In theory, after the Court gives a Judgement in favour of one party and awards costs this should bring a case to a satisfactory conclusion. However, this is often not the end of the story as the winning party will still have to physically recover the money due. With difficult economic times, successful recovery and/or enforcement is the most crucial aspect of any claim.

Questions that need to be properly contemplated from the outset include, ‘How is the Debtor actually going to pay - can he pay?', ‘How long will it take?', and ‘Can I afford to wait for a particular method of enforcement?'. Although not always an easy process, with the right professional legal support the Courts have substantial and effective powers to force the other side to pay.

Developing their arsenal, and updating and consolidating the rules somewhat in the process, the new Tribunals Courts and Enforcement Act 2007 ("the Act") has recently come into operation, concluding matters more raidly and efficiently than ever before. The commonly used procedures; updates, and the respective pitfalls are discussed here:

1. Charging Orders and Orders for Sale - Obtaining a charge on the debtor's property (house, land or securities such as shares). Once an order is in place a creditor can subsequently apply to court seeking an order for sale.

The court could not attach a charging order to an instalment payment order that was not in arrears, a restriction that The Act removes. However, as a safeguard to debtors, the Act has set thresholds beneath which a court cannot make a charging order or order for sale, to ensure that they are not used to secure payment of disproportionately small debts.

2. Attachment of Earnings Orders - Payment by instalments, directly from the debtor's employer. Previously, the rate of deductions under an AEO made to secure payment of a judgment debt was calculated by the court using information provided by the debtor.

Weaknesses in the system were identified, in particular the fact that information provided by debtors was often unreliable. The Act tackles this with a new method of calculation based on fixed rates, similar to the system used for council tax AEOs. The Act also permits the court access to the name and address of any new employers directly from HMRC, for the purpose of redirecting the AEO if the debtor moves.

3. Taking control of goods - Previously called ‘execution', where a bailiff or High Court Enforcement Officer took control of a debtor's property to be sold in order to discharge the debt. The Act modernises and unifies the language used so that there is now only one type of bailiff, an ‘Enforcement Officer', and only one system for taking control of goods. This is intended to make this system user friendly and invaluable to creditors.

4. Information Orders and Departmental Information Requests - Previously, there was only one means for creditors to obtain information and that was by way of an Order to Obtain Information requiring the debtor to attend court for questioning - problematic if the debtor is uncooperative.

The court can now get this information directly from HMRC, other government departments and/or some third parties (including banks and credit reference agencies) to assist with the enforcement of a judgment debt. This tightens the reins on the debtor's ability to hide assets and monies and help creditors get true list of assets is can recover.

Summary
There have also been a number of changes implemented by the Act which relate to enforcement where a claim is not necessary, for example in the case of Rent and what used to be the law of ‘distress' which has now been abolished in favour of a new Commercial Rent Arrears Recovery (CRAR) system (similar in effect to Taking Control of Goods). There are some key changes in the bailiff system and High Court & County Court distinctions to benefit the creditors which will help speed up the debt collection processes.

The Act makes it easier for Creditors to enforce their debts, but it is still as important to carry out proper research about your debtor before commencing action to ensure that the debtor is indeed a safe bet to pursue. There is little point having a Judgment against an organisation, which is then simply wound up or just simply cannot pay.

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