Enforcement Options
MARCH 2010
You were owed money, you have made a claim and you have obtained judgment in your favour – however the debtor has still not paid. What steps can you now take to enforce the judgment?
There are a number of enforcement options available to you and these can be summarised as follows:-
1. Third party debt order
This is an order made by the Court demanding a third party, who owes money to the debtor, to pay you instead. This can either be the debtor’s bank or a third party who owes money to the debtor.
The most common use of this method of enforcement is against a bank account which is in credit (as the money in the account is a debt due from the bank to its customer). As a result, a judgment creditor who has the bank details of the judgment debtor can obtain a third party debt order against the bank to pay money from the debtor’s account to the judgment creditor.
2. Charging order
A charging order secures a judgment debt by imposing a charge over a debtor's property, most commonly a debtor's residential or commercial premises. However, payment under a charging order will not be realised until the property is actually disposed of by the debtor.
Further enforcement proceedings can be continued if required by making a subsequent application to Court for an order for sale. It also means that in the event of insolvency, you will be classed as a secured creditor and rank above those who are unsecured if a distribution of funds is available.
3. Warrant of Execution/Writ of Fi Fa
This involves the issue of a warrant of execution in the County Court. In order to ensure a validity of the execution process, an enforcement officer or bailiff must enter the debtor’s premises and seize sufficient goods in order to satisfy the value of the judgment debt and the costs of enforcement.
It is not necessary for the bailiff to physically take goods into his possession to effect seizure. Instead it is common for bailiffs to make the goods subject to a “walking possession” agreement under which they are left in the possession of the debtor on the condition that he agrees not to dispose of them. There are certain restrictions on the type of goods which can be seized. Bailiffs are also limited to the extent that they cannot force access to property to levy execution.
However if the debt is over £600 the matter can be transferred to the High Court and a Writ of Fi Fa issued. This is basically the same as a warrant of execution, but the enforcement is by the High Court Enforcement Officer rather than the Bailiff.
4. Insolvency proceedings
Taking steps to place the debtor into insolvency is an alternative method of enforcement. The threat of insolvency may pressurise the debtor into paying.
However if the debtor were to be wound up (in the case of a company) or be made bankrupt (in the case of an individual) then it might be difficult for you to actually obtain your money. If the debtor is genuinely insolvent there is unlikely to be sufficient assets available to unsecured creditors, including judgment creditors.
5. Order to obtain information
This procedure is available if more information is needed about a debtor’s assets to help you decide whether it is:
- worthwhile taking an enforcement step; and if so,
- which of the methods available is most likely to get you your money.
If you use this procedure, the judgment debtor (or if a company its directors) will be ordered to attend Court and questioned under oath by a court officer as to details of assets and liabilities including, if a company, the company’s books and trading accounts.
If you have any questions regarding which enforcement option would be most appropriate for your particular circumstances please feel free to contact a member of Goodman Derrick LLPs Litigation department on 0207 404 0606.
This guide is for general use and interest only and should not be relied upon as providing specific legal advice. |
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