Getting The Blood Out Of The Stone

The purpose of this article is to look at the methods of enforcing a Court judgment so you can finally get the money you have spent so long waiting for.

Firstly if the judgment is obtained in from a County Court and is over £5,000 or is a High Court judgment of any amount then it will carry interest at 8% per annum from the date of the judgment and remains enforceable for 6 years without the need to obtain further leave of the Court. It’s worth considering transferring a County Court judgment to the High Court if it for less than £5,000

A judgment can be enforced in a variety of ways. Depending on the information you have on the debtor, the enforcement path is often self selecting. If you have no information about the debtor then you can arrange for the Court to examine the debtor as to their means. If the debtor is a company then a director will be ordered to attend.

If you believe that a debtor owns any assets of value, a bailiff (County Court) or sheriff (High Court) can execute a demand for payment by attending the debtor’s premises and taking goods belonging to the debtor to cover the debt and their costs. Bearing in mind that the goods taken are often put into an auction the mere attendance of a bailiff often prompts the debtor to produce a cheque for the full balance.

Arguments range over the preference, a sheriff over bailiff. You may agree that as a sheriff is paid by results rather than being on a salary there may be more incentivised to get a result!

Neither the bailiff nor a sheriff can force entry into a property (unless they’ve been allowed in previously) but it is surprising how creative and ruthless they can be. I had a case where the football posts were removed mid-game.

If a bailiff or sheriff is unsuccessful or you are not aware of the debtor having any assets to execute on then alternative methods of enforcement include obtaining a charging order over any fixed assets a debtor may own. This is often a house or other property but can also include shares or other securities. The application is initially a simple paper exercise to obtain an interim order followed by a hearing which the debtor can attend. However unless the debt is low i.e. below say £800 or the debtor is about to commence insolvency proceedings then the Court will grant a charging order which, in the case of a property, needs to be registered at HM Land Registry to prevent the debtor selling or passing it on.

Once obtained you can just sit on the security of a charging order as no limitation period runs and interest continues to accrue. However if you want to apply to sell the property, a straightforward application can be made. Depending on the type of charging order the Court will take into account a number of considerations such as the equity available in the property, the needs of the owners and any children in occupations, as well as those of other creditors.

If the debtor is in employed, subject to minimum earning requirements an order can be made for the judgment sum to be paid direct by the debtor’s employer by way of an attachment of earnings order.

Alternatively if the debtor is owed money by another person, often in the form of savings in a bank, then an application can be made for that third party to pay the money direct to you. It is important that the debt is due and owing. If the money is due from the third party at a future date e.g. retention monies being held, then the application will fail.

Finally always consider insolvency proceedings. The advantage, once a judgment has been obtained, is that there are few defences available but remember you may incur a large sum of money and get little or nothing back.

Published 24/11/2007.