This document is the post-consultation report for the Green Paper, Towards Effective Enforcement: A single piece of bailiff law and a regulatory enforcement structure.
It covers:-
Paper copies of this report can be obtained by contacting David Ilic at:
Lord Chancellor's Department
Civil Justice Division
Civil Enforcement Branch
Room 3.23, Selborne House
54/60 Victoria Street
London SW1E 6QW
Telephone: 020-7210 8654
E-mail: David Ilic
The Green Paper Towards Effective Enforcement: A single piece of bailiff law and a regulatory enforcement structure was published on 9 July 2001. Around 1000 copies were sent to members of the judiciary, governing bodies of the legal profession, enforcement agents and their trade organisations, money advice groups, Government Departments and other interested parties. The paper was also available at HMSO Bookshops and on the LCD website.
The Green Paper invited comments on structure for the regulation of enforcement services, a single piece of bailiff law, fees, information and data sharing and the partial regulatory impact assessment. Details of the areas covered by the individual chapters are outlined below.
The chapter on structure for the regulation of enforcement services focuses on identifying and considering options for the regulation of civil enforcement agents, embracing both public and private sector. It offers four options: no change; increased court based direct regulation; self-regulation (voluntary and compulsory); and a self-financing statutory regulatory scheme. The Paper identifies a genuine commitment within the industry and the public sector for improved standards of service and an acceptance from the private sector of the need for regulation.
The chapter on a single piece of bailiff law concentrates on the legal powers that enforcement agents should have to undertake enforcement action, focusing on the recommendations made by Professor Beatson in his Independent Review of Bailiff Law [Endnote 1]. It seeks further views on some particular issues including notice, identification of bailiffs, entry, distrainable goods (and exempt goods), seizure and impounding, and remedies.
The chapter on fees refers to the complexities, scope for exploitation in and inadequacies of the existing fee structures and the need for radical change. These problems are well known to those in the industry, to major creditors and those who advise debtors, but not necessarily to smaller creditors or many of those facing up to the reality of debt. The Government is committed to ensuring that any new structure, or fee scales within it, does not simply replace one bad system with another. A clear set of principles for fees is proposed, which will be enshrined in primary legislation. The proposed role of the Commissioner would include making recommendations for appropriate fee scales to the Lord Chancellor after consultation with stakeholders.
The chapter on information and data sharing outlines a proposed two-stage process for improving access to information in enforcement. The current situation is wholly inadequate and reliant on the creditor initially and then on the compliance of debtors to provide accurate or truthful information. Delay is inherent; the new procedures could introduce swift mechanisms to obtain controlled access to information direct from other sources, within Government and from third parties such as banks and building societies. This would streamline the enforcement process, and provide reliable information for effective enforcement.
The Paper did not ask any specific questions on the delivery of enforcement services. However, 23 out of the 84 respondents sent in unsolicited comments on this issue. We recognise the importance of service delivery and the need for input from those in the private, public and voluntary sectors. An Advisory Group on Enforcement Service Delivery has been established to provide a forum for those with practical expertise and detailed knowledge of the issues to inform and advise the Review Team in the policy making process. Issues relating to service delivery will be included in the Advisory Group's considerations and are outlined in this post-consultation report.
A breakdown by sector of number of respondents is at Annex A.
84 responses to the consultation paper were received. The breakdown of responses is as follows:
9 from Public Interest Group and Advice Organisations (referred to as Public Interest Groups)
26 from Enforcement Agents, Professional Associations and Trade Associations (referred to as Enforcement Agents)
3 Individuals
11 from the Judiciary and County Courts (referred to as Judiciary)
19 from Local Authorities
4 from Solicitors and Legal Advisors (referred to as Solicitors)
5 from Stakeholder Groups and Representative Organisations (referred to as Stakeholder Groups)
7 from Government Departments and Statutory Bodies (referred to as Government Departments)
We have used collective titles to refer to respondents in the body of this report to indicate in broad terms the sector whose interests they represent without revealing the precise identity of any respondent.
Responses have been analysed for: possible new approaches to the question; evidence of impact of the proposals; levels of support among particular groups.
As set out in the Green Paper our purpose is to ensure an effective enforcement service. We are taking a wide ranging approach in order to achieve a fundamental improvement. We are considering possible new structures which will set out the powers for effective enforcement on behalf of creditors and incorporating satisfactory safeguards to ensure fairness to debtors. We propose a significant overhaul of enforcement and must ensure that a new fee structure or scales within it does not simply replace one bad system with another.
The current position of the Lord Chancellor's Department in response to the issues raised by the Green Paper is indicated in bold text boxes throughout this paper. The key messages are:
support for the concept of regulation and in particular a statutory regulatory body
support for a single piece of bailiff law
support for setting fee principles
support for increased and controlled access to information
support for increased powers for enforcement agents in order to achieve effective enforcement, balanced by improved standards and necessary safeguards to ensure fairness to both debtor and creditor.
There was overwhelming support across the range of responses that there was a need for increased regulation. Although some respondents expressed a direct preference for one regulatory option, they also commented on the others, highlighting the pros and cons of each. These comments have been taken into account in the analysis below.
We seek your views on the issues of regulation and would welcome suggestions of, and comments on, other possible approaches |
|---|
34 respondents agreed with this option. However many of those attached a caveat or further revised their answer.
respondents from the judicial group suggested that if the enforcement agents were carrying out court enforcement there should be some judicial supervision/ control
public interest group respondents suggested that there should be some public subsidy
one respondent suggested that there should be representatives from the bailiff organisations whereas another suggested that any statutory body should be completely independent
one enforcement agent, although willing to accept this as an option, suggested that it introduced an expensive bureaucracy and could increase creditors' expectations beyond what is reasonable
another enforcement agent suggested that the proposal for an Enforcement Services Commission is flawed. They argue that a Commission will breach the historic separation of powers between the Executive and the Judiciary, and saying that this divide is already breached in places it is inappropriate for an Executive body to control the people who enforce judicial orders. They further argue that the Green Paper rightly makes the point that administrative tasks are not the core function of judges and if enforcement agents are to be court officers they should be appointed and regulated by a judicially based authority.
Four respondents agreed with this option and suggested that there should be compulsory membership of recognised bodies for bailiffs but that those bodies would require powerful sanctions.
Four respondents did not agree with this option. Of those, one stakeholder group and one public interest group agreed with the reasons set out in the Green Paper.
Only two respondents supported this option, one being a Government Department, the other a public interest group.
without responding directly to any of the questions asked, but as part of a series of extensive recommendations relating to protecting the vulnerable, reforming court processes, extending legal aid provisions, and introducing minimum income standards, the public interest group also commented that regulation by judicial control was preferable to a Commission, and any complaints against bailiffs should be dealt with by a County Court with a right of appeal to the High Court.
Seven respondents disagreed with this option on the grounds that it was more time consuming and the current system, which is partially court based, is already the subject of criticism.
one stakeholder group pointed out that the judiciary would find it impossible to exercise real control as judges are adjudicators not administrators.
Only five respondents commented on this option; all were against it.
We are encouraged by the general consensus that there is a need for regulation and note that most respondents favour a statutory body by way of a Commission. One argument against the setting up of a Commission was that it was inappropriate for an Executive body to control the people who enforce judicial orders. If the final decision is that there should be statutory body to regulate enforcement agents it will be an Executive Non-Departmental Public Body which would be legally incorporated, thus ensuring a separate legal personality. Our legal advice clearly indicates that this need not prevent us from considering a Commission as one of the regulatory options. We are working closely with trade associations and enforcement agents to more accurately gauge the size of the market by examining the numbers of enforcement agents, businesses and trade organisations involved. Accurate market sizing will assist in establishing the cost of a Commission and the resultant cost of licensing. It will also assist in determining how effective any additional regulation of enforcement agents would be in recovering post judgment debt. Significant progress has been made by the Advisory Group on Enforcement Service Delivery who have commissioned a market evaluation report. |
|---|
The next 11 questions consider the possible powers and functions of an Enforcement Services Commission. As stated above, no final policy decisions have been made on any regulatory structure. We have, however, analysed the responses to these questions on the assumption that a Commission exists.
Q.1 Should the Commission have the power to award compensation to both creditors and debtors avoiding the potential for double jeopardy? |
There were 54 responses to this question.
YES. 49 respondents answered yes to this question. However, many of those attached a caveat or further refined their answer:
two commented that there would be a need for independent appeal procedures
one stakeholder group saw the Commission acting in the same way as the Local Government Ombudsman, and suggested that any compensation scheme should be supported by a robust means of enforcing payment
13 respondents suggested that there must be a mechanism to ensure that frivolous or vexatious claims were dealt with
two local authorities and a public interest group suggested that the enforcement agents should be able to try to resolve matters first before they are sent to the Commission.
NO. Five answered no, but for different reasons:
in an increasingly litigious society bailiffs' duties are difficult enough without the added worry of possible compensation claims
compensation can be obtained through other channels and all enforcement agents should be covered by insurance to cover illegal levying illegal entering of premises as well as assault against themselves by debtors or third parties.
We recognise that it would be appropriate for a Commission to have the power to award compensation. The issue of remedy for illegal and irregular distraint is also discussed in Questions 26-28. |
|---|
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? |
YES. 32 respondents answered yes to this question. However, many of those attached a caveat or further refined their answer:
seven respondents commented that there should be an independent appeals procedure
NO. Eight answered no, and of those four suggested that there should be redress by civil court action.
The potential for double jeopardy would have to be addressed by regulation. The practical processes will be a matter for a Commission and is also addressed in the discussion at Question 28. |
|---|
Q.3 Should licence holders be required to contribute funds to a compensation scheme? |
YES. 16 respondents answered yes to this question. However, many of those attached a caveat or further refined their answer. One respondent suggested that this is the only way that a scheme would be self-financing.
NO. 23 answered no, but for different reasons:
one stakeholder group did not support funding coming from all licence holders, but suggested that payment of compensation should be the responsibility of the licence holder against whom an award has been made; the issue of a licence holder using insolvency to avoid payment should be considered, which may justify the creation of a small reserve fund
the majority of respondents suggested that compensation should be dealt with by way of indemnity insurance and one suggested that this could be a licensing requirement
another stakeholder group suggested that it would be too expensive to run.
The issue of a compensation fund is sensitive and if possible it would be preferable for the issue of compensation to be dealt with by way of indemnity insurance. It may be that possession of indemnity insurance or security will be a licence prerequisite as is currently the requirement for certification. If a Commission were set up one of its roles would be to determine the nature and value of any insurance. A Commission with strong regulatory powers would aim to improve standards within the industry so that a steep increase in premiums to cover the cost of compensation would be unlikely. We will consult widely with stakeholders, in particular trade associations, on this issue and consider what role, if any, trade associations will have in relation to regulation and compensation. |
|---|
Q.4 What specific functions should licence holders be able to perform? |
31 respondents said that the licence holders should be able to perform all the functions set out in Question 10, but two commented that there should be training and qualification requirements.
Three respondents commented that functions should be dependent on the licence obtained.
Additional concerns were:
one enforcement agent respondent stated that committal for contempt should not be seen as a route for profit and therefore should not be dealt with in the private sector
one stakeholder group had reservations about the power to arrest in the light of the Human Rights Act.
The main issue relating to the licence is the different functions and powers an enforcement agent has to carry out and the appropriate expertise required. The powers required to carry out distress are very different to those required for committal/arrest and the powers required for possession are a mixture of both. Therefore we see a need for different licences, especially as some enforcement agents may only carry out distress or committal/arrest. We will also need to make available a composite licence for those enforcement agents who perform all tasks and meet the appropriate requirements. One licence would be for distress, another for possession and another for committal/ arrest. The option of a licence for access to information will have to be explored more fully in line with our data sharing proposals. |
|---|
Q.5 Should all licence 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? |
YES. 30 respondents answered yes to this question. However, many of those attached a caveat or further refined their answer:
one enforcement agent respondent suggested that the Commission should employ a legal expert who could be consulted by bailiffs
another suggested this could be restricted to being dealt with through the employer
one local authority agreed that this would be helpful for advising bailiffs of their rights.
NO. Ten answered no, but for different of reasons, including:
a number of enforcement agents commented that it should be advocated as good practice but not enshrined in legislation or regulation. It would be for the individual or their company to decide whether legal advice was necessary and arrange it through the normal channels
a stakeholder group suggested an agent should take legal advice as and when necessary by retaining the services of an appropriately qualified legal practitioner, but made no comment on whether this should be required. A pre-requisite for a licence, however, should be adequate legal knowledge.
To carry out distress the enforcement agent must have a working knowledge of the relevant law and access to appropriate legal advice. It is therefore not necessary for us to legislate or regulate access to legal advice but to encourage through the trade associations, best practice and guidance. In our view it would be inappropriate for an independent Commission to perform the function of employing a legal adviser to the industry. |
|---|
Q.6 Should all licence holders be required to have a period of accredited training during the period of each annual licence - to ensure standards of competence are maintained and knowledge of procedures is kept up-to-date etc. - one day per year? |
YES. 39 respondents answered yes to this question. However many of those attached a caveat or further refined their answer:
one enforcement agent commented that one day a year would not be enough
a public interest group suggested that it should be part of the annual licence renewal to ensure competence is maintained
one local authority and one judicial respondent suggested that if there were any changes to the legislation then updated training should be compulsory
a stakeholder group suggested a requirement to participate in a continuous professional development scheme, and offered an introduction to its own scheme to any future Commission.
NO. One stakeholder group was the only respondent who answered no to this question, stating that it would be too cumbersome and expensive.
Training will be an issue for a Commission to consider in detail. There should be some provision in either regulation or code of practice to ensure enforcement agents keep up to date with procedures this would also apply to the other regulatory options - court based or self regulation. |
|---|
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 licenced functions? |
35 respondents agreed that there was a need for training but no one agreed that it should be a law degree.
12 respondents suggested that there should be a new type of qualification set when it has been decided what regulation is put in place.
Two respondents expressed concern about the cost of setting up a new qualification.
one local authority suggested that the training should be limited to the bailiff courses that are already available.
one stakeholder group proposed its current NVQ in combination with the continuous professional development scheme, and expressly commended that it would not support any transitional or exemption arrangement based on experience. They proposed allowing existing practitioners a longer time to acquire the qualification.
The issue of training needs to be considered in detail by a Commission. We are looking at the training that is currently available and under development so that recommendations can be made. This is particularly important in relation to the different types of licence. A legal qualification would not be necessary but a working knowledge of bailiff law would. A minimum training requirements would be similarly recommended for the other regulatory options - court based or self regulation. |
|---|
Q.8 Should licence holders be prevented from engaging in other businesses or employment - such as debt collecting, running a removals company or private investigation agency? If so, what should these other businesses be? |
YES. 17 respondents answered yes to this question. However, many of those attached a caveat or further refined their answer:
all agreed that it should only be duties where there was a conflict of interest
two respondents suggested auctioneers, two suggested debt collection
a public interest group noted that this would lead to greater regulatory complexity.
NO. 19 respondents answered no, but 11 of those suggested that mechanisms could be put in place through the regulatory structure to address conflicts of interest that could result in the loss of licence.
one stakeholder group proposed a compromise in which enforcement agents should be allowed to carry on other businesses but declare those interests publicly as part of the licensing process. A register of such interests could be maintained and subject to inspection upon payment to cover the costs of maintaining the register.
It is a genuine concern that there should not be any conflict of interest also that if the restrictions were too rigid this they could affect the viability of existing businesses. We intend to explore the purpose and extent of restrictions further with the Advisory Group on Service Delivery. |
|---|
Q.9 Should licence 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. |
YES. 37 respondents answered yes to this question:
five respondents suggested that there should be an individual and a company scheme
two respondents suggested that the level should be £250,000 and one suggested that it should be left to the Commission to decide
one local authority respondent suggested that there should be employer's liability of £10m.
one enforcement agent commented that the Commission should decide the appropriate compensation
As mentioned in response to Question 3 the final decision concerning the level and nature of any indemnity insurance would be for a Commission. We suggest that it should not necessarily be limited to insurance but could include security, as currently required by those undertaking distress for rent rules. We would however not advocate security less than the current value of £10,000. The policy recommendation for the other regulatory options - court based or self regulation - is that it should be no less than the current security for distress which currently stands at £10,000. |
|---|
Q.10 What sorts of activities should the licence cover? Does the use of four categories, 1) distress, 2) committal/arrest, 3) possession and 4) access to information seem the best approach? |
YES. 37 respondents agreed that the licence should cover these four activities. However many of those attached a caveat or further refined their answer:
two respondents suggested that there should just be three licences one to cover distress and possession, one for committal and arrest, and one for access to information
two respondents suggested that the activities should also include process serving
two respondents agreed that there should be four separate licences but an enforcement agent could apply for a licence to cover any or all of the activities
one public interest group respondent suggested that access to information should be through the employer and not the individual enforcement agent
one stakeholder group suggested one licence to be granted after application and the application would state the range of services to be provided; a licence would therefore carry permission to operate in all or any of the disciplines.
a judicial respondent and an enforcement agent respondent did not agree that committal or arrest should be one of the activities.
As stated in the response to Question 4 above it is our intention, with a statutory regulation, to have three licences (one relating to distress, one for possession and the other for committal/arrest,) but that there should also be a composite licence for agents who deal with all activities. The licence relating to access to information will have to be considered in line with the policy on data sharing including whether this should be a separate licence or an additional power available for the existing licences. |
|---|
Q.11 Should each licence attract different powers? For example, should those enforcement agents with an arrest/committal licence have the power to search the person they are arresting? |
YES. 24 respondents answered yes to this question. However one of the respondents commented that if the power of search is granted the following issues will have to be fully considered:
what training will be given? Would there need to be female agents for female arrests? How would risks to agents be addressed? And what protection would an agent have against violence?
NO. Seven answered no, but for different reasons:
it would be too complicated
the power of search could be a violation of Human Rights
one stakeholder group suggested that the powers permitted under the licence must be prescribed for each area of activity.
As suggested by the stakeholder group respondent the powers permitted under the licence will be prescribed for each area of activity to ensure proper regulation if a statutory regulatory body is introduced. We will be looking in more detail at the powers of arrest and committal in both criminal and civil enforcement. We will discussing with others including the police on the issue of search and in particular what is required to ensure the safety of the enforcement agent without in any way giving powers to others that are appropriate only to the police. |
|---|
There was overwhelming support across the range of responses for the need to rationalise, clarify and codify bailiff law, although a number of representative organisations (court enforcement officers, local government) argued for clear recognition of differences particular to their sector.
Most respondents answered the questions directly, enabling a reasonably clear numerical breakdown of responses on each topic. However, some questions generated descriptive responses rather than precise answers; where this is the case, it has been reflected in the analysis. A selection of individual responses to questions has been added to the Yes/No numbers where the answers represent a significant body of opinion, or where the argument outlined adds to the debate on the point at issue.
Q.12 Do you agree that a minimum of 7 days notice is appropriate for residential premises? |
YES. 39 respondents clearly answered Yes to this question. However, many of those attached a caveat, or further refined their answer:
one local authority suggested after taking walking possession
13 suggested that the notice should not be served by the bailiff/enforcement agent, but by the creditor prior to engaging the enforcement agent, by being included on the judgment, or by a solicitor prior to instructing the agent
one respondent suggested the notice should be of the intention to distrain rather than the timing of distraint
two solicitor respondents requested clarification of whether weekends or the debtor being on holiday should be taken into account when establishing the time period
one enforcement agent respondent supported the proposal unless there were grounds for believing the debtor would remove assets.
NO. 12 clearly answered No, but for a variety of reasons:
two local authority respondents preferred their existing 14 days
three respondents argued that the debtor had enough time already, or that there was no need for notice at all
three respondents thought three days was adequate
three respondents, two from public interest group, argued for a longer period of 10 -14 days (but another also proposed the possibility of enforcement without notice if the agent can show good cause).
