1.14     We, in England and Wales, are not alone in recognising a need for change — Portugal, Denmark, Austria and a number of EU accession states are undergoing or contemplating reform. Legislative reform, building on existing structures, has already taken place in Scotland, France and The Netherlands. It is useful, of course, to compare enforcement systems across the EU but with many fundamental differences in legal systems and the relationship between the individual and the state we cannot simply adopt a model from another jurisdiction.

1.15     Dr. Kennett recognises the importance of a strategic approach to enforcement under modern economic and social conditions — particularly in the light of the variety and mobility of assets now available — and links this favoured strategic approach directly to professionals with a "broader range of business or administrative skills." Kennet argues that "Among the specialist enforcement agents (civil service and professional) are those with a clear picture of their economic and social role, a proactive attitude towards policy initiatives, and a vision of the opportunities offered by the European Single Market." Kennett further asserts that "there is the potential for an enforcement strategist to make a significant contribution to debates about promoting social inclusion" and says that, "it is important to ensure that policy making is not a reaction to debtor lobbying."

1.16     Any new system will also need to take account of recent changes in the magistrates’ courts (set out in the section below entitled ‘current arrangements’) whereby Magistrates’ Courts Committees (MCCs) have taken over responsibility from the police for executing warrants against fine defaulters and those in breach of community sentences.

The wider picture

1.17     The Brussels Convention has provided, since 1968, a framework for mutual recognition and enforcement of judgments in civil and commercial matters within the EU. Recognition and enforcement under the Convention is subject to the so-called ‘exequatur9’ procedure, under which a court in the receiving state has to (or at least reserves the right to) effectively check the judgment against various criteria, for example, was the defendant properly served; should enforcement be refused for public policy reasons. The Brussels

Regulation, which will supersede the Convention as from 1 March 2002, streamlines the process of mutual recognition, but it is far from automatic. Courts receiving judgments will continue to be able to refuse to recognise them for reasons related to public policy, inadequate service, inadequate time for the preparation of a defence, and where there are irreconcilable judgments.

1.18     The European Council at Tampere in October 1999, mandated work towards a programme of measures to implement the principle of mutual recognition as the cornerstone of judicial co-operation amongst the Member States of the European Union.

1.19     The program of measures mandated by the Tampere summit has now been adopted. This includes proposals to make mutual recognition easier by abolishing exequatur and introducing a European Enforcement Order, thereby making civil judgments truly portable across borders with the minimum of formality. The power of the courts to review the procedural aspects of incoming judgments will be replaced by a set of agreed minimum standards of civil procedure which will guarantee to each Member State the validity of the judgment being enforced. It is proposed in the first instance to introduce a European Enforcement Order on a pilot basis for uncontested money claims.

1.20     It is important to recognise that the successful introduction of an European Enforcement Order underpinned by minimum standards in procedures leading up to judgment, needs to be matched by confidence in the enforcement mechanisms in the receiving Member State.

1.21     The Lord Chancellor recognises a litigant has not secured justice if he has obtained a court judgment but cannot obtain payment. However, the system must also distinguish between those who go out of their way to avoid payment, and those who find themselves in considerable financial difficulties and cannot pay. An efficient civil system should deter efforts to enforce judgments which are likely to be fruitless, not just to prevent creditors wasting time and money, but also to protect debtors from oppressive and aggravating pursuit of debts. But the system should not just be preventative. It should provide effective help for those who find themselves with multiple debts and who cannot pay them. It should provide opportunities for financial rehabilitation so that those in genuine financial difficulty are not trapped in a downward spiral of financial and social exclusion, unable to access the full range of services which the majority enjoy. It should also ensure that lenders and others have access through registration of judgments to data on which to base future business decisions, thereby reducing risk of irrecoverable debts being entered into.

1.22     The Government wants to encourage enterprise, to prevent people becoming ‘over-indebted’, to promote education and confidence among consumers accessing all the benefits of a modern credit-based society, to ensure responsible lending and borrowing, and to help rehabilitate those in genuine financial difficulties. The DTI’s Task Force on ‘over-indebtedness’ is due to report soon. Against this backdrop LCD is working in partnership with the Insolvency Service in investigating a new approach to personal insolvency. This may include a variety of options for advice and the management of agreed repayment plans, relief for those with no ability to pay, a continuing public sector option for asset realisation and income-based repayment mechanisms where appropriate. The aim of the new approach is to provide effective rehabilitation of those who fall into genuine difficulties, and where misconduct has been identified, to impose suitable penalties on those who abuse access to credit, goods and services.

1.23     Our challenge is to create a new system which can be introduced smoothly and will: improve service delivery

• ensure that enforcement agents are trusted and trustworthy
• be fair to creditor and debtor
• facilitate the appropriate and intelligent use of data
• raise the level of professionalism in the industry
• encourage effective, fair and appropriate enforcement, and
• be better able to respond to change in the future.

The opportunity — a mood for change

1.24     In 1992 a review was set up to consider whether any changes needed to be made to the way in which civil enforcement agents in England and Wales were organised and managed. It also considered whether any changes needed to be made to the law governing the way they do their work and what role the state should play. This resulted in the reduction of the transfer threshold of High Court enforcement from £5000 to £1000 and the setting up of a working group to consider the modification and strengthening of the certification process. They were also required to look at ways of increasing the availability and accessibility of redress for those aggrieved by the actions of private bailiffs.

1.25     In 1999 minor changes to the Distress for Rent Regulations were made, the Court Service published two guidance leaflets about bailiffs and the threshold for the optional transfer of county court judgments to the High Court for enforcement by sheriffs was further lowered to £600. 1999 was also the year in which an announcement was made that Professor Beatson would review the powers of bailiffs.

1.26     There is general will to change among those who provide an enforcement service in the private and the public sector, from those who use the service as creditors, small and large, and from those who represent the debtors. This mood reflects recognition of individuals’ rights, an expectation of greater access to justice, a desire for increased professionalism and improved service delivery. It is now being clearly articulated by a range of key players and is gaining momentum.

1.27     The National Association of Citizens Advice Bureaux (NACAB) have set out three possible options for achieving a regulated, controlled and accountable profession of enforcement officers10:

• all enforcement agents could be brought into the public sector, managed either by Court Service or by a new executive agency;
• an Independent Enforcement Agency could be set up, to contract with firms or individuals in the private sector that meet its standards and requirements;
• an independent regulatory body could be set up, to license and monitor enforcement agents; to investigate and act on complaints; and to ensure compliance with a statutory code of practice.

1.28     In general, Dr. Kennett favours systems which require legal qualifications and professional organisations, and recognise enforcement agents as a high status group. She suggests that the most effective and efficient form of enforcement system concentrate considerable powers and responsibilities in the hands of enforcement specialists. The Bailiff Law Reform Group11 favour "the proper regulation of enforcement activity" under enforcement agents who are:

• professionally trained
• officers of the court rather than agents of the creditor
• bound by a professional code of ethics
• made subject to stringent disciplinary procedures
• fully financially liable in the case of wrongdoing, and
• able to control access to and the use of information in a way in which the public could have confidence.

1.29     The Group is prepared to accept in principle that such agents could have access to the information necessary to make enforcement effective and be allowed forced access to the debtor’s premises on judicial authority (at least during a transitional period) when necessary provided that the law:

• offered appropriate protection for debtors in terms of the property and income protected from seizure by an enforcement agent;
• established enforcement procedures and fee scales in a clear and acceptable manner; and
• ensured that there were readily accessible means of redress for debtors who had suffered an infringement of their rights.

The vision — policy objectives:

1.30     We need an enforcement system which is:

• effective, and
• fair.

