When a claim form is served, bad things can happen to a defendant when nothing is done to respond.
Default Judgment is a judgment like any other.
Claimants obtain judgment so that they can move to the next stage: enforcement of the judgment, or simply bring the dispute to an end and do nothing further.
When a defendant wants to set aside default judgment, the time that it takes to file the application and respond is always a factor taken into account.
Any delay in making the application can be prejudicial to setting judgment aside. It makes a potentially hard task much harder.
How is Default Judgment obtained?
Courts impose fixed timing for things to happen after the claim form and particulars of claim are served.
Those fixed time frames apply for a defendant to act, after service of the claim form, particulars of claim and response pack are served. But then if the claimant has not served the documents in the technical sense, it can all come back to bite them.
If a defendant does not:
- file an acknowledgment of service or defence within 14 days, or
- if an acknowledgment of service is filed, file a defence within a further 14 days,
- unless the court orders and extension or the parties agree an extension of time to file either,
the claimant is entitled to default judgment.
The timescales are different for defendants outside the jurisdiction, but in the scheme of things, not by much. Weeks, not months.
Certificates of Service and Requests
For a judgment in default to be valid, it must be based on a correct certificate of service and a valid request for a default judgment. If it’s not, it’s likely to be set aside.
Grounds to set Aside Default Judgment
There two broad grounds which apply to have default judgment set aside.
Setting aside on Mandatory Grounds:
They are:
- the claim form was never served, within the technical legal meaning of that word
- an Acknowledgement of Service and Defence were filed in time
- the defendant:
- applied for summary judgment, or
- has made a strike out application, and
before those applications are decided by the court, at the time of the request for default judgment.
- The judgment as satisfied by the defendant before judgment in default was entered
Service in English law is a term of art. It has a particular – and precise – meaning of what it is, and what it is not.
Setting aside on Discretionary Grounds
If a Default Judgment is not compromised by the mandatory grounds, courts may still decide as a matter of discretion that the default judgment should be set aside, because:
- the defendant has a real prospect of successfully defending the claim, or
- because there is some other good reason for doing so,
and
- after considering whether the application was made promptly.
The discretionary power of a court to set aside judgment is unconditional:
- any good reason is enough to set it aside, and
- even if time is a factor. It's not decisive, but a factor of some importance.
The purpose of the power to set aside default judgment is to avoid injustice. English judges mostly consider themselves judges of courts of justice, before they consider themselves judges presiding over a court of law.
Prospects of Success
A “real prospect of success” is the same legal test that applies in summary judgment applications.
It is designed to weed out claims that cannot succeed.
A court is not about to set aside default judgment if the Defence would in turn be subjected to a successful application for summary judgment.
The burden of proof however is the reverse of the usual situation.
That is, the defendant (who is the applicant) bears the burden of proof and show that they have a real prospect of success to defend the proceedings (on a summary judgment application, the claimant bears that burden).
The better the stronger the case for the defence, the more likely default judgment will be set aside. But then the defendant also needs to show that they haven’t duly delayed making the application.
Lack of promptness is a factor that can spoil an otherwise good application.
Setting Aside County Court & High Court Judgments
here are a few examples of factual situations where CCJs and other judgments have been set aside:
- the claimant failed to file a certificate of service within 21 days of service of the claim form
- the claimant said that they posted the claim form, but there was evidence it had not
- the claimant did not serve the response pack with the claim form and particulars of claim.
However, there are cases that have gone the other way - the defendant had a sound defence. An administrative oversight meant that the claim form did not come to the attention of the defendant.
Usually, it's not just one factor that justifies setting aside judgment: it's a collage of factors.
Other Good Reason
When assessing whether there is some other good reason to set aside default judgment, the factors which may be taken into account by a court include:
- whether the litigant is a litigant in person. But that of itself is not enough
- when the claim form, particular of claim and response pack was not received
- other proceedings between the parties at the same time
- the risk of inconsistent judgments in the UK and/or in foreign countries
- a mistake was made by the court
Promptness of application
CPR 13.3(2) requires courts to consider to whether the application was made promptly.
There’s no dodging the point.
It must be addressed.
It used to be the case that the passage of time alone did not preclude a defendant having a judgment in default set aside. It’s been done after the default judgment has remained in place for several years.
But now, the more time that has passed where the judgment has remained in place, the more difficult it is. The Court's approach to delay has hardened.
There are so many factors that can come into play in an application to set aside judgment. Not only will the defendant have their say, but the claimant will too, to resist the application.
Questions from the Court
Important questions that need addressing in the context of time. They include:
- When did the defendant learn that the claimant had obtained judgment?
- How quickly did it take steps to have it set aside?
- What has happened since the judgment was entered?
- Have damages been assessed, enforcement action commenced?
- What is the strength of the defence?
- What are the reasons for delay and are there any justifications for it?
No other factor is identified in the Rules of Court which must be considered. So although the court is able to consider all the circumstances of the case, promptness probably carries more importance than any other factor.
That said, it’s not a condition that it must be made promptly – it is a consideration.
Other factors may add together to give sufficient grounds to set aside default judgment, even if the application was not made as promptly as it might have been.
The strength of the defence is likely to be one. If there has been a marked failure to make the application promptly, the court may well be justified in refusing relief, notwithstanding the possibility that the defendant might succeed at trial.
The Time Factor: Examples
When the defendant can show that a real prospect of successfully defending the claim, delay is less of factor. But sometimes it is. For instance:
- when a defendant waited 30 days after they came to know about the application, it was too long
- a delay of two months in another case was on the outside edge of what was acceptable
- in an extraordinary case, default judgment was set aside after several years after a real prospect of success was shown These cases are rare, in the extreme.
Applications of the Claimant
Default judgment is also able to be set aside on an application of a claimant.
In one case, judgment in default was commercially worthless: it could not be enforced in a foreign country.
The default judgment had no commercial value, because it couldn't be enforced in the country where the defendant had assets. The claimant needed to obtain summary judgment for that purpose.
Default Judgment Costs
It is usual for the court to award costs in favour of the defendant when they successfully set aside default judgment.
Appeals of failed applications to set aside default Judgment
Decisions of courts are final, unless and until they are set aside or varied on appeal.
Default judgments are slightly different – there is no appeal available arising from a request for judgment. That's because it's an administrative decision.
So a special procedure is made available under Part 13 of the Civil Procedure Rules.
When the application or motion to set aside is appealed, the defendant needs to show that:
- a change in circumstance likely to produce a more favourable outcome
- existence of evidence which was not available to them earlier
- the judge hearing the set aside application took into account factors that it should not have or gave it more weight than what was warranted, or did not consider a particular factor that they should have
The court engages in a balancing exercise between:
- the merits and strength of the claim cast against the merits and strength of the defence
- delay making an application to set aside, and any justification for it.
Courts of appeal have in many cases found misconduct or deliberate decisions taken by defendants leading to default judgments being entered.
Where there is a defence shown on the merits, still set judgments in default aside.
Conditions on Order to set aside Judgments
Court may impose terms upon a defendant as a condition of set aside a CCJ, to avoid a repeat of the same situation.
The terms of the conditions require the defendant to take specified steps to preserve the setting aside of default judgment.
Conclusion
They’re just as enforceable as any other judgment.
The same rules apply to set aside County Court judgments and High Court judgments.
Default judgment by a Request is an administrative decision and easily obtained.
Essentially, defendants are seen to have delayed filing a document – one way or the other a defence in accordance with the court time table.
When default judgment is set aside, a court is likely to make conditional or unless orders that the defendant does certain things within a limited period of time, to avoid a recurrence of delay.