A number of respondents did not answer the question directly, but offered comments
one enforcement agent suggested prior notice of enforcement should be given but not the specific type of enforcement
one local authority commented that 7 days notice is better for Local Authorities than their current 14, but this does disadvantage the debtor, as they have less time to seek advice
two other local authority respondents stated that notice of enforcement options sent after judgment obtained should be sufficient.
We are satisfied that a minimum of 7 days notice would be appropriate for residential premises. |
|---|
Q.13 Do you agree that a minimum of 72 hours notice is appropriate for other premises? |
YES. 35 respondents clearly answered Yes to this question. However, many of those attached a caveat, or further refined their answer:
one judicial respondent commented that this should be at the bailiff's discretion
one local authority respondent suggested that this should only be after taking walking possession
one enforcement agent respondent suggested 24 hours would be preferable
one respondent suggested the notice should be of the intention to distrain rather than the timing of distraint
seven suggested that the notice should not be served by the enforcement agent, but by the creditor prior to engaging the enforcement agent, or by being included on the judgment
two argued that there should be a procedure for urgent action
one required clarification with regard to a Return of Goods order
NO. 18 clearly answered No, but for a variety of reasons:
four argued there was no need to distinguish between residential and non residential
three argued that there was no need for notice at all, or that they have had enough time already
one local authority argued that an agent should be able to gain court permission to enforce immediately
another local authority proposed 7 days
one judicial respondent proposed 36 hours
one respondent proposed 48 hours
three public interest group respondents argued for a longer period (one suggested 10 -14 days) to enable the debtor to seek advice.
Two respondents found this question too difficult to answer or were unclear as to their answer.
One public interest group argued in answer to Questions 12 and 13 that there should be a 7 day period of grace to pay voluntarily, and if this does not happen a range of enforcement measures may be taken, but no further or separate notice indicating distress or execution should take place - noting that the agent on the doorstep is often the spur to payment or seeking advice.
LCD stated clearly that we generally accepted Professor Beatson's Recommendation 3 a-d which covers such issues as written notice being given explaining that enforcement may follow. This implies that it is likely to be the creditor who must give this notice or that, in many cases it will be on the notice of judgment. Professor Beatson's Recommendation 3d reads: Consideration should be given as to whether commercial debtors should be treated differently and it was this that we were more interested in exploring through consultation. Several respondents believed that the seven days notice period should apply to all. It is still LCD's position that there will be a differential between commercial and non-commercial debtors. We have already proposed a change to the distress for rent procedure to the effect that landlords would need to give a minimum of 72 hours notice before allowing distraint to commence.[Endnote 2] Therefore we would not disadvantage other creditors (of commercial debts) by requiring them to give a longer period of notice. |
|---|
The creditor will be able to apply to the court for leave to distrain without notice if he can provide evidence that the debtor will remove the goods or otherwise hinder the procedure if notified. |
|---|
Q.14 Are there any other requirements relating to information given to the debtor which could usefully be included? |
18 respondents answered No directly. The following additional requirements were suggested:
nine respondents required clear details of fees and costs
three respondents suggested advice sources, and one suggested also including a translation facility
five respondents suggested details of bailiffs' powers, and two suggested also including the power to seek a Data Disclosure Order
court details
one public interest group respondent suggested that the bailiff should explain verbally to ensure the debtor fully understood the situation, as well as providing written information
one argued that the debtor should be given as much information as possible on the creditor, the debt and the enforcement officer
two suggested that the information used by approved enforcement agent in relation to their powers of arrest be used as a model
one suggested authority for forcible entry
one suggested procedures available where the debt is disputed as well as available complaints procedures; another notice of the debtor's rights to apply to set aside the judgment for proper cause and/or stay the execution.
One respondent stated that any further information would be both unnecessary and burdensome, and another stated that debtors were informed enough already.
There were no major suggestions for new information that should be supplied to the debtor. The Green Paper clearly recommended that the information given should detail the charges made in relation to the distress warrant. Suggestions that information and sources of advice should be given will we believe, be addressed in outlining any rights of appeal or avenues of complaints the debtor may have. Seven respondents believed that the bailiff should detail the bailiffs' powers, including the power to seek a data disclosure disorder. We believe the powers vested in the enforcement agent should be clearly stated; information on precise powers to seek a DDO will be determined in the longer term, as part of the policy development on information sharing. |
|---|
We will therefore be taking forward Professor Beatson's recommendation. Some of the suggestions, in particular that the bailiff should explain verbally to ensure the debtor fully understands the situation as well as providing written information, are more appropriate for guidance or inclusion in a Code of Practice. Any Code or guidance will also recommend the use of plain English and provision of translation of documents where appropriate. |
|---|
Q.15 Do you agree with the proposal that execution should commence only between the hours of 6.00am and 9.00pm? |
Questions 15 and 16 generated confusing and occasionally contradictory responses. A number of respondents answered Yes to both questions, without appearing to recognise that this was inherently contradictory. The numbers in response to these questions are therefore best estimates. The main conditional requirements for both questions were that execution against trading premises should take place during trading hours, that there should be a court-based fast track procedure to enable execution to take place outside hours where necessary and that there should be a Code of Practice to govern behaviour. Specific concerns were also raised as to the status of vehicles parked on the street and whether execution against them should fall within an hours limitation.
