Legal Process
Obtaining Judgment
The procedure for obtaining judgment depends on whether or not the case is defended.
The purpose of legal action is to encourage the debtor to pay. If the debtor pays at any stage during the process, legal action can be stopped. If the debtor refuses to pay, legal action will continue until the debt and costs are paid in full or the debtor makes a settlement.
Where a debtor fails to pay, the court will grant judgment in favour of the creditor. This is a decision of the court confirming that the debt is owed by the debtor to the creditor for the amount stated on the judgment together with costs.
Letter of Demand
Issuing and Service of a Court Summons
Affidavit of Debt
Summary Judgment
Defended Cases
Commercial Court
Mortgage Arrears Litigation
Letter of Demand
The debtor must always be made aware of the debt and be advised of any impending action by a creditor. For this reason, the first step in a typical debt recovery action is the issue of a letter before action (LBA).
The LBA will state that the debtor is on notice of a claim for a debt, that it must be paid within a specified time frame, usually seven days and that failure to do so will result in the issue of legal proceedings without further notice to the debtor. It further warns that costs will be claimed if legal action becomes necessary.
The letter in itself is often all that is required to make the debtor appreciate the error of his ways and discharge his indebtedness.
Issuing and Service of a Court Summons
If the debtor fails to respond to the LBA within the time allowed, Court proceedings are issued and served. Great importance is attached to issuing the proceedings seven days after the LBA. This is to maintain momentum and to ensure that the debtor knows how serious the matter is.
Issuing court proceedings is the process whereby the appropriate endorsement of claim is drafted, the summons stamped with the required stamp duty and is submitted to the relevant court office for the allocation of a record number.
Once these matters have been attended to, the proceedings can then be served on the debtor.
In District and Circuit Court cases, the Summons is served by registered post. In High Court cases, the Summons must be served personally. A Company is always served by ordinary prepaid post.
District Court - Civil Summons
Circuit Court - Civil Bill
High Court - Summary Summons
Affidavit of Debt
Debt recovery matters are unique in that they can be dealt with summarily by the Courts. This means that if the debtor fails to respond within the time frame specified in the summons, the creditor may apply to the court for an order for judgment. This is done on foot of an Affidavit of Debt and without the necessity for a Court hearing.
The Affidavit of Debt is drafted at the earliest possible date allowed by the court rules and states the amount due and owing. The Affidavit must be signed by the Creditor and sworn before a Commissioner for Oaths. It must then be lodged along with other documents in the relevant court office in order to obtain judgment.
Summary Judgment
An order for judgment in favour of a creditor where the debtor does not defend the claim is referred to as Summary Judgment.
The manner in which Summary Judgment is obtained varies in each Court, but there are a number of common features throughout.
In each case a judgment set is lodged in the relevant Court. The judgment set consists of the Summons, Proof of Service and the Affidavit of Debt sworn by the Creditor together with several other legal documents relevant to each specific Court.
Defended Cases
Every debtor has a right to defend a claim against him.
For this reason, the creditor should always be satisfied that the claim he is making is provable. A debtor may notify that he intends to defend a claim.
This may turn out to be a delaying tactic, but on the other hand, it may be a genuine confirmation of his intention to proceed to a full defended hearing.
Some of the more common issues encountered in each jurisdiction are dealt with in the menu items. However, each case requires specific attention and a creditor should always consult very carefully with his/her legal advisors if a case is defended.
District Court - Debts under €6,348.69
When the debtor receives a Summons claiming a debt, he may notify his intention to defend proceedings in the District Court by serving the creditor's solicitor with a Notice of Intention to Defend.
This Notice will enable the parties to have the matter set down for a Trial Date. On the hearing date itself, both parties will be required to give evidence. The Plaintiff must prove his case.
Examples of proofs required would be signed Order Forms, Invoices or Delivery Dockets. It is imperative that the creditor consults closely with the solicitor prior to the Court hearing.
