The Sheriffs Office Guide To High Court Enforcement

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A guide to help creditors to recover monies owed.

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The Sheriffs Office Guide To High Court Enforcement

  1. 1. A Guide To Enforcement JudgmentEnforcement Debt Collection Rent CollectionRepossession & Eviction Tracing AgentsMoney Claim Online Other Services
  2. 2. Version 1.1January 2011
  3. 3. The Sheriffs Office Guide to High Court Enforcement1. Introduction 4 Different methods of recovery 4 High Court Enforcement Officer or County Court Bailiff? 62. The transferring up process 8 County Court judgments 8 High Court judgments 9 Making your case enforceable 93. Fees associated with High Court enforcement 12 Court fees 12 HCEO fees 12 The abortive fee 12 Other fees 134. Enforcement of writs by an HCEO 14 HCEO rights of entry 14 Which goods may be seized? 15 Walking possession agreement 17 Selling seized goods at auction or by private treaty 18 Enforcement in specific circumstances 19 Receipt of payment by the creditor 215. Writs of execution 23 Different types of writ 23 Priority of writs 24 Renewing a writ of execution 256. Sheriffs interpleader proceedings 26 Third party claiming ownership of seized goods 26 Debtor claims that goods are exempt from seizure 26Useful links 28Glossary of Terms 29Page 3 © The Sheriffs Office 2011
  4. 4. 1. IntroductionThank you for reading this guide to the process of debt recovery through High CourtEnforcement Officers (HCEOs).But before we go into the detail of High Court enforcement, let’s have a brief look atthe alternative options also available to you.Different methods of recoveryAttachment of Earnings OrderOnce you have a County Court Judgment (CCJ) against an individual debtor, youcan ask the court to order their employer to deduct money from their salary. This ispaid to the court, which then pays you. If the employer refuses, they can be fined.The court reviews the debtor’s income and expenditure and determines theinstalment value. If the debtor changes employer, you need to make anotherapplication.Advantage – as long as they are employed, you are guaranteed to receive theinstalments.Disadvantages – the court may order a very low value instalment, thus taking a longtime to recover the debt. If they lose their job, you have to start again and may findfew assets to seize if they are unemployed. The process can take considerable time.Charging OrderAgain to be used against an individual debtor, this allows you to apply to the court foran order so that, should their property be sold, you may be paid the debt plus interestand costs if and when the property is sold. All joint owners and other securedcreditors, including the mortgage lender, must be served with the application for theorder. A charging order can also be made against shares.The debtor must either fully or partly own the property. It is advisable to check thiswith the Land Registry, as well as checking whether there are other charging ordersagainst the property (all charging orders are registered with them once made andstay there until the debt is cleared).Advantage – if this is the only asset available, you may get your money (eventually).Disadvantages – the property may never be sold. You can apply for an Order forSale from the court, but this can be difficult to get. There may be a large mortgage onthe property and/or, as is often the case, other charges registered against theproperty.Third Party Debt OrderThis is made against a third party holding money on behalf of the debtor, for exampletheir bank or a customer owing the debtor money. You need to try to make sure thereactually is some money in the bank account, otherwise this method will fail.Advantage – if granted this can be effective if there is money available. © The Sheriffs Office 2011 Page 4
  5. 5. Disadvantage – if the account is overdrawn, for example, on the day the order isenforced, then you will not receive any money and will have no further recourse.They can be time consuming and difficult to get.BankruptcyThis is for use against an individual debtor for undisputed debts over £750. You don’tneed to get a judgment first; you can simply send a statutory demand giving them 21days in which to pay in full. If they don’t pay, you then issue a winding up petition(you have four months from the statutory demand in which to do this). If the debtor ismade bankrupt, their house may be sold to pay the debts.Advantage – the threat of bankruptcy may be enough to force payment.Disadvantages – if they really are unable to pay, the threat will not work. Theappointed receiver will pay creditors (secured creditors first), so there is the risk youwill receive little or nothing. The cost of making a debtor bankrupt is high, likely to bein the region of £1500 to £2000.Winding UpThis is for use against a company for debts over £750. You don’t need a judgmentfirst, but can go straight to a statutory demand. If payment isn’t received, the nextstep is a winding up petition, which must be advertised at least seven days before thehearing in the London Gazette. This usually leads to banks freezing bank accounts. Ifthe petition is granted, a liquidator is appointed to realise and distribute assetsamongst creditors.Advantage – the threat may be enough to force paymentDisadvantage – having a company wound up will cause directors inconvenience, butwill not affect their personal assets (unless they have given personal guarantees). Ifthey have many creditors chasing them, they might actually turn it to their advantageand you still don’t get paid. The cost is also high, likely to be in the region of £1500 to£2000.Execution of a County or High Court JudgmentThis can be done either by a County Court Bailiff or HCEO. HCEOs have morepowers and do tend to recover more debt, principally because, unlike the bailiff, theydo not need to give advance notice of a visit. They are also commissioned on whatthey collect.Advantages – a fast and effective method of recovering the debt, interest and fees.Where execution is successful, there is no cost to the creditor.Disadvantage – if the debtor has no assets or is bankrupt/insolvent/in liquidation,there is nothing to seize to then sell to recover the debt.At The Sheriffs Office we believe that, for most cases, High Court enforcement is themost effective method of receiving the money you are owed.Page 5 © The Sheriffs Office 2011
  6. 6. High Court Enforcement Officer or County Court Bailiff?If you have decided that obtaining a judgment and having it executed is the best option foryour case, you then have the choice of having it enforced by County Court Bailiffs or HCEOs.The judgment debt, interest, court fees and enforcement costs are collected from the debtorthrough either route.In April 2004, the law was changed to allow debts between £600 and £5,000 to be transferredup to the High Court for enforcement, a change which has given creditors a great deal morechoice with enforcement. Since April 2004, HCEOs have also had their geographicalboundaries removed, so that they can enforce a judgment anywhere in England and Wales.Debts below £600 can only be enforced by County Court Bailiffs. Judgments for debts of£5,000 and over can only be enforced by an HCEO.High Court Enforcement Officers (HCEO)HCEOs are authorised by the Lord Chancellor and work privately or in private companies.HCEOs work under the authority of a Writ of fieri facias (fi fa). This is issued when a CountyCourt Judgment, Order or Employment Tribunal/ACAS Settlement Award is transferred to theHigh Court for enforcement. These are transferred up using forms N293A, N471 and N471Arespectively. A court fee of £50.00 applies to obtain the writ. The transfer process normallytakes between 5 and 21 days.If successful, the HCEO will collect your judgment debt, your court costs, your £50 transfer upfee, interest at 8% and their fees, costs and charges from the defendant.HCEOs earn their fees from the judgment debtor, but only when they collect. If the HCEO isunable to collect, there is an industry regulated abortive fee of £60 plus VAT paid by thecreditor for each address visited; however the abortive fee is waived for Employment Awardsand ACAS Settlements. Other than the abortive fee, the HCEO receives no income for anunsuccessful enforcement.As a result, HCEOs tend to have significantly higher collection rates than those of the CountyCourt Bailiffs, who are salaried without any financial incentive to collect.Unlike the County Court Bailiff, the HCEO does not have to give the judgment debtor anyadvance notice of their intention to collect, giving them the advantage of surprise (see LandCredit Company of Ireland v Fermoy (1870) L.R. 5 Ch 323) . HCEOs are also permitted toforce entry into commercial premises to enforce, a power not permitted to County CourtBailiffs.County Court BailiffsCCBs are salaried civil servants employed directly by the court service. They can enforce onjudgments up to £5000. They work under the authority of a Warrant of Execution which canbe requested from the County Court for a fee of £100.Before they attempt to collect, the County Court Bailiff must write to the defendant advisingthem of their visit.County Court Bailiffs will collect your judgment debt, your court costs, your warrant cost andinterest (if prescribed) from the defendant. If unsuccessful, there is no abortive fee. © The Sheriffs Office 2011 Page 6
  7. 7. In summarySuccess rates: • HCEOs normally have far higher collection rates due to the financial incentive of fees only being paid on success • Only HCEOs have the element of surprise, as they do not need to give a letter warning of an intended visit • Only HCEOs can force entry to commercial premises and buildings detached from residential living quarters • Only County Court Bailiffs can enforce on judgments below £600 (at present)Time scales: • The process of gaining a warrant of execution (CCB) is normally a little faster than that of transferring up and gaining a writ of execution /fi fa (HCEO); however it can take much longer to start enforcement with a warrantEnforcement costs: • The judgment debt, interest, court fees and enforcement costs are collected from the debtor through either route • A warrant of execution (CCB) costs £100 • A writ of execution/fi fa (HCEO) costs £50 • There is a £60 plus VAT abortive fee if enforcement is unsuccessful (HCEO), excluding Employment Tribunal Awards and ACAS Settlements.Page 7 © The Sheriffs Office 2011
  8. 8. 2. The transferring up processCounty Court judgmentsWhen a CCJ is issued, we would recommend that the creditor transfer it up to theHigh Court for enforcement by an HCEO.When the judgment is transferred up to the High Court, a writ is issued. Mostjudgments are for a monetary sum and if that figure is over £600 (including courtcosts) a writ of fieri facias, or fi fa for short, can be sought. This writ is essentially thesame as a warrant of execution and allows the HCEO to seize goods from the debtorfor sale to raise sufficient funds to recover the debt. Judgments over £5,000 can onlybe enforced by an HCEO.Alternatively, the judgment may be for possession of property or land, or for therecovery of specific goods, in which case a writ of possession or writ of delivery maybe sought. You can read more about the different types of writs in Section 5.This applies to the vast majority of judgments, with the exception of a judgmentarising from a regulated agreement under the Consumer Credit Act. Currently, thesemay not be transferred to the High Court for enforcement by an HCEO, unless over£25,000.The transfer process is started with the completion of Part 1 and Part 3 of FormN293A. When completing, you should provide the judgment details and attach a copyof the sealed judgment or order. The form should be signed by the creditor or theirsolicitor.This completed form is then sent (or taken) to the County Court that issued thejudgment. Providing everything is in order and the judgment still stands, then thecourt will seal Part 2 of the Form N293A, authorising the transfer to the High Court forthe purposes of enforcement. However, it remains a County Court judgment.Once the Form N293A has been sealed, it is returned and can then be submitted tothe High Court or a local District Registry (a High Court section within many CountyCourts) with a completed form no.53 writ of fieri facias.There is a court fee of £50 which must be paid at the same time the two forms aresubmitted. The fee is paid to HMCS (Her Majesty’s Court Services) and is nonrefundable. However, the fee is added to the costs to be recovered from the debtor.The High Court or District Registry will check the details of the forms and, providingeverything is in order, will seal the writ of fieri facias accordingly. Once this isreceived by an HCEO he can enforce against the judgment debtor immediately.Please be aware that this entire process can take up to 28 days, depending on thespeed of the issuing County Court. Some creditors often expedite matters byattending the court personally and having the Form N293A sealed while they wait.This could cut the entire process to just a matter of days.Whilst some HCEOs charge for this service, The Sheriffs Office will handle this entireprocess free of charge. © The Sheriffs Office 2011 Page 8
  9. 9. High Court judgmentsThese do not need to be transferred up for enforcement; however you still need torequest a writ by completing a PF86A form. Simply complete a PF86A form andsend, along with a copy of the judgment and your letter of instruction to a HCEO andthey will obtain the writ of fi fa on your behalf and complete execution.However, there is still a fee of £50 for the issue of the writ of fi fa, which isrecoverable from the debtor, should enforcement be successful, and an abortive feeof £60 plus VAT per address visited if unsuccessful.Making your case enforceableIt may sound so obvious – of course you would want to make your case enforceable,otherwise why go to all the effort of getting a CCJ then High Court Writ! But so oftenwe find that just the smallest incorrect detail can render all that work redundant,leaving you out of pocket and out of luck, even when the case was a “dead cert”.Here’s a checklist worth keeping close at hand to increase your chances of makingyour case enforceable and collecting your money. • Have the correct defendant • Use the correct name for the defendant • Name both parties if the defendant is a “trading as” • Have the correct address or addresses for the defendant • Check the defendant is not subject to insolvency proceedings • Make sure you sue for the correct monetary amount owedHave the correct defendantIf your customer is ABC Services Ltd, then issue proceedings against ABC ServicesLtd, not an incorrect party such as a company director or the employee who actuallyplaced the order, unless this person signed a personal guarantee (and thus becamea guarantor).Use the correct name for the defendantA case can become unenforceable if you don’t have the defendant’s name 100%accurate: for example, putting down ABC Services Ltd when the correct name is ABCServices UK Ltd, or ABC Services when it should be ABC Services Ltd (or viceversa).Even spelling their name incorrectly, whether for a business or an individual, can ruinyour chances. However, the good news is that it is easy to check the correctbusiness name. Companies House offers a free Webcheck service for limitedcompanies.If the defendant is an individual and you want to be sure you have the correct person,it is possible to run a trace on them. This is normally done for a small fixed fee.Name both parties if the defendant is a “trading as”Don’t just sue ABC Services as it is difficult to enforce against this. Use “John SmithT/A ABC Services” to cover all bases. Don’t forget that many limited companies alsooften trade as another name, so put both names in.Page 9 © The Sheriffs Office 2011
  10. 10. Restaurants in particular can be difficult. For example, you may sue “Great FoodRestaurant” but there is almost always a limited company that is the actual owner.You may find that you actually need to sue XYZ Restaurant Group Ltd T/A GreatFood Restaurant.You then need to ensure that when you supplied the goods or services that XYZRestaurant Group Ltd was the owner at that time. Many restaurants change handsregularly, often to relatives or even with the same directors but with a differentregistered company.If you are to sue a trading name, ensure that you put the words “A Firm” in bracketsafter the name. However, we would always recommend you name the individual (s)who run it as well.Have the correct address or addresses for the defendantThis is particularly important if you are issuing proceedings. You may decide to sueJoe Bloggs, but you use the old address that he left a year ago. Even if we find him,he will have grounds to have judgment set aside and proceedings may have to bereissued at his new address, which then may be defended. This would also give thedefendant time to hide/transfer any assets.If you use the registered address for a limited company, this could be theiraccountant’s offices. It is worth checking this and then looking for a trading address.You can check with Companies House or look at the defendant’s own website wherethey usually publish a phone number and sometimes the trading address, so you cancall to check.When dealing with individuals, some claimants drive by or know the defendant livesat a property. You can check with BT Online Directory Enquiries, to see if thedefendant is the phone account holder.Check the defendant is not subject to insolvency proceedingsIf they are, you may well decide that the time and cost of suing would be good moneythrown after bad. You can check with Companies House to find out if a company is inLiquidation or Administration with an “L” or an “A” next to the name.The Insolvency Service allows you to check individuals and “trading as” names forbankruptcy and IVA. They also have a helpful Guide for Creditors on their site.There is also more information purchased by companies such as The Sheriffs Officewhere we can check for details such as other judgments, directors’ details andaccounts, should you need more data.Make sure you sue for the correct monetary amount owedWe have seen cases where some claimants have added spurious figures for loss ofearnings and other unrealistic amounts which cannot be substantiated. These willoften be defended and judges do not look kindly on these claims. You are entitled toadd interest if you chooseFollowing this simple check list will greatly increase your chances of getting a casethat can be enforced – and that means a much better chance of receiving the moneyyou are owed! © The Sheriffs Office 2011 Page 10
