Default judgments: don’t be lulled into deadline complacency

14th February 2019 | Barney Laurence | Dispute Resolution

A recent case has shown that courts are willing to be sensible in their interpretation of deadlines for accepting or defending proceedings. But defendants should not allow this apparent leniency to lull them into missing deadlines (default judgments). When a... Read more

A recent case has shown that courts are willing to be sensible in their interpretation of deadlines for accepting or defending proceedings. But defendants should not allow this apparent leniency to lull them into missing deadlines (default judgments).

When a claimant serves proceedings on a defendant, the latter has a prescribed period to either accept or defend the proceedings. Should the defendant fail to do either within that time, the claimant can seek judgment in default under the Civil Procedure Rules (CPR).

In the case of Cunico Resources NV and others -v- Daskalakis and another [2018] EWHC 3382 (Comm) claimant served proceedings on the defendant, who was in Switzerland.

The defendant did not file an acknowledgment of service within the time afforded, so the claimant requested default judgments.

But, in a twist of timing, it transpired that the defendant had filed his acknowledgment of service, albeit out of time, approximately one hour before the claimant submitted their application requesting judgment.

In considering whether the claimant was entitled to judgment in default, the judge acknowledged that there were three possible interpretations of the CPR.

1. The only allows the court to enter default judgment against a defendant where, at the time of the judgment being entered, there is no acknowledgment of service by the defendant and the time for the defendant to acknowledge that service has expired.
2. The allows the court to enter default judgment so long as, at the time the request or application is made for default judgment is filed, there was no acknowledgement of service and the time for acknowledging service had expired.
3. The CPR allow the court to enter default judgment where timely acknowledgment of service was not filed, irrespective of any acknowledgment later filed, after expiry of the time period set under the CPR.

The court found that the first meaning applied. Judgment is obtained when it is entered on paper by the court or pronounced in court if there has been a hearing to request such.

At the time the claimant requested judgment, there was an acknowledgment of service filed, albeit a late one, prior to the default judgment application.

Many will see this as the sensible solution, and it has been followed in practice prior to this case. However, we should not allow this example to lead to complacency.

A defendant must not become lackadaisical about complying with deadlines. It is of paramount importance that, if they wish to contest a claim, they must do so within the prescribed time.

To find out more, please click here to contact Barney.