Setting Aside Default Judgment – or Setting Aside Common Sense?

When a defendant does not lodge a defence in the County Court in response to a claim made against him/her within a strict timescale, the claimant in the action can obtain from the Court a Judgment in Default.  It is given “over the counter” upon application and the Judgment is awarded against the defendant without a hearing.

If that defendant can show that their defence has a chance of success  and there was a good reason why it was not lodged with the court on time then a Judge may (upon prompt application by the defendant and payment of the fee) have the Default Judgment set aside.  Essentially, it places the parties in the position they would have been in had the defence been lodged with the court on time and matters then proceed ultimately to a full hearing of the case.

A client of ours applied for Default Judgment but it was not successful.  He paid within 14 days of the decision to uphold the Judgment.  Ordinarily, the payment of a Judgment within 14 days prevents details of it being passed to credit reference agencies.  But our client was told by a member of staff at a court office that this was not the case for him because he didn’t satisfy the Judgment within 14 days of it being granted in Default.  Moreover, their “advice” was apparently that he ought to have paid the Judgment in Default with 14 days – i.e. before the hearing to decide whether or not to set it aside.

Quite frankly, this was one of the most ridiculous suggestions we had ever heard.  If you pay the claimant the amount of the Default Judgment and then get it set aside subsequently, do you ever think for one moment that the claimant will give the money back to the defendant pending a full hearing?
 
We challenged this and it was confirmed to us that an application to set aside a Default Judgment suspends the timescale for satisfying that Judgment and that no credit reference agency should be contacted pending an application to set it aside.

Great! Or so we thought.  Until another (unconnected) client told us that he too had been told the same thing as our first client had.  Suffice to say we will be making the appropriate representations there too!

Published: 24 Jun 2013

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