The recovery position
How do I… In the last of our series on cutting your legal costs, Alexandra Clough looks at the options available if you get a court judgment in your favour but still can’t get paid.
Enforcement should be considered from the outset. Before proceedings are issued you should ask yourself whether your opponent has sufficient assets to pay the claim and, if so, will you be able to get hold of those assets.
I have obtained a court judgment, but my opponent has not paid up. What can I do?
You will need to take steps to enforce the judgment. There are several methods of enforcement open to you, depending on your opponent’s assets.
How do I find out what assets my opponent has?
You could employ a private investigator, especially if you think they have "hidden" assets. Another option is to apply to the court for an order that your opponent attend court for an examination of their assets. You can send in any questions you would like answered and a list of documents you would like your opponent to disclose.
If your opponent refuses to answer the questions or produce documents, you can apply to the court for a penalty notice. Failure to comply with this is contempt of court, which can lead to a prison sentence, so your opponent is likely to comply.
What methods of enforcement are there?
The most popular method of enforcement is execution against goods. You must apply for a writ of fieri facias (or fi fa) in the High Court or a warrant of execution in the county court. The procedure is straightforward and quick as it does not involve a hearing.
The most popular form of enforcement is execution against goods. It is straightforward and quick as it does not involve a hearing and can be used against both individuals and companies
The procedure can be used against both individuals and companies and it can be used in combination with other methods (apart from attachment of earnings).
Once the court has issued the writ, a court enforcement officer (or bailiff in the county court) will enter your opponent’s premises and seize goods that will be sold at auction to settle the debt. In the case of a corporate opponent, you must first check that there are no third-party rights over the goods.
Another method of enforcement is attachment of earnings, which can be used if your opponent is an individual and in employment. It involves applying to the court for an order that your opponent’s employer must deduct a certain amount from their wages and gives it to you until the debt is paid off. This method often encourages debtors to pay up to avoid their employers finding out. However, if the debt is large and your opponent’s wages are modest it can take a long time reach settlement, particularly as the court often orders only small deductions to be made. Interest does not accrue on the debt after the date of the order, even if it takes a long time to satisfy the debt. An order for attachment of earnings cannot be sought in conjunction with other enforcement methods.
Your opponent may own assets such as property, stocks and shares or unit trusts. If so, you can apply for a charging order that will prioritise your judgment debt above other unsecured debts. The charging order does not mean the debt will be paid. You must either wait for your opponent to sell the asset or obtain an order for sale. Obtaining a charging order is slow and time-consuming and you will need to be careful if property is jointly owned. Also, given the current market, there may be insufficient equity in any property to satisfy the judgment after taking into account prior charges. The charge will rank behind other existing charges and you must remember to register the charge as appropriate.
If your opponent has debts owed to it by another party, a third-party debt order can be used to freeze those sums and seize them for your benefit. It can also be used where an employer owes money to a contractor under the terms of a contract. This procedure is useful as it can result in a cash payment. However, it is not widely used, perhaps because it is hard to obtain the evidence required. An order can only be obtained against debts that are due and payable before the date of the interim order. And it cannot be obtained over future debts. If your opponent has future debts, a receivership order may be more appropriate.
The above are not the only methods available and you should consider all the enforcement options when determining your strategy. The good news is that if your opponent is in England and Wales and has sufficient assets it should be possible to enforce your judgment relatively quickly.