The defamation case of Johnny Depp v Amber Heard has recently been in the forefront of the media sparking fans across the globe to take to social media to discuss their views on which parties’ evidence they prefer and why. Leaving matters of opinion aside, what is striking about the commentary on the case by both the media and social media is that they depict the judgement as the final chapter in the action.
As it stands Johnny Depp is suing Amber Heard for $50 million. Amber Heard is countersuing Johnny Depp for $100 million. Whilst the final judgement will decide who is the winning party and therefore who has to pay who, it will not secure payment.
As with any civil action obtaining a decree (judgement) against another party does not mark the end of the story. If you are successful in your action and the losing party does not pay the sums you have been awarded, you will need to try and enforce the decree, i.e. take measures to try and recover the sums you are due.
There are costs involved in enforcing a decree (in addition to the costs already incurred in raising and pursuing a court action) with the costs varying depending on which enforcement method you use as well as how many different enforcement methods you require to secure payment.
At the outset of any litigation costs can be significant and therefore ought to be considered against the risks. The risk being that (1) you may not be successful in the action and (2) you obtain a decree and carry out various methods of enforcement to find that the losing party does not have the funds to pay you.
With the above in mind, we often recommend to our clients that research into the other side’s financial circumstances be carried out before raising court proceedings. More often than not this can help decide whether to raise court proceedings or at the very least it can give you an idea as to which enforcement option you may wish to attempt first should you be successful in the action.
For example, if research suggests that the other side has no assets and/or is not likely to come into funds, it may be a red flag that you could potentially be throwing away good money after bad. Alternatively, if the research shows the other side looks like they have sufficient assets/funds to pay the sums due, it may make the decision to raise court proceedings worth the potential risks/costs.
The research you can undertake will vary depending on whether the other side is a company or an individual, however the following are good places to start;
Review the other side’s profile on Google or social media. This may seem obvious but having a quick search online can often provide useful information in relation to the other side’s financial position. For example, sole traders (who will not appear on Companies House) will often advertise using social media outlets. In doing so they can and often do provide information as to their set up and recent/upcoming business. This can point towards the business being in good or bad stead.
Establish whether the other side owns property. This can be done for example by carrying out a search on the Registers of Scotland (for Scottish properties). Where the other side owns property this typically (though not always) increases the prospects of a successful recovery and makes registering an inhibition a worthwhile option if decree is granted (presuming the property remains in their name).
Search to see if the other side is sequestrated/insolvent. Being sequestrated (if an individual) or insolvent (if a company) by their very definitions mean that the individual or company cannot pay the debts they are due to pay. It is possible to undertake a search of the Register of Insolvencies kept by the Accountant in Bankruptcy (AiB). An appearance on the register could be a red flag.
Employment status: if the other side (if an individual) is employed this potentially increases prospects of recovery as there is a flow of income being received by the other side on a regular basis. If you are not aware of the other side’s employment status this can often be found online or alternatively by instructing tracing agents.
Ascertain whether the other side owns anything of value which could be subject to further enforcement including a potential attachment. This could include for example vehicles (if free from finance).
Review all records you hold regarding the other side. More often than not debt recovery matters will concern parties who previously contracted with one another or at the very least have some sort of past relationship. With this in mind, it is worthwhile looking through any records, contracts, invoices you may have to identify whether there is any information which may prove useful, for example if they are due to complete a contract soon and as a result due to come into funds etc.
Companies House: if the other side is a company it is worthwhile looking at Companies House to see the financial position of the company. This could alert you to the company being in a poor financial position in which case raising proceedings may not be productive. Alternatively, it could provide information which may be useful in terms of enforcing any decree awarded. For example, through review of Companies House we were recently able to identify who the other side banked with. Once we obtained decree, we served a bank arrestment and successfully recovered a sum in excess of £60,000 for our client.
Has the other side ever told you information about the financial position/assets they own? More often than not, information provided by the other side themselves can go some way in assisting with your research. For example, if the other side has told you that they have known links to a particular area in Scotland, this may allow you to narrow your search when it comes to trying to see if they own property. With this in mind it is useful to look through any correspondence or attendance notes you may have on file.
Can the other side be ordered by the court to outline their financial circumstances?
In reading the above you may wonder why you should have to do any research at all when it is the other side who owes you money. This often prompts clients to ask, “can the court not order the other side to tell me what assets they have?” In short, no.
The recent case of N v Astora Women's Health LLC arose from a class action brought against various manufacturers of pelvic mesh implants who have been accused of producing defective products. The mesh implants in question had been used to treat conditions many women suffer from after childbirth including incontinence. Sadly, many of those treated with these implants experienced and continue to experience extremely painful and often debilitating side effects.
The pursuers in the action (a group comprising many of the women affected by the mesh implants) asked the Court to order one of the defenders to disclose information regarding their financial position ahead of the pursuers taking further action. The pursuers cited numerous reasons as to why they thought this ought to be allowed including to give the pursuers assurance that in the event they were successful in the action the defender would be able to pay any sums awarded.
The Court held that a defender’s financial information is private and if a defender sued for £X is asked whether they can pay £X they have no obligation to answer this. Furthermore, the Court considered that their role was to listen to relevant factual and legal issues in dispute between the parties and decide based on the same - not to assist a pursuer in deciding whether to pursue a case. For such reasons they refused to order the defender to disclose their financial information to the pursuers.
There is a common misconception that obtaining a decree in your favour automatically results in the losing party paying the sums you have been awarded. Whilst getting the decree is a positive result, if the losing party does not make payment you may need to try and enforce the decree. This is a separate process which involves additional costs. Given the costs and risks associated with raising court action and trying to enforce a decree (if successful) it is recommended that you carry out research ahead of raising proceedings. This could potentially identify:
(1) whether there are good prospects of recovering sums due to you from the other side.
(2) what enforcement option(s) may be worthwhile should you be successful in obtaining decree.
The answers to (1) and (2) may then help you decide whether to call it a day and cut your losses or start the process of raising proceedings with the comfort that the other side appears to have funds to pay any decree.
If you require assistance with raising court proceedings and carrying out the necessary research our Dispute, Resolution and Litigation team may be able to help.
For further information on the services our Dispute, Resolution and Litigation team can provide, please click here.
