CASH RECOVERY IN THE UK SMALL CLAIMS COURT
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ENFORCING JUDGMENTS
When a judgment is obtained it becomes a matter of public record as a "County Court Judgment" or CCJ. The Defendant is formally notified by the Court as to how much they should pay and when it should be paid. In theory the Defendant should should discharge the judgment within 7 days and if they do so the record of the judgment is removed and there is no penalty on the credit record of the Defendant. As far as the credit agencies are concerned the CCJ should be discharged within 30 days for a clean record to be achieved.

Unfortunately, many Defendants simply ignore the CCJ and do not bother to pay up. In this case the Claimant must look at Enforcement options. The options available are:
  1. To instruct the Court Bailiff to collect the outstanding money - a Warrant of Execution.
  2. Apply for an Order to Obtain Information.
  3. Apply for an Attachment of Earnings Order.
  4. Take out a Charging Order on the Defendant's property.
  5. Apply to the Court for a Third party Debt Order.
  6. To make the Defendant bankrupt or if a company to wind it up.
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Warrant of Execution
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This is an instruction from the Court for the Court Bailiffs to collect the outstanding funds from the judgment. The bailiffs can visit the Defendant and collect the outstanding funds or seize goods to the value of the funds if required.

There are a number of rules which the Court Bailiffs are constrained by:
  • They can be refused entry to the Defendant's premises.
  • Essential items for sustaining life cannot be removed (bed, cooking utensils etc).
  • Essential tradesman's tools cannot be removed.
  • They cannot break in to the Defendant's premises (unless the Claimant is the property landlord).
Use of the Warrant of Execution is the most used enforcement option and many Defendants will pay up immediately rather than have persistent visits from the bailiff.

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Order to Obtain Information
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If the Claimant has reason to believe that a Defendant who has failed to discharge a Court Order has adequate assets to discharge same they can apply to the court for an order compelling the Defendant to attend and provide information about their financial assets. This option is not strictly an Enforcement option but does provided the Claimant with adequate information for the selection of the most appropriate option.

The process provides a number of controls in order that the Court may properly ensure that both the Claimant and Defendant are treated in a fair manner. The Defendant (called Judgment Debtor for this procedure) is served with a notice requiring their attendance at court with all or part of the following information:
  • Details of income including pay slips, pension income, investment income etc.
  • Full details of all bank accounts with original statements and pass books.
  • A statement of income/expenditure showing all income and outgoings.
  • An asset statement showing investments (stocks, shares, bank deposits, property etc).
  • Proof of Income Support payments if applicable.
  • Proof of rent payments, Council Tax, utility payments and all other outgoings.
If the Judgment Debtor is a company management accounts supported by audited accounts for two years must be produced.

During the hearing information is provided by the Judgment Debtor on oath to an officer of the court and the Claimant has the option to submit relevant questions to the court officer in advance.

The requirement for the Judgment Debtor to attend at the hearing is not negotiable and the court can impose strict penalties including imprisonment for failure by the Judgment Debtor to attend. It must be noted that the Judgment Debtor has two opportunities to attend and the court may require the Claimant to provide travel expenses to the Judgment Debtor if they claim to be impecunious.

If the Judgment Debtor is a company, a named officer of that company will be required to attend on behalf of the company.

Please note: The Court Service now requires the Claimant to swear an Affidavit in respect of this procedure and we recommend that Claimants consult a solicitor for the preparation of this document.
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Attachment of Earnings Order
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This is an order which is forwarded to the Defendant's employer. It is a strict order which instructs the employer to deduct an amount set by the court from the defendant's earnings. This is carried out each pay day be it weekly or monthly. The deduction is forwarded by the employer to the Central Attachment of Earnings Payment System who are responsible for collecting such payments.

The court will take into account the Defendant's financial status prior to granting such an order and if the Defendant has very low earnings or is supporting a large family may decline such an order.

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Charging Order
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This is a "Charge" over the Defendant's property. It is registered with the Land Registry and the property cannot be sold without the Charging Order being paid off ( much as with a building society. S=Charging Orders can be complicated and it is best to use a solicitor when placing one.

Two things should be remembered
  1. You can only place a Charging Order on a property which is owned by the Defendant only - if the property is jointly owned it cannot be done without the consent of the joint owner.
  2. You may need to wait for several years until the property is sold before you can collect your money.


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Third Party Debt Order (TPDO)
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This was previously called a Garnishee Order. Provided that the Claimant knows the banking details for the Defendant they can apply for a TPDO to be placed over funds held by the Defendant in their bank account. This effectively "freezes" the account until the Claimant is paid. It is necessary to be aware of a number of important things:
  • There must be adequate funds in the bank account otherwise the application will fail.
  • The Claimant must attend court for the TPDO hearing.
  • The Order will only apply to the account cited in the application - if the Defendant has other accounts these will not be included.
The banks now have a standard format when they respond to the court following an application for a TPDO and cannot by law fail to respond.

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Bankruptcy or Company Winding Up
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This can be very effective if the Defendant has cash -but is stubbornly refusing to pay. The problem is that if the Defendant has no money the cost of this action will never be recovered - along the the amount of the Judgment. However, if the Defendant has money this can be a very good way of bringing them "to the table" and providing a very serious ultimatum.

Prior to such an action it is best to obtain as much information as possible about the Defendant such as the property owned, if a company obtain the most recent accounts and an analysis of the Claimant's own experience and dealings with the Defendant.


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