  11. 11. Tracing a debtorAn important part of the process may be actually locating the defendant, either anindividual, a sole trader or a company director.Before you start the trace, try to gather as much information about the person as youcan – name, last known address, telephone number, vehicle registration, date ofbirth.Probably the most useful of these is the date of birth, as this allows a trace with ahigh degree of accuracy, as 90% of the records we have access to hold a precisedate of birth. A vehicle registration and telephone number (personal and businessnumbers) also help in tracing people.The sources of data that can be searched are quite wide-ranging. They are all DataProtection compliant of course, and include: • Land Registry • Birth, death and marriage records for England & Wales from 1984-2005 • BT database (updated daily) • UK Directory Enquiry database • Electoral Register • DVLA - registered vehicle keeper details are only available if the case is being enforced by an HCEO • HPI database - giving details of any financial interest, number-plate changes and insurance write off information of a vehicle • Companies HouseYou can also make some preliminary checks yourself to find out whether it is worthyour while to try to enforce the case. You can check whether an individual or soletrader is insolvent by checking the Insolvency Register, or find out if a company is stilltrading at Companies House.A trace is a fast process with a low fee – at The Sheriffs Office we currently onlycharge £45 plus VAT per person for a positive trace, and nothing for a negative one.A trace can therefore be a worthwhile small investment to improve the chances ofyour case being enforced.Page 11 © The Sheriffs Office 2011
  12. 12. 3. Fees associated with High Court enforcementCourt feesThere is a £50 court fee for transferring a CCJ to the High Court for enforcement,which results in the award of the writ of fi fa. If successful, this fee is recovered in fullfrom the judgment debtor.The only other fee is the £75 renewal fee, should you need to renew your writ of fi fabeyond its initial 12 months’ validity. A renewal fee may also be recovered from thedefendant if enforcement is successful.HCEO feesThe HCEO fees are recovered in full from the judgment debtor when enforcement issuccessful. If enforcement is unsuccessful, as judgment creditor you only have to payan abortive fee of £60 plus VAT per address visited. You do not pay any other costsassociated with the enforcement of your writ. Please see below for further details onthe abortive fee and where other costs may apply.During the course of enforcement, the HCEO may incur other expenses - tow trucks,locksmiths, secure storage etc. - these costs are also recovered from the judgmentdebtor, so there is normally no cost to you, the judgment creditor.The abortive feeThe abortive fee is set out by the High Court Enforcement Officers Association andendorsed by the Ministry of Justice. Under current regulations, all HCEOs arerequired to charge a fee of £60 (plus VAT) per address visited but only if enforcementis unsuccessful.Whilst The Sheriffs Office has one of the highest collection rates in the country andwe always put 100% effort into collecting your money, not every case gets paid infull. The most common reasons enforcement is unsuccessful are: i) The debtor has absconded and cannot be traced ii) The debtor is subject to insolvency proceedings (bankruptcy/liquidation) iii) The debtor has no assets of value to remove and sellUnfortunately some creditors are unhappy to then have to pay an abortive fee. WhileHCEOs sympathise with this view, they do need to cover their costs of attending anaddress to attempt to enforce. At The Sheriffs Office, we charge no more than theminimum £60 fee per address unless genuine additional disbursements have beenincurred (such as a locksmith or tow truck) but this is very rare.The abortive fee is, like the court fees, something to be weighed up by the creditorwhen determining how likely it is their debtor will be able to pay and so assess whatinvestment they will make in recovering the debt. There are also steps that creditorsand their solicitors can take to increase the chances of a successful enforcement –please see Section 2 above, thus reducing the likelihood of paying any abortive fee. © The Sheriffs Office 2011 Page 12
  13. 13. Other feesVery occasionally there may be the need for HCEOs to charge fees to the creditor.It is therefore the creditors’ responsibility to inform the HCEOs of the following. • Creditors should notify the appointed HCEO’s office of all payments received and other contacts with the debtor. • Creditors must not request the suspension of a warrant or make direct payment arrangements with debtors without appropriate notification and payment of fees due to the HCEO.See High Court Enforcement Officers Regulations 2004, SI 2004/400, reg 13(3)Page 13 © The Sheriffs Office 2011
  14. 14. 4. Enforcement of writs by an HCEOHCEO rights of entryThere are many claims regarding the rights of entry of the HCEO acting under a writof fi fa, many of which are under-exaggerated, over-exaggerated or just plain untrue.However, the HCEO does have advantages compared to the powers afforded to theCertificated Bailiff, the County Court Bailiff and the Debt Collector when trying tocollect the monies due to a creditor.The address for enforcementIt is the duty of the HCEO to levy upon the defendant’s goods wherever they may befound (within England & Wales). This will often mean that the HCEO will visit anaddress not detailed on the writ. The writ address is merely an “endorsement” due tothe fact that the address for enforcement may be altered at any time as the creditormay direct.Residential premisesThe HCEO may climb a perimeter wall or fence to gain entry to the grounds of theproperty. They can then enter where a door or window is open, opening further to aidentry if required. They may also use the door handle to gain access when the door isunlocked but may not open a window that is shut.Once inside, they may also break down the inner doors of the property to seek thegoods of the defendant. The HCEO may not be forcibly ejected; however, if they are,they can now force re-entry back into the property.Furthermore, they may force entry to a garage, outhouse, stables or barn providing itis not physically attached to, and form any part of, the residence.Commercial premisesThe HCEO can force entry to commercial premises to levy on a first visit or anysubsequent visit to remove goods, providing the property is not physically attachedto, and form any part of, a residential dwelling. Prior to forcing entry, the HCEOshould have a genuine reason to believe that goods of the defendant are containedwithin. They should make reasonable enquiries as to whether the property is rented,contacting the landlord if necessary.Walking possession agreementsIf the defendant has signed a walking possession agreement, then entry may beforced by the HCEO to remove the seized goods should payment not be made withinthe timescales specified. See below for further details.Registered officesThe HCEO may attend the registered office of the defendant but this will often be anaccountant. It is unlikely that goods of the defendant will be found here. The HCEOmay enquire as to a trading address and attend there accordingly. If the registeredoffice is the home of a director then the HCEO is bound by the rights of entry as perresidential premises above. © The Sheriffs Office 2011 Page 14
  15. 15. Director’s home addressesThe HCEO may visit the home of a director of a limited liability company if theybelieve that goods of the defendant may be located there. This could be companyvehicles or home office equipment (computers etc). However, they are bound by therights of entry as per residential premises above.Third party premisesThe HCEO can enter the premises of a third party but it is advisable to seek theirconsent first. If the HCEO enters and can find no goods of the defendant they may bedeemed a trespasser. However, if they believe that the goods of the defendant havebeen taken there to avoid execution they may force entry, after request and denial,but do so at their own risk.Exempt addressesThe HCEO may not levy execution at royal residences and diplomatic premises.However, it is worth checking the property details thoroughly. For example; manypalaces are not deemed “royal residences”. Some other premises may be of such anature, that care and attention will be necessary when the officer attends to fulfil theirduties, for example, funeral directors, care homes or hospitals.Some of these rights of entry may change as a result of the proposals in theTribunals, Courts and Enforcement Bill, but these changes are not expected until2012 at the earliest.Which goods may be seized?It is the duty of the HCEO to seize the goods of the debtor in order to sell (normally atauction) and raise the money to clear the debt. This however is a “means to an end”and in reality goods are rarely removed, as this very action prompts the debtor tomake the payment that is due: less than 1% of our cases in the last 12 months haveresulted in removal of goods.The HCEO can seize a wide range of goods including but not limited to: • Vehicles, boats and aeroplanes • Stock and machinery • Household furniture • Jewellery and art • Money, bank notes and promissory notes (cheques) • Bonds, shares and deeds • Livestock and animals • Firearms • Jointly owned property (i.e. goods owned by a married couple) • Items held by the police • Goods on finance (providing sale is agreed by the finance company)The main areas where items cannot be seized are: • Bedding, clothing, furniture and provisions that the debtor and their family need for a basic level of domestic life • Perishable goods: refrigerated foodstuffs, fresh flowers etc.Page 15 © The Sheriffs Office 2011
