Can a debtor overturn your County Court Judgment?

In May, it hit the news that the Prime Minister, Boris Johnson, had become the subject of a County Court Judgment for a debt of £535.

However, before questions about what would happen if bailiffs turned up at Number 10 could be answered, Downing Street took action. The Judgment was set aside, and the debt claim struck out (i.e. it was dismissed).

As an individual or business dealing with unpaid debts, it might alarm you to realise that it is possible for a debtor to get a claim struck out even once a CCJ has been granted.

Although most creditors do not have to worry about facing off against Downing Street in their debt recovery claims, it is interesting to explore the circumstances in which a debtor can overturn a County Court Judgment once it has been made.

When can a debtor overturn a County Court Judgment?

Creditors often breathe a sigh of relief once they receive their copy of the County Court Judgment. It is absolute confirmation that the debtor owes them money and, if the debtor does not repay, opens up lots of enforcement options.

But there are situations when a debtor may take legal action to try to get the CCJ overturned (or ‘set aside’). This can often come as a surprise to creditors, particularly where the debtor has not engaged with the money claim proceedings until this point.

The court will agree to set aside a CCJ if the claimant was not entitled to the judgment, for example, the debtor paid the whole amount before judgment was entered. The court may set aside a CCJ in some other cases, for example, where the debtor has a reasonable prospect for defending the claim.

It is very difficult for a debtor to challenge a CCJ if they received the claim form and replied because from the court’s perspective, they should have raised any defence at that point.

There may also be circumstances where the debtor applies to vary the CCJ, rather than to get it set aside. This will usually be the case where they do not dispute the CCJ but cannot afford to pay it all at once or follow the court’s repayment plan. In such cases, the court may agree to make repayments more affordable.

Do you have to go back to court?

If the debtor makes an application to set aside, the court will usually list a hearing which you should attend.

If the debtor did not reply to the original claim form and you got Judgment in Default, this may be your first court hearing, which will understandably be nerve-wracking. However, your solicitor will be by your side throughout the entire process and will take all the necessary steps to defend your position.

At the hearing, the judge will hear all the evidence then make a decision to:

  • Set aside the Judgment;
  • Dismiss the application; or
  • Schedule a further hearing – this is only likely if there are very complex issues to consider.

What happens if the County Court Judgment is set aside?

If the CCJ is set aside, you and the debtor will be back in the position you were before you obtained the CCJ in the first place. Any enforcement action you had planned, such as bailiff instructions, would need to be cancelled.

The proceedings will usually go back to the claim stage, so the debtor will have the opportunity to respond to the claim and make any offers or put forward any defence or counterclaim.

If you are successful after these proceedings, the court will make another County Court Judgment that you can enforce as normal.

In some circumstances (such as Boris Johnson’s situation), the court may strike out the claim, in part or in whole, as well as set aside the CCJ. This may happen where the court decides:

  • That there were no reasonable grounds to bring a claim;
  • That there has been an abuse of process; or
  • That there has been a failure to comply with a court order or the Civil Procedure Rules.

A Strike Out Order usually means that your claim has been dismissed, although a claim can sometimes be restored after being struck out.

If you require any further information, please contact our debt recovery team on 01273 646470 or e-mail our team today: