The reason? In a landmark decision, the court refused a Judgment Debtor’s appeal, in which she was asking to pay her judgment by instalments. Although controversial, it has brought a clarity and sense for judgment creditors.

The case started back in 2010 when solicitor the appellant's husband, was issued with a parking ticket by the London Borough Council of Camden. He appealed the fine to the Parking Adjudicator and when unsuccessful, he proceeded to challenge it by issuing proceedings for judicial review. At a hearing in 2011, the High Court refused permission for judicial review. However, the appellant's husband still refused to pay. As a result, Camden Council issued a warrant for the possession of the vehicle and instructed bailiffs to execute it. The bailiffs located the vehicle in November 2011.

The story didn’t end there. The appellant (Loson), who was shopping at the time, returned to find her car clamped. In December 2011, Loson issued proceedings in the County Court against the bailiffs, seeking an injunction to restrain them from disposing of the vehicle and for the loss of use of the vehicle. Pleas were reportedly made by Loson to the bailiffs not to take the car until her or her husband had the opportunity to pay the fine. The bailiff stated she was uncooperative and there was no prospect of payment, as there had clearly been more than adequate time to pay the fine. The situation continued to develop through to 2016, where Loson was ordered to pay the claimants £5,000 in costs. When Loson failed to satisfy the costs order, the respondents served a statutory demand.

Loson, who was a student at the time with a young child, said she could originally pay £50 a month towards to total cost. The interesting thing about this case is that it was of course largely down to no fault of her own. It was largely down to the resistance of her husband to pay the fine. As a result of his resistance, she found herself on the verge of bankruptcy.  

Loson appealed, albeit it unsuccessfully, to set aside the statutory demand and a further £3,000 in costs was added to the judgment debt. The appellant then made an application under rules of court to vary the ‘Cost Order’ seeking to pay this sum by monthly repayments. In this instance, the order was granted on the basis it was ‘reasonable and proportionate’ considering Loson’s financial situation.

The respondents appealed this decision as, upon review, the District Judge’s decision failed to address the fact that the statutory interest would not be paid and the outstanding amount would continue to increase. The Court of Appeal considered that the instalment order could not even keep pace with the interest and could not be supported. Given Loson’s situation, no alternative was possible, other than to dismiss the Debtor’s application for monthly payments.

In conclusion, it has long been the norm for lower courts to make repayment orders of as little as £1 a month. This then interferes with the rights of judgment creditors to use various enforcement methods. The landmark decision was made by Pattern LJ and Floyd LJ and marks an important point in the legal world, that where a judgment debtor applies to pay by monthly instalments, a realistic payment schedule must be put forward. Both for the debt and the interest accrued, and in a realistic timeframe. If these factors cannot be met, the court reserves the right to refuse the debtors application.

This decision will allow Creditors to be a little more assertive if the only real alternative is Bankruptcy and where a creditor may feel a Trustee in Bankruptcy may have better powers to recover money from the Debtor’s estate and thereby provide a dividend to the creditor albeit small. It will also allow both parties to move on instead of waiting for years for the debt to be settled.

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