Connecticut’s prejudgment remedy (“PJR”) procedures provide litigants with a powerful mechanism to secure assets before final judgment and to preserve the collectability of commercial claims. In business disputes involving unpaid obligations and contract disputes, an effective PJR strategy can substantially alter the leverage and trajectory of litigation.
Under Connecticut law, a plaintiff may seek attachment, garnishment, or other forms of security upon a showing of “probable cause” that judgment will enter in the plaintiff’s favor in the amount sought. The probable cause standard is significantly lower than the “preponderance of evidence” standard applicable at trial, making the PJR potentially obtainable at the early stages of litigation and even before conducting discovery.
In commercial cases, prejudgment remedies often serve several practical purposes. First, they protect against the risk that a defendant may transfer, conceal, or dissipate assets during the pendency of litigation. Second, they may create immediate leverage that may encourage early resolution of the dispute.
Generally, before the court enters a prejudgment remedy, there must be an evidentiary hearing to demonstrate that probable cause exists that the plaintiff will prevail on its claims. At this hearing, a representative of the plaintiff will have to testify as to the underlying claims and requested relief. Naturally, the defendant is entitled to challenge the granting of the PJR and may call witnesses to testify as well. Because this amounts to a “mini trial”, the parties will need to present the basis of their underlying claims and defenses. As a result, the parties become focused on the dispute an early stage of the case, which at times causes the parties to consider settling the dispute rather than proceeding with the PJR hearing and the remainder of the litigation. At times, a defendant will simply agree to allow the entry of the PJR rather than mounting a defense. If no agreement can be reached, the judge hearing the case will have to determine whether the PJR may enter and the amount which may be secured.
Connecticut law additionally permits applications for ex parte remedies under limited circumstances where the plaintiff can demonstrate a risk of concealment or dissipation of assets, although courts scrutinize such requests carefully because of due process concerns.
Because the purpose of the PJR is to enable the plaintiff to attach sufficient assets of the defendant until a final decision is reached at trial, seeking a PJR usually only makes sense if the plaintiff is aware of the nature and value of the defendant’s assets. For example, if the defendant has substantial equity in real property, then an attachment of the real property is worth pursuing. Conversely, if the defendant has little or no assets, or only assets which are substantially encumbered, then obtaining a PJR would have little value.
For Connecticut businesses engaged in commercial litigation, prejudgment remedies remain one of the most effective tools for protecting claims and improving recovery prospects. When deployed thoughtfully and supported by sufficient evidence, a PJR application can become a decisive early advantage in the litigation process.
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