YES. Approximately 40 respondents agreed with this proposal, but with the following caveats:
only if forced entry is available
five respondents suggested that this should be for domestic/residential properties only
one public interest group respondent supported the proposal but suggested that a Code of Practice to govern behaviour should be available, that the hours of 8 am - 8 p.m. were more appropriate for the first visit, and the longer band should apply only when the agent is unable to make contact
six respondents from across the sectors argued that the core hours should apply, but three respondents suggested there should be exceptions where necessary, or leave to apply for exceptions.
one agreed, but would have preferred 6 am - 10 p.m.
NO. Approximately 13 respondents disagreed:
one local authority suggested 6 am - 11 p.m. if the execution occurred peaceably, but ideally any time
three argued for 6 am - 10 p.m. for residential premises
two respondents, one from the public interest group the other a local authority, argued for 8 am - 8 p.m.
one argued for 8 am - 9 p.m. with discretion to attend at other times when the debtor is avoiding contact, with abuses to be dealt with by the Commission
one local authority argued for the retention of the current non-restricted council tax regulations in relation to hours.
One respondent could not decide, one offered no comment and one argued that the right to refuse entry should not be weakened.
Q.16 Do you think it would be appropriate to have longer hours? |
NO. Approximately 14 answered No.
YES. Approximately 23 answered Yes, with the main qualification relating to business/trading hours as outlined above.
As above, one respondent could not decide and one offered no comment.
In relation to the issue of whether execution should take place on Sundays respondents were divided, but the majority agreed that it should, arguing that in a multi-cultural, multi-faith society there should not be a distinction based on Sunday being the sole day of worship. Most of those who argued thus did not offer a counter suggestion that all days of religious observance should be recognised. However, one government department and a judicial respondent argued that enforcement agents should take into account cultural and religious groups whose practices are influenced by time and date.
The Green Paper suggested that Professor Beatson's view (that distress should only commence between the hours of 8.00am and 8.00pm) was a reasonable compromise, but in view of the changing needs of a modern society, such as increased working hours and commuting, sought views by asking the two specific questions. There was wide support for longer hours and many suggested that execution against business should be permitted during any trading hours as Professor Beatson recommended. In discussions, private sector bailiffs and others have implied that different charges are made for work undertaken during hours which might be regarded as unsocial (or overtime). Creditors mentioned that finding a bailiff who would be willing to work on a Sunday was not that easy and, furthermore, when the abuse of fees has been mentioned it has been in the context of charges for both work and travelling time. Some concern exists that, for example, enforcement agents could charge time and a half for unsociable hours to undertake a distress which could have been undertaken at a more reasonable time. However, LCD still believes that 6.00am-9.00pm are the correct hours. Although several respondents were keen to suggest that these hours be extended, no respondent offered any evidence to justify their suggestion. It was mentioned that distraint was undertaken occasionally outside these hours in exceptional circumstances. We do, however, accept that persons trading wholly or partly outside this period are subject to a levy at premises used for the conduct of such trade during trading hours. In addition, we will include a provision for the court to have the power to grant leave for distraint to take place outside these hours. As Professor Beatson acknowledged, distraint on Sundays, Bank Holidays etc is a difficult issue and a topic on which respondents are divided. LCD is currently minded to continue with the law that, unless the court orders otherwise, a writ of execution or warrant of execution must not be executed on a Sunday, Good Friday or Christmas Day. However, if the debtor is trading on any of these days the enforcement agent will be permitted to levy at premises used for those purposes. LCD believes strongly that in any event sensitivity must be shown to the requirements of non-Christian religions and in seeking to serve a diverse community we should try wherever possible not to discriminate unfairly between different religious groups. As a matter of policy, enforcement agents should be required to respect the known holy days of debtors, just as any responsible agent would avoid distraining during a funeral, wedding etc. Therefore additional guidance in the form of a Code of Practice, which would cover related matters, would be particularly appropriate in this area. |
|---|
Q.17 Do you think that peaceable entry to residential and non-residential properties can only be made by normal means? |
Questions 17, 18 and 19 generated confusing results, in the main because each question could have been more easily answered if it had been broken down into discrete units relating to individual issues. The numbers in response to these questions therefore reflect general assent or dissent, with a range of specific points outlined below. A significant number of respondents argued that there should be a lawful right to remain once peaceful entry had been obtained. We have summarised the responses under each question, however, the conclusions and recommendations have been amalgamated and are after Question 19.
YES. 41 respondents answered Yes, with the following refinements:
one public interest group argued that entry should be obtained peacefully or not at all
another public interest group requested clarification of the definition of doors and the right to remain; the Probation Service requested a clearer definition of normal; two more required clearer definitions generally
two local authority respondents said that entry gained through an open or unlocked door should be allowed regardless of dissent
two respondents agreed, but expressed strong reservations, suggesting the proviso of only after a Commission is in place and licensing is in operation.
One respondent was unclear, one responded 'probably'; and one local authority argued that the court should grant permission to allow forced entry at some point in the process, at the debtor's expense, if the debtor were obstructive.
