ENGLAND & WALES Law and Practice Contributed by: James Herring, Nathalie Allen and David Wigg, Addleshaw Goddard
tee in bankruptcy, administrator or liquidator), whose fees will be paid out of the judgment debtor’s estate, reducing the value of assets available for distribution. There may be claims on the debtor’s assets from other parties who have priority, such as secured or prefer - ential creditors. The assets that are available for distri - bution to unsecured creditors are then distributed pro rata to the level of debt. In insolvency proceedings, unsecured creditors often only receive a small propor - tion of the debt they are owed. Ultimately, in deciding which route to use for enforce - ment, it is essential to understand the nature and value of the judgment debtor’s assets and to consider the size of the judgment debt. If a judgment debtor owns substantial property, a charging order might be an obvious choice. However, if the debt is relatively small, it may be more difficult to obtain an order for sale of the property. Equally, it is important to ascertain whether the property in question has existing charges registered against it. Likewise, in relation to a substan - tial debt, an attachment of earnings, for example, may only lead to a limited recovery over a lengthy period of time. A judgment creditor may therefore decide to pursue a number of enforcement routes in parallel, to best protect itself and maximise its prospects of recovery. As discussed in 1.1 Options to Identify Another Par- ty’s Asset Position , a judgment creditor may be able to seek an information order from the court to ascer - tain the judgment debtor’s financial position. This will require the judgment debtor (or the director of a company judgment debtor) to attend court and give disclosure of their financial position, under oath. The court order requiring attendance must be personally served on the judgment debtor when the debtor is within the jurisdiction (ie, in England and Wales). 2.5 Challenging Enforcement of Domestic Judgments There are two main ways to challenge enforcement: • challenging the enforceability of the judgment itself; and/or 2.4 Post-Judgment Procedures for Determining Defendants’ Assets
• challenging the particular method of enforcement. Challenging the Enforceability of the Judgment A common method of challenging the enforceability of a judgment is on the basis that the court did not have jurisdiction over the matter, or that the judgment is not final and is still being considered by the court. The following are by way of example. • The judgment debtor may dispute that proceedings were properly served on them or argue that the court did not have jurisdiction to hear the dispute (for example, the proceedings should have been dealt with in another forum). • The judgment debtor may seek a stay of execution of the judgment on the basis that they are chal - lenging the outcome of the judgment (and that the court should not allow the judgment to be enforced while that challenge is outstanding). Such chal - lenges may involve: (a) an appeal of the judgment; (b) an application to set aside judgment on the basis that the defendant was not in attendance at the hearing; or (c) an application to set aside judgment obtained in default. Challenging the Method of Enforcement Such challenges often take place on the basis that there are questions over the ownership of the asset against which enforcement is sought and/or that undue prejudice will be caused to the judgment debtor if that method of enforcement is allowed. 2.6 Unenforceable Domestic Judgments A judgment by the courts of England and Wales requiring a defendant to pay a sum of money or to act in a certain way is a form of judgment that can be enforced by the courts of England and Wales (subject, of course, to any challenges to enforcement). While a judgment for declaratory relief cannot itself be enforced (on the basis that there is no action to enforce), in practice it may be possible to enforce it if a party acts contrary to the declaration. As dis - cussed previously, this would usually mean starting new proceedings based on the court’s declaration, and enforcing the judgment in those proceedings.
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