News & Insights

Can you enforce a Judgment after 6 years?

Tom Maple, head of the Dispute Resolution team, considers whether you can enforce a judgment after 6 years have expired in light of the provisions of the Limitation Act.

At first glance, you would have thought the answer was simple: No. The reason for this is that the Limitation Act 1980 says “an action shall not be brought upon any judgment after the expiration of six years…”

However, in actual fact, the complete opposite is true, and the answer is yes. In this regard, the word action detailed in italics above, does not, the House or Lords confirmed, include enforcement action.

I have utilised this rule of law on a number of occasions, most commonly acting for banks or companies who obtain judgment but then find out that the debtor has no assets to speak of. The creditor tries to enforce immediately after the judgment is obtained, they get nowhere and the judgment gets forgotten until one day, a new employee stumbles across it, or the creditor company does an audit of its records – At which point, I then get a phone call.

Things change in debtor’s lives, they buy houses, they acquire wealth, they get promoted and get increased salaries. If the debtor is a company, their fortunes often change, they become successful, bank accounts have credit balances, they acquire assets… Moreover, and at times most importantly, companies and individuals alike let their guard down when they think you aren’t watching, and often post things on the wonderful world of social media which gives you vital information.

If you have a judgment and your debtor has no assets when you first obtained judgment, then whilst that may be the end of matters, I would suggest that, at the very least, the judgment should go in the middle drawer and a diary note placed each year either to review matters, or, contact a friendly litigation lawyer who can make discrete enquiries through third parties/ the various means available to us, to find out more about that debtor.

I should say that it is preferable to enforce within 6 years because (i) the court may take into account the delay in enforcing when it exercises its discretion to grant the order (if there is a good reason for the delay, such as lack of available assets in the first 6 years, I would be disappointed if the court didn’t allow the creditor to proceed) and (ii) recoverable interest on the judgment sum is limited to six years.

So, if you have a judgment, old or new, do not put it in the bin if you think/ know the debtor has no assets at the time you obtained judgment. Give me a call. Time is a great healer for creditors too…