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| 12 January 2018

CCJ Shakeup:

Further protection is currently being proposed for consumers who are subject to unfair County Court Judgements (CCJ’S). The Government has decided to tackle the increasing issue of ‘rouge Companies’ that are unfairly turning to CCJs prematurely. Indeed, an increasing number appear to be manipulating the process in order to secure their debts.

Specifically, a consultation paper that was published at the beginning of this year suggests that more and more companies are deliberately sending claims to an incorrect address, to take advantage of CPR 6.9.3, which allows service of the Claim Form to be validly served at the last known address of the consumer. The effect this has on the consumer is that the claim goes uncontested and the CCJ is secured.

It goes without saying that a CCJ severely impacts on the consumers credit rating and due to the issue mentioned above, may only become apparent many months or even years down the line. In fact discovery of the CCJ would only come to the attention of the consumer when they are applying for credit and usually when that application is rejected.

To address this issue, the consultation paper considers the following to curb this worrying trend:

  1. Striking a CCJ from the register immediately once unknown debts are resolved and the Judge agrees the person subject to the CCJ was unaware;
  2. Protecting consumers who do not receive mail because it was sent to a previous address;
  3. A Government information campaign providing a ‘centralised trusted source’ to raise awareness and help consumers with unresolved debt.

Indeed, the Justice Minister, Dominic Raab confirmed that the proposals seek to protect vulnerable consumers for abuse of process which can destroy the credit rating of those unsuspecting consumers. The underlining message was that; “Debts should be repaid, not exploited by a minority of cowboys who need reigning in.”

Consider, over the last four years, the rate of CCJ’s being issued is up by almost 59%, with more than 1 Million CCJ’s being issued in 2016. This is a concern which must clearly be the focus of reform. The consultation period will be, as it often is, slow. The Government has spent over a year gathering information and consulting with consumer groups and advice organisation to ensure the shakeup is focused and preventative.

Having considered the proposals, perhaps there is a solution that is much simpler; to require production of a tracing certificate on issue of the debt claim. This will demonstrate that the company has taken all reasonable steps to locate the consumer. This will, of course cost the company, but the fee is relatively small (usually approximately £50 + VAT and on a no find no fee basis) and the objective of the reform appears to have been met.

For any member of the public, it is so important to regularly monitor your credit score to ensure you have not fallen foul of this issue and in time to legitimately contest the CCJ. That is, of course, where we come in; if you believe you have been affected by this, any other debt action or are considering making an application for a CCJ, please get in touch with Paul Robinson Solicitors LLP on 01702 338 338 and speak to one of our Legal experts.

Tyler Fitzpatrick

Trainee Solicitor

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