01 Jun 2021

Debt Recovery

‘Yes Prime Minister’

Earlier this year, it was widely reported that Prime Minster Boris Johnson (the “PM”) had a Judgment in Default entered against him, which was swiftly Set Aside and Struck Out soon after it was discovered.

In a four part blog series, Associate William Watkins. who heads up our debt recovery team, explores what a 'Judgment in Default' is, how you 'Set it Aside' and what it means to 'Strike Out a Claim'.

Judgment in Default

Most people assume that all cases end up in front of a Judge, where each party gets a chance to have their say and the Judge subsequently rules on the case.  In reality, most cases never get that far.

Where a Claimant believes they are owed money, for example in the PM’s case, it is alleged that he owed the Claimant damages for “defamatory comments”, the Claimant is entitled to issue a Claim at Court.  You complete the Claim Form, which can be completed either electronically or in paper form and then you send it to the Court, together with the Court Fee.  The Court then issues the Claim and serves it on the Defendant.  The Defendant has 14 days to file the Defence.  If the Defendant needs more time, for example, because they are the PM and have other matters to deal with, you can file an Acknowledgment of Service first, which extends the deadline to file the Defence by an additional 14 days.  If a Defence is filed, the case is transferred to a local Court and goes through the relevant procedural steps until it goes to Trial in front of a Judge, where each party can argue the merits of their case.

However, as stated above, most cases never get as far as a Judge.

Most of the time, the Defendant never files a response to the Claim, which allows the Claimant to make an Application for Judgment in Default.  Judgments in Default are entirely procedural and involve examination of the merits of the case.  The Claimant merely needs to be able to show no Acknowledgment of Service or Defence has been received.

If the Court is satisfied that the grounds for Judgment in Default exist, the Judgment is granted and a CCJ is entered against the Defendant.  The same consequences apply to a CCJ obtained via a Judgment in Default as a CCJ obtained at a Trial.  The CCJ gets registered at the Register of Judgments, Orders and Fines, who send the information to credit reference agencies.  The CCJ remains on the Defendant’s credit file for at least 6 years, unless they pay the debt within 1 calendar month, in which case an Application can be made to have the Judgment “cancelled”.  If payment is made after one calendar month, the CCJ can be marked as “satisfied” but remains on the credit file.

Often however, having a CCJ does not automatically lead to payment.  In the Prime Minister’s case, he was not even aware the CCJ had been entered.  In that regard, Enforcement action may need to be commenced.

 

William Watkins is a specialist in debt recovery and commercial litigation. He heads up the Debt Recovery team within our Dispute Resolution department at Harding Evans. Get in touch on 01633 244233 or hello@hevans.com.

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