There has been much talk about the impact of the current pandemic on commercial relationships and what steps businesses might take to protect their position such as taking steps to enforce contractual provisions or seeking to negotiate to resolve potential disputes early on.
But what about businesses already involved in litigation? What about those who have successfully obtained money judgments and are owed money? Is it possible to continue with enforcement and recover much needed funds? There are some important practical considerations.
Unlike the position in a number of other countries, the English Court system remains open for business. The work of the Courts and Tribunals has been consolidated into fewer buildings and only some of those buildings are open to the public.
Claims can be issued and Court documents can be filed. In the Royal Courts of Justice in London this is done through the Court's CE-Filing platform. The Courts are avoiding physical hearings wherever possible and while there have been some adjournments, many hearings are going ahead by telephone or video link. The Courts are contacting parties or their representatives about arrangements for these.
As such, judgments can be obtained in much the usual way.
Enforcement of money judgments
Once a judgment for money has been awarded the paying party will have a period of time, usually 14 days, to pay. Where the judgment goes unpaid, there are a number enforcement options available. Your choice depends on the particular facts including the type of debtor, the value of the judgment, the debtor's known assets, the cost of the enforcement steps, urgency etc.
Enforcement options include:
- Taking control of goods via a writ of control, enforced by High Court Enforcement Officers;
- A charging order against a property owned by the debtor;
- A third party debt order against monies held in the debtor's bank account;
- An attachment of earnings order to receive a proportion of the debtor's earnings each month;
- Insolvency proceedings, i.e. presenting a bankruptcy petition (individual) or a winding up petition (company).
Practical considerations during lockdown
While these methods of enforcement are all available, the Covid-19 crisis is likely to have an impact on the speed with which they can be obtained and the way in which they can be employed. In particular, you should bear in mind that:
- Some Court buildings are closed and staffing levels will vary between the Courts and potentially from day to day. It may therefore take longer to process requests and applications.
- Where a hearing is required, how soon this will be listed will depend upon the Court dealing with the case. However, County Courts are prioritising certain types of work including enforcement work that does not involve High Court Enforcement Officers.
- High Court Enforcement Officers may be unable to enforce writs of control in the normal way due to the social distancing measures in place. You should contact individual companies to explore the steps that they remain able to take.
- The government has announced changes to insolvency laws in order to protect companies in difficulty. Please see our guidance here.
- Specific measures have been announced in relation to the collection of rent from commercial tenants. You can read more on this here.
If you require further assistance with these or any other Covid-19 related issues affecting your business, please contact us.