This paper sets out for consultation the Lord Chancellor's proposal to
increase enforcement agents' fees for the collection of fixed penalties under the Road Traffic Act 1991;
increase enforcement agents' fees for distress for rent, under the Distress for Rent (Amendment) Acts 1888 and 1895.
The consultation is aimed at all individuals and groups who have an interest in civil enforcement, particularly those enforcing and enforced against under the Distress for Rent and Road Traffic Acts in England and Wales. A full list of questions on which we are seeking comment is attached at Annex A. This consultation is being conducted in line with the Code of Practice on Written Consultation issued by the Cabinet Office. It falls within the scope of the Code. The Code criteria set out in Annex B have been followed.
The proposals are unlikely to lead to additional costs or savings for businesses, charities or the voluntary sector. Furthermore, proposals that increase a statutory fee by a predetermined formula such as the rate of inflation do not require publication of a Regulatory Impact Assessment.
Copies of the consultation paper are being sent to:
Please send your response by Friday, 16 May 2003 to:
James Parker
Lord Chancellor's Department
Civil Justice Division
Third Floor
Selborne House
54-60 Victoria Street
London SW1E 6QW
DX 117000
Tel: 0207 210 8311
Fax: 0207 210 8559
Email: James Parker
Representative groups are asked to give a summary of the people and organisations they represent when they respond.
The Department may wish to publish responses to this consultation document in due course. Please ensure your response is marked clearly if you wish your response or name to be kept confidential. Confidential responses will be included in any statistical summary of numbers of comments received and views expressed.
Further copies of this consultation paper can be obtained from James Parker at the above address or by phoning 020-7210 8311.
This consultation paper seeks views from interested parties on whether there should be:
an 11.9% uplift to enforcement agents' fees under the Road Traffic Act 1991;
an 11.9% or 73% uplift to enforcement agents' fees under the Distress for Rent Amendment Acts 1888 and 1895.
The Road Traffic Act 1991 decriminalised parking offences in London and established a regime of fixed penalty notices, issued by local authorities, to be enforced through the civil courts. Fees under the Road Traffic Act were last raised in 1998. Following an official industry request for an inflationary uplift, we are consulting on uplifting these fees and charges by 11.9%. This figure is derived from calculating inflation rates (based on the Retail Price Index) since the last increase.
By virtue of the powers conferred to him by Section 8 of the Law of Distress Amendment Act 1888 and Section 3 of the Law of Distress Amendment Act 1895, the Lord Chancellor may make Rules relating to fees, charges and expenses for levying distress. Fees under these Acts were last raised in 1988. The Lord Chancellor's Department proposes to introduce a parallel uplift to distress for rent fees and charges, alongside the increases to Road Traffic Act fees and charges. We are consulting on uplifts based either on figures of 11.9% (representing inflation since 1998 - in line with other proposed increases) and 73% (this represents the rate of inflation since 1988, the last time Distress for Rent fees were raised).
This consultation paper arises from formal requests to LCD from the major trade associations in the enforcement industry, asking for an increase to enforcement agents' fees. These organisations have argued that there is an economic need for such a rise since there have been substantial increases in overhead costs for enforcement agents in the period between 1998 and the present. One industry estimate, for example, records increases of up to 26% in staff costs and 32% in transport costs. Furthermore, the drive towards increased professionalism and the move towards a greater use of technology have resulted in increased costs for enforcement agents and agencies. They argue that existing fees for enforcement agents, which, in the case of Road Traffic penalties were last set in 1998 and in the case of Distress for Rent in 1988, do not reflect the costs of those agents in pursuing enforcement.
The arguments for an early increase to enforcement agents' fees, as well as a move towards harmonisation of fees, are also supported by the Enforcement Law Reform Group, an independent advice, discussion and research group for enforcement issues within the United Kingdom and Europe in the enforcement field. They have been further endorsed by representations made to LCD at Enforcement Conferences held during 2002.
This consultation is conducted in parallel with a similar exercise being undertaken by the Office of the Deputy Prime Minister (ODPM). ODPM will be consulting on whether to uplift enforcement agents' fees for council tax and non-domestic rates by the rate of inflation since the last uplift in 1998. It also takes place against the background of a consultation paper on increases to civil court fees, issued in September 2002.
This consultation on uplifting enforcement agents' fees under the Distress for Rent and Road Traffic Acts is independent of forthcoming proposals to modify existing fee principles and structures across the range of debt stream areas under the aegis of the Enforcement Review. We are not proposing to change the existing fee structures for enforcement agents prior to any legislative change which may emerge following the forthcoming Enforcement White Paper. We do, however, recognise the arguments that the current fee levels need to be responsive to market conditions, and our proposals for uplifts based on inflationary rises reflect this position.
The Road Traffic Act 1991 decriminalised parking offences in London and established a regime of fixed penalty notices, issued by local authorities, to be enforced through the civil courts. Unpaid parking penalties are registered as judgments of the county court through the Traffic Enforcement Centre at Northampton. If the driver fails to pay after receipt of a court order, the local authority can apply to issue a warrant of execution.
The Enforcement of Road Traffic Debts Order 1993 provides that warrants of execution issued in these circumstances must be executed by certificated bailiffs. These are bailiffs in the private sector who have been granted a certificate by a county court judge under the Distress for Rent Rules 1988. The fees which bailiffs may charge debtors for enforcing these debts are set by order of the Lord Chancellor, under section 78 of the Road Traffic Act 1991, and are detailed in Schedule 1 of the Enforcement of Road Traffic Debts (Certificated Bailiffs) Regulations 1993.
Representations have been made to the Department that RTA fees are due for review, since they were last raised in 1998, and there is a need to account for the effects of inflation. It has been argued that a rise in fees is needed to account for increased costs for enforcement agents, especially in the areas of transport and staffing, despite the overall low rate of inflation.
There are two options open for consultation:
Option 1: No Change: maintain the current level of fees, as set out in Schedule 1 of the Enforcement of Road Traffic Debts (Certificated Bailiffs) Regulations 1993;
Option 2: 11.9% Uplift: increase fees based on a figure of 11.9%, the rate of inflation since they were last raised
The table below details the fees and charges as set out in Schedule 1 of the Enforcement of Road Traffic Debts (Certificated Bailiffs) Regulations.
Table 1
| Fee Type | Current Level |
|---|---|
| 1. Fee for preparing and sending a letter advising the debtor that a warrant is with the bailiff and requesting the total sum due (fee recoverable only if letter is sent before a first visit is made to the debtor's premises) |
£10 |
| 2. For levying distress |
£25 |
| 3. Reasonable costs and charges for attending to levy distress, but where levy is not made. |
The costs and charges are not to exceed the fees and charges which would have been due under 2 above if the distress had been levied |
| 4. For taking possession - |
£5.00 each day; |
| 5. Valuation 6. Removing goods or attending to remove goods where no goods are removed 7. Sale of goods |
Reasonable fees, charges and expenses of the broker 15% of the proceeds of sale if the sale is held on auctioneer's premises to cover the auctioneers commission and out-of-pocket expenses, plus the reasonable cost of advertising, removal and storage OR 7.5% of the proceeds of the sale where the sale is held on the debtor's premises to cover the auctioneer's commission, plus out-of-pocket expenses actually and reasonable incurred |
Question 1Should enforcement agents' fees under the Road Traffic Act 1991 remain the same? Yes or No. Please give reasons |
The table below sets out the effect of an uplift based on 11.9%, and then rounded up or down to the nearest 5p, whichever results in an amount which is administratively practical for enforcement agents, while maintaining sufficient proximity to the original 11.9%. This is broadly in line with the uplift proposed for council tax and national non-domestic rates by ODPM.
Charges for the sale of goods have not been uplifted, since the price realised at auction will be linked to market conditions and the effects of inflation at the time of sale. This, in turn, will be reflected in the percentage owed to the enforcement agent. This obviates the need for Government to uplift charges in this area.
Table 2
| Fee Type | Current Level | After 11.9% Uplift |
|---|---|---|
| 1. Fee for preparing and sending a letter advising the debtor that a warrant is with the bailiff and requesting the total sum due (fee recoverable only if letter is sent before a first visit is made to the debtor's premises) |
£10 |
£11.20 |
| 2. For levying distress |
£25 |
£28 |
| 3. Reasonable costs and charges for attending to levy distress, but where levy is not made. |
The costs and charges are not to exceed the fees and charges which would have been due under 2 above if the distress had been levied |
|
| 4. For taking possession - |
£5.00 each day; |
£5.60 each day; |
| 5. Valuation 6. Removing goods or attending to remove goods where no goods are removed 7. Sale of goods |
Reasonable fees, charges and expenses of the broker 15% of the proceeds of sale if the sale is held on auctioneer's premises to cover the auctioneers commission and out-of-pocket expenses, plus the reasonable cost of advertising, removal and storage OR 7.5% of the proceeds of the sale where the sale is held on the debtor's premises to cover the auctioneer's commission, plus out-of-pocket expenses actually and reasonable incurred |
Question 2Should enforcement agents' fees under the Road Traffic Act 1991 be increased by 11.9% (the rate of inflation since the last increase)? Yes or No. Please give reasons |
The Lord Chancellor may make Rules relating to fees, charges, and expenses for levying distress, by virtue of the powers conferred on him by Section 8 of the Law of Distress Amendment Act 1888 and Section 3 of the Law of Distress Amendment Act 1895. After consultation, fees were last raised under the Distress for Rent Rules 1988.
The Lord Chancellor's Department proposes that distress for rent fees should be uplifted alongside similar rises in Council Tax, Non Domestic Rates and Road Traffic Act fees. The Lord Chancellor's Department therefore seeks views on whether distress for rent fees should be uplifted, and if so, whether fees should be raised by 11.9% or 73%.
There are three options open for consultation
No Change - maintain current levels of fees, charges and expenses, as set out in Appendix 1 to Distress for Rent Rules 1988;
Increase Fees by 11.9% - increase distress for rent fees by same rate being proposed for Road Traffic Act fees;
Increase Fees by 73% - increase distress for rent fees by the rate of inflation since they were last raised.
The table below details the current fees and charges as set out in Appendix 1 to Distress for Rent Rules 1988.
Table 3
| Fee Type | Current Level |
|---|---|
| 1. For levying distress |
£12.50 12.5% on the first £100; |
| 2. For taking possession - |
£4.50 per day |
| 3. For appraisement |
Reasonable fees, charges and expenses of the broker, subject to assessment. |
| 4. Sale |
15% of sum realised |
Question 3Should distress for rent fees remain the same? Yes or No. Please give reasons |
The table below sets out the effect of an uplift based on 11.9%, and then rounded up or down to the nearest 5 p or 50 p, whichever results in an amount which is administratively practical for enforcement agents, while maintaining sufficient proximity to the original 11.9%. This option uses the same rate of increase that is proposed for Road Traffic Act penalties, and is broadly in line with the uplift proposed for council tax and national non-domestic rates by ODPM.
As with Road Traffic Act fees, no increase has been made to the charges for sale of goods, since inflationary increases will be reflected in the sale prices received, and therefore the percentage realised, by the enforcement agent.
Table 4
| Fee Type | Current Level | After 11.9% Uplift |
|---|---|---|
| 1. For levying distress |
£12.50 12.5% on the first £100; |
£14.00 14% on the first £100 4.5% on the next £400 |
| 2. For taking possession - |
£4.50 per day |
£5.00 per day |
| 3. For appraisement |
Reasonable fees, charges and expenses of the broker, subject to assessment. |
|
| 4. Sale |
15% of sum realised |
This increase broadly reflects the percentage raise applied to other enforcement fees. This allows for consistency across debt streams, sending a single and simple message to both debtors and enforcement agents.
Question 4Should distress for rent fees be uplifted by 11.9%? Yes or No. Please give reasons |
However, an uplift of 11.9% to distress for rent fees is not consistent with the principle of an inflationary uplift, since the point at which the fees were last raised for distress for rent was 1988, which yields an inflationary raise of 73%.
