Chapter 4: A single piece of bailiff law
4.1 Professor Beatson made a large number of proposals, covering all areas of bailiff activity. When final decisions are made, some of these will be implemented by primary or secondary legislation; some will fall to the regulatory structure or appropriate body. He made 46 recommendations; most of which we are wholly or partly in favour of and could be implemented. There are others which could benefit from further public discussion and are set out below.
4.2 The activities of bailiffs are governed by a combination of common law and statute law. There are currently nine different forms of distress undertaken by distrainors on behalf of county courts, High Court and magistrates courts, landlords, local authorities (Council Tax, Non-domestic rates and Road Traffic penalties), Customs and Excise, Inland Revenue and Child Support Agency.
4.3 The myriad of rules and regulations by which distress is undertaken has already been detailed in Professor Beatson’s Independent Review of Bailiff Law27 and there is little to be gained by re-iterating them again. A summary of his recommendations is at Annex B.
4.4 We would expect a single bailiff law to give powers to make rules governing distress where appropriate in England and Wales.
4.5 One of the objectives of a single bailiff law should be that the rules governing distress be set out clearly in one place, and the differences between the rules for different types of debt should, where possible, be eliminated. To that end we accept Professor Beatson’s first recommendation28. This will also entail ensuring that all common law procedures are repealed where appropriate.
4.6 We also asked Professor Beatson to consider bailiff law in the light of an ECHR Convention-based challenge and considered that it is desirable to remove uncertainties in the law and to clarify the grounds upon which distress can be levied and discretion in its administration can be exercised. We therefore accept his recommendation concerning minimising the risk of an ECHR challenge29.
4.7 Chapter Two covered the regulation of enforcement and Chapter Three delivery of enforcement services, this chapter will address the powers that enforcement agents have when executing distress. We will specifically be looking at issues which we think merit some further discussion, and we would like to consult further on the following issues in particular:
4.8 The following paragraphs will concentrate on the recommendations from Professor Beatson’s Independent Review of Bailiff Law covering the details outlined above. As explained earlier the rules governing distress will apply to all enforcement agents. Each stage of the process of levying distress is set out, identifying Government’s current thinking and proposals which we believe need further consideration.
4.9 At common law there is no requirement that notice is given, although many of the statutory regimes require the distrainor to give some information about the process. The purpose of giving notice is to inform the debtor of the possible consequences of their failure to pay the debt and the forms of enforcement that may follow, including the use of distress if they fail to do so. Notice also gives the debtor the opportunity to seek advice, ensure that they are aware of the avenues available to them, and that they have proper opportunity to dispute or pay the debt before any enforcement action begins. (The notice may be contained in the notice of judgment or, for local authorities, in the summons prior to the liability order.) Therefore we generally accept Professor Beatson’s Recommendation 3 a-d30.
4.10 In any event, it appears to be unusual that distress is undertaken without any form of notice. The creditor would need to have reasonable grounds for believing that the debtor would remove or dispose of the goods, if notice were given, before enforcement without notice would be allowed. In order to meet the commitment of giving debtors proper opportunity to resolve the situation (by payment or other arrangement to the creditor) we believe that the period of notice should be seven days, for residential premises.
4.11 However, we do believe that the requirement for notice for other premises need not be as stringent as those for residential. Therefore, we propose that a minimum notice of 72 hours be required.
Q.12 Do you agree that a minimum of 7 days is appropriate for residential premises?
Q.13 Do you agree that a minimum of 72 hours is appropriate for other premises?
4.12 However, we are not in agreement with Recommendation 3 (e) (i) and have concerns with 3 (e) (ii). In Recommendation 3(e)(i) Professor Beatson proposed that consideration be given to making distress in residential premises only available where other methods of enforcement have not worked or are not available. As already indicated, we believe that the creditor should be able to make an (informed) choice as to the best method of enforcement and the initial choice of distress in residential premises should not be precluded. Recommendation 3(e)(ii) concerning insufficient distrainable goods is discussed later in the chapter.
4.13 In all cases of distress it is important that an enforcement agent be easily identified as having the authority to undertake enforcement action and to ensure that the debtor understands that. Regulation will of course affect the final requirements but all distrainors will be required to carry an appropriate identity card in a prescribed form as recommended by Professor Beatson31.
4.14 The distrainor will be responsible for advising the debtor why this enforcement action is being taken against him or her and under which authority. To ensure this happens we are proposing that all forms of distress will be subject to uniform minimum requirements regarding information that is given to the debtor. All enforcement agents will be required to give to the debtor, on or shortly after entry, a document which explains in simple terms this information. Therefore we propose to accept Professor Beatson’s Recommendations in this area32.
Q.14 Are there any other requirements relating to information which could usefully be included?
4.15 Professor Beatson clearly received a large variety of responses on this issue and attempted to draw a middle ground. He recommended that execution should not take place outside the hours 8.00am—8.00pm (subject to being able to distrain on the premises used for business at any hour at which they are trading)33. This position reflects that outlined in the rule governing the collection of indirect taxes.
4.16 We think that his suggestion is a reasonable compromise between the demands of creditors’ and debtors’ representatives, however we also have concerns over the practicality of the proposition. Whilst understanding the need to protect debtors in residential properties, the proposed hours could be very limiting indeed particularly in a modern society where longer commuting and working hours are the norm. We therefore suggest that execution could take place between the hours of 6.00am and 9.00pm.
