If a business you have sued in England and Wales does not respond to your money claim in time, you can usually ask the court to enter judgment in default, without a hearing. For a fixed sum this is a short request, made online or on a court form, and the judgment covers the debt, interest properly claimed and fixed costs. It is an order to pay, not payment itself.
1. What is default judgment?
Default judgment is judgment without a trial. It is governed by Part 12 of the Civil Procedure Rules, which apply in England and Wales. Northern Ireland and other parts of the UK have their own rules.
There are two kinds. Judgment in default of acknowledgment applies where the defendant has filed neither an acknowledgment of service nor a defence in time. Judgment in default of defence applies where it acknowledged the claim but filed no defence in time.
2. How long does the debtor have to respond?
The clock runs from service, not from the day you issued the claim. Under rule 10.3, the period for filing an acknowledgment of service is 14 days after service of the particulars of claim, where the claim form said particulars would follow, or 14 days after service of the claim form in any other case.
Under rule 15.4, the general period for filing a defence is 14 days after service of the particulars of claim. If the defendant files an acknowledgment of service, that becomes 28 days after service of the particulars.
Rule 15.5 also lets the parties agree to extend the time for a defence by up to 28 days. The defendant must tell the court of that agreement in writing.
In practice, the court's letter or email tells the defendant the date to respond by, as the government's page on responding to a money claim explains.
3. When can you ask for judgment, and when can you not?
Once the relevant time has expired with no acknowledgment, no defence and no admission, rule 10.2 says the claimant may obtain default judgment if Part 12 allows it. Under rule 12.3(3), it is still not available if:
- the defendant has applied to strike out the claim, or for summary judgment, and that application has not yet been dealt with;
- the defendant has paid the whole claim, including costs;
- in a money claim, the defendant has admitted liability for the full amount and asked for time to pay (that route is covered in step 5).
If you served the claim yourself, Part 12 cross-refers to the rule on filing a certificate of service (rule 6.17), so make sure that is done.
Before you file the request, check your bank account and your post. A judgment entered after the debtor had already paid in full is one the court must set aside (step 7).
4. How do you request judgment for a specified amount?
Where you claimed a specified amount of money, such as your unpaid invoices, rule 12.4 lets you get judgment by filing a request rather than applying to a judge. The rule names Form N205A or Form N225. Where the amount is for the court to decide, the forms are N205B or N227.
- If you claimed online, the government's page on what happens after you make your claim says you request judgment through the online money claims service.
- If you claimed on paper, the same page says to use form N225 for a specified amount and N227 for an unspecified amount.
If your claim includes some other remedy, you need a Part 23 application instead, unless you abandon that remedy in your request.
What the judgment includes
Under rule 12.5, the judgment is for the amount of the claim, less any payments made, and costs. In your request you can state a date by which the whole sum must be paid, or the times and rate of instalments. If you state neither, the money is payable immediately.
Broadly, interest can be included in the request if your particulars of claim set out the interest you are claiming and your request includes a calculation of it, under rule 12.7. Otherwise the court decides the amount. For a business-to-business debt, the statutory rate for late commercial payments is 8% plus the Bank of England base rate, as the government's page on charging interest on commercial debt explains. Our guide to late payment interest covers how to work it out.
Costs are fixed rather than assessed. Part 45 sets fixed costs on entry of judgment in a claim for money, and it applies where the only claim is for a specified sum and judgment in default is obtained under rule 12.4(1).
5. What if the debtor admits the claim instead?
Some debtors respond only to admit what they owe. Part 14 deals with admissions, the other route to judgment without a hearing.
Where the defendant admits liability for a specified sum, you can file a request for judgment and the court enters judgment for the amount admitted, less any payments, plus costs. The payment terms then depend on what has happened:
- if you and the debtor have agreed a time to pay, the judgment gives effect to it;
- if the debtor has asked for time and you have not agreed, the court decides the time and rate of payment;
- if the debtor has not asked for time, the date or rate you specify applies, or payment is immediate.
A debtor asking for time must give a statement of its income, outgoings, assets and liabilities. Under rule 14.6, a court officer may decide the rate without a hearing where the amount outstanding, including interest and costs, is not more than £50,000. Either party may ask for that decision to be looked at again by a judge within 14 days.
Form N225 is also used to reply to an admission and say whether you accept the debtor's proposed terms. If only part is admitted, you can carry on for the balance. Our guide to small claims and the fast track explains what happens when a claim is defended.
6. What does the judgment give you, and what does it not?
A default judgment is a county court judgment, or CCJ. The government's page on CCJs and credit ratings says it stays on the Register of Judgments, Orders and Fines for 6 years. If the debtor pays in full within one month, it can get the judgment removed from the register. If it pays later, the judgment is marked as satisfied but stays listed. A debtor wanting proof of payment can apply on form N443 for a certificate of satisfaction, which that page says costs £19.
The debtor pays you, or your solicitor, and not the court, as the government's page on paying a judgment says.
What the judgment does not do is put money in your account. If the debtor still does not pay, enforcement is a further step. The government's page on enforcing a judgment lists the main options. A court fee is payable when you ask the court to act:
- an order for an officer of a debtor company to attend court and answer questions about its finances;
- a warrant of control, so that bailiffs can seek payment and look for goods to sell;
- a third-party debt order against money held in the debtor's bank or business account;
- a charging order over the debtor's land or property.
Choosing between them is covered in our guide to recovering a business debt in the UK.
7. Can the debtor have the judgment set aside?
Yes. Part 13 gives the court two powers.
It must set the judgment aside if it was wrongly entered. That covers a judgment entered when the conditions in rule 12.3 were not met, for example because the time to respond had not expired or a bar in step 3 applied. It also covers a judgment entered when the whole claim had already been paid.
It may set the judgment aside or vary it in any other case, if the defendant shows a real prospect of successfully defending the claim, or some other good reason why the judgment should be set aside or varied. In deciding, the court must consider whether the defendant applied promptly.
The government's page on cancelling a judgment says the application is made on form N244, that a court fee of £321 may be payable, and that the applicant must attend a hearing.
So a default judgment is only as solid as the steps behind it: serve properly and wait for the deadline to pass.
8. What should you check before and after you issue?
- Check the company is active. Search the debtor on Companies House before you issue. Confirm its exact registered name and number, and that it is not dissolved, in liquidation or in administration.
- Use the registered office. Under section 1139 of the Companies Act 2006, a document may be served on a registered company by leaving it at, or posting it to, its registered office.
- Check the address is in England or Wales if claiming online. The government's page on making a claim says you cannot claim online if the party you are claiming against has no address in England or Wales.
- Diarise every deadline. Note the date of service, the 14-day point, the 28-day point if the debtor acknowledges, and any agreed extension.
- Keep your file in order. Keep the claim, proof of service, any letters from the debtor and a note of payments received.
9. When should you pass it on?
A business can request default judgment itself, online or on paper. It is worth getting help when the debtor files a defence or a set-aside application, when the claim is large, when you are unsure whether service was effective, or when the judgment is entered but the debtor still does not pay and you need to trace its assets or choose the right enforcement step.
If you have a judgment that has not been paid, or a claim the debtor has gone quiet on, you can tell us about the debt and we will look at the next step with you.
This guide is general information about the law in England and Wales as it stood when it was written. It is not legal advice, and it does not take account of your circumstances. For advice on a particular case, speak to a solicitor.