Defendant's application to set aside a default judgment

A money judgment is a court order for the defendant to pay a sum of money to the claimant. The judgment is the court's final decision about a claim.

A default judgment means the court has made a money judgment when the defendant did not file either an admission or a defence to the claim.

When a defendant does not respond to a money claim, the court grants the claimant's application for default judgment. It does not consider the merits of the claimant's case.

Part 12 of the Civil Procedure Rules sets out when a claimant can apply to court for a default judgment in a money claim.

Read more about the money claims process.

When does the court grant default judgment

The court can grant a default judgment when they receive the claimant's application on form N227.

The court cannot grant default judgment if there is another matter to be decided in the case. For example the defendant has:[1]

• paid the claim

• filed a defence

• sent an admission to the claimant

• applied for the claim to be struck out

• applied for a summary judgment against the claimant

The court cannot grant default judgment if an acknowledgment of service has been filed unless the deadline to file a defence has passed.

The defendant files a late defence

The court can only grant a claimant's application for default judgment if the defendant has not filed a defence or acknowledgment of service, and the deadline for doing so has expired.

The defendant can still file a defence after the deadline has expired, as long as the claimant has not already applied for default judgment. The court cannot grant an application for default judgment that is received after the defence form is filed.

Before they file a late defence, the defendant can contact the court to ask whether the claimant has already made an application for default judgment. If the application for default judgment has already been made, the defendant can apply to set aside the judgment.

A defendant who has a default judgment against them can apply to the court that issued the judgment to set it aside.

The court must set aside the order if the judgment was wrongly entered.[2]

The court can exercise discretion to set aside the order if:[3]

• the applicant has a defence with a reasonable prospect of success

• there is some other good reason to set aside the judgment

If the court sets aside the judgment, it is as though the order was never made. The court still needs to deal with the claim. It can give directions to the claimant and the defendant about what to do next. The directions should include instructions to the defendant for filing their defence.

The court can also strike out the claim if it is satisfied the applicant provided enough evidence for it to make a summary judgment.[4]

Part 8 claims, possession orders, and other orders made at a trial have their own rules.

The court must set aside a default judgment if it was wrongly entered.

A default judgment is wrongly entered if:[5]

• the claim was paid before judgment was entered

• it was applied for before the deadline for the defendant's response

• it was applied for after a defence had been filed, even if the defence was filed late

• the defendant has applied to have the claim struck out

The court must set aside a wrongly entered judgment even if the application has not been made promptly or the defendant's case does not have a good prospect of success.[6]

Claim form not served correctly

The court must set aside a judgment if the claim was not served according to Part 6 Civil Procedure Rules.

A claim is served correctly if it was sent to the usual or last known address of the defendant. It is the defendant's responsibility to update their address details. Where the claimant has reason to believe the address of the defendant has changed, they must take reasonable steps to find out their current residence.[7]

Read more about the process for issuing a money claim.

The court may set aside the judgment if either:[8]

• the applicant would have a reasonable prospect of success in defending the claim

• there is some other good reason why the judgment should be set aside

The applicant must submit a witness statement that sets out the facts of the case. It must explain how they found out about the judgment, and that they acted promptly.

The court will take into account:

• the reason why the applicant did not defend the claim at the time it was issued

• whether the applicant acted promptly when they found out about the judgment

The applicant could apply to set aside a default judgment because they had a defence to the claim, but failed to file it. The defence must have a reasonable prospect of success.

Sanction for failing to file a defence

The court can impose a sanction on the claimant or the defendant for failure to comply with any rule, practice direction or court order.

The sanction for failing to file a defence to a money claim is default judgment for the claimant.

An applicant can ask the court to set aside the sanction (default judgment) because they have a defence to the claim but failed to file it at the time. This is called an application for relief from sanctions.[9]

Relief from sanctions

The judge uses their discretion to decide whether to grant the application for relief from sanctions and set aside the judgment.

They consider the need for litigation to be conducted efficiently and at proportionate cost, and the need to enforce compliance with rules, practice directions, and orders.[10]

The judge considers:

• if the application was made promptly

• the reason for the set aside application

• if the defence has a reasonable prospect of success

The applicant must submit evidence in support of their application. The applicant can set out the facts of the case in a witness statement.

Does the defendant have a good reason for not defending the claim at the time?

The defendant must have a good reason for not defending the claim at the time. They must explain their reason in a witness statement, and include supporting evidence, if any.

