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Major overhaul for charging orders

Many senior civil litigation solicitors will have cut their teeth in court doing final charging order hearings. However most of us will recall that generally most hearings were unopposed and the debtor would often not attend. They were in effect box ticking exercises before the judge.

Changes that come into effect on 6 April 2016 mean that such hearings will become the exception rather than the norm.

In an attempt to cut down on wasted court time and unnecessary court hearings, from 6 April 2016 most charging order applications will be made to a centralised court handling centre in Northampton. The application will then be assessed by a Court officer. If the application meets certain criteria then the interim charging order will be made immediately; if it does not it will then be referred to a judge who will either make, vary or discharge the order, or list the application for a hearing.

If the interim order is made immediately then the sealed application and order are returned to the applicant who then must serve it on the debtor. The debtor then has 28 days from the date of service to raise any objections; any objections will be referred to a district judge who can then vary or discharge the interim order or list the application for a final charging order hearing. If the debtor fails to respond within the 28 day period (and the applicant files evidence of service) then the interim order is likely to become final without the need for a hearing.

This is a change to be welcomed as it streamlines the process and makes it more attractive, particularly to institutional creditors who often favour obtaining charges over other types of enforcement. It will also be cheaper for clients as the previous need for a lawyer to attend a hearing will no longer be required.

If you would like to discuss this or any other legal issues then please do not hesitate to contact Peter Brewer at Clarke Willmott.