The normal guidance is that money judgments need to be enforced within six years of being awarded. However, does this mean that there is no further action that the judgment creditor can take to enforce it beyond that time period?
Limitation Act 1980
Section 24 of the Limitation Act 1980 states that:
• An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable
• No arrears of interest in respect of any judgment debt shall de recovered after the expiration of six years from the date on which the interest became due.
Lowsley v Forbes
This situation was considered by the House of Lords in the case of Lowsley v Forbes where the claimant wished to enforce the judgment 11.5 years later, when the defendant returned to the country.
The Lords ruled that the legislation barred the bringing of a fresh action, but that execution of the existing judgment did not count as a fresh action. Therefore the claimant was able to take enforcement action.
However, the Lords did rule that the limit of six years’ interest did still apply.
Impact of delays
The main impact of a long delay in enforcement will be whether the judgment debtor can be located, has sufficient assets and is solvent. In the case of a business, it may have been wound up or gone into insolvency.
There will also be the fact that only six years’ interest can be recovered.
Permission will be required from the Court to obtain a writ of execution on a judgment more than six years old under RSC Order 46, rule 2(1)(a). The Court is likely to ask why there has been such a delay and will take this into account when making its decision.
The judgment debtor may also challenge enforcement on the basis of delay. However, he will have to provide compelling evidence of the extent of prejudice to the debtor by reason of the delay.
There are cases where a judgment previously considered unenforceable becomes viable, and can still be enforced beyond the six year period. However, we strongly advise that you take enforcement action as soon as it becomes necessary to increase the chances of success.