ENGLAND & WALES Law and Practice Contributed by: James Herring, Nathalie Allen and David Wigg, Addleshaw Goddard
the court for an order freezing the judgment debtor’s assets pending enforcement. This is in an attempt to avoid the debtor’s assets being dissipated (and can be used only where it can be shown there is a risk of dissipation). 2.3 Costs and Time Taken to Enforce Domestic Judgments The typical costs involved and the length of time for enforcement will vary depending on the complexity of the case. Applying for an interim charging order, attachment of earnings or enforcement by taking con - trol of goods should – in theory – be straightforward and can usually be achieved in a relatively cost-effec - tive manner. Any challenge to the method of enforcement naturally increases the time and expense. This is particularly the case in relation to seeking an order for sale once the judgment creditor has obtained a charging order. A charging order may help safeguard the asset in ques - tion (and is therefore worth considering), but to sell the asset, the judgment creditor will need to apply for an order of sale. These applications are often hotly disputed, particularly if the asset is a family home, or where there is limited equity in the property, or where the property is jointly owned. It is important to note that insolvency proceedings require a professional person to be appointed (a trus - 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, then 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 on it. Likewise, in relation to a substantial 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 • 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 2.4 Post-Judgment Procedures for Determining Defendants’ Assets
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