Associated Installations Ltd v All Asbestos Ltd

[2025] EWCC 76

The Parties entered into a contract for the removal of asbestos. AIL alleged that AAL’s work was defective and sent a formal letter before action to AAL and in copy to its insurance broker. There was no material response and AIL issued a Claim in the Civil National Business Centre ("CNBC") which was served on 17 October 2025. There were nine detailed heads of loss, and the special damages claim amounted to £172k. AAL accepted service of the claim form and liaised with its insurers and subcontractors, but did not acknowledge service and/or defend the claim. For reasons that remained “opaque” to Worthley DJ, AAL failed to instruct solicitors to act on its behalf, instead awaiting advice as to next steps from its insurance broker.

In light of AAL’s failure to respond, the CNBC entered a default judgment on 17 November 2025. Four days later, AIL’s solicitors applied for a Third Party Debt Order. The case was then transferred out of the CNBC into Worthing County Court where an interim Third Party Debt Order was drawn up ("ITPDO").

On 2 December 2025, AAL sent an “urgent” email to the Worthing CC which included the following:

“Under the guidance of the court and the court bailiff Mr Paul White, we acted in good faith to pay the agreed amount of £45,549.00 as proof of funds on 24/11/25, as we have a real prospect of defending this case. This payment was made on the understanding this would be honoured, and the judgement would be set aside and proof of funds returned to us "immediately" or within 2 days.

We have complied with the directions we received from the court in this regard. Please find attached Certificate of Cancellation and Certificate of Satisfaction dated 24/11/25 sealed by the court setting aside the judgement for 28 days, therefore we contest the formal objection from the claimant to overturn this decision.” 

The district judge noted that the attached certificate was set out on a “slightly blurry” Form N441A and there were two ink court seals and one further embossed court seal. However, those court seals featured the old St Edward's Crown rather than the Tudor Crown which has been used in court seals since the spring of 2024. The court seals also had "The County Court" curving around the bottom of the seal rather than the top, which is the case with the new seal. The document said that the judgment had been “set aside” and that £45,549 had been paid as “proof of funds only”. There was also a reference to the now non-existent Northampton County Court. That said, Worthley DJ noted that the presence of the old crown and coat of arms was still erroneously used in many parts of the court estate, including the online "Judicial Case Manager" and also on certain parts of the public-facing online portal.

There was a short hearing on 9 December 2025. AAL maintained that it had acted in good faith in paying what it understood to be a required “proof of funds” payment to the Court Office. It said that the judgment had already been set aside and therefore the ITPDO had been issued in error. AIL said that it had made enquiries of the CNBC who were unable to locate any copy of the purported Certificate. The mechanism of paying in monies as proof of funds to the court so as to set aside a judgment was also unknown.

The district judge, who was “in the unusual but timely position of having just vacated a case on 15 December 2025”, directed that the Parties make any necessary applications and/or serve evidence in time for a hearing on that day. AAL duly applied to set aside the default judgment.  

AAL explained that they had had an initial approach, or cold call, from a 'Mr Paul White' purporting to be a Court Enforcement Officer. The email correspondence that followed was from the email address: “judgments.cnbc.justice.gov.uk[@]hmcts.cc”. The email header said: "Northampton County Court". Given their previous lack of experience with the court system, AAL did not consider there to be anything unusual about the email address or note that the ".cc" domain is the internet country code for the Cocos (Keeling) Islands, an Australian territory.

There were other errors. The district judge noted that the official CNBC website confirmed by way of "additional information” as follows:

"Scammers are mimicking genuine HMCTS phone numbers and email addresses. They may demand payment and claim to be from HMRC or enforcement. If you're unsure, do not pay anything and report the scam to Action Fraud."

The district judge also noted that AAL had also encountered a number of issues which were “unfortunately consistent with the experience of litigants reported to this court on a routine basis. Namely that his calls to the switchboard placed him on lengthy hold without being connected to an operator, and that correspondence with the CNBC simply referred him to the County Court at Worthing which no longer has public-facing telephone accessibility. This is because all telephone communication to local court centres is now routed through a contact centre in HMCTS National Services”.   

It was clear that AAL had been the victim of a scam whereby an unknown third party bad-faith operator had approached the company, impersonating the CNBC, in order to coerce a substantial payment on a fraudulent pretext of a temporary payment into court. That payment was made to an account purporting to be a UKFOREX LTD bank account. It was highly likely that the money would not be recovered directly.

This identification of a scam was the reason why Worthley DJ decided to arrange for his judgment to be published. The district judge also “neutrally” observed that: “there is a broad societal trend away from the personal face-to-face service interactions and toward online automated service provision, increasingly via AI. Many predatory practices have emerged to fill the space that has been created. The National Crime Agency reports that 41% of all crime in England and Wales is estimated to be fraud, and that 67% of fraud reported in the UK is cyber-enabled”.

The district judge also set out what were described as “some obvious common-sensical cross-checks” for litigants. These included:

1. Be aware that the County Court will not 'cold call' any litigant demanding a payment of a judgment sum into court;
2. Check the telephone number of any purported HMCTS building or staff member against the maintained telephone numbers on an official gov.uk website … ;
3. Check the email address number of any purported HMCTS building or staff member against the maintained email addresses on an official gov.uk website...Such addresses should ordinarily end @justice.gov.uk;
4. Check for obvious typographical errors in any email signature or header;
5. Check that any court seal is the current seal featuring the Tudor Crown; …
6. In the event that an individual is claiming to be a bailiff or enforcement officer, cross check their details against the Certificated Bailiff Register maintained by the government online at https://certificatedbailiffs.justice.gov.uk/; [1]
7. If in doubt, always consider seeking legal advice from a regulated lawyer or other verified sources of advice such as the Citizen's Advice Bureau or Advice Now.

The court then proceeded to consider the application to set aside the default judgment. In the usual way, the court has a discretionary power under CPR 13.3 to set aside or vary a regular default judgment. In deciding whether or not to do so, the court will need to consider three related stages:

• Does the defendant have a real prospect of successfully defending the claim or is there some other good reason why the judgment should be set aside or varied?
• Was the application made promptly?
• Then the court will consider the test for relief from sanctions and the circumstances of the case generally in order to determine whether or not to exercise its discretion.

Here the district judge focussed on the seriousness of this claim and the suggested defence, that there would be a counter-claim for set off of the original contract sum, along with the potential for additional claims against the subcontractors who carried out the works and the air monitoring checks. Proportionality would indicate that these should be heard together under one global claim rather than be split of inefficiently into a separate number of proceedings.

There was agreement that this application had been made promptly. As to the question of relief from sanctions, this was: “the most serious of failures; a failure to defend a claim.” Any company when sued must act promptly; it was not enough to simply notify a broker and hope for the best. However, when the district judge came to evaluate “all the circumstances of the case,” it could not be said that to date that this claim had not been conducted efficiently and at proportionate cost. The prejudice suffered by AIL was the: “the procedural, administrative and modest financial cost of making its application for judgment and responding to AIL’s application to set aside”. This could be addressed by the making of an indemnity costs order in the sum of £4,980.60.

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