  16. 16. • Tools of the trade: those needed by the debtor to do their job or run their business, for example tools, books, vehicles etc.However, these goods must be used solely by the debtor for the purposes of his orher work to fall under “tools of the trade”. For example, a commercial van that is alsoused by the debtor’s work colleague or spouse is available for seizure.An example is when we removed a commercial van from an individual trading as ageneral builder who subsequently claimed it to be a "tool of the trade”. It was foundthat the vehicle was un-taxed so therefore could not be legally used on the road.Consequently, it was not deemed to be a tool of the trade and was sold with thesums recovered clearing the debt in full.“Tools of the trade” cannot be claimed by partnerships or limited companies.However, the HCEO may take luxury or items of value that are needed for basicdomestic life and replace them with similar goods of a lower value. This form ofenforcement whereby removal and replacement takes place is extremely unusual.Having seized goods, the HCEO can either take the goods away there and then orleave them on the premises for collection at a later time if necessary.If goods are not removed, the debtor is asked to sign a statement known as aWalking Possession Agreement, confirming that neither they nor anyone else willremove or damage the goods and that they will let the enforcement officer re-enterthe premises at any time to inspect or remove the goods. Again, in reality, it ispayment that is sought.If it is claimed that some of the items belong to a third party then they may makeapplications to the Sheriff, Landlord or Court as necessary. Interpleader proceedingsmay be needed, resulting in costly legal fees that can often run into many thousands,negating any value of the goods seized. See Section 6 below for more details.If the debt is not paid in an agreed timescale, the HCEO will remove and sell thegoods, taking their lawful fees, costs and charges from the money raised and thebalance is given to the creditor. If there is any money left over from the sale after this,this is returned to the debtor.If the goods sold do not cover the total sums now due, the HCEO may return to thedebtor’s property (and any others that may contain their assets) to seek further goodsto seize and sell accordingly.An example in one case is when the HCEO returned 9 months after the sale of adebtor’s vehicle to find he had replaced it with another. Again, the debtor refusedpayment so this vehicle was also seized, removed and sold, clearing the debt in full.There is one other area where goods cannot be seized, but we don’t come across ittoo often – works of art on loan from other countries to UK galleries and museumsare immune from seizure! © The Sheriffs Office 2011 Page 16
  17. 17. Walking possession agreementWhen executing a writ, the HCEO will seize goods for later sale to recover the debt ifthe debtor is unwilling or unable to pay. However, the HCEO does not need tophysically remove the goods there and then. In fact, the Lord Chancellor has statedthat he prefers if the goods are left in situ and are only removed straight away whenthe HCEO deems it necessary to safeguard the goods.When leaving the goods at the premises, the HCEO provides a walking possessionagreement. This document states that he has taken possession of the goods and thatthe goods will remain in his custody until the debt and all costs have been paid. Thedebtor may not sell or remove the goods, nor may he let any one else do so,including other enforcement officers.The walking possession agreement also obtains the debtor’s permission for theHCEO to re-enter at any time and as often as they need to inspect the goods andremove them. The agreement allows the HCEO to re-enter by force if necessary.Once the walking possession agreement is signed, the HCEO should leave a copywith the debtor. The debtor cannot sell the goods now, and if he does, the HCEO canseize them from the purchaser, even if the purchaser did not know the goods hadbeen seized.Who can sign a walking possession agreement?In most cases the walking possession agreement will be signed by the judgmentdebtor but if the judgment debtor is unavailable, it may be signed by any responsibleadult at the premises.When the debtor refuses to signIf the debtor refuses to sign the walking possession agreement, then the HCEO willmost probably remove the goods there and then to safeguard them but may requirean indemnity from the claimant before doing so.Payment by instalmentsIf the creditor and debtor reach an agreement on an instalment payment plan, thenthe goods remain seized under the walking possession order until the debt and costsare paid in full. Once paid in full, the ownership of the goods returns to the debtor. If,however, the debtor falls behind in the instalments, the creditor can decide to havethe goods covered by the walking possession agreement removed and sold.Third party ownershipIf the HCEO seizes goods that do not belong to the debtor or are under a hirepurchase agreement, then the third party needs to provide evidence of this to reclaimthem. This should be made in accordance with RSC Order 17 Rule 2 and may end ininterpleader proceedings at court where a Master will decide ownership. See Section6 for further details.Page 17 © The Sheriffs Office 2011
  18. 18. Selling seized goods at auction or by private treatyNormally the threat of seizure is enough to encourage a debtor to pay and we rarelyhave to take the next step of removing, then selling the goods to raise enough toclear the debts and fees. But, when we do need to sell goods, HCEOs can arrangefor this to be done either by auction or by private treaty.The auctioneer will always try to get the best price for the goods, selling to thehighest bidder on the day. However, as you may well have experienced firsthand, thesums realised at auction are often much lower than their purchase price, as fewitems hold the value they had as new.In the case of vehicles, if the HCEO is unable to get the keys and documents (V5 andservice history), the sale price really plummets. You can, of course, get new keys cutsometimes, but this adds significantly to the cost, usually around £250, depending onthe vehicle.There has also been a significant decline in the value of household goods, especiallyelectrical items. Televisions and computers bought several years ago fetch very littlethese days, as brand new products can be bought at relatively low cost.The court may also allow for the goods seized to be sold privately rather than atpublic auction if it can be demonstrated that a higher price is likely to be obtained.This is called private treaty. This is usually the best option for goods that are quitespecialist or where there is already an interested party.While the costs of removal and sale may vary, the fees for the HCEO are set by theLord Chancellor as a percentage of the sums realised, as follows:By auction • 15% - first £100 • 12.5% - next £900 • 10% - above £1000When the goods are sold by auction on the debtor’s premises, the fee is 7.5%By private treaty • 7.5% - first £100 • 6.25% - next £900 • 5% - above £1000 © The Sheriffs Office 2011 Page 18
  19. 19. Enforcement in specific circumstancesSuing a “trading as” businessWhere you are dealing with a sole trader or a partnership, ensure that you name notjust the entity they are trading as, but each and every individual running the business.This will enable you to enforce against the assets of either the trading entity or, if ithas no assets or has ceased trading, you can then still enforce against theindividuals.With limited companies, it is also important to put both the limited company nameand the trading as name in the judgment and subsequent writ, so that you havecovered all bases. This is particularly true of restaurants which are almost alwaysowned by a limited company with a different name to the restaurant.Check who was the owner of the “trading as” entity at the time you supplied thegoods or services. If the business has changed hands, but still using the sametrading name, you must ensure you sue the correct entity. We would always advisethat you check their terms and conditions before you agree to supply the goods, soyou know who you are supplying. It is, of course, also good business practice to runa credit reference at that time, possibly asking for trade references as well.There are also instances where the limited company has gone out of business, butthe directors have started a new company and are still using the same “trading as”name. Unfortunately, there is little you can do in this instance to enforce against theoriginal company you supplied, but by checking their status at Companies Housebefore embarking on legal action; you can save yourself the cost involved.Finally, if you are suing a “trading as” name, ensure that you put the words “A Firm”in brackets after the name.PartnershipsPartnerships, apart from limited liability partnerships, are not a legal entity, rather acollection of individuals trading together. As such, the partners are liable for the debtof the business and this liability is not limited.When enforcing against a partnership, the creditor is best advised to obtain ajudgment against the partnership, so that the partnership’s assets may be seized.Then, when applying for the writ of fieri facias (fi fa), the creditor needs to include thename/s of the individual partner/s within the command portion of the writ. This thengives the creditor, via the HCEO, the option of enforcing against the partnership, thepartners individually or both.If the creditor wishes to enforce the writ at the private residence of a partner, it isimportant that the partner is identified personally in the writ, so as to avoid potentialinterpleader claims after enforcement.As a word of warning, if the writ is solely against a partner, and not the business orother partners, then seizing the assets of the partnership may also give rise to aninterpleader claim by the other partners, looking to recover the business’s assets.The creditor is not permitted to seize the partnership’s assets if the debt is a personaldebt owed by one partner (rather than a debt owed by the business). However, thePage 19 © The Sheriffs Office 2011
