Third Party Debt Orders (TPDO) Under CPR 72: Enforcement of a Judgment Debt

Where a judgment debtor continues to refuse to pay, there is still a card left to play which should be within the repertoire of any specialist litigation solicitor, that of the Third-Party Debt Order (previously known as Garnishee Orders) provided by Part 72 of the Civil Procedure Rules. In short, a TPDO allows you to enforce the debt against monies owed to, or more importantly held for, the debtor. Thus it enables you to seize the monies from the bank accounts of the person who owes it to you (as long as they have enough money in the account). It is done by way of a two-part process:-

1. Obtaining an Interim TPDO (made without notice to the debtor); and then
2. Obtaining a Final TPDO (made with notice to the debtor)

The Interim Order will fix a date for the hearing of the final Order and will direct that the third party (i.e. a bank or building society) must not make any payment from the debtor’s accounts which will reduce the funds therein to less than the amount owed. Basically, it operates so as to freeze the bank accounts (without the need for a Freezing Order or other injunctive relief) insofar as to ensure the account maintains a funding level sufficient to discharge the debt if the Court makes a Final Order. However, a debtor in extreme financial hardship can ask the Court to authorise the release of small amounts of money to help them though this must be done by way of an application.

The Third Party will also have to undertake a search of the accounts held by the Judgment Debtor and confirm the same to the Court within 7 days of being served with the Interim Order. Details of the accounts, whether they are in credit and if so, whether there are sufficient funds to discharge the debt. This allows you, as the creditor, to ascertain whether or not other types of enforcement action are necessary.

If the debtor or the third party wish to dispute the debt in its entirety or to allege someone else has a claim to the monies, they must serve written evidence on all parties as soon as possible, not less than 3 days before the final hearing. If the creditor disputed the debtors case, they too must serve counter evidence in writing.

At the hearing for the final Order, the Judge can either award a final TPDO, dismiss the application or rule on any issues in dispute/direct a trial to take place to determine those issues. If the final Order is granted, it is immediately enforceable and the third party must pay the monies due to the creditor. At that point, the third party is discharged from their debt to the creditor.

TPDO’s rank in accordance with priority, i.e. when they were secured. This is of importance if you suspect that a number of people may apply, so it is essential that action is taken quickly. Other points to note include the fact that they cannot be made against insolvent debtors or against monies held by the Court.

If you are owed money by someone, or have a judgment debt, our specialist litigation department is on hand to assist quickly. We have considerable experience in securing this type of Order and can advise you on all aspects of the procedure, as well as the other types of enforcement that may be available to you. If you are in need of assistance, or would like to better understand your options for pursuing a debt, do not hesitate to contact us at mbh@wigansolicitors.com or by phone on 01942 206 060.