A default judgment is issued by the court when the defendant in a case has not engaged with the legal action. This could be because they have not responded to a claim or because they have failed to file a response within the given deadline.
The court’s authority to grant this type of order arises under the Civil Procedure Rules Part 12.
A claimant can ask for a default judgment early on in the case if the defendant is missing deadlines and failing to file required documents.
A default judgment will grant the claim, as the court does not have any reason not to do so because of the failure of the defendant to put forward a case. This means that the defendant will be required to pay the damages requested.
It is also open to a defendant to ask the court for a default judgment if the claimant fails to respond to a counterclaim.
If you receive a default judgment, you may be able to ask the court to set it aside. Taking prompt action is recommended, as this type of application is time-sensitive. Ignoring a default judgment can affect credit ratings and limit someone’s ability to obtain a mortgage and other credit. Our personal litigation solicitors regularly advise defendants in this position.
We look at what happens after a default judgment is issued and how to go about setting aside a default judgment.
Summary
- Immediate Consequences of Default Judgment
- Options Available to Defendants
- Steps to Take After Receiving a Default Judgment
- Consequences of Inaction
- How to Prepare for a Hearing
Immediate Consequences of Default Judgment
Once a default judgment is granted, you will receive a copy. There is not usually any prior notice of the judgment, as there is not generally a hearing. The court is asked to make the order because of the lack of response from the other party. The immediate effect is that the defendant becomes legally liable for the sum awarded, together with any interest and costs the court allows, and the debt becomes immediately payable unless a payment plan is agreed.
The judgment will usually be a county court judgment or CCJ, unless the case was a high court case. Other rulings that could also result in a default judgment include those made under the Consumer Credit Act 1974 and overseas judgments that are registered in an English or Welsh court for the purposes of enforcement.
Options Available to Defendants
If you receive a default judgment, your options include:
Pay the Amount Requested
If you pay the full amount within thirty days, then you can apply to the court to ask that the judgment not be recorded on the Register of Judgments, Orders and Fines. This is the official public record of CCJ and high court judgments in England and Wales.
It is used by lenders and businesses when they make decisions about whether to offer credit. When a judgment is entered on the register, it usually remains there for six years. If a defendant wants to explore clearing the record early, there are a number of options for removing a CCJ from the register. If payment is made after thirty days, then the judgment will be marked as ‘satisfied’.
Apply to the Court to Have the Judgment Set Aside
If you want to have a default judgment set aside, you can file application notice N244 with the court. You will need to pay the court fee and provide a statement explaining why the deadline was missed.
The Civil Procedure Rules at Part 13 set out the circumstances in which a default judgment can be varied or set aside.
There are mandatory grounds on which the court must set aside a default judgment and discretionary grounds where it can choose whether to do so.
Mandatory Grounds for Setting Aside a Default Judgment
- The defendant filed an acknowledgment of service or defence to counterclaim before the expiry of the deadline.
- The whole of the claim was paid, including interest and costs, before the judgment was requested.
- The defendant applied to strike out the claim or made an application for summary judgment, and the court has yet to rule on this.
- The claim or counterclaim was not correctly served, or an incorrect address was used.
Discretionary Grounds for Setting Aside a Default Judgment
- The defendant or other applicant has a genuine chance of success with their case. This can be demonstrated by the provision of relevant evidence and a clear argument.
- Some other good reason, for example, the defendant was overseas when the claim was served or an old address was used, and so they did not receive notice of the claim.
Agree a Payment Plan With the Claimant
Where it is not possible to pay the claim in one go, the claimant may accept a payment plan allowing the debt to be paid in instalments.
Take No Action
If no action is taken, the defendant will be able to enforce the judgment to obtain the money they are owed. This could be by obtaining an attachment of earnings order or a charging order over a property. Another option is engaging bailiffs to recover goods to the value of the debt. If bailiffs do become involved, our guide on dealing with bailiffs at your door explains your rights.
Steps to Take After Receiving a Default Judgment
The court will look to see how promptly the defendant’s action is after a default judgment is made. It is recommended that steps be taken as soon as possible if you wish to have a judgment set aside.
As well as filing the application, robust evidence in support should be included. A solicitor will be able to help with the preparation of this, where necessary.
Consequences of Inaction
If no action is taken when a default judgment is made, the defendant is likely to take steps to recover their money.
In addition, the judgment will be entered on the Register of Judgments, Orders and Fines, which will affect the debtor’s credit rating.
How to Prepare for a Hearing
A strong defence is recommended to show that you have a realistic prospect of success in opposing the claim. You can prepare a witness statement setting out your position, including an explanation of why the deadline was missed.
This can also include the facts that you will be relying on when defending the claim or counterclaim. You should also include copies of any relevant documents that support your position.
At the hearing, you will have the opportunity to put your case. You will need to address the claim, as well as explain why you did not respond to it. Ideally, you will also be able to show that you acted promptly as soon as you became aware of the judgment.
If your case is successful, the judgment will be cancelled, and you will be given a new deadline, usually fourteen days, within which to file your defence or defence to the counterclaim.
Contact Our Commercial Dispute Resolution Solicitors
If you have received a default judgment, our solicitors can advise you on your options. Where necessary, we can apply to the court to set aside a default judgment, then respond to the initial claim on your behalf.
For more information on our services, see our commercial dispute resolution solicitors page.
To speak to one of our experienced commercial dispute solicitors, ring us on 0300 303 2071, email us at info@witansolicitors.co.ukor fill in our contact form, and we will talk through your situation with you and discuss how we can assist. We have offices in Birmingham, Northampton, London and Wellingborough.
