Facing a Default Judgment? What You Need to Know
If you have received a default judgment, you might feel overwhelmed but don’t worry. There are options for you. Under CPR 13.2 and CPR 13.3, you can apply to set aside a default judgment. In this article, our expert litigation lawyers will walk you through the steps to set aside a default judgment, highlight relevant case law, and provide practical tips to improve your chances of success.
For expert legal assistance, contact our experienced solicitors at Go Legal for a Free Consultation at 0207 459 4037 today. We have extensive experience in helping clients with applications for default judgment and obtaining successful results.
What is a Default Judgment and Why Should You Set It Aside?
A default judgment occurs when a defendant in legal proceedings fails to respond to a claim within the specified time limits. This can lead to severe consequences, such as enforcement actions, bankruptcy, attachment to earnings order, or seizure of assets by a bailiff. However, under CPR 13.2 and CPR 13.3, you can apply to set aside a default judgment if it was wrongly entered or if there is a good reason why the default judgment should be set aside.
Why has a Default Judgment been issued?
- CPR 12.3(1): A default judgment can be issued if the defendant does not file an acknowledgment of service or a defence by the due date.
- CPR 12.3(3): The claimant must not have received a notice of intention to defend within the prescribed period.
Consequences and Effects of a Default Judgment
Default judgments can have significant implications for defendants. Understanding these consequences can highlight the importance of promptly addressing a default judgment. These can include:
- Enforcement Actions: Creditors can initiate enforcement actions to collect the judgment debt, which may include seizing assets, attachment to earnings order, or placing a legal charge on property.
- Credit Impact: A default judgment can adversely affect your credit rating. It can remain on your credit report for up to six years, making it difficult to obtain loans or credit.
- Increased Costs: Interest and additional legal costs can accrue on the judgment amount, increasing the total debt owed.
- Reputational Damage: A default judgment can also impact your reputation, particularly if you are a business owner, affecting relationships with clients and suppliers.
CPR 13.2: Grounds for Setting Aside Default Judgment
Mandatory Grounds to Set Aside Default Judgment
Under CPR 13.2, the court must set aside a default judgment if:
- The judgment was wrongly entered, such as if any of the conditions in CPR 12.3(1) or 12.3(3) were not met.
- This includes improper service of the claim form or timely acknowledgement of service not being considered.
Discretionary Grounds to Set Aside Default Judgment
In addition to the mandatory grounds, CPR 13.3 provides discretionary grounds for the court to set aside or vary a default judgment. The court may set aside a judgment if:
- Real Prospect of Success: The defendant has a real prospect of successfully defending the claim.
- Other Good Reasons: There is another good reason why the judgment should be set aside or the defendant should be allowed to defend the claim.
When applying under CPR 13.3, the court will consider factors such as:
- Promptness of the application.
- Whether the defendant acted promptly after learning of the judgment.
- Whether the defendant has a good explanation for failing to respond to the claim.
- The interests of justice.
Steps to Set Aside a Default Judgment Under CPR 13.2 and CPR 13.3
Review the Default Judgment and Grounds for Setting Aside
Ensure the judgment meets the criteria under CPR 13.2 or CPR 13.3. Gather all relevant documents.
Prepare the Application
- Complete the N244 Application Notice.
- Provide a witness statement or affidavit detailing the grounds for setting aside the judgment.
- Include a draft defence to the claim to demonstrate the merits of your case, particularly if applying under CPR 13.3.
File the Application
Submit the N244 form and supporting documents to the court where the default judgment was issued. Pay the applicable court fee or apply for a fee remission, if eligible.
Serve the Application
Serve the application and supporting documents on the claimant as per the Court’s rules.
Attend the Hearing
Prepare to present your case, demonstrating why the default judgment should be set aside under CPR 13.2 or CPR 13.3.
