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Attachment of Earnings and Charging Order Processes changes

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Author: Catherine Worrall

Commercial Recoveries

You might have heard that as of the 6th April the process for the Attachment of Earnings (AoE) and Charging Orders will be centralised, this being part of the 83rd update to the Civil Procedure Rules.

The previous service offered by the Courts was both inconsistent and slow. Applicants (and their legal representatives) dealing with the procedure know the severe delay that can be caused (especially in certain London Courts) in obtaining even the interim charging order. Not to mention the time taken for the application to be finally determined, which in turn may cause complications along the way. 

The aim has been to create a centralised unit via the County Court Money Claims Centre (CCMCC). This will (hopefully) streamline the process by reducing the need for judicial input, leading to fewer inconsistencies and delays. The service should then be more efficient, run by a team designed to deal with this specific area.

Attachment of Earnings

Previously applications would have been made to a respondent’s local Court; now, all applications will be sent to the CCMCC overseen by a Court Officer. They will consider a completed N56 and make either the full or suspended AoE order. As usual, CAPS (Centralised Attachment of Earnings Payment System) will continue to monitor payments, but should payments fail to be forthcoming then CAPS will refer the matter to the home Court and not back to the CCMCC. 

The matter will also be referred to the local Court should there be no response received from the defendant. They will then serve the notices and list the matter for any necessary hearings. Any requests to re-issue the application should be made to the Court that last dealt with the application.

The defendant has the right to ask for a decision which has been made by a Court Officer to be reviewed by a District Judge. Whilst a judicial safeguard is generally a good idea, could this lead to a perception that the appointed officers do not have sufficient knowledge to make these decisions?

Charging Orders

Previously we would make an application for an Interim Charging Order which is still the same process however, the new forms N379 and N380 now have a different layout.

So-called ‘straightforward’ applications are to be sent to the CCMCC and will be dealt with by a Court officer which will save the judicial time spent on these cases. The Court Officer will review the application against an agreed checklist criteria; should this be met then the Interim Charging Order (ICO) will be drawn up. If the criteria are not met, the application will be referred to the Judge for directions.

If the application is for an order over an interest in a fund in Court, then the application should be sent to the County Court hearing centre where the original judgment was made.

Within 21 days of the ICO date the judgment creditor is required to serve all affected parties with the ICO, the application and any other relevant documents. This gives a consistent procedure – in the past, it could be served by either the judgment creditor or the Court and previously it could be served up to 21 days before the hearing date. 

Within 28 days of the ICO date, certificates of service must be filed in relation to each party that has been served, together with a statement of the up-to-date amount, including costs and interest accrued, so the Court can make the Final Charging Order (FCO).

Straightforward applications don’t require an attendance at a hearing to obtain the FCO however, anyone who wants to object to the application has 28 days from service to do so. If an objection is received, the matter will be forwarded to a District Judge then probably transferred to the home Court of the defendant.

If the procedure has been correctly followed (and there has been no objection received from the respondent) then, unlike previously, the FCO will be made without any hearing taking place. Not only will this save the creditor time and money but, again, will be another way to save judicial time and reduce costs for HMCTS.

How will this affect you?

In my view these changes are positive as they will bring many applicants a quicker, more efficient service at no extra cost. A centralised Court with a more consistent approach will also reduce the variations in how applications are dealt with. Moving forward, we should see fewer unnecessary hearings and lower costs, making these types of enforcement procedure more economical and quicker for applicants. 

It is also worth mentioning that these applications are now being dealt with by dedicated teams. One team also means that ‘batch’ applications (large numbers of applications made at the same time, usually by entities such as utility companies) can be processed. 

The whole process however, relies on how CCMCC will cope with the increase of applications and whether the system in place is sufficient.

With a lot of talk lately regarding streamlining the Court process, including the need to reduce the costs of litigation, it would not be surprising if this is only the start of many changes to come.

You can view the infographics on these processes here.