Guest post by Philip Gardner, senior associate, and Sarah Gabriel, partner, at City firm Peters & Peters
Philip Gardner
‘When do I get my money?’ is a question that litigators acting for successful parties are used to fielding.
Winning at trial is only part of the battle. The value of judgments and their consequential orders is, of course, in the recovery made: assets recovered and money in the bank.
Against this background, the Civil Justice Council’s enforcement working group has been an important opportunity for improvement. Its goal is to make enforcement in England less complex, cheaper, faster and more effective.
For those litigating or enforcing high-value and international claims, its recent report makes four key recommendations.
A new court for an old problem
Likely to draw most of the headlines is the suggestion of creating a unified, specialist and digital court focused on enforcement.
Such a court would retain financial information on judgment debtors. This would include unpaid court judgments and, crucially, other debts. The idea is to offer a one-stop shop for enforcing a judgment, with the court being able to consider the wider financial context of the defendant and manage competing attempts at enforcement more efficiently.
The UK has excellent experience of specialist courts. The Competition Appeal Tribunal and Commercial Court are two examples where judges chosen for their expertise and bespoke rules have very positive impacts.
In principle, few practitioners will resist the possibility of judges and court staff with specific training in facilitating and achieving enforcement.
However, much of the reasoning for the unified digital court appears aimed at getting round the chronic problem of underfunding in the county court and the resulting inefficiencies. Such problems are important to solve but may call for quite different solutions to the enforcement difficulties that arise in very high-value and transnational cases.
Repealing (or amending) CPR part 71
The working group’s report takes a generally negative view of the effectiveness of part 71. This is the procedure whereby judgment debtors can be compelled to answer questions and provide documents regarding their assets.
The evidence presented to the working group was that, while CPR Part 71 promises much, it delivers considerably less, with determined recalcitrant defendants avoiding the effects.
The recommendation that there should be more training of court officers and judges on extracting information as to assets is welcome. So too is the suggestion that a judge, at the conclusion of a hearing delivering judgment, should ask defendants there and then about assets and how the judgment will be met.
However, it is not clear how these recommendations will help with the most determined (and dishonest) judgment debtors. The working group thinks that contempt applications should be used more sparingly, no doubt aware of the abusive way such applications are used in low-value disputes.
However, where one is faced with a determined and sophisticated judgment debtor who is highly motivated to hide the millions that they have stolen, the risk of a contempt application can be a very important tool. The working group’s view that clients are over-confident as to what part 71 will achieve may well be true, but is not the answer to make resources and court-practice available to achieve what the CPR says?
Sarah Gabriel
Other forms of enforcement
Among many others, the working group makes two other points that deserve the most enthusiastic reception. Those are the recommendation (finally) to bring into effect the whole of part 4 of the Tribunals, Courts and Enforcement Act 2007 and for greater consideration of extra-jurisdictional enforcement.
Part 4 of the Tribunals, Courts and Enforcement Act 2007
Bringing into effect section 95 to 105 would give the court an important and straightforward tool to assist those undertaking enforcement in England. It would allow the court, on application by the creditor, to ask governmental bodies to provide information regarding judgment debtors, including as to their assets.
Various other jurisdictions, notably the UAE, have processes whereby enforcement courts are able to obtain extensive asset information on debtors to aid with civil enforcement. Subject to being under the appropriate control of the court, this would be a welcome development.
Extra-jurisdictional enforcement
It is a product of the globalised economy that assets cross borders quickly. This is particularly so in cases involving dishonesty and high-value fraud, where defendants know that by holding assets across jurisdictions they will make enforcement more costly and challenging.
The working group, which had already taken on an enormous task, rightly focused here on recommending a more in-depth and thorough study on this specific topic.
In an international environment where cross-border business is not being made easier, efforts to break down barriers in the enforcement of court judgments are particularly welcome. Much of this will need discussions at a governmental level.
However, other forums exist to explore practical steps to improve enforcement. One such option is the Standing International Forum of Commercial Courts, where important judicial dialogue on issues of mutual concern to those engaged in major commercial disputes takes place.
Looking ahead
The UK often trumpets its legal system as a national treasure, a beacon of impartiality and a major commercial opportunity for the country. All of these things are true. However, the reality is that not all parts of our legal system function equally well.
Much like the adage that the criminal law is only as useful as the police can make it, we will only really have a Rolls-Royce civil justice system if we ensure that the decisions it comes to are enforced promptly, inexpensively and fairly.
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