Circuit Court - Debts of €6,348.70 to €38,092.14
The procedure for defending a case in the Circuit Court is more intricate than at District Court level. Here, the debtor notifies his intention to defend proceedings by way of an "Appearance". This allows the debtor 10 days to enter a Defence.
However, the entry of a Defence may be delayed by a Notice for Particulars to which the Plaintiff must reply.
When the pleadings are finalised, the matter is set down for trial. Both parties will be required to give evidence and the Plaintiff must prove his claim. This process will require close consultation between the creditor and his/her solicitor.
High Court - Debts over €38,092.15
If a debtor intends to defend a High Court case, his/her Solicitor will enter an Appearance. If no Defence is forthcoming, an Affidavit of Debt is signed and sworn before a Commissioner for Oaths. This Affidavit together with a Notice of Motion seeking Judgment is filed in the High Court Office and a date is given for a hearing before the Master of the High Court.
At the hearing, if the Master is satisfied that the debt is due and owing, he will grant liberty to enter final Judgment. This Order together with other documents are then lodged in the Central Office of the High Court and Judgment is granted.
If on the other hand, the Master is satisfied that the defendant has a genuine dispute he will send the matter for Plenary Hearing.
Plenary Hearings
In High Court actions for a liquidated debt, a full or complete hearing on the merits of a case subsequent to the issue and service of Summary Summon is known as a Plenary Hearing. This hearing usually follows a direction from the Master's Court that the case be adjourned for Plenary Hearing. Hearings of this kind do not involve a jury but are heard before a judge of the High Court and only after a full Book of Pleadings has been prepared. This will include, - (but is not limited to), - the Summary Summons, Memorandum of Appearance of the Debtor and other essential notices, in particular the Particulars of Claim, the Replies to Particulars, and the Defence. Once all necessary papers are in order the Certificate of Readiness is lodged by the Creditor's solicitor and this will enable the matter to be set down for hearing.
Commercial Court
The Commercial Court is a division of the High Court dealing with claims exceeding €1,000,000. The Commercial Court has proved highly effective in disposing of commercial disputes. The majority of cases in the Commercial List are concluded within three months of proceedings being initiated.
Entry in to the Commercial Court is brought by motion on notice to the Judge of the High Court of the Commercial List. Summary proceedings may be heard on affidavit without pleadings. A certificate from the applicant's solicitor specifying how such proceedings qualify for entry into the High Court Commercial List is also required. On hearing the Motion the Judge can direct that proceedings be entered into the High Court Commercial List. When proceedings are adopted the Judge will fix a date for an initial directions hearing or alternatively treat the hearing of the motion as the initial directions hearing. The pre-trial process of the Commercial Court provides for a case management conference and a pre-trial conference where both contested issues and uncontested issues are addressed. Once this is complete the matter will proceed to trial.
Mortgage Arrears Litigation
Jurisdiction is determined on the rateable valuation of the Property however proceedings for Possession orders can be brought in either the High Court or the Circuit Court. With the introduction of the new Code of Conduct financial institutions must wait at least six months from the time the arrears first arise before applying to the courts to commence repossession proceedings.
Proceedings in the Circuit Court are brought by way of an Ejectment Civil Bill seeking possession and costs. Where no appearance is entered, the applicant can issue a motion for judgment in default of appearance. If an appearance is entered the applicant can then issue a motion seeking possession by way of summary Judgment. If summary judgment is refused, the Defendant will be given leave to file a Defence and the matter will proceed to a plenary hearing. Hearings in the Circuit Court require oral evidence to prove the loan arrangement. If the court is satisfied an order for possession will be granted.
Proceedings in the High Court are brought by way of a Special Summons and Grounding Affidavit. The Summons will provide for a return date before the Master of the High Court. The Master will review the papers and ensure service has been properly effected especially where no appearance has been entered. The Master will transfer the matter into the Chancery Special Summons List in the High Court when all the papers are in order. Adjournments may be granted where there are payment proposals put forward or where a sale is pending. When an order is granted the Court will generally put a stay of three months on the order except where the property is vacant or is falling into serious disrepair. When the order is granted the bank will then be able to rely on the statutory power of sale.