Q.15 Do you agree with the proposal that execution should commence only between the hours of 6.00am and 9.00pm?
Q.16 Do you think it would be appropriate to have different hours?
4.17 Professor Beatson recommends that only public holidays should be exempt34. However, we consider that it may be more appropriate to have a stricter requirement, particularly for residential accommodation. Therefore, we propose that distraint should not be allowed on a Sunday, Bank Holiday, Good Friday and Christmas Day. Again this would be subject to being able to distrain on premises used for business on any day on which they are trading.
4.18 Professor Beatson considered entry in Recommendations 10—13. We would like to consider two proposals in regard to right of entry. Right of entry is an extremely complex and in reality often an emotive issue. This is a particular area of law which has developed piecemeal over centuries and started in a time when property was radically different than it is today. The right of entry is often not clearly understood by the debtor and the current case law whilst allowing entry through an open window, is hardly appropriate as being regarded as a "normal" way of entering. There should also be a distinction between commercial and residential and other premises for right to force entry.
4.19 As Professor Beatson pointed out it is possible that there will need to be a more elaborate definition of normal/peaceable entry to cover such modern-day attributes of housing such as where entrance to apartment blocks is restricted by intercom access. However, we do not wish to introduce unnecessary complexity. The outcome of Professor Beatson’s consultation was general support for rationalisation and clarification in which forcible entry is permitted.
4.20 It may be considered that forced entry should not be allowed without prior judicial authority in any circumstances. We also have a great deal of sympathy for the position taken by some that entry (without consent) to commercial premises should be allowed (during trading hours). This approach has its attractions, particularly taking into account the very small number of cases in which peaceable entry is refused. However, until we are sure that we have a strong regulatory system in place it may be considered appropriate only to allow forced entry with prior judicial authority.
4.21 This would have the double impact of emphasising that enforcement is taking place in a context where it has judicial backing and support, and not just at the request of the creditor. In the long term, when it has been shown that all enforcement officers can demonstrate that they behave in an ethical and responsible manner, the need for court authorisation might be removed.
4.22 Some consideration may be given to why we would allow forced entry to premises at all. Much emphasis is given to the subject of forced entry although peaceable entry is refused in a minority of cases. It may be easier to consider that debtors should have a clear understanding that in certain circumstances forced entry will be allowed and that refusing to answer the door or not being on the premises does not mean that enforcement agents will not have the right to enter. Therefore whilst it is important to establish what the rights of entry might be, ensuring that the debtor understands those rights is equally important.
4.23 We propose that the very basic tenets of the right of entry to premises for enforcement purposes will be as follows:
Q.17 Do you think that peaceable entry to residential and non-residential properties can only be made by normal means as described above?
Q.18 Do you think that forced entry to residential and non-residential properties should only take place with prior judicial authority (including re-entry and entry to third party premises)?
4.24 On the issue of forced entry we also want to consider the distinction between domestic and non-domestic premises.
4.25 Domestic premises would have the full protection of the law and any right to force entry could not happen without prior judicial authority.
4.26 For non-domestic premises we do not consider that it is necessary that the rights and protection afforded in residential cases need be afforded to commercial premises. This recognises a specific right of entry to commercial premises for the specific purpose of applying the law. There is no fear of breaking into premises in the middle of the night because of the constraints some of the other recommendations already impose. To avoid the possibility of an individual debtor gaining an advantage by denying a distrainor access to business premises, which can occupy large areas and many different buildings, we propose that forced entry (without prior judicial authority) would be allowed, with provision that the enforcement agent must give notice to the debtor with details of the normal entry attempts and stating when the forced entry will take place.
4.27 We believe that there will always be some blurring of the distinction between types of debtors no matter what system one has. But the question of entry is complex and by the nature of enforcement can be confrontational, therefore the greater the clarity of the rules the greater protection to both debtor and enforcement agents.
Q.19 Do you think that forced entry should be allowed on to non-residential premises without prior judicial authority (within strict circumstances)?
4.28 It is important for there to be as much certainty as possible about exemptions as at present there are different types of restrictions for different types of debt. There were a great many responses to Professor Beatson’s consultation paper on this issue. Respondents did agree that in considering the rationalisation and simplification of the position of goods should take into account:
4.29 Professor Beatson concluded that section 16 of the Debtors (Scotland) Act 1987 provides a useful model for rationalisation and simplification in England and Wales35. Although on the face of it, this list appears to exempt more goods, respondents had two other concerns: firstly, that a detailed list might prove inflexible and secondly that a detailed list did not really expand on more general lists for example, the broad statement used by the Insolvency Service. Both of these lists are attached at Annex E.
Q.20 Respondents are asked to comment on the two proposed lists of goods to be exempt from distress at Annex E.
4.30 Debtors must be given the opportunity to challenge the seizure of any item on the grounds that it is exempt. The period in which that challenge can be made must also be aligned with the period in which seized goods cannot be sold. Therefore we propose to accept Professor Beatson’s recommendations36.
4.31 We also propose to accept Professor Beatson’s recommendation regarding utility fittings being specifically exempt from seizure37.
