UK Law and Practice Contributed by: Simon Bushell and Gareth Keillor, Seladore Legal
5. Enforcement 5.1 Methods of Enforcement
Care should be taken before initiating insolvency pro - ceedings, as the amount received by the claimant will depend on: • the value of any assets owned by the defendant; and • the interests of any other creditors (particularly pre - ferred creditors such as employees, or those who hold a security interest in particular assets). Examination of the debtor Where the judgment debtor is within the jurisdiction of the English courts, it is possible to obtain an order for their examination. This requires the judgment debtor to attend court and be cross-examined about their assets and affairs. If the judgment debtor does not attend, or does not answer truthfully, they may be sub- ject to proceedings for contempt of court. 5.2 Enforcement of Foreign Judgments Whether the English courts will recognise and enforce a foreign judgment depends on the jurisdiction the judgment originates from. This factor will also dictate the framework for enforcement spanning treaties, common law and statutory regimes. For some coun - tries, depending on the seniority of the court, when the judgment was handed down or its subject matter, etc, those looking to enforce a judgment may be able to utilise multiple regimes. Each has slightly different requirements and procedures, and vary in complexity. Consideration should therefore be given to which will be the most effective and efficient process. First, the most broadly adopted treaty is the Hague Convention on Choice of Court Agreements of 2005. This applies as between the UK and the EU, Mexico, Singapore, Switzerland, as well as some additional signatories. It is often the most straightforward process, but is not without its limitations. For example, it only applies to exclusive choice of court agreements, and a country must have formally ratified the treaty for it to apply. Second, judgments from specified jurisdictions, including other United Kingdom and most Common - wealth jurisdictions, have the benefit of express Eng - lish statutory schemes for enforcement. Each piece of legislation has its own requirements and processes.
In England and Wales, the court will not automatically enforce any judgment or order that is obtained against a defendant. In circumstances where the defendant fails to make payment by the timeframe set by the court, the claimant will be required to take steps to enforce the judgment (including by seeking a further order from the court). Common Forms of Enforcement in Fraud Proceedings A freezing order It is possible to obtain a post-judgment freezing order. This is more straightforward than obtaining a freezing order before a claim is commenced, and it can be a useful tool in securing assets pending other enforce - ment mechanisms being used. A charging order A charging order imposes a charge over the defend - ant’s interests (including beneficial interests) in spe - cific land, securities or other assets. In doing so, it prevents the defendant from selling the land or assets without paying what is owed to the claimant (assum - ing there are no other prior creditors). A charging order is sometimes combined with an “order for sale”, which requires the defendant to sell the property or asset in order to satisfy the judgment. A third-party debt order A third-party debt order freezes assets that are owned by the defendant but which are in the hands of a third party, such as a bank. In doing so, it restricts the defendant’s ability to access those assets and may lead to the third party being required to make payment to the claimant. Insolvency proceedings If the result of the judgment is that the defendant no longer has sufficient assets to pay their debts, it may be possible to apply for them to be wound up (in the case of a company) or made bankrupt (in the case of an individual). In such circumstances, the defendant’s assets will vest in a trustee in bankruptcy or a liquida - tor, who will then seek to realise the value of those assets and pay the defendant’s creditors accordingly.
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