MoJ consultation on default CCJs

I have responded to the Ministry of Justice’s consultation on Default County Court Judgements (CCJs). This consultation was started in December 2017, because of:

concern about the potential adverse impact of a County Court judgment on individuals who, unaware that a judgment had been made against them, found months or years later that their credit rating had been damaged.

This article expands on some of my responses to the consultation. It is a subject that many Debt Camel readers rightly feel strongly about!

This article looks at future policy changes – it won’t help if you have a current CCJ problem! If you do, see one of the following:

• threats of CCJ’s – is a debt collector bluffing?
• what to do if you have been sent a Letter Before Action/Claim
• what to do if you have been sent a Claim Form
• your options if you have a CCJ.

Improving public information

At the moment there is a lot of information on gov.uk on how to use the small claims process to sue someone for a debt but nothing about how to defend a claim if you are sued. There needs to be information provided about:

• how to complete the forms,
• what the possible common defences are (including statute barred and the need to produce CCA information for consumer debt), and
• what the steps in court procedures are. Even simple court forms can leave people uncertain and worried if they aren’t expecting them, people don’t realise they need to send in a witness statement, etc

Signposting to debt advice would be useful – many people will be unable to complete the Income, Expenses, priority debts sections on the N9A form accurately without some assistance.

Other aims or responsible behaviours the improved public information should include

When the Consultation says:

It is the defendant’s responsibility to ensure that the correct address is known to those who provide them with goods and services and to whom they may owe money. We propose to help defendants discharge this responsibility by providing better public information.

it is being unreasonable. In the cases where an unexpected CCJ appears on someone’credit record, this is very often because they were unaware they owed the money. The likelihood of someone with a good financial history deciding not to pay a parking ticket, a small mobile bill or a small utility bill when they had moved because they hoped to save a few pounds is about zero – the bills weren’t paid because they were simply unaware any money was owed.

The importance of customers putting change of address information in writing has to be stressed. But creditors have a responsibility to make this easy. Every utility and other common creditors should have a simple change of address form on their website. And companies should share information more (with customer’s permission) for example, when someone tells a Water Company that they are now living at this address, there should be a section which asks where they lived before and if their previous Water Company should be notified of the move.

It could help if a voluntary central Register of Addresses was established. There could then be an equivalent of the Tell Us Once service for address changes. Any utility/bank/DVLA could ask a customer if they want the Register updated. Then any business planning to put in a claim for a debt should check beforehand to see if the defendant has moved address. I am not underestimating the size of this task, but it could of huge benefit to utilities and creditors, reducing the need for court Claims at all, as well as making sure more Claims go to the correct address.

Policy proposal for removing an entry from the Register of Fines, Orders and Judgments

The consultation proposes that a CCJ should be removed from the Register of Fines, Orders and Judgments when a defendant settles the claim immediately once a judgment is brought to their attention, provided they satisfy the court that they were not previously aware of the judgment.

I think the proposal is a very useful improvement on the current situation where the defendant agrees that the money is owed and the debt is enforceable.

The cost for this application needs to be minimal, say £10. The cost for a set-aside application at the moment is a significant barrier to justice, especially for low-value CCJs.

But the proposal does not cover the situation where the defendant is unsure whether there is a defence. Creditors will habitually refuse to provide a CCA agreement or statement of account when a CCJ is in place – without these it isn’t possible to tell if the debt is enforceable or if it is statute barred. There needs to be a way to provide this information on demand when someone finds they have a CCJ so they can decide to go for a set aside or use the new procedure and pay the debt.

Several months needs to be allowed between someone becoming aware of a CCJ and using this new procedure:

• it can take time for someone to get the details of the CCJ.
• it would help if the Northampton Court had more staff answering the phones and routine procedures to send out copies of the Claim Form and Default Judgment when requested. At the moment this can be very slow – it can take someone who is working several attempts to have their phone call answered.
• Sometimes people don’t ask for the right information – the Court should offer to send copies of the Claim and Default Judgment whenever someone is querying a CCJ.
• It can then take more time for someone to work out why the debt arose and talk to the original creditor about it, who may need to get records back in some cases.

I hope we see progress soon – also on defaults

The consultation comes after The Mail’s campaigning articles on default judgments, for example, How stranger’s £40 parking ticket cost family their new home. The cases in the newspapers are extreme, but the problem of people finding an unexpected CCJ is not uncommon and needs to be remedied.

Although removing these unfair CCJs from people’s credit records will be good, there will remain the associated problem of default markers on the underlying debt, see MoJ is consulting about default CCJs – but what about unfair defaults? 

---