  20. 20. creditor may seek a charging order over the partner’s share of the partnershipassets.Judgment debtor deceasedIf a judgment has been obtained and a writ of fi fa issued against a debtor beforetheir death, then the judgment and writ are valid and execution may take place. Thisis normally achieved through the seizure of goods held by the executor on behalf ofthe estate. These are then sold at auction or by private treaty. If more money israised than is required to satisfy the judgment debt, interest, court fees and executioncosts, then the balance is returned to the deceased’s estate.If the creditor wishes to issue proceedings against a debtor who is already deceased,the court’s prior permission is required before a warrant of execution or writ of fi facan be issued.The HCEO may not seize the executor’s personal assets when enforcing. Similarly, ifthe writ is issued against the executor themselves, then the HCEO may not seize theassets of the deceased’s estate, only those of the executor. However, if the executorhas been using goods from the deceased’s estate as if they were their own, thenthese goods are not exempt from seizure.During bankruptcyBankruptcy may be initiated by either the individual or sole trader debtor, or by acreditor owed £750 or more. It may also be petitioned for by the supervisor of avoluntary arrangement if the person wasn’t complying with the terms of thearrangement.If you do decide to petition for your debtor’s bankruptcy, should the threat not beeffective, as an unsecured creditor you will only be paid after the bankruptcy costsand preferential creditors have been paid. If there is any money left, you may onlyreceive a dividend payment as a proportion of what you are owed. It may also takemonths to sell the assets.The Official Receiver or Insolvency Practitioner may also reject some or all of yourclaim, meaning that you would have to apply to the court to change this.In terms of an option to a creditor for recovering their debt, bankruptcy is a route tobe carefully considered before taking action. You can check if a person has alreadybeen declared bankrupt though The Insolvency Service. You can also check whetherthey also have other unpaid judgments by searching Registry Trust Ltd.If you already have a judgment against the individual, you are entitled to apply for anorder to obtain information to bring the debtor to court to answer your questions onwhat assets they have. When requesting the order you will need to provide theirname and address, details of the judgment, the questions you want to ask and thedocuments they must bring to court. The debtor must attend or may be fined and/orimprisoned if they don’t. Once you have the order you must arrange for it to bepersonally served and provide an affidavit to the court that you have done so.Having undertaken all your research and discovered that the debtor does haveassets that can be realised to repay your debt, you can apply for your judgment to betransferred up to the High Court for enforcement by an HCEO. © The Sheriffs Office 2011 Page 20
  21. 21. If you are concerned the debtor may petition for their own bankruptcy, you need toact fast, because once the bankruptcy order is made by the court, unsecuredcreditors cannot take any further action against the bankrupt debtor without thecourt’s consent.However, you can still apply for an order for periodic payments during a bankruptcyand existing orders may continue to be enforced (although the bankrupt may apply tohave the terms changed).Once an individual has been declared bankrupt, all their debts are discharged andcreditors have no right to pursue their claims any further. However, if the debt is anew event and was not a debt placed in the bankruptcy, then it may be possible tosue for and obtain a judgment for that new debt.When your debtor is declared bankrupt, there are a number of steps you can take toensure that you are in with a chance: • Check the debtor has assets before pursuing the bankruptcy option • If the official receiver (OR) or insolvency practitioner (IP) hasn’t contacted you, write to them to advise them you are a creditor • If you change address during the proceedings, let the OR or IP know • If you are aware of any specific assets of value or any conduct by the bankrupt that should be investigated, let the OR or IP know • If the OR or IP decides to hold a creditors’ meeting they will send you a proof of debt form – complete it, sign it and return it by the date shown • If a creditors’ meeting is not planned, 25% in value of the creditors can insist on one being held • You have the right to vote at the creditors’ meeting, but only if you returned your proof of debt form in time. If you cannot attend you can submit a proxy form – this must be signed by the same person who signed the proof of debt form • You can get a full list of creditors from the OR or IP (although they are allowed to charge for this service). You can also normally inspect the court fileReceipt of payment by the creditorWhen the execution of a writ of fi fa is successful, the HCEO will have either beengiven the outstanding money owed by the judgment debtor, or they will have seizedgoods and sold them at public auction or by private treaty to raise the necessaryamount.In either case, the HCEO will retain the money recovered “in suspense”, i.e. neitherbelonging to the creditor nor debtor, for 14 days before payment is made to thecreditor.Many HCEOs retain this money in a separate client account. This is not a legalrequirement, but is good practice. Wherever the money is held, it must be instantlyaccessible.The 14 day retention of the money recovered is stipulated in the Insolvency Act 1986and the Enterprise Act 2004. If a winding up order is issued against a limitedcompany or a bankruptcy petition against an individual or partnership during this 14day period, then the money recovered is returned to the Liquidator or OfficialPage 21 © The Sheriffs Office 2011
  22. 22. Receiver for the payment of all creditors, not just the judgment creditor. However, thejudgment creditor can apply to the court to have the liquidator’s rights set aside in thecreditor’s favour. This ruling does not apply to an Interim Administration Order.If the goods have been sold, the official receiver or trustee of the bankrupt’s estatehas no right to reclaim them from the purchaser who acquired them in good faith fromthe sale organised by the HCEO.Once the 14 day period is complete, and no winding up order or bankruptcy petitionhas been issued, the money is no longer “in suspense” and is paid to the judgmentcreditor. © The Sheriffs Office 2011 Page 22
  23. 23. 5. Writs of executionDifferent types of writThere are several different types of writs that may be used by an HCEO to execute ajudgment. The one most commonly used is the writ of fi fa, but there are other writsof execution for different scenarios: • Writ of fieri facias • Writ of delivery • Writ of possession • Writ of restitutionThere are other writs including a writ of sequestration and a writ of assistance, butthese are rarely used today.Writ of fieri faciasThe writ of fi fa is the High Court version of a warrant of execution in the CountyCourt. It empowers an HCEO to seize goods belonging to a judgment debtor in orderthat the judgment debt is settled, either by way of payment or sale of the goodsseized. No notice is given to the debtor that a writ of fi fa has been issued. The firstcontact is a visit from an enforcement officer to seize goods. This writ will soon beknown as a Writ of Control.Writ of deliveryThe writ of delivery is most commonly used by companies to recover specific goodsthat have not been fully paid for and the defendant is in arrears, for example financecompanies. The writ of delivery is appropriate where the claimant wants to recoverthe goods, rather than receive payment for them.The writ can also be used in matters of Intellectual Property to seize counterfeits.A writ of delivery, despite its name, is used to recover (repossess) specific goodsfrom a named party. This is often when the purchaser has failed to make payment forthe goods, as title to the goods does not pass to the purchaser until they have beenpaid for in full. This might be where trade credit has been extended or where afinance company has provided a loan or hire purchase agreement.If the claimant wants the actual goods back, rather than an equivalent monetarypayment, then the HCEO will ask for a writ of specific delivery. This type of writ isalso used when the claimant is looking to recover documents.If the claimant is happy to accept money instead, then a standard writ of delivery isused.A writ of delivery may also be used to seize counterfeit goods. Because counterfeitsare a copy of intellectual property rights, the court deems the owner of the IP to alsobe the owner of the counterfeits, hence the choice of a writ of delivery. The policeand Trading Standards may be a first point of call for addressing counterfeiters, but ifyou want to get counterfeits out of the retail environment quickly, then a writ ofdelivery might be a good alternative.Page 23 © The Sheriffs Office 2011
