Defendant's application to set aside an order made at a hearing

An order could be made at a hearing when:

• a defendant admits part of a County Court money claim

• a judge decides the time and date of repayment, including on an application for redetermination

• a defendant defends the claim and the case is listed for a trial

The court can make a summary judgment if it does not think the defence has a real prospect of succeeding and there is no other compelling reason why the case should be listed for a trial.[1] The court does not have to apply the same strict rules for setting aside a summary judgment, but it should have regard to them.[2]

The overriding objective in civil proceedings is that the court should deal with cases justly and at a proportionate cost.[3]

An order made at a hearing or trial is a final order. Case law has confirmed that it is rarely in the interests of justice to override a final order.[4]

The court might be able to set aside a final order if:

• the defendant could not attend the hearing

• the order was obtained by fraud, oppression, or abuse of process

• there are exceptional circumstances

Exceptional circumstances that allow a court to set aside a hearing

A final order should usually only be set aside when obtained by fraud, oppression, or abuse of process.  

However, in one case the court held that non-compliance with the Consumer Credit Act 1974, which resulted in agreements being unenforceable, consisted of truly exceptional circumstances, and set aside orders made on admission.[5]

Read our case summary of Madison 118 118 Money v Various.

Relief from sanctions

An application to set aside a judgment is an application for relief from sanctions.  

The court will consider all the circumstances of the case to enable it to deal justly with the application.[6] It will consider the need for litigation to be conducted efficiently and at proportionate cost, and to enforce compliance with rules, practice directions and orders.[7] An application must be supported by evidence.[8] 

The court will use a three stage process for deciding whether to grant relief from sanctions. It will consider:[9]  

• the seriousness or significance of the breach 

• why the breach occurred 

• whether there are any other circumstances to take into account 

Relief will usually be granted if the breach of a deadline or rule is not serious or significant. If this is the case, the court does not need to spend much time on the second and third stages.

Late service of witness statements or a failure to submit a defence is almost always considered to be a serious breach. A significant delay in applying to set aside a judgment might be a serious breach, unless there is an arguable defence.[10]

The ill health of a claimant’s solicitor might be considered a good reason for a breach of a rule or order. The failure of a litigant in person to understand court procedures is not necessarily a good reason.

The court must have regard to all the circumstances of the case. The court can take into account promptness and other past or current breaches when considering any other circumstances, but these will hold less weight than the first two tests.[11] 

A defendant can make an application to set aside an order made at a hearing if they were not able to attend.

When making the application, the defendant must show that they have grounds to have it set aside. They must provide evidence that they:[12]

• had a good reason for not attending the hearing

• acted promptly after the order was made

• have a defence with a reasonable prospect of success

Does the defendant have a good reason for not attending the hearing?

The court decides what is a good reason for not attending the hearing.

The Court of Appeal held that the notice of the trial being sent to the wrong address was a good reason.[13]

In one case, the High Court held that the defendant’s failure to request alternative arrangements for the trial in good time was not a good reason.[14]

Where there are medical reasons for not attending, the High Court has held that the court should generally “not be very rigorous” when considering the applicant’s conduct.[15]

Has the defendant acted promptly?

The Civil Procedure Rules do not define what is a prompt application. The judge dealing with the application must use their discretion.

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 long delay that cannot be justified.[17]

Does the defendant 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.[18]

The judge decides whether the defence has a reasonable prospect of success.[19] The courts have defined a real prospect of success as 'the opposite of fanciful'.[20]

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

A defendant can make an application to set aside an order made at a trial if there was fraud, oppression or abuse of process. 

Orders obtained by fraud

If a claimant misled or deceived the court into making its original decision, this may be considered fraud.

The Court of Appeal held that where a claimant had obtained an order through deliberate and dishonest concealment of facts by a key witness, it had been fraudulently obtained and should be set aside.[21]

Orders obtained by oppression

The House of Lords held that where a claimant obtained an order based on issues which overlapped with another claim, which could therefore have been decided in a single action, the action was oppressive.[22]

Orders obtained by abuse of process

If a party is found to have misused or abused the process of the court, this will be an abuse of process.[23] 

When considering whether to strike out a claim for abuse of process, the court must use a two-stage test.[24]

Firstly, it must determine whether the claimant’s conduct was an abuse of process. 

Secondly, if the claimant's conduct was an abuse of process, the court has to exercise its discretion as to whether or not to strike out the claim. The court will consider what is proportionate in terms of the cost and resources of the court, and what is fair to the parties.  

There are numerous examples of a claimant obtaining an order by abuse of process, including:

• bringing a subsequent set of proceedings using evidence that should have been brought to the court’s attention at the initial proceedings[25] 

• raising issues that should have been brought against a different defendant in a separate action[26] 

• where the claim is simply to prevent a limitations defence being raised by the defendant[27]  

• where there is only a meaningless or minor remedy and this is not an appropriate or proportionate use of the court’s resources[28]

A defendant cannot apply to set aside an order because they disagree with the decision of the court.

An application to set aside an order cannot be made as an alternative to an appeal.[29] A defendant can appeal a decision if the judge applied the wrong law, took account of irrelevant facts, or did not take account of relevant facts.

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.

Witness statement

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

The applicant should use the witness statement to explain the grounds on which they are applying to set it aside.

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.

Preventing enforcement

If enforcement has started, the defendant will also need to apply to suspend or stay the enforcement.

After the judgment is set aside, the claim is still outstanding and has to be decided. It is not automatically cancelled unless the court has made an order to strike out the claim. The court can give the parties directions, which tell them what they need to do next. 

The claimant could apply for judgment again if the applicant fails to follow the directions for dealing with the claim. It is very important to comply with the deadlines set by the court. The applicant can apply to court for an extension if they need more time.

Costs

Costs are usually awarded against the unsuccessful party. This is at the discretion of the court. Costs will be awarded based on the specific circumstances of the case.[30] 

If the applicant has failed to respond adequately to the original claim, then costs may be awarded against them even if their application to set aside is successful.[31]  

If the original claim is for less than £10,000, it is allocated to the small claims track and has fixed costs protection.[32] If the claim is not allocated to the small claims track there may be significant costs risks. 

A claimant can request that costs above the fixed costs be awarded, for example, if a party has behaved unreasonably.[33]