What is a Default Judgment?

A default judgment is a binding court decision made in favour of the claimant when the defendant fails to respond to a legal claim. If the defendant doesn’t file a defence or acknowledge the claim within the specified time frame, the claimant can ask the court to enter judgment ntcan be may automatically rule in favour of the claimant. 

Default judgments are often sought in civil cases where one party doesn’t participate in the legal proceedings, allowing the other party to obtain a judgment without a full trial.

When Is Default Judgment Available?

Default judgment is available in situations where the defendant does not take any action in response to the claimant’s legal claim. It applies when the defendant fails to acknowledge the claim or file a defence within 14 days or file a defence within 28 days if they did acknowledge the claim within 14 days.

Default judgment isn’t available in all cases, for example in claims for the delivery of goods subject to certain regulated credit agreements, housing possession claims, or any claim on the Part 8 Procedure. Claims for and against the government or children usually require special court permission before a default judgment can be granted. 

Additionally, default judgments cannot be applied for where the claim is for unliquidated damages. In these types of disputes, the claimant will need to apply to the court for an order. This will usually result in a court hearing when the court will assess damages.

Legal Implications of a Default Judgment

A default judgment carries significant legal weight. Once granted, it has the same effect as a judgment made after a full hearing. The defendant is legally obligated to comply with the decision, which typically involves paying the amount claimed by the claimant or performing specific actions ordered by the court.

Failure to comply with a default judgment can lead to severe consequences, including enforcement actions such as damages being taken out of your salary, charges obtained against your property, or even bankruptcy proceedings. Moreover, having a default judgment on your record can severely impact your credit rating and financial standing, making it more difficult to obtain loans, credit, or even housing in the future.

For claimants, a default judgment resolves the dispute without a trial. However, it’s not without risks. If the defendant later successfully applies to set aside the judgment, the claimant will need to continue their claim to trial or reach a settlement and may possibly need to start the legal process all over again.

What Are the Relevant Time Limits for a Default Judgment?

Time limits are fundamental in the process of obtaining a default judgment. The key deadlines are as follows:

• Acknowledgement of Service: The defendant has 14 days from the date of receiving the claim form to file an acknowledgement of service. This acknowledges receipt of the claim and indicates the defendant’s intention to defend it.
• Filing a Defense: If the defendant files an acknowledgement of service, they then have an additional 14 days (28 days total from receiving the claim form) to file their defence. If they fail to do so, the claimant can apply for a default judgment.
• Application for Default Judgment: Once the deadlines for acknowledgement and defence have passed, the claimant can either request or apply for a default judgment. The application or request must be made promptly, but there is no specific statutory deadline.

Claimants must monitor these deadlines closely, as missing them could result in restarting the legal process or, in some cases, losing the opportunity to obtain a default judgment altogether.

How Does the Claimant Request or Apply for Default Judgment?

• Check Eligibility: Before making the request or applying, the claimant must ensure the defendant has not filed an acknowledgement of service or defence within the required time limits. Additionally, the claimant must confirm that the claim is eligible for default judgment (e.g., it’s not against a government entity or involves unliquidated damages without court approval).
• Complete the Necessary Forms: The claimant must complete the relevant court forms to apply for default judgment. It typically includes Form N225 for money claims or Form N227 for non-money claims. 
• Submit the Application: The completed forms must be submitted to the court, either online or by post. If the claim was issued through the Money Claim Online (MCOL) service, the application for default judgment can also be made online. The relevant court fee must paid. 
• Wait for the Court’s Decision: Once the request application is submitted, the court will review the documents and make a decision. If granted, the court will issue an order detailing the judgment, which may include payment instructions or other specific actions the defendant must take.

How Does the Claimant Request or Apply for Default Judgment?

• Check Eligibility: Before making the Application, the claimant must ensure the defendant has not filed an acknowledgement of service or defence within the required time limits. Additionally, the claimant must confirm that the claim is eligible for default judgment (e.g., it’s not against a government entity or involves unliquidated damages without court approval).
• As above Complete the Necessary Forms: the claimant must file an application notice in form N244 together with a witness statement setting out why judgment should be entered in their favour and that all of the requirements of the Civil Procedure Rules have been complied with and a draft order. 
• Submit the Application: The completed documents forms must be submitted to the court, either online or by post. The relevant court fee must be paid.
• The Hearing: The court will list the application for a hearing. If the defendant didn’t file an acknowledgement of service, then they are not entitled to notice of the application or to be served with any evidence The defendant will be served with the application and allowed to attend but may not be permitted to participate.

What is the benefit of a request over an application and vice versa?

The benefit of making a request is that it is quick and doesn’t require a hearing. The downside is that you are limited to very modest fixed costs. The benefit of making an application is that you can make costs submissions and seek all of your costs. This is especially important if you have the benefit of a contractual costs indemnity. The downside is that a hearing is required and there is more work required in an application. It is more expensive and takes longer because a hearing is required and this might take many months.

Can a Default Judgment Be Set Aside?

Yes, the defendant can apply to the court to have the judgment set aside if they can demonstrate a valid reason, such as not receiving the claim form, having a reasonable defence to the claim, or proving that they acted promptly once they became aware of the judgment.

When applying to set aside a default judgment, the defendant must complete and submit Form N244, along with a witness statement explaining the reasons for the application. The court will then schedule a hearing to consider the application and may set aside the judgment, effectively reopening the case.

What Happens if a Default Judgment Is Set Aside?

If a default judgment is set aside, the legal proceedings effectively restart. The case will move forward as if the default judgment had never been granted. It means the defendant will have the opportunity to file a defence, and the case will proceed through the usual stages of litigation, potentially leading to a trial.

Setting aside a default judgment doesn’t mean the defendant will automatically win the case; it simply restores the defendant’s right to defend themselves in court.

Frequently Asked Questions

How Long To Pay After Default Judgment?

Once a default judgment is granted, the court order will specify the time frame within which the defendant must pay the amount owed. It’s typically within 14 days of the judgment date. If the defendant fails to pay within this period, the claimant may take enforcement action to recover the debt.

Final Thoughts

Default judgments can resolve cases quickly when a defendant doesn’t respond, but the process must be handled with care to avoid potential issues. Both claimants and defendants should be well-versed in the necessary steps and deadlines.

If you’re dealing with a claim and are minded to pursue a default judgment, or perhaps if you have received a default judgment you now need to challenge, our expert commercial litigation solicitors will be happy to assist you. We act nationally and have considerable experience dealing with all manner of commercial, property and construction disputes and claims, with a proven track record of specialist expertise in our field. Contact our team; we’d love to assist you.