Avoiding damage from County Court Judgments

County Court Judgments (CCJ’s) can limit a company's ability to obtain credit and damage relationships with suppliers. A proactive approach can avoid these negative consequences.

CCJ is a type of court order in England, Wales and Northern Ireland that might be registered against you if you fail to repay money you owe. If you get a judgment, this means that the court has formally decided that you owe the money.

CCJs can be issued against a business or individual for example in relation to a motor claim. They are usually issued due to a failure to formally acknowledge a County Court claim or a failure to pay the claim in accordance with the terms of a court order. 

County court judgments against businesses in England and Wales rose four percent (opens a new window) in the first half of 2019, according to the June 2019 Registry Trust Limited report. 

A formal claim in England and Wales must be initiated by the service of a County Court claim form (opens a new window) (known as an N1).

This form will usually be completed by a legal representative acting on behalf of the claimant. The court will stamp the document and will either send it directly to the defendant, or leave the claimant’s solicitor to do this within 4 months of the form being stamped. This process is called ‘service’.

Where can a claim form be sent? 

The usual rule is that a claim form must be sent to/served upon a ‘principal office of the company or any place of business of the company within the jurisdiction, which has a real connection with the claim’. 

This can often be widely construed and therefore it is important that all staff who handle inbound correspondence are aware of the need to immediately escalate the receipt of formal court documents. Until a solicitor is on record with the court as acting for you, the defendant is able to send all formal documents directly to your business addresses and does not have to send them to your insurer.

Acknowledging a claim form 

If the receipt (or service) of a claim form is not formally acknowledged to the court within 14 days of receipt the claimant is entitled to apply for a CCJ. When a CCJ is in place the claimant can then apply to enforce the order, for example by sending bailiffs to recover the debt.  Upon receipt of this form it is imperative that it is sent immediately to your insurer and your nominated legal representative (should you have one). They will formally acknowledge the claim with the court and will file a formal defence to the claim as appropriate. 

I have received a CCJ. What should I do?

CCJs will be added to the Register of Judgments which can be searched by businesses and individuals. They will remain on the register until they are settled, paid or set aside.   The court can set aside a judgment but this is time critical – a formal legal application to the court needs to be made as quickly as possible. Therefore should you receive a CCJ relating to any insurance claim, the matter should be immediately referred to your insurers who can determine the best way to remove it from the Register of Judgment. 

How can Lockton help? 

Where you have arranged to deal directly with your insurer please copy in your nominated Lockton claim contact in to any correspondence relating to the receipt of claim forms or CCJs. They will be able to advise you throughout the process and ensure that your nominated insurer/legal representative takes the necessary action to avoid a CCJ being entered against you. 

For further information, please contact: 

Sam Ellerton, Regional Claims Leader 

Email: sam.ellerton@uk.lockton.com (opens a new window) | Tel: +44 (0)121 232 4563