Bradley Grant of F Barnes Solicitors explains how you can apply for or defend an application to ‘Set Aside Judgement in Default’
What is a CCJ?
A CCJ is short for a County Court Judgement.
What is a Judgement in Default?
A common type of County Court Judgement is a Judgement in Default also known as a Default Judgement. This form of Judgement is obtained by a Creditor when a claim is submitted to the Court and you as a Debtor did not respond to the claim.
It is not uncommon for a Judgement to be entered against you without your prior knowledge and can come as a shock to most people.
How does a Judgement in Default affect me?
A CCJ can result in certain problems such as:
difficulty in obtaining credit or a loan
the enforcement of payment of the debt
the tarnishing of reputation
detrimentally affect your credit rating
How can I find out if I have a CCJ, County Court Judgement against me?
You can check your credit history; there are many platforms you can use online that are free. It is important to regularly check this as many people are unaware of a default Judgement against them until the enforcement of the Judgement is attempted or you are refused credit.
Can a CCJ be set aside? Or can a CCJ be challenged?
The rules of the Court allow you to make an application to set aside a Default Judgement. There must be a good reason, common reasons are:
1. The claim form was not received.
2. A response was submitted but it was not received by the Court.
3. The matter was settled but the Court was not informed
How can I challenge the CCJ if I did not receive the claim form or my response was not received by the court?
If you did not receive the claim form or your response was not received by the court and the Creditor made an application for a Judgement in Default on the basis that no acknowledgement of service or defence had been filed within the requisite period, the Court should set aside the Judgement in Default even if the Debtor does not have a defence. This is due to the procedural error in the application resulting in the Judgement.
How can I apply to set aside Judgement in Default?
The majority of applications where there is no procedural error, request the Court to exercise its discretion to set aside the Judgement in Default and the following must be demonstrated:
that there is a real prospect of successfully defending the claim or
the Court thinks that there is some other good reason why
the Judgement should be set aside or varied; or
the claim can be defended.
The phrase 'real prospect of successfully defending the claim' has been interpreted by the Court to mean that the Debtor must show more than an arguable defence which cannot be false, fanciful or imaginary.
It is important to note that even if there does not appear to be a defence with a real prospect of success, the Court may exercise its discretion and set aside the Judgement if there is a good reason to do so.
I have a CCJ how long do I have to challenge this?
The Court will take into account how promptly an application is made and it is therefore important to obtain legal advice once you find out that a CCJ has been entered against you. Any delay in making the application to set aside the Judgement may result in the Court choosing not to exercise its discretion in favour of the Debtor.
Promptness will always be a significant factor to consider, although Judgements have been set aside even where there has been a substantial delay.
Where will the hearing of my application to set aside Judgment take place?
The hearing of the application will take place in a County Court or remotely by telephone or video. Parties may attend the Court in person or instruct a legal representative to act on their behalf but may also wish to attend together with their legal representative.
Unless the Court has stated that parties must be in attendance, there will be no mandatory requirement for them to attend. However, if parties choose not to attend, the Court will likely continue to decide the outcome in their absence and a decision in the form of a Court Order will be sent to them in the post.
How much will it cost to apply to set aside a CCJ?
There are different ways in which the court will order a party to pay costs.
Although an application to set aside a Judgement in default may seem appealing to a Debtor as a temporary solution to delay the enforcement of a Judgement, they should be aware that if the court determines the proceedings were instigated solely to delay enforcement of a Judgement, the Court will likely order that the Debtor pays the Creditors costs and any interest on the debt.
In the alternative, if the Court is convinced that the Creditor has unreasonably refused to consent to Debtors application to set aside the Judgement, the Court will usually order that the Creditor pays the Debtors’ costs.
Typically, the costs incurred in making an application or defending an application are between £1,200 - £3,500 excluding VAT. However, in complex cases, the costs can be considerably more.
Costs are important when deciding to make or defend an application to set aside a Judgement. From a commercial view, the potential costs may be far less than the potential economic losses incurred from the CCJ. You should obtain legal advice before issuing or defending an application to set aside a judgement in default.
What happens after I have set aside a Judgement in Default?
If the application to set aside the Judgement is successful, the claim will proceed on the basis that Judgement was not entered and unless the claim is withdrawn by the Creditor a Trial will take place at a later date. Creditors and Debtors must try to resolve matters by mutual consent, rather than by Court hearings as this would be a more timely and cost-efficient solution.
Bradley Grant is an Associate Solicitor at F Barnes and regularly writes and advises on all aspects of debt recovery and commercial litigation. If you have received a Judgement in Default or receive an application to set aside a Judgement in Default, Bradley can be contacted on 01708 745183 or email firstname.lastname@example.org to discuss your options.
For more information visit www.gov.uk