Further, an increase of 11.9% still leaves a significant gap between the costs of distress for rent and Road Traffic Act enforcement fees. For example, levying on a distress for rent debt of £100, if fees were raised by 11.9%, would result in the debtor owing £14.00. The corresponding fee for levying on a Road Traffic Act penalty, after an 11.9% uplift, would be £28.00. This mitigates against a harmonisation of fees across the debt stream areas.
In the light of these two points, we are putting forward a third option for consultation - an uplift of 73%, which reflects the rates of inflation since 1988, the year in which distress for rent fees were last set.
The table below sets out the effect of an uplift based on 73%, and then rounded up or down to the nearest 5 p using the same rationale as outlined above. Once again, no changes have been made to the figures relating to sale, again for the reasons detailed above.
Table 5
| Fee Type | Current Level | After 73% Uplift |
|---|---|---|
| 1. For levying distress |
£12.50 12.5% on the first £100; |
£21.65 21.5% on the first £100 1.7% on the next £8000 |
| 2. For taking possession - |
£4.50 per day |
£7.80 per day |
| 3. For appraisement |
Reasonable fees, charges and expenses of the broker, subject to assessment. |
|
| 4. Sale |
15% of sum realised |
This option has the advantage of using the same rationale for calculating each of the uplifts across the range of debt stream areas. It also narrows the gap between the fees charged under different debt streams, therefore generating less confusion for debtors. For example, levying on a distress for rent debt of £100, if fees were raised by 73%, would result in the debtor owing £21.65. The corresponding fee for levying on a Road Traffic Act penalty, after an 11.9% uplift, would be £28.00.
We recognise that a rise of 73% represents a substantial increase; however, even with a 73% increase distress for rent fees still remain below those charged in other debt stream areas.
Question 5Should distress for rent fees be uplifted by 73% (the rate of inflation since the last uplift)? Yes or No. Please give reasons |
This consultation paper is issued in the wider context of the Enforcement Review. The forthcoming Enforcement White Paper will contain recommendations on the future shape of fee principles and structures for those conducting warrant enforcement business.
Responses to consultation will be analysed and a summary published in due course.
We would welcome responses to the following questions set out in this consultation paper:
Should enforcement agents' fees under the Road Traffic Act 1991 remain the same?
Should enforcement agents' fees under the Road Traffic Act 1991 be increased by 11.9% (the rate of inflation since the last uplift)?
Should distress for rent fees remain the same?
Should distress for rent fees be uplifted by 11.9%?
Should distress for rent fees be uplifted by 73% (the rate of inflation since the last uplift)?
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If you are a representative group please give a summary of the people and organisations you represent
James Parker
Lord Chancellor's Department
Civil Justice Division
Third Floor
Selborne House
54-60 Victoria Street
London SW1E 6QW
DX 117000
Tel: 0207 210 8311
Fax: 0207 210 8559
Email: James Parker
If you have any complaints or comments about the consultation process, you should contact the Lord Chancellor's Department's consultation co-ordinator, Laurence Fiddler, on 020 7210 8516 or email him at Laurence Fiddler. Alternatively, you may wish to write to the address below:
Laurence Fiddler
Consultation Co-ordinator
Room 8.23
Lord Chancellor's Department
Selborne House
54-60 Victoria Street
London SW1E 6QW
The criteria in the Code of Practice on Written Consultation issued by the Cabinet Office is as follows:
Timing of consultation should be built into the planning process for a policy or service from the start, so that it has the best prospect of improving the proposals concerned, and so that sufficient time is left for it at each stage.
It should be clear who is being consulted, about what questions, in what timescale and for what purpose.
A consultation document should be as simple and concise as possible. It should include a summary, in two pages at most, of the main questions it seeks views on. It should make it as easy as possible for readers to respond, make contact or complain.
Documents should be made widely available, with the fullest use of electronic means (though not to the exclusion of others), and effectively drawn to the attention of all interested groups and individuals.
Sufficient time should be allowed for considered responses from all groups with an interest. Twelve weeks should be the standard minimum period for a consultation.
Responses should be carefully and open-mindedly analysed, and the results made widely available, with an account of the views expressed, and reasons for decisions finally taken.
Departments should monitor and evaluate consultations, designating a consultation co-ordinator who will ensure the lessons are disseminated.