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High Court Enforcement Changes Explained
1. Adam Wonnacott
Sales Director, Burlington Group
ICM Law Conference 2013: The Law Society, London
www.burlingtongroup.co.uk
Effective Enforcement, Responsibly Delivered
“Quids in? High Court Enforcement post-TCE Act”
2. • Primary and Secondary Legislation
• Tribunals, Courts and Enforcement Act 2007
• Taking Control of Goods Regulations 2013
• ‘Transforming bailiff action’ – MoJ consultation
• Government response & future developments
• Impact upon claimants and representatives
3. Tribunals, Courts and Enforcement Act 2007
• Part Three of the TCE Act provides for a new procedure, ‘taking control of
goods’, to replace existing bailiff powers
• Schedule 12 to the Act provides framework for the procedure, with much
of the detail deferred to secondary legislation
• The Taking Control of Goods Regulations 2013 provide detail on
procedure and are due to come into force on 6th April 2014
• Further regulations regarding fee structures and certification and
competency requirements still outstanding and due imminently
4. Tribunals, Courts and Enforcement Act 2007
The legislation changes will affect:
• High Court Enforcement Officers
• Bailiffs collecting public sector debts (court fines, HMRC debt, council tax,
non-domestic rates, parking fines, etc.)
• Bailiffs acting on behalf of commercial landlords (CRAR procedure)
• Judgment creditors, local authorities, central government and commercial
landlords
5. Taking Control of Goods Regulations 2013
Exempt Goods (para 4)
Defined as: ‘items or equipment (for example, tools, books, telephones,
computer equipment and vehicles) which are necessary for use personally by
the debtor in the debtor’s employment, business, trade, profession, study or
education’ (“tools of the trade”)
Limit on value: Aggregate value of the items or equipment to which the
exemption is applied shall not exceed £1,350
Also includes items required to satisfy the basic domestic needs of the
debtor (household appliances etc)
6. Taking Control of Goods Regulations 2013
Notice of intention to take control of goods (para 6)
• 7 clear days will be required (not including Sundays and bank holidays)
• Court may order that a shorter period of notice can apply where it is satisfied
that the goods are at risk of being moved or otherwise disposed of
• Notice must follow form specified at para 7
• Enforcement Officer must give the notice by method specified in para 8 (postal
service will suffice)
7. Taking Control of Goods Regulations 2013
Notice of intention to re-enter premises (para 25)
Will apply where the Enforcement Officer seeks to re-enter premises having
granted walking possession (entered into a ‘Controlled Goods Agreement’)
• 2 clear days notice must be provided, unless the court orders otherwise
• Notice must follow form specified in para 26
• Notice must be given by the Enforcement Officer and will follow the same
method as para 8
8. Taking Control of Goods Regulations 2013
Shelf life of writ of fi fa/‘writ of control’ (para 9)
12 months from date of issue of notice of intention to take control of goods; or
12 months from the date of breach of a repayment arrangement that follows
service of the notice
Court can order extension of 12 months in specified circumstances
9. Taking Control of Goods Regulations 2013
Days and times for taking control of goods (para 12)
• Any day of the week (removes previous restriction on Sundays) between hours
of 6am-9pm (reflecting National Standards for Enforcement Agents)
• Enforcement Officer may apply to the court for permission to proceed during
‘prohibited hours’
• Enforcement Officer may proceed during prohibited hours (without the need
for an application) if goods are located on premises that are open for the
conduct of business outside of those hours (e.g. restaurants, nightclubs, etc.)
10. Taking Control of Goods Regulations 2013
Securing and removal of vehicles (para 18)
• When securing a vehicle, enforcement agent must provide a written warning to
the debtor in specified form
• The vehicle must remain immobilised where it is positioned for a period of not
less than 2 hours from the time of immobilisation
• Thereafter vehicle may be removed for storage (further notice required prior to
proceeding to sale)
11. Taking Control of Goods Regulations 2013
Mode of entry or re-entry to premises (para 20) and powers of entry
• Entry must be by any door, or any usual means by which entry is gained to the
premises
• HCEO’s retain power to use reasonable force to enter commercial premises
and upon re-entry following default upon ‘controlled goods agreement’
(Schedule 12 to TCE Act, as amended by Crime and Courts Act 2013)
• Enforcement Officer may apply to court for warrant authorising use of force to
enter premises to which goods have been moved to avoid execution (para 28)
12. Taking Control of Goods Regulations 2013
Minimum period before sale (para 37)
• TCE Act provides that 7 clear days notice must be provided before goods can be
sold
• Notice must be in prescribed form and method/service requirements as per
Part 2 of Regulations
13. “Transforming bailiff action”: What’s next?
The consultation on bailiff reform (‘Transforming bailiff action’) represented a
much heralded government commitment to protect the public against
‘aggressive bailiffs’ and to clarify the law
The Taking Control of Goods Regulations 2013 go some way towards clarifying the
law but the government has yet to produce regulations concerning two other key
areas: the costs regime and competency/certification of Enforcement Officers
The consultation document also looked at removing the current restrictions upon
enforcement of monetary judgments arising from Consumer Credit Act regulated
agreements
14. “Transforming bailiff action”: What’s next?