4.32 Professor Beatson recommended that any new statutory provision should authorise the seizure of money, banknotes and bills of exchange, promissory notes, bonds, specialities and securities for money.38. This follows the approach of section 138 of the Supreme Court Act 1981 and section 89 of the County Courts Act 1984. We are content to preserve this provision in a general bailiff law but as Professor Beatson points out there may be some practical difficulty for those levying distress. As the question as to whether a document can be transferred is a technical question, distrainors would probably need to be versed in commercial law in order to make proper assessment. However, we believe that if a qualified enforcement agent is fully conversant with the law in these areas they should not be denied the opportunity of seizing such documents.
4.33 In addition the seizure of cash is often constrained by the wording on the warrant which amounts to the enforcement agent being instructed to either collect payment or seize goods to that amount. It is certainly the case that such items as closed cash boxes have been seized and sold. Therefore, we propose to accept Professor Beatson’s Recommendation 17, but would like to seek views on the practicality of it.
Q.21
4.34 Third parties’ goods include joint property, hired goods and goods purchased on hire purchase terms. We propose to accept Professor Beatson’s recommendations regarding these goods39.
4.35 Once a distrainor has entered premises the next steps in distraint (unless the debtor pays the debt) are seizure and impounding. Seizure is the process by which the distrainor identifies the goods and takes possession of the goods to be distrained. Impounding the goods is where the distrainor would acquire legal control of the goods and remove (impound) and sell them.
4.36 Removal and impounding of goods is no longer the normal practice. More often than not the distrainor and debtor enter into a ’walking possession’ agreement. Such an agreement is essentially a compromise. The distrainor agrees that a debtor can retain possession of the goods without someone being left to guard them. The debtor (or other responsible person) undertakes not to remove the goods (or allow another to remove them) and agrees that the distrainor may return at any time to complete the levy. The courts have accepted that goods may be validly distrained in this way.
4.37 In order to put the process into a modern context we agree with Professor Beatson’s Recommendations 20 (a) and (b)40.
4.38 Professor Beatson’s third recommendation (20 c) is that: "Consideration should be given to requiring the distrainor to provide the debtor with an estimate of the total re-sale value of the goods over which legal control has been taken and to prevent proceeding with the levy where there are insufficient distrainable goods on the premises to cover the expenses and 10% of the debt or £50, whichever is the lesser".
4.39 The existing law already provides some protection from excessive distraint but may require strengthening to reflect that as a matter of principle, goods distrained should have some proportionate value in regards to the outstanding debt. The introduction of such a mechanism may require that some valuation take place on the premises. There has been much discussion as to whether this sort of ’valuation’ already takes place. Some distrainors believe that valuation automatically does take place and others believe it does not. Additionally there is some concern that because distrainors would be required to estimate the value of the goods on the premises that they could mislead the debtor, as there is no easy way to predict what the goods might fetch at sale. There is also concern that the distrainor may be left open to compensation claims under the Torts (Interference with Goods) Act if he or she got it wrong.
4.40 The difficulty of implementing such a proposal is not underestimated and consideration will also be given to the suggestion that the goods should not be sold unless the sum realised is as the above. This has the added advantage of emphasising to the debtor that their goods are ‘worth’ more to them than any money that could be raised at sale. It may also be thought that it would be unjust to sell goods which may not even raise enough to cover the enforcement agent fees never mind any of the debt.
Q.22 Do you consider requiring the enforcement agent to provide the debtor with an estimate of the total re-sale value of the goods over which legal control has been taken and to prevent proceeding with the levy where there are insufficient distrainable goods on the premises to cover the expenses and 10% of the debt or £50, whichever is the lesser is practical?
Q.23 Do you agree that where there are insufficient distrainable goods on the premises to cover the expenses and 10% of the debt or £50 the debtor’s goods should not be sold?
4.41 In line with abolition of seizure and impounding Professor Beatson has recommended three forms of legal control which we propose to accept41.
4.42 The third form of legal control is based upon the current use of ’walking possession agreements’. Where a debtor signs a standard form of agreement or where the debtor refuses to enter a walking possession agreement the enforcement agent should be able to retain legal control of the goods by completing a form and, unless impeded by the debtor, handing him or her a copy of an inventory and other information required by Recommendation 5. This might be in two different forms of documentation:
Q.24 Should an enforcement agent be able to take walking possession without the written agreement of the debtor?
4.43 Professor Beatson was clear that there was general support for a standard form of walking possession agreement and we therefore accept in principle his recommendations regarding the details of such a form. We also accept Professor Beatson’s recommendation that whilst it is preferable for the agreement to be signed by the debtor, it should be capable of being signed by any responsible person on the premises42.
4.44 In respect of Recommendation 2443 we do not consider there is a need to have a formal agreement regarding the continued trading in seized stock. Enforcement agents could continue to come to their own informal arrangements without a specific power.
4.45 Professor Beatson recommended that there should be a maximum period for the levy44. However, currently some levies remain in place during the whole time of an instalment period. We consider that the maximum period of levy should be 6 months. This is in order to protect the enforcement agent from abandonment but also that any arrangement to pay over a longer period should more normally be regarded as an instalment arrangement proper.