NO. 10 responded negatively, for a range of reasons:
two respondents implied a negative, stating that entry through windows was and ought to remain common practice, and that entry through an open portal should be allowed regardless of dissent
one argued for the positive right to apply for a special warrant to force entry
one argued No, provided the means used were necessary, reasonable and proportionate and authorised by court if they were not.
Two argued that there must be adequate provision for forced entry to encourage debtors to co-operate.
One detailed response from the enforcement agent group argued that forced re-entry should be possible to any premises, and the criteria for forced entry to non-domestic properties when enforcing a civil court judgment should be extended to all types of debt; forced entry to domestic property should be allowed without judicial authority; and it should be possible for an application to be made by an enforcement officer and the cost added to costs of the creditor to be recovered by debtor.
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)? |
YES. 29 respondents gave general agreement, predominantly in relation to residential premises, with reservations relating to the need to avoid undue delay. Many of the caveats echoed those listed in response to Question 17; many did not refer to the distinctions between residential, non-residential and third party, entry or re-entry. There were very few specific answers in relation to third party premises.
NO. 20 respondents disagreed, but because of the phrasing of the question in many cases it was unclear which aspects they were opposing.
one clearly stated there should be no need for permission in relation to third party premises; one clearly that it should take place only with judicial authority; and three that it should require court permission
three argued that judicial authority was not necessary provided rules were set down and notice given and abuses were dealt with by a statutory body
two specifically argued that judicial authority should not be required for non-residential/commercial premises.
More detailed refinements were as follows:
two argued for the right to force re-entry without judicial authority should be retained where police assistance required or agent has been forcibly ejected, and after the debtor has broken levy; in all other cases where the agent has yet to gain entry judicial authority needed, with substantial costs penalty
prior to levy forced entry should be allowed to commercial premises if peaceful entry specifically refused, or on 48 hours notice; forced entry to residential premises should require judicial authority with stringent guidelines. After levy, forced entry should be allowed subject to written notice of intention to do so
a public interest group proposed:
discretion be given to the licensed agent for re-entry after levy after notice when previous attempts failed
the abolition of the Inland Revenue distrainor's right to forced entry
entry to third party premises only with judicial authority (see above)
forced entry to commercial premises without notice.
Q.19 Do you think that forced entry should be allowed on to non-residential without prior judicial authority (within strict circumstances)? |
YES. 43 respondents clearly answered Yes to this question. However, many of those attached a caveat, or further refined their answer:
one argued that there should be clear guidelines and police support available
two argued that it should take place when pursuing goods, after levy, which have been moved to avoid distress
one argued only where walking possession had been signed
four argued that notice in writing should be given that it is to take place after certain time
one argued only where peaceful entry is refused
one local authority respondent argued that there was no need for strict circumstances
another local authority argued that the issue only became live if walking possession had not been signed; if entry were required prior to levy then judicial authority should be sought
agent should not be required to say when
a number of respondents answered yes but required further clarification of what constituted 'residential' and 'domestic'. Some proposed making the distinction on the basis of the status of debtor - individual (privileged) or body corporate (not privileged) - rather than on basis of the debtor's premises; another suggested that where a business was run from home, the premises should be deemed residential.
NO. 11 respondents clearly answered no, but on different bases:
one local authority stated there should be no distinction between residential and non-residential
four respondents from a variety of sectors argued that judicial authority should be required in each case, not least to determine what is non-domestic.
One judicial respondent gave an equivocal response and one respondent specifically offered 'No comment.'
The Inter-Departmental Working Group on Bailiffs were in general agreement that Professor Beatson's recommendations on entry did not go far enough. In particular he did not address how agents should deal with commercial premises within private grounds, units within other buildings, or private residences with security systems. The Group was particularly concerned to ensure that those who could afford such protection systems should not be able to avoid enforcement more readily than those who could not. The present law on bailiff's rights of entry is based on case law, which in general is founded on mediaeval authorities, and needs updating radically. Final decisions on bailiff powers, including entry, must partly depend on the regulatory structure. It is the Government's position that whilst regulation of enforcement agents is evolving there is a strong case for ensuring that the law does not encourage abuse. Therefore we do not believe that forced entry to any premises (including third party premises) without judicial authority, in the first instance, should be used by any enforcement agent. If, however, a statutory regulatory body is set up to regulate the powers and activities of the enforcement agent, we will need to consider what powers a Commission would have in this area. We agree with Professor Beatson that it is likely that there will need to be a more elaborate definition of normal/peaceable entry to cover such modern-day attributes of housing where entrance to apartment blocks is restricted by intercom access. Furthermore, we agree that the legislation should provide guidance as to what is a "normal" means of entry. We accept that if, after goods have been levied on, attempts to re-enter the premises are frustrated then forced entry may be appropriate without judicial authority. The Government is particularly concerned to ensure that those who can afford more elaborate protection systems should not be able to avoid enforcement more readily than those who could not. We see this as a very important principle in enforcing debt. Some respondents also suggested that powers of entry should differ according to the circumstances of the debtor rather than, as now, the type of debt. For example:
Inevitably there will be difficulties in definitions that we will be exploring further with the Inter-Departmental Working Group on Bailiffs and other stakeholders. We will need to ensure that business debts are not protected by enforcement because the business is registered in a private residence. We will, however, also need to protect the family home proper and the debtor's family. This will assist in providing further clarification of the rights for agents to enter a property. |
|---|
Q.20 Respondents are asked to comment on the two proposed lists of goods to be exempt from distress at Annex E. |
Because this question did not request a specific Yes/No answer it is difficult to give an accurate breakdown in relation to each of the lists Where an answer clearly supports List A or List B this has been indicated; a selection of other responses is also provided. In general, items which caused the greatest concern were computers (respondents felt their status was unclear but they should be available for seizure) and tools of the trade (the definition required clarification).