Effective

1.31     An effective enforcement system is essential to providing access to justice and is central to the public’s perception of justice. Court Service information about the success of warrants of execution (which account for about 85% of all enforcement effort) show that only 35% of all warrants issued are paid12. We are unable to provide equivalent information from other Government Departments or the private sector as it is not information that is collected. We have estimated that the value of unpaid post-judgment debt is more than £600 million per year13. Court Service statistics suggest that the address is wrong on as many as half the warrants issued14. A major study undertaken on small claims found that 35% of successful claimants had received no part of the sum awarded to them, several months after judgment15.

Fair

1.32     The NACAB Report alleges abuses of power, primarily among private bailiffs acting on behalf of the local authority or magistrates’ court through intimidation, misrepresentation, and acting beyond their powers. It identifies problems with seizure of goods and an absence of effective independent monitoring, complaints and redress mechanisms. It has been suggested that bailiff action is overused compared to the rest of the EU16. Government recognises the need for enforcement agents and the fact that for some debtors at least, it may be the only way that they will face up to their debt. However, in our view it is primarily the lack of information available to creditors and those trying to enforce judgments that leads to an over-reliance on bailiffs17. Human Rights Act 1998 and Data Protection Act 1998 provisions are relevant to debtors, creditors and enforcement agents and will require detailed and careful consideration when legislative proposals are made.

1.33     We are inclined towards an enforcement system which reflects a market based strategy and encourages smarter ways of working.

1.34     To reflect a market-based strategy it will need to:

• be competitive, productive, innovative and open to new entrants;
• provide the best possible opportunities to support existing businesses;
• endorse our commitment to work towards more effective cross-border enforcement of judgments and to setting minimum agreed standards for the European Enforcement Order;
• direct public subsidy to where the market cannot provide, or would produce an unacceptable result in social policy.

1.35     Smarter ways of working will include:

• more joined up and intelligent and appropriate use of information to deliver a better service;
• introducing targets for performance standards across the whole sector;
• committed to improving service delivery — as part of the Lord Chancellor’s Department’s Public Service Agreement18;
• use of the most appropriate means of enforcement.

1.36     Several respondents to Professor Beatson’s Consultation Paper supported the idea that an enforcement system should facilitate and prioritise different methods of enforcement and that distress should be the method of last resort. The procedural changes from Phase One of the Review go some way to introducing improvements to these alternatives. The Scottish Law Commission has noted that since the reforms introduced by the Debtors (Scotland) Act 1987, the position in Scotland is reversed. There, attachment (arrestment) of earnings and other arrestments account for some 88% of enforcement proceedings. As a result of a study undertaken by the Scottish Office Central Research Unit19 interviews with facilitators suggested that the changes introduced by the 1987 Act had rebalanced the system in favour of the debtor. By reducing the attractiveness of poinding and warrant sales in particular, the Act had encouraged a shift towards the use of informal procedures in debt cases. This report also stated that "interestingly, the impact of the Act was said to have been affected by wider changes in public awareness of debt enforcement procedures."

1.37     The abolition of Poinding and Warrant Sales Bill was introduced to the Scottish Parliament on 24 September 1999 and will take effect on 31 December 2002. A cross-parliamentary working group is considering alternative procedures for enforcing debts, and the Scottish Executive is committed to legislating for an alternative system before the end of 2002.

1.38     Nearly all comparable legal systems offer a sanction similar to seizure and sale of the goods of debtors. In the Government’s view it is possible that such a sanction might always be necessary against particular debtors, as it is currently. However, as an ideal the Government would like to see a system that encourages the use of the most appropriate enforcement method rather than the widespread use of distress.

1.39     The Government’s position is that it sees a continued place for distress, but only in a reformed and regulated system, where efforts are made to ensure that it is not used indiscriminately.

1.40     Government takes the view that the creditor should make the choice, but enforcement agents may have a role to play in providing advice and information where this is required. It should not be left to the creditor’s ethics alone to determine the type of enforcement, there should be:

• clear information on the choice and suitability of enforcement options;
• greater understanding of the difficulties that both debtors and creditors face;
• a duty to direct debtors towards advice agencies, assess their assets, and not to enforce where there are no assets (still less to enforce repeatedly in those circumstances).