4.46 Legislation should specify the circumstances in which a distrainor is permitted to make a second levy. We agree with Professor Beatson that it may possible to widen the circumstances in which a second levy is permitted once an effective system of regulation is in place. However, presently we accept Professor Beatson’s proposals45.
4.47 Sale of goods taken by bailiffs is, in fact, very rare. It is important, however, that there is some clear way of avoiding unnecessary sale of goods, particularly goods taken from domestic premises and that the manner and the conduct of the sale is undertaken in a fit and proper manner. We would particularly wish to avoid causing disproportionate hardship to the debtor through the sale of goods taken from domestic premises. Therefore we propose to accept most of Professor Beatson’s recommendations with regard to the sale of goods46.
4.48 However, with regard to Recommendation 28, we propose that the sale should not be permitted on residential premises unless it is impossible to conduct the sale anywhere else or the debtor gives written consent; but, will be allowed from commercial premises.
4.49 In order to protect a debtor from undue harshness and to ensure that the distress is proportionate to the debt, a mechanism will be introduced to ensure that goods are not sold where it appears that the proceeds of the sale will not reduce the debt or a given proportion of the debt. The arguments are of course similar to the earlier ones of not continuing with the levy where the goods will obviously not raise enough money to cover the enforcement agent fees plus 10% of the debt or £50 (whatever is the lesser), implying that a distrainor would have to value goods on the premises.
4.50 A second issue would be for debtors who would be charged for seizure or impounding and then the goods would not be sold and they would be further in debt. In cases where it was clear that there were insufficient goods the cost of appraisal would fall to the distrainor.
Q.25 How do you think valuation of goods on the debtor’s premises might be objectively and fairly achieved?
4.51 Termination of distress is partly a fee issue and partly a communication issue. The debtor, whatever the circumstances, is entitled to receive clear information on what he is legally obliged to pay (debt, fees, charges etc).
4.52 It must also be clear that once seizure and/or removal have commenced the debtor is liable for the costs of action taken. This is a difficult issue because it appears the cost is rising against a ticking clock. But in order to protect both the enforcement agent and the debtor in view of the possible uncertainty as to the charges due at the time of payment, we accept Professor Beatson’s recommendation47.
4.53 Professor Beatson’s recommendations on unlawful interference with distrained goods may be dependent on the future regulation of enforcement agents.
4.54 If the final outcome of regulation is that all enforcement agents are officers of the court, and where they have taken goods into legal control by the means of a court warrant, then if a debtor were to rescue or attempt to rescue goods taken into legal control then we are likely to be dealing with a ‘contempt issue’ in which Professor Beatson’s Recommendation 35 would be sensible.
4.55 In all other circumstances, however, we propose that the county court or appropriate authority, on application by the creditor or enforcement agent, might award simple damages.
Q.26 Do you agree that in all circumstances (excluding that described in paragraph 4.55 relating to officers of the court enforcing court warrants) that the appropriate penalty for unlawful interference with distrained goods should be simple penal damages?
4.56 In the Independent Review of Bailiff Law, Professor Beatson set out the detail of the remedies available where a creditor or distrainor acts inappropriately. The remedies arise from various statutes and common law (there are at least 65 different pieces of case law which have been used to interpret the law in this area). The remedies available for unlawful distraint depend on whether the distress was illegal, irregular or excessive and different consequences arise from each. These categories were developed in the context of distress for rent but similar distinctions have been made in execution and in some forms of statutory distraint. Where a statute is silent on the matter it is assumed that the common law distinctions are intended to apply.
4.57 In looking at distraint and execution Professor Beatson recommended retaining the distinctions of illegal/wrongful, irregular and excessive48.
4.58 Clearly any proposals need to protect the debtor from the unreasonable creditor, but should not constrain the creditor to the extent that he cannot collect the debt or finds himself sued for damages because of technical infringements. However we would wish to ensure that debtors are protected in these situations and want a system which is easily accessible even though remedies are rarely used.
4.59 The reasons for remedies being rarely used is unknown, however, we might assume at least in some cases that it is because they are obscure and debtors are unaware of their rights, and/or they may be complex and expensive in both time and money to pursue. We must also bear in mind that under a newly regulated regime there may, in the first instance, be a significant increase in complaints simply because there is a clear, accessible system in place.
4.60 We agree with Professor Beatson’s views and the remedies available, however would prefer to see a much-simplified remedial structure to provide the same regimes:
4.61 In practice this will mean repealing all common law precedents/definitions and previous statutory provisions. The proposed definitions of illegal/wrongful and irregular distraint or execution are set out below.
4.62 Illegal distraint or wrongful execution will apply where the action was not authorised or justified from the outset or where entry to the premises is obtained in an unlawful manner.
4.63 Penalties might include damages for trespass, with the ability to take account of any malice; and the automatic return of goods, or payment of their full value to the debtor if they have already been sold (i.e. replacement value).
4.64 There may be a case for setting out in legislation amounts recoverable by way of damages for different types of illegal distraint. Professor Beatson concluded that there should not be. Currently, damages where recoverable will be for interference with goods or trespass. Recognised torts and the principles governing the assessment of damages are common law principles.
