In this series I will explore the circumstances in which each enforcement mechanism may be used and why a judgment creditor may want to use a particular mechanism, and set out some of the advantages and disadvantages of each of these methods.

Enforcement mechanism 4: Appointing a Receiver

The judgment creditor may apply to the court to appoint a receiver to manage the assets of the judgment debtor and pay off the judgment debt.

When to use this method?

The court has the power to appoint a receiver at any time before or during proceedings, or after a judgment has been given although only the latter will be relevant to a claimant to whom the defendant does not already owe an undisputed debt. For the purposes of a judgment creditor seeking to enforce a judgment debt, this method is most effective after the judgment has been handed down and security has been taken over some of the assets of the judgment debtor.

The judgment creditor will need to provide written evidence that the court should appoint a receiver. There is quite a high evidential hurdle here and a receiver will usually only be appointed where other methods of enforcement are not available, so all other options should be considered first.

The judgment creditor must also be satisfied that appointing the receiver will enable them to actually recover the judgment debt or a meaningful part of it. If the part 71 procedure reveals little or no assets that might be applied to pay off the judgment debt or there is insufficient equity in any asset over which the judgment creditor holds security, the appointment of the receiver may yield limited payment to the judgment creditor, especially after the receiver’s fee is paid. (While it is at the court’s discretion whether the receiver should receive a fee at all, it may be impractical for the court to appoint a willing and capable receiver who will do the work for no fee.)

Advantages and disadvantages

This is a very flexible method of enforcement in that the court can grant the receiver powers relevant to the circumstances. If the judgment creditor holds security over the judgment debtor’s assets (perhaps by way of a charging order) the receiver may be appointed with the power to realise that security to pay back the judgment debt.

However, the powers and even the appointment of the receiver are at the discretion of the court and combined with the high evidential hurdle, this method of enforcement may prove to be unavailable in the circumstances or simply a slow and inefficient means of recovering the judgment debt. In deciding whether to make this appointment, the court will consider the probable costs of appointment, the likely amount receivable and the amount being claimed and the judgment creditor should do the same prior to making the application.

Timescales

The application itself is straightforward (and can be made without notice), but the timescales with which the court will deal with the application will, as with all things, depend on the capacity of the court and the application can often be opposed which will inevitably lead to further delays.