Chapter 2: Structure for the regulation of Enforcement Services
2.1 Having considered the background, need for change and existing arrangements, for regulation of enforcement agents it will be helpful to consider the options available for regulation. These include:
2.2 The existing arrangements are a mix between state employed bailiffs and those employed in the private sector some of whom are certificated through a court procedure, others who are not. There is limited regulation through the certification process and contracts with MCCs.
2.3 There is, however, no easy means of communication between the existing structures. For example, a complaint against a certificated bailiff under contract to a MCC may not be brought to the attention of the county court that issued that bailiff’s certificate. Where that bailiff has contracted separately with other MCCs, the problem is increased. The profession is fragmented, with some individuals operating outside of any structures and some evidence of threats and intimidation being used against vulnerable people in their own homes. While the introduction of a single piece of bailiff law would address some of the areas of malpractice, without increased regulation the impact of these changes would be diminished.
2.4 Initial consultation has indicated that there is a need for controlled access to data held in both the private and public sector to enable more effective enforcement. The major conclusion of Phase One of the Enforcement Review was that information is the key issue to improve enforcement. It concluded that this information, relating primarily to personal details, is absolutely essential to an improved enforcement system, but that there should be strict safeguards to ensure that the information was not misused or used for other unrelated purposes. In addition, the Data Protection Act 1998 requires transparency in the collection of personal data. Such transparency and safeguards could not be guaranteed in an unregulated system. For example, some enforcement agents will have diverse interests such as debt recovery, tracing and investigation as well as enforcement of warrants and in this situation their probity and integrity in relation to their access to and use of personal data could be called into question.
2.5 If there were to be no change to the current structure of bailiffs, only those enforcement agents acting under the provisions of the Access to Justice Act 1999 and enforcing criminal fines and breaches of community sentences through the magistrates courts and county court bailiffs would have enhanced access to information. In these circumstances there would be no prospect of removing statutory monopolies or improving the effectiveness of high court, or general, enforcement through enhanced access to information. Consequently the uneven treatment of different types of debt and unequal status of enforcement agents would continue. Current inefficiencies of services and poor access to justice for members of the public (both creditors and debtors) identified by the Report of the First Phase of the Enforcement Review, and the NACAB Report on Undue Distress, would remain. In Chapter Six we consider a two-stage process for improving access to information in enforcement, the first stage of which proposes allowing a regulated enforcement agent a limited ability to obtain information to confirm the accuracy of existing information about a debtor.
2.6 If the proposals to introduce access to information were followed through, however, monitoring of compliance with the Data Protection Act, the Human Rights Act and the various legislative provisions governing access to information would raise a number of problems. The Data Protection Act requires levels of security proportionate to the sensitivity of the data being obtained and the risks to the individuals involved, and if bailiffs remain unregulated, there is no guarantee that such security would be present. Complaints relating to illegal use of data would either be directed at the bailiffs or bailiff companies, and result in similar problems to those currently in existence with relation to unscrupulous operators. Complaints could also be directed to the magistrates’ courts, further adding to their administrative and cost burdens, or pursued through prosecutions under the Data Protection Act which would be time consuming and complicated.
2.7 In such circumstances, with no strong safeguards or security to prevent inappropriate access to and use of information, or transparent and open structures ensuring clear responsibility and accountability for the handling of such information, it is unlikely that the proposals to introduce increased access to information will be pursued.
2.8 There is extensive public concern about the behaviour of bailiffs, particularly those who are not currently regulated in any form. The industry itself seems to favour increased regulation and without this, public concern will persist.
2.9 The existing arrangements involve judicial and staff resources in the courts in several ways. The county court deals with the certification system by which bailiffs operating in the private sector obtain a certificate under the Distress for Rent Rules 1988. Further information is at Annex C and in the recently published Consultation Paper on Distress for Rent. District judges are currently responsible for the actions of county court bailiffs under section 123 of the County Courts Act 1984 which provides that the district judge shall be personally responsible for executions carried out in his name and for the bailiffs who enforce them. The First Phase of the Enforcement Review has proposed that section 123 should be repealed to allow district judges to deal with the interpleader applications and remove the perceived conflict between their role as High Bailiff and their power to hear applications for suspension of warrants.
2.10 MCCs can contract with Approved Enforcement Agencies to execute a range of warrants. An enforcement agency wishing to gain approved status must meet the requirements of the Approval of Enforcement Agencies Regulations 2000 and must apply, separately, to each MCC with which it wishes to contract. Some MCCs also contract with private bailiffs to execute distress warrants. These bailiffs may not necessarily be Approved Enforcement Agencies and may not be certificated.
2.11 If enforcement agents are to be subject to direct regulatory control the government doubts whether this would be rightly part of the core business of the courts and judiciary. The NACAB Report, for example, was critical of magistrates’ courts, because it is claimed, they do not monitor effectively the behaviour of the bailiffs they use.
2.12 While we recognise that there is a continued role in dealing with claims arising from the alleged misuse of enforcement agent’s powers, judges’ core skills are in adjudication, not administrative tasks such as performance monitoring and contract provision. Any time that court staff or judges spend on regulatory control of enforcement agents is time away from their core functions.
2.13 A system of increased court based regulation would have to work along the following lines:
2.14 This also raises the fundamental question of whether the certification process, originally required for The Law Distress Amendment Act 1888 should be used, in effect, as a means for regulating bailiffs wishing to enforce a whole range of other debts.