4.65 Irregular distraint or execution will apply:
4.66 Penalties for irregularities ought to be lower to reflect the less serious nature of the infringement — perhaps only allowing for any loss actually suffered as a result of the irregularity. It may be possible to set fixed penalties for particular types of infringement. The penalties in any event for irregularities should not be in excess of the full value of the goods and in some cases this will be reduced by the amount of the debt and the costs. Return of the goods should not be automatic, since the irregularity may not be so great as to invalidate the execution — but the debtor ought to be able to apply for the return of the goods or for the order to be set aside.
4.67 By aiming for a more simplified way of defining illegal/wrongful and irregular distraint or execution we are not attempting to reduce in any way the remedies available to debtors for the actions of distrainors and creditors. The objective is to introduce a much simplified system which addresses both the needs of the debtor and ensuring that they have access to remedy and know how to access it. However, there is also a need to ensure that there are no cases taken maliciously or with a view to preventing or delaying sale of goods.
4.68 If a third party claims exclusive ownership of the goods he or she should provide evidence to the enforcement agent (or to the creditor if the creditor has nominated goods to be seized). If the agent/creditor is satisfied as to exclusive ownership then the goods will be released. This does not interfere with the reservation of interpleader action49. The question of distrained goods which are jointly owned and the opportunities for a joint owner to apply for release of that article has been addressed in Recommendation 18, therefore we would like to give consideration to reserving interpleader action for claims to full ownership.
4.69 Some consideration should also be given to cases which involve third party claims to ownership, that a case for damages may lie against the debtor who has allowed the goods to be distrained. This is consistent with the situation that the debtor is responsible for informing the third party of any goods seized in distraint.
Q.27 Do you agree that a much simplified remedial structure would be practical and acceptable to debtors, creditors and enforcement agents?
Q.28 Do you agree that the definitions set out in paragraphs 4.64 and 4.66 are workable within the suggested simplified remedial procedure?
4.70 Professor Beatson recommended the retention of replevin as a remedy for illegal distraint. An owner can recover distrained goods, provided he gives an undertaking to bring an action to determine the right to distrain, and also tenders sufficient security for the debt and costs of the action50. However it is an ancient remedy and is now little used. We consider that if we were able to introduce appropriate statutory penalties for illegal distraint there would be little need for the retention of replevin as an additional remedy.
4.71 We accept Professor Beatson’s recommendation on the complaints procedure with regard to considering an enforcement agent’s conduct and fitness to practice in the context of the regulatory framework51.
4.72 We accept Professor Beatson’s recommendations concerning the priorities to distraint for different types of debt52. The priority accorded to distraint for a debt owed to the Crown shall remain and consideration will be given as to where the power of this should lie. We are also in agreement with the recommendation that the order of execution will be dictated by the time of delivery.
4.73 One of the points raised in response to Professor Beatson’s consultation paper is that there is no power for a magistrates’ court to suspend or withdraw a distress warrant. It is suggested that this has led to difficulties, particularly where a debtor’s circumstances have changed since the warrant was issued. At the same time, allowing magistrates’ courts to withdraw warrants could have implications for the person charged with executing the warrants (usually either a bailiff or an employee of an approved enforcement agency) as he or she may have already incurred costs attempting to execute the warrant.
Q.29 Should magistrates’ courts have the power to suspend or withdraw a distress warrant?
28 Recommendation (1) a) That the rules governing distress be set out clearly in one place, preferably in a statute, and b) The differences between the rules governing distress for different types of debt should, where possible, be eliminated.
29 Recommendation (2) To minimise the risk of a successful ECHR challenge, the regime governing distress by bailiffs be set out clearly in one place, preferably in a statute and should contain the following features:
(a) The rights of the creditor, and the debtor’s rights to challenge the distress at the relevant stages, should be set out consistently and clearly.
(b) There should be sufficient time for the debtor, or a third party who claims an interest in the goods, to apply to court to prevent sale of the goods at an appropriate stage in any distress proceedings.
(c) The types of goods against which distress may be levied, and those which are exempted, should be set out clearly and should be consistent in all cases.
(d) The circumstances in which the debtor, or a third party who claims an interest in the goods, can prevent a sale should include rules which ensure that the sanction is not disproportionate to the debtor’s failure to meet his or her obligations (for example, the sale of goods which are difficult or expensive to replace to pay off a very small debt).
(e) A clear statement of the remedies for wrongful distress.
30 Recommendation (3) (a) Debtors be given written notice that enforcement may follow and of the forms of enforcement that might be adopted unless the creditor has reasonable grounds for believing that if notice is given the debtor will remove or dispose of assets.
(b) The notice, which may be contained in the notice of a judgment, should state the consequences of the bailiff calling, the costs involved, and complaints procedures. As well as informing the debtor, notice will give him or her an opportunity to seek advice and, if possible, to make arrangements for payment by instalments before any costs of enforcement are incurred.
(c) The period of notice be seven days.
(d) Consideration be given as to whether commercial debtors should be treated differently.
(e) Consideration be given to a method of confining distress in residential premises to those cases where:
(i) other methods of enforcement such as attachment of earnings have not worked or are not available, and
(ii) there is a reasonable likelihood that sufficient distrainable goods are in the premises to cover the expenses and 10% of the debt or £50, whichever is the lesser.
31 Recommendation (4) (a) All distrainors shall be required to carry an appropriate identity card in a prescribed form and to show it to the debtor or the person who appears to be in control of the premises as soon as is practicable.