1.41     NACAB calls for all enforcement agents to be independent of both creditor and debtor. However, it must be remembered that post judgment the creditor has an entitlement to expect his claim to be enforced. What is needed is a balance between duties to:

• the court
• the creditor, and
• the debtor.

Current arrangements

1.42     Detailed information about the existing arrangements is set out in Annex C. Currently there are four types of bailiff, briefly these are:

Sheriffs

1.43     The appointment of sheriffs is governed by the Sheriffs Act 1887. High Sheriffs are appointed each year by HM the Queen for each bailiwick. Although responsible for High Court enforcement within their bailiwick, the High Sheriffs are not, and do not wish to be, involved personally in enforcement. Instead they delegate powers of enforcement to their Under Sheriff (normally a practicing solicitor) and to his Sheriff’s Officer (who, with their bailiffs carry out the day to day work). Under Sheriffs and Sheriff’s Officers are appointed by the High Sheriff on an annual basis. Although the sheriffs have already made serious efforts to improve the level of diversity within their ranks, especially in terms of female and ethnic minority representation it is accepted that the appointment procedure is clearly in need of reform.

1.44     The sheriff is an officer of the court. The sheriff’s status as an officer of the Crown is recognised in the Sheriffs Act 1887. They have the monopoly to execute High Court writs of fieri facias and also writs for possession and return of goods. Where High Court judgments require enforcement by way of execution, sheriffs enforce them. They can also enforce county court money judgments where the amount it is sought to enforce exceeds £600 and the creditor chooses to transfer the debt to the High Court for execution.

County court bailiffs

1.45     County court bailiffs, who are employees of the Court Service, deal with enforcement of judgments and/or orders made and registered in the county courts. They enforce warrants of execution, repossess land with warrants of possession and recover goods under warrants for return of goods20. In addition, county court bailiffs carry out other duties, including personal service of documents and warrants of committal21.

Certificated bailiffs

1.46     Certificated bailiffs are private bailiffs and are certificated under the Distress for Rent Rules22, and so are authorised by a Circuit Judge sitting in the county court. Under a number of other Acts certificated bailiffs are also permitted to enforce other specific debts such as council tax, non-domestic rates etc.

Private Bailiffs

1.47     Private bailiffs are bailiffs who enforce debts where regulations do not stipulate that the debts should be enforced only by a county court bailiff, sheriff or certificated bailiff. There are no qualifications required to become a private bailiff.

Magistrates’ Courts

1.48     From 1 April 2001, MCCs took over formal lead responsibility from the police for executing warrants issued against fine defaulters and those in breach of community sentences. Under the new arrangements, it is for individual MCCs to determine how their warrants are executed. Some are employing their own civilian enforcement officers, others are contracting this work out to Approved Enforcement Agencies or back to the police, and some are using a combination of these methods. In addition, some MCCs still contract with private or certificated bailiffs (who are not necessarily Approved Enforcement Agencies) to execute distress warrants.

Professional bodies in England and Wales

1.49     In England and Wales those actively involved in enforcement have their own trade associations. These are playing a significant and increasing part in regulating their members even though their roles and responsibilities are not established by legislation. These associations are:

• Association of Under Sheriffs
• Sheriffs Officers Association
• Certificated Bailiffs Association
• Association of Civil Enforcement Agents.

1.50     Further information regarding these associations, the services they provide including the arrangements for complaints handling, training and appointment of the bailiffs that they represent can be found in Annex C.

1.51     In addition, The Sheriffs of England and Wales — a federation embracing the Shrievalty Association, the Under Sheriffs’ Association and the Sheriffs’ Officers’ Association — represents the common interests of High Sheriffs, Under Sheriffs and Sheriffs Officers in enforcement. This federation was launched in January 2001.

2 Report of the First Phase of the Enforcement Review, Lord Chancellor's Department, July 2000 (First Phase Report). Copies are available from Chris Bell at LCD on 020 7210 8560, or may be viewed at www.lcd.gov.uk.