Default Judgment? How to set it aside.

A default county court judgment is ordered when a defendant has failed to either pay a money debt or file an admission or defence within prescribed court deadlines (usually within 14 days, or 28 days if an acknowledgment of service has been filed).

This type of judgment does not require a court hearing and is obtained by the claimant completing a form confirming the defendant has not responded. Once the order is made and Judgment obtained, payment of the sum claimed, interest and costs are immediately payable and can be enforced against the defendant.

If there is however a defence to the claim, it may be possible for the debtor to set aside the judgment. The court rules enable a debtor to make an application to the Court to set aside a default judgment.

If the defendant did respond within the given time frames, then the Court will set the Judgment aside on the basis of an administrative error. It will be necessary to prove that the defendant did reply to the claim in time.

Alternatively, if the debtor did not respond and default judgment was therefore entered, the court has a discretion to set aside or vary a default judgment only if:

• the defendant has a real prospect of successfully defending the claim; or
• the court finds that there is some other good reason why the judgment should be set aside or varied, or the defendant should be allowed to defend the claim. This will depend upon the specific facts of each case.

When an application to set aside a default judgment, the court also considers whether the defendants took prompt action in making its application. If the application was not made diligently and at the earliest opportunity, the court may not set aside a default judgment even if there is a real prospect of the defendant successfully defending the claim.

In summary, there must be a defence to the action, good prospects of success and the application to set aside must be made expeditiously.

When making the application, the defendant can ask the claimant to consent to the application to set aside judgment rather than proceed to a full hearing. If agreed, this becomes a paper exercise without the parties attending Court. If the application is made promptly and the defendant has grounds to defend the action, a claimant may be advised to agree to the application and it can be advantageous to do so. As the Court’s discretion is wide, the Court could order costs against a claimant who unreasonably refuses to consent to a defendant’s application. Such a refusal could therefore be a costly decision on behalf of a claimant. Instead, the claimant could seek to recover all or part of its own costs from the defendant for steps taken that were incidental to the defendant’s application whilst still agreeing to the consent order. Such costs could be payable within a short period of time and before the matter proceeds further.

Once set aside, the judgment cannot be enforced. The claim continues through the court process with a Judge ordering directions as the next step so a timetable is set as to how the claim will be handled in the approach to a trial.

If you seek to set aside a default judgment or have been approached to agree to an application, secure advice quickly. This is a process in which your conduct and the time taken will be considered by the Court and your chance of success will be determined by your actions.  For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk