Tips for Avoiding CCJs During the Covid-19 Pandemic

None of the rules that govern the time for responding to claims have been relaxed in light of the Covid-19 pandemic and they need to be dealt with as promptly as ever.

The county court is continuing to process and issue claims during the pandemic through all of its usual channels (the Money Claims Centre, Bulk Centre and Money Claims on Line). None of the rules that govern the time for responding to claims have been relaxed and they need to be dealt with as promptly as ever. However, with many businesses closed unless proper redirection arrangements have been made the risk of falling foul of a default judgment will increase hugely, and I have seen several recent judgments where despite clients’ best efforts this has happened.

You can read tips for managing that risk below, but first a reminder on the time limits.

A defence, or an acknowledgment of service form, must be filed within 14 days of the claim being served. The date of service will be stated on the claim form itself (or the notes which accompany it, depending on the method used to issue it). Filing an acknowledgment of service form that indicates an intention to defend the claim will extend the time for filing a defence by 14 days to give you 28 days from service. If you don’t file a defence, or an acknowledgement of service, form a claimant can, and very likely will file a request for a default judgment. It’s a quick administrative job done with a form the court sends the claimant when the claim’s issued and which is processed without any judicial intervention in a simple invoice debt claim.

Tips for managing risk and avoiding CCJs during the Covid-19 pandemic:

  1. Make sure post addressed to your registered office as well as any trading addresses is redirected. If your solicitor’s or accountant’s office is your registered office, make sure you know what arrangements they have put in place to receive and forward anything sent there, and that all post is sent on quickly.

  2. Make sure any staff who receive redirected post know how to recognise claim forms, as well as letters before action, and how these are to be actioned. As businesses focus on cash collections claims are highly likely to follow unanswered letters of claim quickly.

  3. If you get a letter of claim, engage with creditors early and make sure that any terms which are agreed are recorded in writing, particularly if the contract in question requires formal written variations. You can read my article on how to address negotiations and variations by clicking here.

  4. Act quickly if a judgment is entered. One of the criteria for having it set aside is that you acted “promptly” so keep full details of when a claim was received, where and what was done in response to it as well as the reasons for any delay.

  5. Make sure you follow the court’s latest guidelines regarding communicating with it by email. The county court is reporting an increased volume of emails and is asking its customers to follow its guidance on emails, which can be found here and use the specific subject lines in its guidance document here. The information in the guidance is correct at date of publication (21st April 2020), but should be checked before it is relied on as it is subject to change by HMCTS.

  6. All is not necessarily lost if a claim doesn’t get to you before the deadline for responding to it. Part 12 which governs default judgments was amended on 30 March 2020, so that the late filing of an acknowledgment of service or a defence that is received before default judgment has been entered, will be a bar to the entry of a default judgment. A defence or acknowledgment of service must therefore be filed straightway to stand any chance of getting within this change.

  7. If in doubt, seek early advice. Our litigation team is working remotely as usual and available if you need help.

CONTACT SIMON

If you would like more information or advice relating to this article or a Commercial Litigation & Dispute Resolution law matter, please do not hesitate to contact Simon Walsh on 01727 798085.

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