(b) The identity card should contain: (i) the name of the bailiff, (ii) the name and a contact number of the bailiff’s employer, (iii) a photograph.
(c) It should be stated on the identity card that the bailiff is authorised in the prescribed manner to execute warrants as soon as is practicable.
32 Recommendation (5) All forms of distress should be subject to uniform requirements regarding the information to be furnished to the debtor. On entering the premises and before starting to take legal control of goods, the distrainor should be required to provide the debtor with a document stating:
(a) the statutory liability or judgment which has given rise to the debt, (b) the legislative provision authorising the distress, (c) the amount for which the distress warrant was issued, (d) the charges made in relation to it, (e) how payment can be made, (f) that the goods will be sold if the debt and costs are not paid, and (g) in outline any rights of appeal or avenues of complaint the debtor may have.
After taking legal control of goods the distrainor should be required to provide the debtor with a document stating what goods have been seized, i.e. to provide an inventory.
Recommendation (6) Where what is now called a walking possession agreement has been entered into, a document containing the terms should also be provided to the debtor.
Recommendation (7) (a) A bailiff levying distress should be required to direct the debtor to inform the bailiff of any petition for bankruptcy and whether the goods are (i) exempted from distress, and (ii) subject to a hire purchase agreement.
(b) Where goods not belonging to the debtor are seized, the debtor should be required to inform the owner of such goods that the distraint has taken place and to tell that person to write to the person levying distress.
33 Recommendation (8) (a) Unless the court orders otherwise the execution of a writ of execution or a warrant of execution must commence between eight o’clock in the morning and eight o’clock in the evening, but that if it is so commenced but it may continue outside those hours until the levy is completed.
(b) Persons holding themselves out as conducting any profession, trade or business during hours which are, wholly or partly, outside this period are subject to a levy at premises used for the conduct of the profession, trade or business during trading hours.
34 Recommendation (9) (a) Unless the court orders otherwise a writ of execution or a warrant of execution must not be executed on a public holiday.
Persons holding themselves out as conducting any profession, trade or business on a public holiday are subject to a levy at premises used for the conduct of the profession, trade or business during trading hours on that public holiday.
35 Recommendation (14) The following articles belonging to a debtor shall be exempt from distress at the instance of a creditor in respect of a debt due to him by the debtor-
(a) clothing reasonably required for the use of the debtor or any member of the debtor’s household;
(b) implements, tools of trade, books or other equipment including a car or van reasonably required for the use of the debtor or any member of the debtor’s household in the practice of the debtor’s or such member’s profession, trade or business, not exceeding in aggregate value £1,000 or such amount as may be prescribed in regulations made by the Lord Chancellor;
(c) medical aids or medical equipment reasonably required for the use of the debtor or any member of his household;
(d) books or other articles including a computer reasonably required for the education or training of the debtor or any member of the debtor’s household not exceeding in aggregate value £1,000 or such amount as may be prescribed in regulations made by the Lord Chancellor;
(e) toys for the use of any child who is a member of the debtor’s household;
(f) articles reasonably required for the care or upbringing of a child who is a member of the debtor’s household.
(2) The following articles belonging to a debtor shall be exempt from distress if they are at the time of the distress in a dwellinghouse and are reasonably required for the use in the dwellinghouse of the person residing there or a member of the household-
(a) beds or bedding;
(b) household linen;
(c) chairs or settees;
(d) tables;
(e) food;
(f) lights or light fittings;
(g) heating appliances;
(h) curtains;
(i) floor coverings;
(j) furniture, equipment or utensils used for cooking storing or eating food;
(k) refrigerators;
(l) articles used for cleaning, mending, or pressing clothes;
(m) articles used for cleaning the dwellinghouse;
(n) furniture used for storing-
(i) clothing, bedding or household linen;
(ii) articles used for cleaning the dwellinghouse; or
(iii) utensils used for cooking or eating food;
articles used for safety in the dwellinghouse or of household articles.
(3) The Lord Chancellor may by regulations add to the list set out in subsection (2) above, or delete or vary any of the items contained in that list.
36 Recommendation (15) If, on an application made within 7 days after the date of the execution of the warrant—
(a) by the debtor or any person who owns a seized article in common with the debtor; or (b) by any person in possession of an article seized, the [district judge] is satisfied that the article is exempt from distress, an order releasing the article from the distress shall be made.
37 Recommendation (16) If utilities fittings are not fixtures, they should be specifically exempt from seizure.
38 Recommendation (17) Any new statutory provision should authorise the seizure of money, banknotes and bills of exchange, promissory notes, bonds, specialties and securities for money.
39 Recommendation (18) (a) As a general rule only the goods of the debtor should be liable to seizure.
(b) Joint property should be liable to seizure but the distrainor should only acquire an interest in the debtor’s share, and only that interest can be sold. If the entire interest in the goods is sold, the joint owner should be paid for his or her share out of the proceeds of sale before either the enforcement costs or the debt are satisfied.
(c) If, on an application made within 7 days after the date of the execution of the warrant by the debtor or any person who owns a seized article the [district judge] is satisfied that the article is exempt from distress, an order releasing the article from the distress shall be made.
Recommendation (19) (a) Hired goods should not be liable to seizure.
(b) Goods purchased on hire purchase terms should not be liable to seizure unless the debtor has acquired title at the time of the seizure. If such goods are lawfully seized the person who has sold the goods to the debtor on hire purchase terms should be paid for his or her share out of the proceeds of sale before either the enforcement costs or the debt are satisfied.
(c) If, on an application made within 7 days after the date of the execution of the warrant by the debtor or any person who owns a seized article but has hired it to the debtor or sold it to him or her on hire purchase terms, the [district judge] is satisfied that the article is exempt from distress, an order releasing the article from the distress shall be made.
40 Recommendation (20) (a) The distinction between seizure and impounding should be abolished and replaced by a single simple process called "taking legal control" of goods after entry.
(b) After entry the distrainor must
(i) indicate clearly that legal control is being taken over the goods, and,
(ii) unless impeded by the debtor, take an inventory and provide the debtor with a copy of the inventory.
41 Recommendation (21) There should be three forms of legal control of goods:
(i) taking the goods away from the premises and securing them,
(ii) securing them on the premises, and
(iii) a form based on "walking possession", possibly to be called "reservation pending further enforcement action" or "legal control without physical possession".
42 Recommendation (22) The terms upon which the bailiff taking legal control of goods leaves them on the premises and neither removes them nor takes physical possession should:
(a) be stated in legislation together with a model form of agreement,
(b) require the distrainor to agree to leave the goods on the premises and delay sale, and
(c) require the debtor/signatory to agree that until payment is made or the warrant withdrawn, he or she:
will not remove the goods (or allow them to be moved) from the premises,
will show the agreement to any person who calls to the premises to levy on the goods and immediately to inform the bailiff of such a visit,
will not damage the goods or allow any other person to do so,
authorises the distrainor to re-enter the premises at any time to inspect the goods or to complete the execution of the writ as often as he or she thinks necessary,
will pay the appropriate fees.
The debtor/signatory should sign two copies of the agreement, one of which should be handed to him or her.
Recommendation (23) While it is preferable for the agreement to be signed by the debtor, it should be capable of being signed by any responsible person on the premises.
43 Recommendation (24) Where what is now known as a walking possession agreement is entered into, consideration should be given to enabling the distrainor to give the debtor permission to dispose of the seized stock if required for normal trading, and arrange either to receive the proceeds of the sale or for replacement stock acquired by the debtor to be subject to the levy.
44 Recommendation (25) That consideration should be given to the need for a maximum period for a levy and, if such a period should be specified, what it should be.
45 Recommendation (26) (a) that legislation should specify the circumstances in which a distrainor is permitted to make a second levy,
(b) that the present rules are satisfactory but that it may be possible to widen the circumstances in which a second levy is permitted once an effective system of regulation is in place. Until then a second levy should only be permitted where:
there were insufficient goods to satisfy the debt when the first levy was made,
on the first visit to the premises, the distrainor agreed to delay the distraint at the debtor’s request or the debtor agreed to pay by instalments which were not subsequently paid,
where the distrainor withdrew from the first distress because the debtor had been adjudicated bankrupt and the bankruptcy has since been annulled,
if the distrainor was prevented from realising the distress by some wrongful act by the debtor, such as deliberately disrupting the sale, or where the goods are destroyed or substantially damaged by a natural event such as fire or, in the case of livestock, death.
(c) the creditor should be able to issue repeat warrants for a particular debt, as many times as necessary, but in the case of execution, it should be possible to issue a second writ for a particular debt only after the first writ has been returned.
46 Recommendation (27) No goods taken into the legal control of a distrainor should be sold until the expiration of a period of at least seven days next following the day on which the goods have been taken into the legal control of the distrainor unless the goods are perishable or the person whose goods have been so taken gives written consent.
Recommendation (28) No goods taken into the legal control of a distrainor should be sold on the debtor’s premises unless directed by the court on the ground that it would be impossible to conduct the sale anywhere else or the debtor gives written consent.
Recommendation (29) Goods taken into the legal control of a distrainor who takes them away from the premises must be deposited in some fit place, remain in the custody of a suitable person duly approved or be safeguarded in other such manner as directed
Recommendation (30) (a) Where it appears that there are insufficient distrainable goods on the premises to cover the expenses and 10% of the debt or £50, whichever is the lesser, the goods should not be sold.
(b) The debtor should be entitled to have the goods appraised upon making a written request, but will be required to meet the costs of the appraisement either as part of the fee payable to the bailiff, except where it is clear that there are insufficient distrainable goods (as defined in (a) above) on the premises.
(c) Consideration should be given to the abolition of the requirement of appraisal in the case of income tax and national insurance debts.
(d) The determination of precise rules on appraisal may depend on the form of regulation that is adopted for bailiffs and the enforcement process.
Recommendation (31) The sale must be appropriately advertised, and an auction sale must be advertised at least 3 days before it is held.
Recommendation (32) That the rules governing the conduct of the sale should be set out in the legislation.
Recommendation (33) (a) The legislation should provide for the passing of title of goods sold in distraint.
(b) Where goods are sold in distraint, where no claims have been made against the goods, (i) the buyer should acquire a good title to them and (ii) the sheriff or bailiff and anyone lawfully acting under his authority should be immune from claims unless it is proved that the officer had notice that the goods were not the property of the execution debtor or might have ascertained it with reasonable inquiry.
