Today assets move around so easily we often find asset finance companies need help with a defaulting customer who has taken a vehicle overseas. So, do lenders abandon the vehicle to save costs or do they try to recover it? In our view, most vehicles located overseas can and should be recovered as the procedure required is not as complex as may be envisaged. You will be familiar with the procedure for obtaining a return of goods (ROG) order when a vehicle is located in England or Wales. If it’s overseas, the procedure to obtain a ROG order is the same, but to repossess the vehicle the asset finance company will usually be required to:

  • Obtain a certificate from the English court certifying that the judgment is enforceable abroad;
  • Serve the certificate and judgment on the customer and/or apply to the foreign court to register the judgment ahead of repossessing the vehicle.

The exact enforcement procedure required differs depending on where the vehicle is:

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  • The European regime is contained in a number of instruments. Which instrument is relevant depends on the country in which the vehicle is located and the date the asset finance company obtained judgement;
  • Enforcement in a country not covered by the European regime will be a matter of local law in the enforcing state, on which local advice must be sought.

As an way of example, in summer 2015, our client obtained a ROG order against its customer and we were instructed to recover a luxury vehicle. Before incurring costs it was essential to find out where the asset was, and, what was it worth? We instructed tracing agents who confirmed that the vehicle was being held by a third party (TP) in the south of France. The TP confirmed he had been storing the vehicle for three years and it was in a normal used condition (estimated value £40,000). The TP asserted that he had the right to exercise a lien in respect of a debt owed to him arising from alleged storage costs. We provided the TP with a copy of the ROG order. We said we would apply to enforce the ROG order in France should he not promptly return the vehicle to our client’s agent. This opened lines of communication with the TP. While no payment was required, our client offered the TP a small goodwill payment for the safe return of the vehicle. Crucially, this sum was only paid once the agent had inspected the vehicle and safely loaded it on to the transporter.

  • When a vehicle is abroad you should consider carefully both your English and foreign legal advisors. Many law firms operate a best friend network. Enquire whether your legal team has a relationship with a legal team in the relevant country which can assist with translation and procedural advice when required.
  • Repossession agents with an international presence will assist. Ensure your agents go out to see the vehicle and ask them to circulate photographs so that you can check the vehicle’s condition ahead of incurring significant costs.
  • Once repossessed, consider selling the vehicle abroad. Selling to a local dealer will avoid significant shipping costs bringing the vehicle back to the UK. If the vehicle is being stored/held by a TP, consider asking them to make a realistic offer for the vehicle.

Jonathan Mills is a managing associate and Georgina Skuse an associate in Addleshaw Goddard’s motor finance recoveries team

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