  24. 24. Writ of possessionThis is a writ of possession issued by the High Court after a judgment or order forpossession of either property or land has been awarded. It can only be passed to theHigh Court for enforcement if the occupiers are deemed trespassers or specialprovision is granted by the issuing County Court. An example would be the evictionof travellers or squatters from land or a property.These are often combined with monetary orders allowing enforcement and theseizure of goods in the same manor as with a writ of fi fa. A common example wouldbe for the recovery of rent. Applying for a combined writ will save time as well asallowing the HCEO to enforce both simultaneously.Writ of restitutionThis writ is used if, after the successful eviction of trespassers from a property or landunder a writ of possession, the trespassers re-enter that property or land again. Thiswrit will allow the HCEO to again enforce and remove the trespassers accordingly.Writ of sequestrationIf the debtor fails to pay within the specified time, the judgment creditor may beentitled to a writ of sequestration to obtain payment. The original order requiringpayment of the judgment debt must warn the debtor that failure to pay the sum setout in the order may be enforced by writs of sequestration. The original order must beserved personally and contain the penal notice.Priority of writsIt is very possible that more than one creditor may be suing a debtor at the sametime. When writs of fieri facias (fi fa) are issued, they will be given priority dependingon when they are lodged with NICE Sheriffs and NOT when the judgment or writ wasissued.The creditor will either choose their own HCEO or they will ask the High Court toallocate them an HCEO. Once the writ of fi fa has been passed to the HCEO, he orshe must then lodge it with NICE Sheriffs (National Information Centre forEnforcement run by The Registry Trust).This is an online system and the priority of the writs is determined by the time anddate the writ was logged onto the system. If, however, the writs are logged onto NICESheriffs at the same time, the priority then falls to the date and time it was physicallyreceived by the HCEO.From the creditor’s perspective, it is therefore very important that they (or theirsolicitor) instruct an HCEO as soon as they get the judgment and writ of execution,so that priority can be established. Obtaining priority prevents any other HCEO orCounty Court Bailiff from executing another writ (High Court) or warrant (CountyCourt) against that debtor until the priority writ has been fully executed.If a writ is renewed or extended, priority will remain as per the original logging withNICE Sheriffs, as long as it is renewed or extended before it expires. © The Sheriffs Office 2011 Page 24
  25. 25. Renewing a writ of executionThe life of a writ of execution (including writs of Fieri Facias, Possession andDelivery) is generally twelve months from the date of issue. However the writ may beextended if it is not completed in that time.Extending before date of expiryThe court form no 71 (notice of renewal of a writ of execution) must be completed bythe claimant or claimant’s solicitor. A statement of truth is also required, giving thereasons why the writ was not executed within the twelve months. A court applicationfee of £75 is also required.The advantage of extending before expiry is that the priority of the writ is maintained.The disadvantages are that the court fee is more than the issue fee of £50.00 for anew writ, there can be a delay before the application can be seen by a judge andthere is no guarantee that the judge will agree to an extension.New writ after expiryThis means starting the process again. The claimant will need to complete andsubmit either court form N293a (combined certificate of judgment and request for writof fieri facias or writ of possession) for a judgment or order that was made in theCounty Court, or court form PF86a (combined request for writ of fieri facias or writ ofpossession or writ of delivery) if the judgment or order was made in the High Court.There is a court fee of £50 for the issue of a writ.The advantages are speed because the N293a/PF86a can be sealed in the issuingcourt very quickly, as can the issue of the writ, and there is a £25 saving on the issuefee. The disadvantage is that priority is lost although this will not be important if thereare no other writs for judgments or orders for that defendant.Page 25 © The Sheriffs Office 2011
  26. 26. 6. Sheriffs interpleader proceedingsThird party claiming ownership of seized goodsAt The Sheriffs Office we do frequently have cases where we enforce a writ andseize goods, only to find a third party enters the picture and claims the goods aretheirs and that they want them returned, or, in the event they have already been sold,the money raised given to them.This can be very frustrating for the creditor and generally causes a delay in themreceiving their money, whilst the Court decides who rightfully owns the goods(assuming that the creditor disputes the third party’s claim). This process is calledinterpleader proceedings.If a third party intends to make a claim, they must tell the HCEO who is enforcing thewrit, and give their name and address (the address must be the address where courtdocuments will be served).The HCEO must then tell their client, the creditor. The creditor has seven days to letthe HCEO know whether they agree with the third party’s claim, or whether theydispute it. If they do agree that the third party owns the goods, then they are onlyliable to pay for the fees and expenses incurred by the HCEO before the notice wasreceived.If the creditor either disputes the claim or fails to respond within seven days, then theHCEO can apply to Court (Queen’s Bench division) to issue an interpleadersummons. All parties come to Court so that rightful ownership can be determined.When disputing the third party’s claim, the creditor must provide evidence that they: • claim no interest in the subject matter in dispute other than for charges or costs • do not collude with any of the claimants to that subject matter • are willing to pay or transfer that subject matter into court or to dispose of it as the court may direct.Further information is available from the Ministry of Justice under RSC Order 17.Debtor claims that goods are exempt from seizureThe other situation when interpleader proceedings can arise is when the judgmentdebtor claims that the goods that have been seized are actually exempt from seizure.There are two primary types of goods that may not be seized – tools of the trade anditems essential for basic domestic needs.“Tools of the trade” only relates to sole traders, not to partnerships or limitedcompanies, and the tools must be exclusively for the use of the debtor to be exempt.For example, if a farmer allows a labourer to use his tractor, then the tractor is notexempt from seizure. © The Sheriffs Office 2011 Page 26
  27. 27. With goods essential for basic domestic needs, this includes clothing, bedding,furniture and other basic items. It then becomes a judgment call for the HCEO as towhich household items are essential or luxury. While enforcing a writ, one of TheSheriffs Office HCEOs was told by the defendant that a smoothie maker was exemptfrom seizure, as it was essential for basic domestic needs!In some instances, very expensive or luxury items, including tools of the trade, maybe taken by the HCEO and replaced with similar goods that still service the needs ofthe debtor and his family.Items clearly belonging to children may not be seized.However, should an HCEO seize goods and the judgment debtor believe they wereexempt from seizure, then the debtor needs to make a formal claim to the HCEO inwriting and within 5 days of seizure. This must comply with RSC Order Order.17. TheHCEO will, in turn, write to the creditor advising them of the claim, who should thenrespond within 7 days of receipt either admitting or disputing the claim.If the creditor disputes the claim, the HCEO will make an interpleader application tothe High Court for a hearing. This will be heard by a Master in the Royal Courts ofJustice in London. The Master will look at any evidence and decide whether thegoods are exempt from seizure.If the creditor admits the claim, the HCEO will release the goods from seizure and thecreditor will be liable for the enforcement officer’s fees to that point.During the process of interpleader, the enforcement officer can continue actionagainst the debtor and can seize other goods if necessary.Page 27 © The Sheriffs Office 2011
