two lawyers reviewing files, looking to set aside default judgment

What do you need to do to get a default judgment set aside? What are the grounds on which a Court may consider your case and what happens if the default judgment is left unsatisfied?

This article runs through what a default judgment is, what it could mean for you or your business, and our top tips for applying to the Court for it to be set aside.

What is a default judgment?

A default judgment is a judgment which can be obtained by the claimant in circumstances where the defendant has not responded to the claim within the relevant deadline. This can happen for a number of reasons. Some examples include:

  • The defendant not realising they needed to respond;
  • The defendant not actually receiving a copy of the claim form; or,
  • An error with the court process.

When making a default judgment, the court does not assess the merits of the claim, it simply awards judgment on the basis that the defendant did not respond to the claim in accordance with the correct procedure.

What does it mean for me or my business?

A default judgment works in the same way as a judgment obtained at a final trial. If the judgment was made in the county court, it will be listed on the county court judgments register and if left unsatisfied, can affect your credit rating.

In addition, the claimant will be entitled to take enforcement action. This could include, amongst other things: instructing bailiffs, getting an attachment of earnings order or getting a charging order against your property.

There is also a risk of bankruptcy proceedings (if the debt is against an individual and £5,000 or more) or insolvency proceedings (if the debt is against a company and is £750 or more).

How can I get the default judgment set aside?

The Civil Procedure Rules set out the grounds on which the court can set aside default judgments:

  1. Mandatory grounds – the court must set aside the default judgment in circumstances where the conditions for default judgment were not actually met;
  2. Discretionary grounds – the court may set aside default judgment in circumstances where (i) the defendant has a real prospect of successfully defending the claim and/ or (ii) there is some other good reason why the defendant should be allowed to defend the claim.

In order for the court to consider your case, you will need to make a formal application to the court and pay the relevant court fee.

Five tips for applying to set aside the default judgment

  1. Act quickly. It is important to act quickly as soon as you become aware of the judgment. You will need to show the court that you have acted “without delay”.
  2. Instruct solicitors. We would normally recommend that you instruct a solicitor to help you prepare the application form and supporting witness statements, particularly if the default judgment could have a significant impact on you and/or your business.
  3. Identify how the situation arose. Did you receive a copy of the claim form? Was the claim form sent to the right address? Did you receive it but just ignore it?
  4. Collate all the relevant evidence. Whilst the court should not perform a “mini trial” at the hearing, it will expect you to provide evidence that you have a valid and arguable defence to the claim.
  5. Prepare a defence. We would normally recommend that you have a defence ready in advance of the hearing. This shows the court that you have dealt with the matter proactively. It is also a good opportunity to illustrate to the court that you do have good grounds to defend the claim.

If you have any questions about default judgements, please get in touch with our team.