Can your Opponent Afford to Pay You?

If you obtain a money judgment against someone, it may be of no practical benefit if they do not have the money to pay you. Even if you are claiming something other than money - for example an injunction to prevent a nuisance, or a determination of ownership of land - if your claim is in a court or tribunal which normally awards costs to the winner, you should consider whether your opponent will be able to pay any costs award. If not, it might still be worth proceeding, but it is something you need to know.

If you are on the receiving end of a claim, whether your opponent can afford to pay your costs if they lose is something to consider because, if this is in doubt, you might be able to get an order that they must provide security for costs as a condition of being allowed to proceed.

Once you have a money judgment against someone, which is not paid, there are court procedures which can be used to find out what assets they have so that payment can be enforced, but these court procedures are not generally available before judgment so, at the point where you are considering starting a case, other means have to be used to try to find out whether your opponent is likely to be able to afford to pay you if you win. Generally you will want to consider using an enquiry agent. 

Using an enquiry agent to make enquiries as to what assets your opponent currently has before you sue them is not exactly the same as using an enquiry agent to, for example, find out how successful someone you are thinking of entering into a business venture with has been in the past. In the latter case it will be relevant to find out, for example, what companies an individual was an officer in and whether those companies, if no longer in existence, were dissolved insolvent (such initial information can be obtained from the Companies House website) and BAILII could be searched to find any court cases that your opponent himself, or any company he has been associated with, has been involved in (though only a small proportion of court cases are reported on BAILII). But when you are engaging an enquiry agent to enquire whether someone might have the money to pay you if you sue them, the emphasis is on the present - what assets they now have. There is not a rigid dividing line between the two types of enquiries - if you sue someone and they become bankrupt, recent transactions can sometimes be reopened. For example if they have recently given away assets or sold them at an undervalue, it might be possible to recover them, and knowing what they have done in the past and who they have been associated with in the past, may help in tracing where assets have gone. But the main focus, at least initially, when engaging an enquiry agent to make enquiries about someone you are considering suing, is on what assets they have currently.        

If you decide not to use an enquiry agent, there are a few checks you can do yourself, as explained below, although these provide only limited information.

Individuals - search the bankruptcy register

If your opponent is an individual you can check for bankruptcy. The Insolvency Service provide records of undischarged bankrupts, but it can also be important to know if someone was made bankrupt in the past, even if it is several years since they were discharged, because, not only can that affect their liability for matters arising before discharge, but it may indicate that they are still rebuilding their life and may have limited assets even if historically they appeared to be well off. The Gazette archives will contain a permanent record of any bankruptcy.

Companies - get the accounts from Companies House

If your opponent is a limited company you can obtain a copy of its latest accounts from Companies House but if it is a small private company they are likely to be unaudited accounts. In any event the most recent filed accounts will at best show the position as it was some months ago, not the up to date position.

A limited company is a separate legal entity from the individuals who own and run it. In some circumstances (e.g. a claim based on the tort of negligence or deceit) it might be possible to sue both a company and an individual in it, or even just an individual in it, but if (as is often the case) the circumstances are such that you are only suing the limited company, bear in mind that it is the ability to pay of the company itself, rather than the wealth of its owners, which is important.

Some other checks which can be done

You can check for outstanding court judgmentsIt is possible to check the registered proprietor of registered land at the Land Registry but, whilst it is useful to know of land your opponent is the registered proprietor of, the true "beneficial" owner of land is not necessarily the registered proprietor. The registered proprietor may only be a trustee. Similarly the fact that someone drives an expensive car does not mean that they own it.  

This page was lasted updated in December 2017          Disclaimer