  28. 28. Useful linksBT Directory Enquiries www.bt.comCompanies House www.companieshouse.org.ukHCEOA www.hceoa.org.ukHCEO Regulations http://www.hceoa.org.uk/regulatoryInformation_1.phpInsolvency Service www.insolvency.gov.uk- Guide for Creditors www.insolvency.gov.uk/pdfs/guidanceleafletspdf/guideforcreditors.pdfInstruction forms www.thesheriffsoffice.com/downloadsLand Registry http://www.landregistry.gov.uk/Ministry of Justice www.justice.gov.ukRegistry Trust www.trustonline.org.ukRSC Order 17 www.justice.gov.uk/civil/procrules_fin/contents/schedule1/rscorder17.htmTracing services http://www.thesheriffsoffice.com/services/tracing_agents/Further reading http://www.thesheriffsoffice.com/articles/ © The Sheriffs Office 2011 Page 28
  29. 29. Glossary of TermsAddress for enforcementIt is the duty of the HCEO to levy upon the defendant’s goods wherever they may befound (within England & Wales). This will often mean that the HCEO will visit anaddress not detailed on the writ. The writ address is merely an “endorsement” due tothe fact that the address for enforcement may be altered at any time as the creditormay direct.Abortive feeThe abortive fee is set out by the High Court Enforcement Officers Association andendorsed by the Ministry of Justice and, under current regulations, all HCEOs arerequired to charge a fee of £60 (plus VAT) per address visited but only if enforcementis unsuccessful. The most common reasons enforcement is unsuccessful are: a) thedebtor has absconded and cannot be traced; b) the debtor is subject to insolvencyproceedings; c) the debtor has no assets of value to remove and sell.Attachment of Earnings OrderOnce you have a County Court Judgment (CCJ) against an individual debtor, youcan ask the court to order their employer to deduct money from their salary. This ispaid to the court, which then pays you. If the employer refuses, they can be fined.The court reviews the debtor’s income and expenditure and determines theinstalment value. If the debtor changes employer, you need to make anotherapplication.BankruptcyThis is for use against an individual debtor for undisputed debts over £750. You don’tneed to get a judgment first; you can simply send a statutory demand giving them 21days in which to pay in full. If they don’t pay, you then issue a winding up petition(you have four months from the statutory demand in which to do this). If the debtor ismade bankrupt, their house may be sold to pay the debts.Certificated bailiffsThis is a bailiff who has been granted a certificate by a judge to levy distraint. Thegeneral certificate lasts for two years and cannot be granted to anyone employed in abusiness that buys debt or any officer of a county court. A landlord may use theancient common law remedy of distress for rent to recover this money. He does notneed a court order and can simply instruct a Certificated Bailiff to enter the premisesand seize goods (“distrain”) in order to sell them to recover the rent.Charging OrderAgain to be used against an individual debtor, this allows you to apply to the court foran order so that, should their property be sold, you will be paid the debt plus interestsand costs if and when the property is sold. All joint owners and other securedcreditors, including the mortgage lender, must be served with the application for theorder. A charging order can also be made against shares.Page 29 © The Sheriffs Office 2011
  30. 30. County Court BailiffsCounty Court bailiffs are civil servants employed by the court. They use a warrant ofexecution to enforce CCJs valued up to £5,000. The warrant costs £100 (and there isno abortive fee). The County Court bailiff is required to give notice to the debtor inwriting that they are intending to enforce. HCEOs do not need to do this.County Court Judgment (CCJ)If you have an outstanding sum owed to you and have chased the debtunsuccessfully, you should write a Letter Before Action to the debtor, advising themthat, unless you receive full payment within 14 days, you will commence court actionto recover the debt.You may either use a solicitor to obtain your CCJ or you can use the Government’sself-service called Money Claim Online. If the debtor still does not pay, you mayproceed to enforcement. CCJs can be enforced for 6 years from the date they areawarded.Debtors in liquidation or administrationYou can check with Companies House to find out if a company is in Liquidation orAdministration with an “L” or and “A” next to the name.Delivery – writ ofThe writ of delivery is most commonly used by companies to recover specific goodsthat have not been fully paid for and the defendant is in arrears, for example financecompanies. The writ of delivery is appropriate where the claimant wants to recoverthe goods, rather than receive payment for them. However, it can be combined with amoney order under a writ of fieri facias if necessary.Employment tribunal award enforcementWith the new Fast Track scheme, employment tribunal awards can be easilytransferred to the High Court for enforcement. You need to download and completethe Form N471 and send it with the award and £50 court fee (recoverable from theformer employer) to your HCEO, who will then obtain the writ on your behalf andcommence enforcement. There is no minimal value to the award for High CourtEnforcement and there is no abortive fee.Exempt addressesThe HCEO may not levy execution at royal residences and diplomatic premises.However, it is worth checking the property details thoroughly. For example; manypalaces are not deemed “royal residences”. Some other premises may be of such anature that care and attention will be necessary when the officer attends to fulfil theirduties; for example, funeral directors, care homes or hospitals. © The Sheriffs Office 2011 Page 30
  31. 31. Fieri facias/fi fa – writ ofThe writ of fi fa is the High Court version of a warrant of execution in the CountyCourt. It empowers an HCEO to seize goods belonging to a judgment debtor in orderthat the judgment debt is settled, either by way of payment or sale. No notice is givento the debtor that a writ of fi fa has been issued. The first contact will be a visit froman enforcement officer to seize goods. This writ will soon be known as a Writ ofControl.Gaining entry by forceCommercial premises: the HCEO can force entry to commercial premises to levy ona first visit or any subsequent visit to remove goods providing the property is notphysically attached to, and form any part of, a residential dwelling.Residential premises: the HCEO may climb a perimeter wall or fence. They can enterthe premises through an unlocked door or open window. Once inside, they maybreak down inner doors to seek the defendant’s goods. The HCEO may not beforcibly ejected, but if they are, they can now force re-entry. They may force entry toa garage, out house, stables or barn providing it is not physically attached to, andform any part of, the residence.Insolvent debtorsThe Insolvency Service allows you to check individuals and “trading as” names forbankruptcy and IVA.Interpleader – claims by third partiesThis can occur if, after the creditor obtained a judgment and the appropriate writ, athird party then claims ownership of the money or goods that have been or will beseized. If the creditor disputes the third party’s claim, an interpleader summons willbe issued for all the parties to attend the High Court so that rightful ownership can bedetermined by a Master.Judgment debtor deceasedIf a judgment and writ of fi fa were awarded before the debtor’s death, then they arevalid and execution may take place, normally through the seizure and sale of goodsheld by the executor on behalf of the estate. If more money is raised than is requiredto satisfy the judgment debt, interest, court fees and execution costs, then thebalance is returned to the deceased’s estate. If the creditor wishes to issueproceedings against a debtor who is already deceased, the court’s prior permission isrequired before a warrant of execution or writ of fi fa can be issued.Lodgment of writs to ensure priorityIt is very possible that more than one creditor may be suing a debtor at the sametime. When writs of fieri facias (fi fa) are issued, the HCEO will lodge it with NICESheriffs (National Information Centre for Enforcement run by The Registry Trust).Writs are given priority depending on when they are lodged with NICE Sheriffs andNOT when the judgment or writ was issued. If a writ is renewed or extended, prioritywill remain as per the original logging with NICE Sheriffs, as long as it is renewed orextended before it expires.Page 31 © The Sheriffs Office 2011