Good reasons for not defending a claim at the time could include if the claim was served:

• at a previous address

• while the defendant was in hospital, or out of the country

The court can grant an application to set aside because the defendant was not able to obtain legal advice at the time or was unaware they had a defence.[11] This usually requires exceptional circumstances.

The court could be reluctant to set aside a judgment where the defendant received the claim form but did not defend it, especially if there has been a long delay in making the application

Does the defence have a reasonable prospect of success?

For the judge to agree to set aside the judgment, the applicant must be able to show their defence would have a reasonable prospect of success.[12]

The applicant does not need to provide all the details of the defence in their application. They should provide as much information as possible so that the court can decide whether to set the judgment aside.

The judge decides whether the defence has a reasonable prospect of success.[13] The courts have defined a real prospect of success as 'the opposite of fanciful'.[14]

If the defendant provides enough evidence in their application, the court can decide that a trial is not necessary to decide the claim.

The court can set the judgment aside if the claim was properly served, but the defendant did not receive it. The defendant does not need to show they have a reasonable prospect of successfully defending the claim if they have another good reason to set the judgment aside.

A defendant with the ability to pay the debt could apply to set the judgment aside.[15] This has the advantage of removing the judgment from the Register of Judgments, Orders and Fines, and the defendant's credit reference files.

The defendant must submit evidence in the form of a witness statement. The witness statement should explain that they have acted promptly since they found out about the judgment, and the impact of having a judgment registered against them. The impact on the defendant could include difficulties being accepted for a private tenancy, or higher interest rates on their mortgage.

The applicant should act promptly when they find out about the judgment or order.

The Civil Procedure Rules do not define what is prompt application. The judge dealing with the application must use their discretion. In one case, the Court of Appeal held that a delay of 28 days could not be justified.[16]. In other cases, longer delays have been permitted if the court decides it is in the interests of justice to do so.

The judge can refuse the application if there has been a delay that cannot be justified.[17]

The defendant must make the application on form N244 and pay the appropriate court fee. The defendant can send a completed fee remission form if they are entitled to fee remission, along with any required evidence.

When they make the application, the defendant is called the applicant and the claimant is called the respondent.

The applicant must show evidence to the court that the judgment should be set aside. The evidence required depends on the reason for asking for the judgment to be set aside.

The applicant's evidence can be submitted in the form of a witness statement. The applicant's witness statement provides the background and facts of the case.

The applicant should use the witness statement to explain why they did not defend the claim when it was issued. If the defendant did not receive a copy of the claim form (for example because they were out of the country or the form was sent to the wrong address), they should provide evidence of this.

The applicant's witness statement should state the steps they have taken since they found out about the judgment. They should explain the reason for any delay in making the application.

After the judgment is set aside, the claim is still outstanding and has to be decided.The claimant's claim needs to be decided after the judgment is set aside. It is not automatically cancelled. The court can give the parties directions, which tell them what they need to do next.

If the applicant fails to follow the directions, the claimant could apply for default judgment again. It is very important to comply with the deadlines set by the court, or apply for an extension if more time is needed.

File the full defence

The court's directions are likely to include instructions to file a defence to the claim and a witness statement setting out the facts of the case. They may also include a deadline for completing an allocation questionnaire.

The allocation questionnaire contains information to allow the court to decide which track to allocate the claim to. In the County Court, the claim could be allocated to the:

• small claims track

• fast track

• multi track

The small claims track is for claims where the value is less than £10,000.

The fast track is for most other claims.

The multi track is for claims where there is a complex issue to be decided. The procedure is more complicated the defendant could incur significant costs if the claim is allocated to the multi track.

A claimant or a defendant can apply to court for an unless order.

The claim remains with the court if the

• claimant does not restart it

• court does not set directions to deal with it

The claimant's claim could be outstanding for a long time after the default judgment is set aside. The claimant could apply to court to restart the claim at any time. This puts the defendant in a difficult position if they do not know whether or when the claimant will restart the claim.

The defendant can force the claimant to take action by applying to court for an unless order. An unless order contains an instruction for the claimant to take a specified step by a given date. If they do not comply, the claim is struck out.

The defendant could apply for an order giving the claimant a deadline to provide more information, and unless this is provided, the claim is struck out

The parties can apply to vary or amend the unless order if they are not going to be able to comply with it.