Rule change to clarify default judgment can't be entered if acknowledgement of service or defence filed before judgment

There have been a number of conflicting first instance decisions on the proper interpretation of CPR 12.3, which sets out the conditions for obtaining judgment in default of an acknowledgement of service or a defence.

In summary, CPR 12.3 provides that the claimant may obtain judgment in default only if the defendant has not filed an acknowledgment of service or defence (as the case may be) and the relevant time for doing so has expired. The cases have identified three possible interpretations of this provision, ie that default judgment may be obtained only if no acknowledgement of service or defence has been filed:

1. at the time of entering default judgment;
2. at the time of filing the application for default judgment; or
3. by the deadline for filing the acknowledgement or defence.

This lack of clarity was recognised by the Civil Procedure Rule Committee, which agreed an amendment clarifying that the relevant date for considering whether an acknowledgement or defence has been filed is at the date judgment is entered (ie the first of the above meanings). This change will be implemented from 6 April by the Civil Procedure (Amendment) Rules 2020.

The practical implication is that defendants will be able to avoid default judgment being entered against them by filing an acknowledgement of service or a defence at the last minute, after the deadline for filing, and even after the application for default judgment has been issued. In most cases, however, default judgment can be obtained through an administrative process, simply by filing a request with the court, and even where an application is required it can in some circumstances be made without notice to the defendant. To avoid default judgment being issued, therefore, defendants should ensure they file a timely acknowledgement of service and, where further time is necessary to prepare a defence, seek an appropriate extension either by agreement with the claimant or from the court.

From a claimant's perspective, the obvious message is to act quickly once the deadline is missed: if you wait, you may be too late.

Of course, even where default judgment is entered, that is not necessarily the end of the matter. The defendant may be able to have the judgment set aside if it can persuade the court that it has a real prospect of successfully defending the claim or there is some other good reason why the judgment should be set aside.