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Using the law

Q: Enforcing claims court action

I recently won a small claims court action against a producer who owed me money. How do I enforce this judgment?

A: If the judgment debtor has a settled address and the means to pay, there is an impressive armoury of enforcement measures available to you in the county court as follows:

(i) Levying Execution (court fee £25 or £45 depending upon whether the debt is less or more than £125). This involves sending the court bailiff to the debtor's home to seize and sell the contents (excluding the debtor's clothing, bedding and tools of his trade, which he is entitled to retain). However, if the bailiffs consider that the value of the chattels concerned is insufficient to cover the cost of removal and sale they will not proceed. Also you may find that ownership of all or some of the items is claimed by a spouse or domestic partner or other third party, or claimed to be on hire purchase, and if that is disputed it will have to be resolved by further proceedings in court which adds to the expense of enforcement.

(ii) Attachment of Earnings (court fee £50), where the debtor's employer is ordered to pay part of the debtor's wages towards discharging the judgment debt, subject to the debtor being left sufficient for basic living expenses.

(iii) Attachment of Debt due to the debtor (previously called garnishee) (court fee £50) which involves the court ordering someone who owes money to the debtor to apply the whole or part of it towards discharging the judgment debt, but obviously this remedy cannot be pursued without knowledge of what is owed to the debtor and by whom.

(iv) Charging Order (a type of mortgage) imposed by the court on any land or securities or trust benefits which may belong to the debtor (court fee £50). Again relevant information is needed before this remedy can be pursued.

(v) Application to the court for an instalment order (either party can apply) requiring the debt to be paid by instalments, based on the court's view of the debtor's financial circumstances.

(vi) Appointment of a Receiver (court fee £50) eg to collect rental income or partnership profits due to a debtor and apply the proceeds towards discharge of the judgment debt.

(vii) Administration Order (court fee £100), which involves disclosure by the judgment debtor of all his debts, and payment of all of them by instalments or on such terms as the court thinks fit.

(viii) Bankruptcy (or liquidation in the case of a corporate debtor) but this is expensive and may not be available for the amount of your small claims court judgment.

(ix) Oral Examination of the debtor (court fee £40). The county court office will explain to you how to apply for any of the above. Any court fees incurred as above are recoverable by addition to the judgment debt, but that still leaves you with the problem of enforcing recovery.

Oral examination can be a very useful tool indeed in cases where a creditor has insufficient knowledge of the debtor's affairs to exercise an informed opinion as to the best other means of enforcement. It involves the court ordering the debtor to go into the witness box and be questioned about his financial affairs by the creditor or the creditor's legal representative.

If the debtor is duly served with the order to present himself for oral examination, and repeatedly fails to turn up without just cause, the ultimate sanction is committal to prison.

All the above measures require due service of legal process on the debtor, usually by an officer of the court. The main problems arise in the case of an experienced debtor who knows how to play the system and is able to stay constantly on the move, so that he is difficult to find without further expenditure on a private detective or whatever.

Also, if the debtor genuinely cannot pay due to impecuniosity, it is axiomatic that one cannot get blood out of a stone. In practice the county court is not unready to suspend or stay execution or enforcement on the ground of inability to pay, and sometimes makes such small instalment orders that it may take years to pay the whole amount due, particularly with statutory interest accruing from the date of judgment on the balance outstanding from time to time.

I have assumed your debtor is an individual, but if it is a company some of the above enforcement measures may, by their nature, be inapplicable (eg Attachment of Earnings, Bankruptcy).

However, if the company is still carrying on business, Enforcement by Execution or Charging Order or Receivership, or even a winding-up petition, should be relatively easy, unless the company is trading while insolvent, in which case anything you recover may possibly have to be given up to a liquidator for the benefit of all the company's creditors, but the liquidator may be able to bring a claim against the directors personally.

If the debtor company has ceased trade without any known assets, then your only remedy will be winding up, which is very expensive and could lead to your throwing good money after bad.

I should add that you have 12 years from date of judgment to enforce the judgment debt. Where enforcement proves difficult it is worth noting that sometimes inactivity for a while may give the debtor a false sense of security, and in time assets may appear which may make renewed enforcement attempts worth considering.

First published May 2001