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To Sue or not to Sue

If you are going to spend time, money and resources pursuing or defending a court claim, then you need to think about what you are going to get out of it. We explain what you can do with an English court judgment at home or abroad and how you can trace and preserve assets to make sure you get paid.

Usually, a judgment debtor will have 14 days from the date of the judgment to pay. So what can you do if they don’t?

Some options to consider:

  • Taking control of goods – taking control of goods can be quick, simple and straightforward. It does not require a judicial decision as a writ of control can be issued administratively by the Court Office.
  • Apply for a third party debt order – this compels a third party (within the jurisdiction) to pay over to the judgment creditor the money he owes to the debtor. This can be useful where you can identify a bank account.
  • Apply for a charging order, a stop order or a stop notice – this allows you to enforce over or against the debtor’s interest in an asset. A stop order can be used to prevent the debtor from selling property, for example land, without paying the judgment.
  • Serve a statutory demand and start insolvency proceedings – this is required in advance of applying for a winding-up order or bankruptcy, but can be served simply to apply pressure as the threat of insolvency is often enough to prompt payment from a solvent company. If the statutory demand is not satisfied then you can apply for a winding-up order.

Identifying Assets

It makes no sense to try and enforce a judgment if the judgment debtor has no money/assets to sell – no one wants to throw good money after bad. On that basis, it is always advisable to research the judgment debtor before embarking on enforcement proceedings. A good lawyer will have advised you to do this at the outset of any proceedings.

Some points to consider:

  • Check the judgment debtor is not subject to an insolvency procedure - search the Insolvency Register, the Bankruptcy and Companies Court registries, Companies House and the London Gazette (you cannot, generally, enforce against a company in insolvency proceedings or one that has been dissolved).
  • Apply for an order to obtain information from a judgment debtor – this compels the debtor (if he is in the jurisdiction) to attend court to provide information, under oath, for the purpose of enabling a judgment creditor to enforce a judgment or order against him. If the debtor fails to comply, he faces a committal order.
  • Check the Register of Judgments, orders and fines (via ) – this lists all County Court and High Court judgments (for the payment of money) that are not satisfied within one calendar month of the date of the judgment.
  • Instruct an Enquiry Agent – use the resources of professional enquiry agents to seek out assets in (and outside) the jurisdiction.

Enforcement abroad – points to consider:

  • Enforcing your English judgment is generally more straightforward in the common law and commonwealth jurisdictions.
  • English judgments can be enforced in the EU relatively easily but there may be some hoops to jump through. This may not be the case for long.
  • Some jurisdictions will re-examine the merits of a judgment or award before enforcing it.    
  • Always consider how enforcement actions in one jurisdiction might impact your options in another jurisdiction.
  • Some jurisdictions will not enforce summary or default judgments (or equivalent) – for example India – and so explore possible enforcement jurisdictions before making a summary judgment application.
  • Not all jurisdictions will enforce declaratory judgments or awards (as opposed to money claims). In France for example, an English Deputyship Order (made under the Mental Capacity Act 2005) will not be recognised.

Prevention is better than cure:

  • Identify assets – or the potential dissipation of those assets – early.
  • Consider taking security – whether for payment or for your claim.
  • Look after your original award – you might need to provide it (or a certified copy) for enforcement proceedings.

Our Litigation team and agents are particularly adept at locating and enforcing payment from problem debtors even before proceedings are necessary. If you need help collecting or enforcing a debt, please contact Chris Sykes to discuss the best next step.