding to a halt. This is done by agreeing on the terms of a settlement by consent between the parties, known as a Consent Order.
The Consent Order will contain the amount agreed for damages, when to pay, and costs entitlement. Both parties will sign the Consent Order once it is agreed, and it will be filed at court with a court fee.
From time to time, a party may not comply with the terms of agreement and if this happens enforcement action can be taken to recover the debts agreed. The claimant should then apply for a court order, meaning unless the defendant complies, judgment be entered so the claimant can enforce the terms of the order.
The claimant will be entitled to recover the costs of the application.
The claimant may also decide to apply to the court for a charging order. When the defendant owes a property, it may be feasible to obtain a charging order over that asset. The effect of this is that the outstanding debt becomes secured on the defendant’s property or land in the same way as a mortgage.
Obtaining a charging order will not give you priority over the right of any existing mortgages already registered. Issuing and applying for a charging order is mainly used for much larger debts.
The application is made without notice or consent of the defendant and will be considered by a District Judge on the papers. If satisfied, the Judge will order a nisi and set a date for a hearing to decide whether the order should be made absolute.
It will be up to the claimant to serve the order on the defendant at least seven days before the hearing. The defendant may want to contest the application. The land registry should also be informed of the charging order.
Subject to the court approving the application and making it absolute, the next step is to apply for an order of sale of the land owned by the defendant, so that the debt can be paid out of the proceeds. However, courts will only grant an order of sale in exceptional circumstances.