Being sued when uninsured? You could face a CCJ against you

An overview of County Court Judgments CCJs – Breaking down the basics

If you are at fault for an accident and you don’t have insurance, you could find yourself being sued and face the possibility of a CCJ against you.

The amount of stress and worry that debtors suffer in relation to CCJs should not be underestimated. Homes and cars can be lost over CCJs, jobs can be put at risk and it will be difficult to pass credit referencing checks or obtain credit.

Simply put, you may get a County Court Judgment (CCJ) or High Court Judgment if someone takes Court action against you (saying you owe them money) and you fail to respond. It is imperative that you respond to any claim form you receive from a court, solicitor or other party within the Court’s deadline to avoid your opponent entering an ‘automatic’ judgment against you, known as a Default Judgment.

If a Default Judgment is entered against you for a fixed sum, you MUST EITHER pay this within 28 days OR apply immediately to the Court to set the judgment aside. If you do neither, the judgment debt will be automatically registered on the Registry of Judgments, Orders and Fines which then becomes referred to as a CCJ and shows up on your credit report for 6 years.

If the judgment is set aside by the Court, any mention of this on your credit report should be removed when the Registry is automatically updated each month. However, for reassurance, it is always advisable to apply to the Court requesting a Certificate of Cancellation, to prove the judgment has been cancelled from your credit report.

If you pay the debt within 28 days, it is also worth applying for a Certificate of Cancellation as the judgment should not get as far as being registered as a CCJ on your credit report. Again, possession of the Certificate gives you that reassurance and can be produced by you in the future if required.

Crucially, if the debt is paid after 28 days, you can only apply for a Certificate of Satisfaction. This means that the CCJ stays on your credit report for 6 years from the date of the judgment, but does at least show to lenders and other interested parties that the debt was paid. In other words, it stays on your credit file as a footprint for 6 years despite the fact you have paid it in full albeit late.

Note that if there is a delay between the date the debt is recorded as incurred on your credit report, and the date of the judgment, whilst the debt itself will disappear from your credit report after 6 years sadly the CCJ will continue to show until that too has run for 6 years.

A person injured by you has 3 years from the date of the debt being incurred to issue proceedings (known as limitation) so there could be a significant delay before they issue proceedings to obtain a judgment order. If there is no injury involved, they have 6 years from the date of the debt to issue proceedings.

So we strongly recommend that if you’re engaged in any activity which might lead to injury to others for example, driving, your work (especially if self-employed) or sport that you ensure that you have insurance to protect you against the risks of having to pay any judgment yourself personally.

As an employer, it is a legal requirement to have employer’s liability in place, and if you are a driver, it is also a legal requirement under the Road Traffic Acts to have motor insurance in place which must be at least ‘third party’ cover. This covers third parties suffering injury or damage by you as a result of your driving and suing you for their losses. Any judgment they obtain should be covered by your insurers providing you have complied with the terms of the policy and been granted indemnity.

Finally, it is up to you whether you wish to pay for fully comprehensive cover to cover yourself in the situation where you were at fault for the accident and therefore cannot sue the other driver for your car damage. However, you cannot claim for injury on your fully comprehensive policy and therefore people can also take buy a personal accident or critical illness cover policy separately if they so wish.

For advice about personal injury claims contact Rachael Stibbe, specialist personal injury lawyer on 01227 763939. 

For advice about CCJs and debt recovery contact a member of our debt recovery team.