14 Jun 2021
As we touched in our previous blog, Judgments in Default are entirely procedural and do not involve looking at the overall merits of the case. Due to this, Defendants have the option to apply to ‘Set the Judgment Aside’ so that they can look to allow the matter to be argued on the merits alone.
We know from the PM’s case that he challenged it based on the merits, but there are in fact 3 ways you can Set Aside Judgment; 1 is a mandatory ground, where the Court must Set Aside, while the remaining 2 are discretionary.
The Court must Set Aside Judgment in cases where the Claimant did not follow the correct procedure when entering a Judgment in Default. This is typically seen in cases where an Acknowledgment of Service or Defence was incorrectly served, or, where, the Claim was not served on the correct address. In the PM’s case, we know that the Judgment was issued against 10 Downing Street, while we know, that the PM lives in the flat above 11 Downing Street. Serving on the PM’s work address would not be seen as serving to the correct address and would give rise to a mandatory ground to Set Aside.
Discretionary grounds when the Court may Set Aside Judgment are typically where the Defendant has a realistic prospect of success of defending the case on the merits, if given the opportunity, or, where there is another good reason why the Judgment should be Set Aside. The Court states that the Defence must be “more than arguable” for these purposes.
In practice, while it is a discretionary ground, it will be rare where a Court will allow a Judgment in Default to stay in place where an arguable Defence exists. It appears it was on this ground that the PM was successful. The second discretionary ground is left deliberately wide in terms of what it covers which gives the Court the opportunity to consider the case holistically. By way of an example, the PM may have argued, that as the Claim Form was sent to 10 Downing Street and he would likely not have been allowed to examine his own post for security reasons, there is a good reason why he was not aware of the Claim and why it should be Set Aside.
When considering to Set Aside Judgment, the Court must consider the promptness of any Application. The Court encourages finality to proceedings and therefore, if an Application to Set Aside is being made a significant amount of time after the Judgment was entered then the Court will be less likely to Set Aside Judgment, even if the discretionary grounds are met. Case law suggests Application made more than 60 days after will suffer from difficulties.
Once Judgment is Set Aside, the case is ordinarily listed for directions to Trial for the parties to argue the merits. If one party believes the case has little merit and would be a waste of time to go to trial, a party can then Apply to Strike Out the Claim.
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 email@example.com.
Harding Evans is a trading name of Harding Evans LLP, a limited liability partnership, registered in England & Wales (registered number: OC311802), authorised and regulated by the Solicitors Regulation Authority (SRA number: 419663).