Costs Regime
High Court Enforcement Officer costs are currently determined by Schedule Three
to the High Court Enforcement Officers Regulations 2004, which are themselves
based upon fee structures and case law that date back (in some cases) to the
earlier part of the last century
The new fee regime proposed in the consultation document provides for a more
simplified ‘staged’ approach to costs, with fixed costs being applied at each stage
upon completion of one or more of the elements within the relevant stage. An
additional percentage fee (7.5%) is likely to apply to High Court debts over
£1500.00 which proceed to Enforcement Officer visit
15. “Transforming bailiff action”: What’s next?
Enforcement Officer Certification/Competency
Further regulations are also required to state the certification process for
Enforcement Officers.
Transitional provisions will be put in place for those holding ‘bailiff certificates’
issued under section 7 of the Law of Distress Amendment Act 1888.
There will also be mandatory training for Enforcement Officers, although the
competencies/training methods are yet to be finalised
16. “Transforming bailiff action”: What’s next?
Consumer Credit Act (CCA) Regulated Debt
The consultation also asked whether the High Court and County Courts
Jurisdiction Order 1991 should be amended to allow judgment creditors whose
monetary judgments arose from a CCA regulated agreement the freedom to
enforce the judgment in the High Court using HCEO’s
The government response to the consultation appeared to reserve comment on
this issue until the fee regime and its impact could be determined
17. Likely Effect of Regulatory Changes
Notice Requirements
Will introduce another hurdle and further delays, although it may be that notice
could be served concurrently with the ‘transfer-up’ process
May result in debtors removing goods to defeat execution. This certainly might
apply to vehicles, but it may not be practicably possible for debtors (particularly
businesses) to relocate/hide goods.
Notice might prompt the more intransigent ‘won’t pays’ to act within the 7 day
period
18. Likely Effect of Regulatory Changes
Tools of the trade
The Regulations are a little more prescriptive as regards ‘tools of the trade’ and
introduce a rule regards the maximum aggregate value of goods that can be
covered by this exception (£1350.00)
This could be good news for judgment creditors whose debtors are self-employed
tradesmen, where commercial vehicles are usually currently considered exempt
from seizure
19. Likely Effect of Regulatory Changes
Shelf life of writs
Currently writs of fi fa are valid for 12 months from date of issue.
The Regulations will allow for writs to remain valid for 12 months from the date of
default on terms of repayment
This may have a small positive effect as regards costs and administrative burden as
it will reduce the number of writs requiring extension
20. Likely Effect of Regulatory Changes
Days and times for enforcement
The removal of restrictions on seizing goods on a Sunday will allow HCEO’s more
flexibility around managing their workload and make it easier to achieve results
for judgment creditors
The ‘new’ restrictions on times (6am-9pm) are unlikely to have any practical effect
because most HCEO’s will already subscribe to the National Standards for
Enforcement Officers, which recommend the same as appropriate
21. Likely Effect of Regulatory Changes
Notice to be provided prior to sale of goods
The introduction of a 7 day notice period prior to sale proceeding represents a
potential additional delay for creditors in realising value from the proceeds of sale
However, the practical impact of this is likely to be negligible since auctioneers
processes of cataloguing and advertising tend to take longer than 7 days
22. Likely Effect of Regulatory Changes
Costs Regime
The new costs regime is likely to bring more certainty for debtors and uniformity
across different organisations providing High Court enforcement services
High Court Enforcement Officer costs have been a matter of some contention
within the advice sector and forums so increased certainty/legitimacy is
welcomed and may encourage the more ‘reputationally aware’ creditors to use
High Court Enforcement Officers
It will also provide creditors and their solicitors with more certainty as to what
they might expect to receive as a credit from proceeds of sale/part payments
23. Likely Effect of Regulatory Changes
Enforcement Officer Certification/Competency
The certification process is likely to be broadly similar to that which currently
exists for bailiffs seeking to levy distress for rent (acting on behalf of commercial
landlords)
The competency requirements are likely to raise the bar – resulting in a better
quality of Enforcement Officer, with a positive impact for all concerned
24. Likely Effect of Regulatory Changes
High Court and County Courts Jurisdiction Order 1991
If the government opts to amend the Jurisdiction Order, the consumer finance
industry will have an effective method of enforcement against goods
This will enable lenders to use private sector enforcement rather than relying on
an under-resourced County Court bailiff service
25. Conclusions
The changes in legislation are designed to make the process of taking control of
goods ‘fairer’ for debtors, whilst maintaining an effective enforcement method for
creditors and the changes broadly achieve this aim
The new regime appears to encourage a resolution without the need for
enforcement by seizure and removal of goods; creditors expectations may need to
change, with even more recoveries likely to be made by repayment arrangement
Whilst the changes are likely to have a mixed impact for High Court enforcement
service providers, they will almost certainly give more consumer-focused creditors
confidence in High Court enforcement, which will open up new markets