47 Recommendation (34) (a) The legislation should provide that distraint should cease if the debtor tenders the amount owed and the costs either before the distrainor takes legal control of the goods (the replacement proposed for seizure and impounding) or at any time before sale save during the process of taking legal control or removing the goods from the premises.
(b) The legislation should also specify that any goods seized should be made available for collection if payment is received.
(c) If the debt is paid before entry then, by analogy with the common law position, the distrainor should not be entitled to proceed or to claim any fees.
(d) The taking of legal control of the goods is not rendered wrongful by a later tender of the money after legal control has been taken.
(e) Consideration be given to whether the debtor should be able to pay while the bailiff is engaged in taking legal control or removing the goods from the premises, and, if so, how to protect the bailiff and the debtor in view of the possible uncertainty as to the charges due at the time of payment.
48 Recommendation (39) (a) That an unlawful distraint may be illegal, irregular, or excessive.
(b) Distraint will be illegal if it was wrongful from the outset. In cases of illegal distraint, the owner of the goods and the distrainor will be liable for wrongful interference with the goods. It will be no defence that:
(i) the goods taken into the legal control of the distrainor were applied to pay off the owner’s debt, or
(ii) the distrainor had the authority to take legal control of the goods in a proper manner or to take legal control of other goods.
(c) Distraint will be irregular if entry and the taking of legal control of the goods was carried out correctly but the distrainor subsequently does something unlawful.
(i) The distrainor will be liable for any damage actually suffered by the debtor.
(ii) An irregularity in the distraint process does not prevent the distrainor from passing good title to a purchaser.
(d) Distraint will be excessive where the value of the goods seized is clearly disproportionate to the value of the debt.
(i) A distrainor who exercises a reasonable and honest discretion and takes legal control of what any reasonable person would think adequate to satisfy his or her claim shall not be liable for excessive distress.
(ii) If there is only one article available a distrainor is entitled to seize that article even if its value greatly exceeds the value of the debt. If the debt could have been satisfied through seizure of other goods of a lesser value then the distrainor may be liable for excessive distraint.
Recommendation (40) (A) Execution will be wrongful
(a) where the execution was not authorised or justified by the writ of execution or by the judgment under which it is issued,
(b) the writ of execution was issued maliciously and without reasonable cause.
(c) The levy is carried out unlawfully, as where the distrainor executes on a Sunday or forces entry,
(e) Where unfair means, such as the procuring of a search warrant, are used to enable the bailiff to enter the debtor’s premises.
Where execution is wrongful the debtor can recover damages for trespass. Where there is malice the damages will be assessed according to the degree of malice.
Wrongful execution should not necessarily affect the validity of the levy.
(B) An execution will be irregular if any of the rules of court have not been complied with
(i) If the execution is irregular the debtor may apply to have it set aside or amended or for a restitution order.
(ii) Proceedings will not automatically be nullified by an irregularity in the execution but may be if the irregularity was sufficiently serious.
(iii) The setting aside of a writ of execution for irregularity will not prevent the creditor from issuing and executing another writ.
(iv) No officer of a county court in executing any warrant of the court, and no person at whose instance any such warrant is executed shall be deemed a trespasser by reason of any irregularity or informality.
(a) in any proceedings on the validity of which the warrant depends; or
(b) in the form of the warrant or the mode of expressing it.
But any person aggrieved may bring an action for any special damage (in excess of £2) sustained by him by reason of the irregularity or informality against the person guilty of it.
(C) Execution will be excessive where the value of the goods seized is clearly disproportionate to the value of the debt
(i) A distrainor who exercises a reasonable and honest discretion and takes legal control of what any reasonable person would think adequate to satisfy his or her claim shall not be liable for excessive distress.
(ii) If there is only one article available a distrainor is entitled to seize that article even if its value greatly exceeds the value of the debt. If the debt could have been satisfied through seizure of other goods of a lesser value then the distrainor may be liable for excessive distraint.
(D) Consequences of setting aside writ of execution
Where an execution is set aside, either because it was wrongful or irregular, a writ of restitution may be issued ordering the judgment creditor to restore the property or pay over the proceeds of sale to the debtor.
49 Recommendation (42) The interpleader procedure should be retained, but consideration should be given as to whether it requires modification in the light of the changes made by the Civil Procedure Rules.
50 Recommendation (41) That replevin be retained as a remedy for illegal distress. Consideration should be given as to whether the procedure requires modification in the light of the changes made by the Civil Procedure Rules.
51 Recommendation (43) Complaints procedures such as those under the Distress for Rent Rules 1988 concerning a bailiff’s conduct or fitness to practice and sanctions such as cancelling a bailiff’s certificate should be considered in the context of the regulatory framework.
52 Recommendation (44) The priority accorded to distraint for a debt owed to the Crown over any earlier distraint provided that the goods have not been sold should not be removed. It is for consideration whether this should, in the interests of clarity in the context of bailiff law, be contained in legislation governing bailiffs.
Recommendation (45) The priority accorded to landlords in respect of distress for rent should be abolished.
Recommendation (46) The legislation should provide that a writ of execution binds the property in the goods of the debtor from the time that it is delivered to the officer to be executed so that the order of execution will be dictated by the time of delivery.
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