Enforcement of a Judgment
If you have obtained a Judgment against a Defendant, what are the best ways of enforcing this judgment?
Before considering any form of enforcement it is advisable to obtain as much information on the judgment debtor as possible to ensure that the debtor is able to satisfy the judgment debt. If the judgment that you have obtained is against a company it is advisable to carry out an up to date company search at companieshouse.gov.uk. You can also carry out an officer search on the individual, which will tell you what other directorships the individual has and when he was a director of these companies.
With regard to an individual the main asset that you can usually enforce a money judgment against is the home and therefore you should try to establish if they own a property. A search of the electoral role should provide you with an upto date address from which you can carry out a Land Registry Search to see if the individual in question is the registered proprietor of the property, or if they own the property jointly. In the event that the property is in joint ownership you will only be able to enforce a judgement against the debtor’s share in the property.
A Land registry search will tell you when the property was purchased. If the property was purchased before the recession it is likely that it will have increased in value and there will be equity in the property so that you can enforce the judgment. The search will also show if there are any mortgages on the property (but not the amount).
If the title to the property is congested with lots of charges etc it is unlikely that there will be little or no equity in the property, as the changes will be discharged in order of registration.
We would suggest that you carry out a search at netprices.com, which will show you what properties on the particular road in question have sold for so that you will have an indication of current value.
In the alternative you can engage the services of an inquiry agent who will carry out the above searches for a fee. Some of the inquiry agents that we use carry out what is called a presue report, which offers comprehensive information on companies and individuals and the companies that they work for. Carrying out a comprehensive search on an individual is money well spent as there is no point in pursuing an individual if they have no money to satisfy a judgment.
Orders to obtain information from judgment debtors
It is sometimes worthwhile to apply to the Court for an Order to obtain financial information from the debtor. This requires the debtor to be examined as to his assets by an officer of the Court or Solicitor. The examination seeks to obtain a variety of information including income and savings. In principle this is a good idea, however, in practice it can take a substantial time to obtain this information especially as it is common that the debtor does not attend Court to give this information.
Methods of Enforcement
A charging order can be obtained against land, which can be freehold or leasehold. As stated above the land can be either owned solely or jointly. Applying for a charging order on a property will not produce payment although it is an effective means of securing a debt, as effectively the creditor becomes a mortgagee. When the property is sold the charges on the property will have to be cleared. Once a charging order has been obtained you can make an application for an order for sale. The judgment debtor can object to the order being made and the outcome will depend on the individual circumstances. The advantage of obtaining a charging order is that is that your interest will be registered against the property as a secured creditor, so in the event that the individual is made bankrupt your interest will be protected.
Attachment of Earnings Order
Where a judgment debtor is employed an Attachment of Earnings Order compels his employer to make regular deductions from his pay to satisfy the Judgment. In theory this is an effective method but unfortunately this method is only available against employees and not selfemployed individuals and therefore it is often not suitable for commercial disputes. The Court allows the debtor a minimum income before an order can be made.
Warrant of Execution
This method of enforcement involves seizing and selling a debtor’s assets to satisfy the judgment debt. This can be an effective method of enforcement as the embarrassment of a bailiff arriving at a person’s home or company to remove assets can often result in a prompt payment.
Third Party Debt order
A Third Party Debt Order is an order obtained by a judgment creditor requiring a third party to pay the judgment creditor directly, the sum that is owed by the third party to the judgment debtor.
When a bank account is in credit to the account holder, the bank owes the account holder that sum. The creditor first applies for an interim third party debt order, without notice to the judgment debtor, which freezes the account of the judgment debtor. Once a third party has been served with the order, it is liable to pay the judgment creditor from their own pocket if they allow or cause the account to be dissipated or debt to be reduced. The interim third party debt order issued by the court will specify the date when the court will consider making a final third party debt order. The court maintains discretion to discharge the interim order or to vary its terms in the final order or direct a trial of the issues arising.
It is useful to retain copies of any documents which contain details of the debtor’s bank accounts.
Freezing injunction in aid of execution
If a judgment debtor intends to remove their assets from the jurisdiction or to deal with them with the intention of frustrating the judgment debt, the judgment debtor’s assets can be frozen so that they may be taken in execution subsequently. This method of enforcement must only be used when there is a real threat that assets will be dispersed and it is viewed as an emergency.
Insolvency – Individual
The threat of bankruptcy can often motivate the debtor into paying off the judgment debt.
Can you use more than one method of enforcement?
A judgement creditor can use more than one method of enforcement simultaneously, or one after another (CPR 70.2(2)). If a judgment creditor uses more than one method of enforcement and one method results in part payment from the judgment debtor, the judgment creditor should notify the court of the part payment received.
This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.