Case Law on Setting Aside Default Judgments
Understanding relevant case law can significantly enhance your application to set aside a default judgment. Our lawyers set out a table below which shows some key cases that illustrate how courts handle such applications in practise:
| Case | Details | Key Points |
| Harrison v. Bloom Camillin (2000) | The court set aside a default judgment because the claim form was not served correctly. | This case underscores the importance of proper service and adherence to CPR 12.3, showing that improper service can be a valid ground for setting aside a default judgment. |
| Aktas v. Adepta (2010) | The court exercised its discretion to set aside a default judgment, considering the defendant’s reasonable defence and prompt application. | It established that courts can set aside default judgments if the defendant shows a reasonable defence and acts promptly. Highlighting the necessity of acting swiftly and providing a strong defence when seeking to set aside a default judgment. |
| Pinnock v. Rochester (2004) | The judgment was set aside due to procedural irregularities, such as incorrect service and errors in judgment entry. | This case highlights the critical importance of following correct procedures in serving documents and entering judgments. Demonstrated that procedural errors, such as incorrect service or judgment entry, can justify setting aside a default judgment. |
| Mohun-Smith v. TBO Investments Ltd (2016) | The defendant successfully set aside a default judgment by proving that the judgment was entered in error and providing a compelling defence. | This case emphasizes the importance of presenting a strong, credible defence in applications to set aside default judgments. It highlights the significance of demonstrating both procedural errors and a substantive defence to the claim. |
| Royal Bank of Scotland plc v. Sulaiman (2013) | The court set aside a default judgment after finding that the claim form was served at an incorrect address, resulting in no service. | It illustrates that serving the claim form at the correct address is fundamental. If the claim form is not properly served, the default judgment can be set aside. Also emphasizes the importance of thorough verification of service addresses in litigation. |
| Dubai Financial Group LLC v. National Private Air Transport Services Company (2014) | The court set aside a default judgment due to the claimant’s failure to adhere to the procedural requirements for serving documents. | This case reinforces the necessity of strict adherence to procedural rules in serving documents. It shows that any failure by the claimant to comply with procedural requirements can result in the setting aside of a default judgment, emphasizing the procedural safeguards in the litigation process. |
| Bank of Scotland v. Pereira (2011) | The court considered the fairness of allowing the judgment to stand and set it aside to allow the defendant to present their defence. | This case illustrates that the court will consider the fairness and justice of allowing a default judgment to stand. If there is a compelling reason to believe that the defendant has a viable defence, the court may set aside the judgment to ensure justice is served. |
Tips to Successfully Set Aside a Default Judgment
There are several things that you can do to improve the prospects of your application being successful including:
- Act Promptly to File Your Application: Delay can weaken your application. File your application as soon as you discover the default judgment.
- Ensure Complete Documentation: Ensure all forms are accurately completed and supported by relevant evidence.
- Follow Correct Service Procedures: Follow the proper procedure for serving documents to avoid any procedural challenges.
Free Consultation – Expert Litigation Lawyers in London
Setting aside a default judgment requires understanding the legal grounds and following the correct procedures. By acting promptly and preparing thoroughly, you can successfully challenge a default judgment.
For expert assistance, contact our experienced solicitors at Go Legal for a Free Consultation today at 0207 459 4037 or through our online booking form.
FAQs About Setting Aside Default Judgments
Q: What are the key conditions under CPR 13.2 to set aside a default judgment?
The judgment must be wrongly entered, such as improper service or timely acknowledgement of service not considered.
Q: What should I do if I miss the deadline for acknowledgment of service?
You can still apply to set aside the default judgment under CPR 13.2 or CPR 13.3 if you can demonstrate that the conditions for entering the judgment were not satisfied.
Q: Can I appeal if my application to set aside is denied?
Yes, you can appeal, but it’s advisable to seek legal advice to assess the merits of your appeal.
Q: How long does the process of setting aside a default judgment take?
The timeline varies depending on the court’s schedule and the complexity of your case. Prompt action and thorough preparation can help expedite the process.
Q: What evidence do I need to support my application to set aside a default judgment?
Relevant evidence may include proof of incorrect service, timely filings, and any correspondence with the court or the claimant.
Q: Can I negotiate with the claimant after a default judgment is entered?
Yes, negotiating with the claimant can be an option. If both parties agree, you might settle the matter out of court, but ensure any agreement is legally documented.
Q: What happens if I do not set aside the default judgment?
Failing to set aside a default judgment can result in enforcement actions against you, additional costs, and a negative impact on your credit rating. The default judgment can remain on your credit report for up to six years, affecting your ability to secure loans or credit.
Q: How does a default judgment affect my credit rating?
A default judgment can severely impact your credit rating. It stays on your credit report for up to six years, which can make it difficult to obtain credit, loans, or even mortgages. Lenders view a default judgment as an indicator of financial irresponsibility.
