Payment of Judgement Debts

When a case is lost, and you are ordered to pay a  judgment together most probably with legal costs, the usual order will usually be for payment within 14 days. But what if you do not have the money to pay the judgment debt and cannot pay? This will very often be the position for a losing party so will you be given time to pay?

A court has the power, when giving judgement, to order payment by installments or by some later date. The Civil Procedure Rules provide (CPR 40.11) that:

‘A party must comply with a judgement or order for the payment of an amount of money, including costs, within 14 days of the date of the judgement or order, unless the judgement or order specifies a different date for compliance, including specific payment by installments.’

This would seem simple and straightforward and give the judge an absolute discretion to set a time scale which would allow the losing party to pay by installments and thereby avoid bankruptcy or some other enforcement action. Unfortunately, however, it is not the end of the story, as a recent case has shown.

In the case of Amsalem, the judge held that the court’s discretion, when making orders concerning the payment of judgement debts, must be exercised in accordance with CPR 70. This is the section of the Civil Procedure Rules which deals with the enforcement of judgements. This particular rule states that it is not for the court to enforce judgements or decide how enforcement is to take place. That is a matter for the judgement creditor, who is entitled to use any of the enforcement methods available or insolvency proceedings.

The judge then went on to hold that it was clear that the intention of the law was to give judgement creditors the right to enforce judgements. It would not therefore be right in any other than most unusual circumstances for the court, having given judgement, to exercise its discretion to allow time to pay, where there was no realistic prospect of payment being made even if an installment order was made.

In the circumstances of this particular case it had become clear that the defendant was in no position to pay the amount ordered, even if payment was to be by installments. In the absence of any realistic prospect of payment, the judge considered himself unable to exercise his discretion and allow time to pay. It was only where given time payment could be shown as being forthcoming, that the discretion in CPR 40.11 would be exercised.

What is also clear is that the court will always balance the right of a judgement creditor to be paid as soon as possible against the interests of the judgement debtor not to be placed in an insolvency position.

So, if you are in the unfortunate position of having to pay a judgement debt without having the money to do so, you are going to have to make realistic offers of payment and show that if the payment is to be by installments; you will be able to pay the whole amount within a reasonable time.

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