2.15 Furthermore, increased court regulation would not address the inherent weaknesses in the existing systems. The county courts and the magistrates’ courts in effect operate two independent systems of regulation. This can lead to much duplication of effort, both on the part of the courts and the enforcement agents themselves. As highlighted above, enforcement agencies wishing to gain ‘approved’ status must apply separately to each MCC with which they wish to contract, and their employees must be awarded a certificate of authorisation by the MCC to allow them to execute warrants. Those employees may also have to apply for a certificate under the Distress for Rent Rules to allow them to enforce other debts. The stand-alone nature of the two systems also means that complaints about a bailiff may not be thoroughly investigated.
2.16 Respondents to Professor Beatson’s consultation paper overwhelmingly agreed that the differences should be eliminated where possible and that the laws governing enforcement agent activity should be simplified and clarified. We accept this opinion. Increased court based regulation would not achieve this and would not open up a free market for individuals and small companies.
2.17 Self-regulation works best in professions and industries where there are established Codes of Practice, clear rules of behaviour, high voluntary compliance with professional and ethical standards, and well-informed customers. It cannot be said that these considerations apply to the whole of the enforcement sector. There are no established and enforced Codes of Practice or professional rules for all enforcement agents. Standards of service and conduct vary. Advice services are available in some areas. Some customers, particularly large creditors, are well-informed, but many others, particularly unrepresented individuals, are not. Debtors are often vulnerable.
2.18 There are two main ways that self-regulation could be introduced:
Voluntary self-regulation2.19 Registration would be voluntary and practising without registration would not constitute an offence or lead to sanctions. The Government believes this would only work if there were sufficient market and other incentives to direct creditors towards registered practitioners. The unscrupulous would fail to register and would probably attract the unscrupulous creditor. Debtors in the latter case would be without protection. | |
Compulsory self-regulation2.20 Statute would require practitioners to register with a self-regulatory scheme, backed by a criminal offence for practising without accreditation. This would only work if there were an umbrella organisation setting standards and policing the activities of its members. There is no such organisation, at this time, available which also has the confidence of the rest of the enforcement community in its ability to enforce Codes of Practice. To select any one of the existing trade associations and exclude any of their competitors in the market place would not be appropriate and no one organisation could, in the Government’s view, attract such extensive confidence. | |
Advantages2.21 The main advantages of a self-regulatory structure would be that it:
Disadvantages2.22 The main disadvantages would be:
Statutory Regulation2.23 A statutory scheme would reflect some of the advantages of the self-regulatory model, by encouraging responsible associations to be actively involved in raising standards across the industry, and be able to meet the objections set out above. This regulatory framework would involve a statutory body setting and monitoring the levels of competence required of a licensed practitioner. The body would need machinery to test whether applicants met the standard required, and would need to be able to undertake random inspections, and to apply directly or through the courts a range of sanctions for breaches. Models for Statutory Regulation:2.24 We have considered a number of models, including the Financial Services Authority, proposed Security Industry Authority and Immigration Services Commission. The models vary with the powers, the level of intervention required, the nature and size of the business sector, and the level of compliance within the industry. 2.25 A possible model for an Enforcement Services Commission is at Annex D. The government is aware that a statutory regulation system would be costly but we consider it is worth exploring to find out whether the benefits could outweigh the costs. Advantages:
Disadvantages:
2.26 There is already some commitment towards achieving improvements in the existing associations and good regulation in the public sector. It should be feasible to harness this expertise and enthusiasm, working with those in the industry and other interested groups, as well as those in the public sector, to develop a statutory regulatory framework that operates across the whole enforcement system. This could provide adequate controls to safeguard the vulnerable without burdensome regulation that is costly to administer or restrictive to business and build on the experience of all concerned. 2.27 It is proposed that there could be four different types of licenses which would allow different powers to reflect the different types of duties. The initial proposals are that the licenses would be: 1) distress — allowing enforcement agents to seize a debtor’s goods; 2) committal/arrest — allowing enforcement agents to arrest an offender or a debtor under an order of a court and to take him or her into custody; 3) possession; and 4) access to information. We seek your views on the issues of regulation and would welcome suggestions of, and comments on, other possible approaches. 2.28 In respect of a statutory scheme please consider the following questions: Q.1 Should the Commission have the power to award compensation to both creditors and debtors? Q.2 Should the pursuit of compensation through the Commission prevent/foreclose the pursuit of redress or compensation through other bodies, thereby avoiding the potential for double jeopardy? Q.3 Should license holders be required to contribute funds to a compensation scheme? Q.4 What specific functions should license holders be able to perform? Q.5 Should all license holders be required to have access to legal advice? (For example this could be provided by their employer or through their membership of an accredited association). Q.6 Should all license holders be required to have a period of accredited training during the period of each annual license (e.g. one day per year) to ensure standards of competence are maintained and knowledge of procedures is kept up-to-date? Q.7 What should the level of training and qualifications cover and should a legal qualification such as a law degree be required in due course for all or for certain specific licensed functions? Q.8 Should license holders be prevented from engaging in other businesses or employment as suggested above — such as debt collecting, running a removals company or private investigation agency? If so, what should these other businesses be? Q.9 Should license holders have indemnity insurance? If so at what level? This could be provided for all individuals or through a company scheme by their employers or purchased at competitive rates through the accredited associations. Q.10 What sorts of activities should the license cover? Does the use of four categories, 1) distress, 2) committal/arrest, 3) possession and 4) access to information seem the best approach? Q.11 Should each license attract different powers? For example, should those enforcement agents with an arrest/committal license have the power to search the person they are arresting?
23 See the reference to an article written for NACAB publication Adviser (No. 78, March/April 2000), by the Secretary of the CBA — cited in NACAB Report. 24 Regulation in EU Enforcement Systems (unpublished) by Wendy Kennett, Law Lecturer at Keele University.
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