  32. 32. Money held by HCEO after enforcementWhen the execution of a writ of fi fa (fieri facias) is successful, the HCEO will haveeither been paid or will have seized and sold goods. The HCEO retains the moneyrecovered “in suspense”, i.e. neither belonging to the creditor or debtor, for 14 daysbefore payment is made to the creditor in case a winding up order or bankruptcypetition is issued against the creditor during those 14 days. If this happens, themoney is returned to the Liquidator/Official Receiver to pay all creditors. After the 14day period with no winding up order or bankruptcy petition, the money is paid to thejudgment creditor.Notice of enforcementCounty Court Bailiffs are required to write to the judgment debtor before they visit.This can sometimes lead to assets being hidden or removed. With High CourtEnforcement this does not occur, as there is NO requirement for HCEOs to giveadvance notice in any form before enforcement.Older people and the vulnerableEnforcement agencies must ensure that the genuinely vulnerable and sociallyexcluded are protected. The potentially vulnerable include: elderly, people with adisability, the seriously ill, the recently bereaved, single parent families, pregnantwomen, unemployed people, those who have obvious difficulty with English andchildren. Enforcement agents must withdraw from domestic premises if the onlyperson present is, or appears to be, under the age of 18, although they can ask whenthe debtor will be home. If the child appears to be less than 12, the enforcementagents must withdraw without making any enquiries.PartnershipsPartnerships (apart from limited liability partnerships) are not a legal entity, rather acollection of individuals trading together. As such, the partners are liable for the debtof the business and this liability is not limited. When enforcing against a partnership,the creditor is best advised to obtain a judgment against the partnership and includethe name/s of the individual partner/s within the command portion of the writ of fi fa.This then gives the creditor, via the HCEO, the option of enforcing against thepartnership, the partners individually or both.Payment by instalmentsIf the creditor and debtor reach an agreement on an instalment payment plan, thenthe goods remain seized under the walking possession agreement until the debt andcosts are paid in full. Once that happens, the ownership of the goods returns to thedebtor. If, however, the debtor falls behind in the instalments, the creditor can decideto have the goods covered by the walking possession agreement removed and sold.Possession – writ ofCommercial landlords may apply for a writ of possession to repossess land andproperty on that land. The landlord, or their solicitor, must attend the repossession toshow the actual property or land that is being repossessed. The HCEO enforcing thewrit is not obliged to warn the building’s occupants that they are about to be evicted,but it is good practice to do so to avoid problems and prepare any special measuresor support that think they might need in order to execute the writ. The HCEO is © The Sheriffs Office 2011 Page 32
  33. 33. entitled to use force to enter commercial premises and may also use reasonableforce to eject the occupants and other people found on the premises at the time.Questions to get answers to before obtaining a judgmentIs the debtor is still in business, or in the case of a sole trader, not bankrupt? Checkwith Companies House or the Insolvency Register.Do they have assets? You can ask the defendant to provide details of their businessat court.How old is the debt/judgment? You may enforce a judgment up to six years old. Ifyou don’t have a judgment, you may still obtain one if the debt is no more than sixyears old.Have you got all the details correct? Check the company/individual name. If it’s a“trading as”, put those details in too. Get the right address. Get the right amount - youcan legitimately add interest at 8%, court fees and enforcement costs.Seizure and sale of goodsIt is the duty of the HCEO or Certificated Bailiff to seize the goods of the debtor inorder to sell (normally at auction) and raise the money to clear the debt. If sold atauction, the auctioneer will always try to get the best price for the goods, selling tothe highest bidder on the day. The court may also allow for the goods seized to besold privately rather than at public auction if it can be demonstrated that a higherprice is likely to be obtained. This is called private treaty. This is usually the bestoption for goods that are quite specialist or where there is already an interestedparty.Sequestration – writ ofIf the debtor fails to pay within the specified time, the judgment creditor may beentitled to a writ of sequestration to obtain payment. The original order requiringpayment of the judgment debt must warn the debtor that failure to pay the sum setout in the order may be enforced by writs of sequestration. The original order must beserved personally and contain the penal notice.Setting aside judgmentWhen the debtor applies to set aside judgment (sometimes used as a delayingtactic), the court will fix a date for the hearing, which both parties will attend. Thedebtor will have to explain why they want the judgment set aside. If the court doesset aside judgment, then the debtor is allowed to put forward their defence, havingprovided the creditor with documents they intend to use and witnesses to supporttheir defence. If they are successful, enforcement cannot proceed. If their applicationis denied, the creditor may proceed with enforcement. Enforcement can continuewhilst the application is awaiting a hearing.Tools of the tradeTools of the trade, i.e. tools and equipment essential to work or trade, are exemptfrom seizure. However, these goods must be used solely by the debtor for thepurposes of his or her work. For example, a commercial van that is also used by thePage 33 © The Sheriffs Office 2011
  34. 34. debtor’s spouse is available for seizure. This exemption is only available to soletraders and cannot be claimed by partnerships or limited companies.Third Party Debt OrderThis is made against a third party holding money on behalf of the debtor, for exampletheir bank or a customer owing the debtor money. You need to try to make sure thereactually is some money in the bank account, otherwise this method will fail.Third Party OwnershipIf the HCEO seizes goods that do not belong to the debtor or are under a hirepurchase agreement, then the third party needs to provide evidence of this to reclaimthem. This should be made in accordance with RSC Order 17 Rule 2 and may end ininterpleader proceedings at court where a master will decide ownership.Third party premisesThe HCEO can enter the premises of a third party but it is advisable to seek theirconsent first. If the HCEO enters and can find no goods of the defendant they may bedeemed a trespasser. However, if they believe that the goods of the defendant havebeen taken there to avoid execution they may force entry, after request and denial,but do so at their own risk.Tracing individuals and companiesIt’s important to have all the correct details about the debtor so that the judgment canbe enforced. This may include actually locating the defendant, either an individual, asole trader or a company director. Good information to gather includes: name, lastknown address, telephone number, vehicle registration, date of birth. Date of birth isthe most useful, as 90% of the records hold a precise date of birth.Trading asDon’t just sue ABC Services as it is difficult to enforce against this. Sue “John SmithT/A ABC Services” to cover all bases. Don’t forget that many limited companies alsooften trade as another name, so put both names in. If you are to sue a trading name,ensure that you put the words “A Firm” in brackets after the name. However, wewould always recommend you name the individual (s) who run it as well.Transfer of judgment to High CourtWhen a County Court Judgment (CCJ) is issued for £600 and above (including courtcosts), the creditor can transfer it up to the High Court for enforcement by an HCEO.The transfer form is the N293A and there is a court fee of £50, which can be addedto the debt. Once completed, a writ of fieri facias, or fi fa for short, is issued, whichthe HCEO will use to enforce.“Unless” orderThese are court orders specifying that a party to the proceedings must do a specificthing by a set date. If they do not, then the order stipulates what will happen next. Ifthe party does not comply, then the next stage will happen automatically, without anyfurther orders from the court. For example, the court may order the judgment debtor © The Sheriffs Office 2011 Page 34
  35. 35. to pay in installments; if they miss an installment, then the HCEO is authorised toenter and seize goods to cover the outstanding balance owed.Voluntary arrangements – how they impact on enforcementA company voluntary agreement is put in place to allow a company to continuetrading while making an arrangement with its creditors. The arrangement is proposedby the company to its creditors and, once accepted by the appropriate majority, isbinding on all creditors. Normally, the creditors will agree to accept a delay inpayment, a smaller payment, or a combination of the two. Enforcement of writs ofexecution is normally suspended during a company voluntary arrangement.Walking possession agreementWhen leaving seized goods at the debtor’s premises, the HCEO provides a walkingpossession agreement. This states that he has taken possession of the goods andthat the goods will remain in his custody until the debt and all costs have been paid.The debtor may not sell or remove the goods, nor may he let any one else do so. Thewalking possession agreement also obtains the debtor’s permission to re-enter atany time and as often as they need to inspect the goods and remove them. Theagreement allows the HCEO to re-enter by force if necessary.Winding upThis is for use against a company for debts over £750. You don’t need a judgmentfirst, but can go straight to a statutory demand. If payment isn’t received, the nextstep is a winding up petition, which must be advertised at least seven days before thehearing in the London Gazette. This usually leads to banks freezing bank accounts. Ifthe petition is granted, a liquidator is appointed to realise and distribute assetsamongst creditors.Page 35 © The Sheriffs Office 2011

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