PI Brief Update

Setting aside default judgment in the High Court requires promptness even after the application has been made - Paul Erdunast, Temple Garden Chambers

04/03/21. The Lord Chancellor (as Successor to the Legal Services Commission) v Halberstadt-Twum (t/a Cleveland Solicitors) & Anor [2021] EWHC 413. Unlike the County Court, the High Court requires steps to be taken in order to obtain a hearing beyond simply making an application. This fact becomes important when you are seeking to set aside default judgment, as the claimants found out in this case.

Relevant facts

The facts of this case are quite stark. The Defendants ran an immigration firm. The Claimant opened an investigation under its Standard Civil Contract in relation to fraud, which resulted in the prosecution and conviction of the Defendants.

As for the civil case, the allegation in the Particulars of Claim was that there were 5,795 cases where there was no match between claims made by the firm for immigration work done, and records of any immigration application at the Home Office. The total value of payments wrongly made to the firm by the Legal Services Commission, as it then was, was said to be £4,097,768.20. While an Acknowledgment of Service was sent, no Defence came afterwards. Default judgment was entered.

Relevant provisions of the CPR

CPR 13.3 makes it clear that promptness is a key factor in whether the court will set aside default judgment:

“13.3 (1) In any other case, the court may set aside or vary a judgment entered

under Part 12 if -

(a) the defendant has a real prospect of successfully defending the claim; or

(b) it appears to the court that there is some other good reason why -

(i) the judgment should be set aside or varied; or

(ii) the defendant should be allowed to defend the claim.

(2) In considering whether to set aside or vary a judgment entered under Part 12,

the matters to which the court must have regard include whether the person

seeking to set aside the judgment made an application to do so promptly.” (My emphasis).

The Court’s decision

The Court refused to set aside default judgment. Part of the reasoning is interesting, because it will be applicable to all applications to set aside default judgment in the High Court. It is as follows at [22]:

“This is a case where the issue of promptness is not limited to the period between the default judgment and the relevant Application but also the period through to the listing of and the hearing itself. This is because of the required procedure in the Queen’s Bench Division of the High Court. Failure properly to follow that procedure, the Claimant submits, can also be taken into account on the issue of promptness because, as distinct from the County Court, it remains for an Applicant to ensure that further relevant steps are taken beyond the issuing of an Application. An Applicant in this Division cannot simply sit back and attribute any delay in seeing the Application listed as purely reflecting the workings of the court system. I agree with that submission.”

There is not much to say about this regarding lessons to be learnt, as it is rather obvious. If you ever find yourself in the unfortunate position of having to attempt to set aside default judgment, and you are in the High Court, make sure that you act with the required promptness even once the application is filed. Ensure that you are aware of the procedural workings of the court system, and take prompt steps to get a hearing listed as soon as possible.

Image cc Ian Britton