What is a default judgment?
A default county court judgment is obtained by a claimant in a money claim when a defendant has failed to either pay the debt or file an admission or defence within the prescribed court rule deadlines (usually within 14 days, or 28 days if an acknowledgment of service has been filed within 14 days).
A default judgment can be obtained by a claimant filing at court a request for judgment. There is no need for a court hearing and no notice is given to the defendant. The default judgment provides for payment of the sum claimed (together with interest and costs) forthwith. This means that a claimant can take immediate steps to enforce it – for example, instructing a county court bailiff or (depending upon the value of the default judgment and whether the judgment debt relates to a consumer credit agreement), a high court enforcement officer placing a charge over the defendant’s goods. The claimant can also use the county court judgment to issue insolvency proceedings.
The court rules allow a defendant to make an application to set aside a default judgment in certain circumstances, either under CPR 13.2 where a judgment is irregular or under CPR 13.3 where the judgment is regular the court can still use its discretion where a defendant has a potential defence to the claim and would, had the time limits been complied with, have been able to enter a defence to the claim or for any other good reason.
An application to set aside a default judgment is made using the Court Form N244 (application notice), which is available from the court’s website. There is a court fee payable of £255.00, unless both parties consent to the application where the court fee is reduced to £100.00.
Is the judgment an irregular judgment?
The court must set aside a default judgment in circumstances where it has been “wrongly entered” (otherwise known as a irregular judgment), even if the defendant does not have a defence to the claim. An example of an irregular judgment would be where the defendant had replied to the proceedings within the relevant time periods.
Is the judgment a regular judgment?
If the judgment has been validly entered because the defendant has not filed an acknowledgment of service or a defence within the required time allowed, then the court may exercise its discretion to set aside or vary a default judgment if:
- the defendant has a real prospect of successfully defending the claim; or
- it appears to the court that there is some other good reason why the judgment should be set aside or varied, or the defendant should be allowed to defend the claim.
When considering such an application, the court will take account of whether or not the defendant’s application was made promptly. The court may not set aside a default judgment even if the debtor has a real prospect of successfully defending the claim if the application has not been made promptly. The longer the time since the default judgment was made the harder it is to persuade the court to set it aside.
We have however successfully obtained the set aside of default judgment where judgment was entered up to 12 years ago.
What happens if a default judgment is set aside?
If a default judgment is set aside, the claim will proceed as a defended claim with the court giving directions for the claim to progress to trial. A claimant should consider consenting to an application to set aside judgment as there is a real risk that the court will make an adverse order for costs to be paid by the claimant to the defendant. In other cases, however, and depending upon the grounds for which the application is being made, the claimant may well be successful in persuading the court that the defendant should pay its costs of and incidental to the application, even in cases where it agrees that the judgment should be set aside.
What happens if a default judgment is not set aside by the court?
If the judge refuses to grant an order to set aside the judgment, it is likely the Claimant will be able to enforce the judgment. It is also likely that the court would make a costs order against the defendant in the claimant’s favour.
Considering making an application to set aside a default judgment can be quite complex depending on the circumstances. It is important that the best case for setting aside the default judgment is put forward at the time the application is made. It is therefore important that you seek legal advice promptly to ensure that the application is dealt with in a timely manner and in the most appropriate way. If you should require legal assistance please do not hesitate to contact us.