Brave New World - Enforcement of Judgments

Posted on May 05, 2020

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The economic changes following COVID-19 will be with us long after this tragic episode is at an end. Individuals and companies alike will be under financial strain and be forced to adapt where necessary to ride the tide of financial ripples caused by the outbreak.

Change in the face of this is inevitable. Creditors, debtors, governments and courts will have to change their expectations, procedures and possibly even laws and rules to deal with what might otherwise be a tidal wave of potential debt claims. For now, we must deal with the mechanisms currently in place. Elsewhere https://www.mplegal.im/info-ce... we offer practical advice about recovering debt and so in this article, we attempt to explain what the options are to enforce any judgment which is obtained (locally or worldwide).

The first thing to do when judgment is obtained on the Isle of Man is to put it in the hands of the local coroner to try and enforce it, assuming the debtor doesn’t just pay up. Coroners are individuals appointed by the court and who are responsible for (amongst other things) collection of judgment debts (much as bailiffs are in England and Wales). The coroner has a number of options at his disposal:

1. The arrest of the debtor’s goods to the appropriate value.

2. The arrest of debtor’s land as above (including the forced sale of property by auction).

3. Removal of sufficient monies from the known bank account of a debtor.

4. Coroners enquires whereby a debtor can be summonsed to provide information about finances and supporting documentation. Potentially useful if used in conjunction with one of the previous options (i.e. such an enquiry may inform as to the existence of an account such that 3 above can be deployed).

If none of the above bring success then there are still things a creditor can try such as applications to the court for:

1. Instalment order.

2. Attachment of earnings order, compelling an employer to pay a proportion of a debtors earnings to the creditor before the debtor is paid the balance.

3. Garnishee proceedings which allow a Coroner to arrest monies owed to the debtor by a third party.

In all circumstances, but especially in light of the current climate, it is important if possible to keep dialogue open with a debtor to try and resolve the issue without recourse to the courts.

Where a non-Manx judgment/order requires enforcement then there are two ways to do that. First, some foreign judgments will be capable of recognition and enforcement in the Isle of Man under the Judgments (Reciprocal Enforcement) (Isle of Man) Act 1968 (“the Act”). Second, where the original judgment is from a country with no reciprocal agreement (or if it is but the judgment has not been issued by the appropriate court) a new action must be commenced based on the foreign judgment.

As for English judgments then most recognised judgments obtained in English courts are enforceable on the Isle of Man by virtue of the Act and its associated subordinate legislation. The procedure is largely administrative and requires submission of a petition and supporting affidavit together with certified copies of all pleadings.

Put simply the Act defines a recognised judgment as one which is:-

1. From a Superior Court of England and Wales i.e.

The House of Lords, The Court of Appeal, The High Court of Justice.

(Note not County Court judgments or appeals to the Courts listed above from non-recognised courts. Where a County Court judgment is obtained then it can be re-registered by the High Court by way of application (advice will be required from an English Solicitor) and then enforced via the Act);

2. Is either final and conclusive as between the judgment debtor and creditor or requires the former to make an interim payment to the latter; and

3. There is payable under it a sum of money, not in respect of taxes, fines or some other penalty; and

4. It is given after 1 May 1973.

5. Is capable of enforcement in the jurisdiction given.

Once judgment has been registered, by whatever means, it can be placed in the hands of the Coroner for execution (see above).

M&P Legal have an experienced debt collection team ready to help where necessary.

This article does not constitute legal advice.

Written by Advocate Damian Molyneux Director at M&P Legal

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