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General principles of the enforcement of financial orders - overviewApplication of the Civil Procedure Rules 1998 (CPR 1998) and the Family Procedure Rules 2010 (FPR 2010)
Obtaining a financial remedy order is sometimes the first stage in a case, the second stage being enforcement of that order.
The FPR 2010 introduced an ability to apply to the court either for:
a specific method of enforcement or for
an order for such method of enforcement as the court may consider appropriate
The applicant or the court might consider the following matters in selecting the most appropriate enforcement remedy:
whether the enforcement is required against capital or income
which court is the most appropriate venue
whether the choice of remedy could affect the payment of interest
whether there are any preliminary steps that may assist the enforcement, eg an oral examination
which rules apply
whether there is another means of recovery without taking proceedings, eg registration of maintenance order in the magistrates' court
the likely costs of the proceedings compared to the amount to be recovered, the debtor's financial circumstances and the likely costs of recovery
The rules on enforcement were codified in the FPR 2010, which imported the enforcement provisions of the Civil Procedure Rules 1998 into family proceedings. There is now a coherent code for the enforcement of financial orders made in the Family Division, whether in financial remedy cases, Inheritance Act disputes or cases under the Trusts of Land and Appointment of Trustees Act 1996.
When drafting or negotiating the final terms of an order, it is good practice to consider the enforcement of that order. A means of payment order may be appropriate; ensure that the order sets out exactly what has to be done, a date by which that action is required, and that the undertakings are clear; where relevant, include provision for vacating a property. The terms and consequences of a breach of undertaking must be explained to the parties. Where possible, obtain the parties' signatures to an order.
Interest due is enforceable in the same way as monies due under the order except there is a time limit on enforcing payment of interest. Interest on lumps sums is generally due from the date due for payment, but different provisions apply to a lump sum payable by instalments. Interest is not payable in the county court on lump sums under £5,000. Commencement of enforcement proceedings in the county court may affect the payment of interest on the monies due.
Where an application to enforce includes payment of interest, the application must be accompanied by a certificate containing prescribed information about the calculation of interest. This is often contained in, or exhibited to, the affidavit that must accompany the application.
Enforcement of undertakings and agreements
Undertakings and agreements in ancillary relief orders are generally required in order to bind a party to carry out an act that the court could not otherwise order, eg payment of premiums for a life policy. Undertakings are now enforceable as if they were orders under Practice Direction 33A to the FPR 2010.
Enforcement against a company or trust
Where a concession has been made that company assets can be treated as the debtor's, it has been suggested that the Family Division can make orders for enforcement directly or indirectly regarding such assets where:
the debtor is the owner and controller of the company, and
there are no adverse third parties whose positions or interests would be likely to be prejudiced by such an order being made
These principles also apply to trusts.
Effect of the death of a party
If one party to a marriage or civil partnership dies leaving an unfulfilled financial obligation under the terms of a financial order, careful consideration of the terms of the order and relevant statutory provision is required. As a general rule, if such a financial obligation could have been enforced during the lifetime of the deceased then the death of that party will not act as a bar to enforcement proceedings being taken. There are limitations to this: for example, obligations of a continuing nature (save for secured orders) will cease on death.
Effect of bankruptcy
If the paying party under an order becomes bankrupt, the steps that can be taken to enforce the order depend upon the type of financial obligation and whether it is provable or non-provable in bankruptcy. In principle, the applicant is not debarred from taking proceedings to enforce a non-provable debt during the existence of the bankruptcy, although the court may stay such proceedings. Proceedings may also be stayed where a bankruptcy petition is pending. The impact of bankruptcy is dependent upon the type of enforcement employed.
Discharge from bankruptcy does not automatically release the judgment debtor from any bankruptcy debt arising from an order made in family proceedings; therefore, such a debt may be enforced after bankruptcy.
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