Arguably the most important consideration before deciding to pursue another party in a commercial dispute is: can they pay if I win? It would take an extraordinarily principled person to pursue a claim against another party where there was little prospect of recovering any money (including your legal costs) from that party. Therefore, as legal advisers, we will always address this issue right at the outset of any potential claim we are asked to advise on.
Unsurprisingly, it is quite common for the opposing party in your dispute not to have a large sum of money sitting in their bank account with which to pay damages and costs to you if you win your case against them. In these circumstances, we will always ask the question: do they have any assets which can be used to satisfy any judgement debt they owe to you? More often than not the asset that most people, and businesses, will have of any value will be a property.
Properties are a fairly static asset and, if you ask a conveyancer, can take quite a while to sell to another person. However, if a person or company is aware of the threat of, or is in the middle of, legal proceedings, then there are mechanisms to transfer a property to a third party pretty quickly.
There are tools available to lawyers to try and prevent the sale or transfer of a property such as placing restrictions or notices on the title to the property or seeking an injunction to prevent the sale or transfer, but these are not available in every case, and in the case of an injunction, the courts will require a high threshold to be met. There are also mechanisms to reverse the sale or transfer of a property ‘after the event’ if it can be shown that the transaction was entered into to put the asset beyond the reach of people they owe money to; however, invoking such mechanisms can be a lengthy and laborious process.
In Spring 2014 the Land Registry launched their Property Alert Service (https://propertyalert.landregistry.gov.uk/), a free service aimed at preventing fraud relating to properties. The Property Alert Service allows you to monitor up to 10 properties (owned by anyone) and receive notifications if anyone makes an application against a property or if an official search is made against a property. Such notifications will therefore alert you to any activity related to a property which may be intended to put that property beyond your reach. We are then able to look more closely at who made the application or the search, for what purpose and then advise as to what action we can take to preserve your position in respect of that property.