Responding to a claim - Entering and setting aside judgment in default

Learning Outcomes

After reading this article, you will be able to explain the process for entering judgment in default when a defendant fails to respond to a claim, identify the mandatory and discretionary grounds for setting aside default judgment, and apply the relevant Civil Procedure Rules (CPR) to practical SQE1 scenarios. You will also understand the importance of promptness and procedural compliance for both claimants and defendants.

SQE1 Syllabus

For SQE1, you are required to understand the procedures and legal principles relating to default judgment and setting aside default judgment. As you revise, focus on:

• the process for entering judgment in default when a defendant does not respond to a claim
• the mandatory and discretionary grounds for setting aside default judgment under the CPR
• the time limits and procedural requirements for both entering and challenging default judgment
• the consequences of failing to comply with CPR deadlines and directions

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What are the two main grounds on which a defendant can apply to set aside a default judgment?
2. If a defendant is served with a claim form and particulars of claim but does not respond, what can the claimant do?
3. What must a defendant show to succeed on a discretionary application to set aside default judgment?
4. Why is promptness important when applying to set aside a default judgment?

Introduction

When a defendant fails to respond to a claim within the time limits set by the Civil Procedure Rules (CPR), the claimant may apply for judgment in default. This mechanism ensures that claimants are not left waiting indefinitely for a response. However, the CPR also provides defendants with the opportunity to apply to set aside a default judgment, either on mandatory or discretionary grounds. Understanding these procedures is essential for effective civil litigation practice and for SQE1 assessment.

Entering Judgment in Default

If a defendant does not file an acknowledgment of service or a defence within the required time, the claimant can apply for judgment in default. This is a straightforward process, but strict compliance with the CPR is essential.

Key Term: judgment in default
A court order made in favour of the claimant when the defendant fails to respond to a claim within the time limits set by the CPR.

To enter judgment in default, the following conditions must be met:

• The claim form and particulars of claim must have been properly served on the defendant.
• The defendant has not filed an acknowledgment of service or a defence within the relevant time limits (usually 14 days for acknowledgment, or 28 days if acknowledgment is filed).
• No application for summary judgment or to strike out has been made by the defendant before judgment is entered.

The claimant applies for default judgment using the appropriate court form (N225 for specified sums, N227 for unspecified sums). If the requirements are satisfied, the court will grant judgment for the amount claimed or for damages to be assessed.

Key Term: specified claim
A claim for a fixed amount of money, such as a debt.

Key Term: unspecified claim
A claim where the amount of damages is to be determined by the court, such as most personal injury claims.

Worked Example 1.1

A claimant serves a claim form and particulars of claim for £10,000 on a defendant. The defendant does not file an acknowledgment of service or defence within 14 days. What can the claimant do?

Answer: The claimant can apply for judgment in default for the sum claimed, as the defendant has failed to respond within the required time.

Setting Aside Judgment in Default

A defendant who discovers that judgment in default has been entered against them may apply to have it set aside. The CPR provides two categories of grounds: mandatory and discretionary.

Key Term: set aside
The court’s power to declare a previous judgment or order invalid, so that the proceedings continue as if the judgment had not been made.

Mandatory Grounds

The court must set aside a default judgment if it was entered in error. This includes situations where:

• The defendant filed an acknowledgment of service or defence within the time limit, but the claimant applied for default judgment before the deadline expired.
• The defendant paid the claim in full before judgment was entered.
• The claim form or particulars of claim were not properly served.

Discretionary Grounds

The court may set aside or vary a default judgment if:

Key Term: real prospect of success
A genuine, not fanciful, chance of successfully defending the claim if the case proceeds.

Key Term: good reason
A substantial justification for the defendant’s failure to respond, such as serious illness or not being aware of the proceedings due to circumstances beyond their control.

The court will also consider whether the defendant applied promptly after learning of the judgment. Delay can lead to refusal of the application, even if the defendant has a real prospect of success.

Worked Example 1.2

A defendant was abroad when the claim form was served and did not respond. Judgment in default was entered. On returning, the defendant applies to set aside the judgment, explaining their absence and providing a draft defence with a real prospect of success. What is the likely outcome?

Answer: The court is likely to set aside the default judgment on discretionary grounds, as the defendant acted promptly and has a real prospect of defending the claim.

Procedure and Practical Points

• Applications to set aside must be made promptly, supported by evidence (usually a witness statement explaining the circumstances and attaching a draft defence).
• If the application is successful, the proceedings continue as if judgment had not been entered.
• The court may impose conditions, such as payment into court, especially if there has been delay or prejudice to the claimant.

Exam Warning

If a defendant delays in applying to set aside default judgment, the court may refuse the application even if there is a defence with merit. Always act promptly.

Revision Tip

When preparing for SQE1, memorise the difference between mandatory and discretionary grounds for setting aside default judgment, and be able to apply them to practical scenarios.

Summary

Key Point Checklist

This article has covered the following key knowledge points:

• Judgment in default allows claimants to obtain judgment when a defendant fails to respond within CPR time limits.
• The court must set aside default judgment if it was entered in error or before the defendant’s time to respond expired.
• The court may set aside default judgment if the defendant has a real prospect of success or another good reason.
• Applications to set aside must be made promptly and supported by evidence.
• The court may impose conditions when setting aside judgment, especially if there has been delay or prejudice.

Key Terms and Concepts

• judgment in default
• specified claim
• unspecified claim
• set aside
• real prospect of success
• good reason