Three respondents felt both lists were acceptable and one respondent proposed that List B be introduced by primary legislation, and List A be introduced by Statutory Instrument.
List A received 11 positive responses:
one Local Authority requested clarification on how the £1000 total should be reached
one respondent suggested there should be amendments for non-domestic cases.
List B received 23 positive responses, with most respondents saying List A was too prescriptive:
one Local Authority requested additional guidelines, and two further specified that the guidance should come from an Enforcement Services Commission
medical equipment should be added
list B was preferable unless the last line of List A provided an aggregate total of all categories capped at £1500 or £2000.
Non-specific answers covered the following points:
a general and flexible list was preferable
only necessities should be allowed to remain
hired goods should be exempt from seizure
the exemption from trade goods should not apply to business debts
the lists for non domestic rates and council tax should cover all debts.
It was the opinion of Professor Beatson and of Counsel in advising on distress for rent that there should be as much certainty as possible about exemptions, for the purposes of the Human Rights Act. The majority of respondents clearly favoured the less detailed list of exempt goods, similar to that of the Insolvency Act (List B). LCD also believes that as a matter of principle it may well be anomalous if a landlord could seize and sell goods which the tenant would be entitled to retain on his bankruptcy. One respondent to the Green Paper stated that the exemption for tools of the trade should not apply to business debts, another that the list for non-domestic rates should apply - this would also have the effect of allowing seizure of tools of the trade. As indicated in the analysis of responses to the Distress for Rent Consultation Paper LCD are persuaded quite strongly by John Kruse's argument that the insolvency type list of exempt goods should be enshrined in legislation with more detailed lists in either secondary legislation or in a code of practice produced by a Commission. [Endnote 3] We will however be working with the Inter-Departmental Working Group on Bailiffs and other stakeholders to provide further clarification of particular issues such as tools of the trade, cars and computers. |
|---|
Q.21 a) Do you agree that any new statutory provision should authorise the seizure of money, banknotes and bills of exchange, promissory notes, bonds, specialities and securities for money? |
YES. 53 respondents clearly answered Yes.
NO. six respondents clearly answered No, for the following reasons:
it targeted the vulnerable
it was only acceptable to seize cash or cash equivalent, since the garnishee process was available for other funds
as a process it was open to abuse.
Q.21 b) Please comment on any practical issues raised by Q.21a). |
the need to recognise that cash was more likely to be held by the poorer members of society with no access to credit cards and that there should be safeguards to guard against undue hardship. A number of respondents argued that the poorer members of society should not penalised by this recommendation. Suggestions included a code of practice to cover the right to seize money, and a minimum amount to be left to cover subsistence
the need for training and access to legal advice for bailiffs (this was clearly and repeatedly raised)
the need for an accompanying statutory power of search or a clarification in relation to the powers of search
the need to distinguish impounding from disposal
a recognition of the difficulties involved in assessing the value of non-cash items
clear definitions in legislation to determine what comes under Question 21 a)
clarification in relation to ownership and the bailiff's right to establish it (this was clearly and repeatedly expressed)
the authority of the bailiff to convert securities into cash/realise bills of exchange (this was clearly and repeatedly expressed). One respondent proposed including this authority in a license
the right to seek outside expert assistance, the costs of which should be recoverable through fee scales
consider setting clear limits subject to which agents will enjoy indemnity from suit provided they were acting properly
the money seized should be used to reduce the debt and a receipt should be issued, rather than set against the monies detailed on notice of distress
the bailiff must have an express power, and regulations should cover the mechanics of conversion; there is a need for a clear audit trail and there should be statutory protection for failure to recognise obscure negotiable documents.
Unsurprisingly this recommendation received overwhelming support whilst raising an extensive list of potential difficulties. LCD agrees with the respondent who stated that there is a need to recognise that cash is the currency used by the less well off in society and we must guard against causing undue hardship. Even where the provision to seize such items exists, it is seldom used and an agent would need to be very experienced/well versed in commercial law to know which documents could legally be seized. In principle, LCD accepts this recommendation, and would hope to introduce such a power when there are satisfactory training and licensing powers in place. LCD (or a Commission) will explore the idea that bailiffs could be licensed to seize documents if they were trained and examined in this area - and an agent would only be allowed to seize money if trained in the seizure of other items. |
|---|
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? |
Having a compound question which was linked to two further questions (23 and 25) caused some confusion amongst respondents and led to difficulties in establishing clear and distinct answers.
In relation to the provision of the estimate, respondents stated:
the agent should make clear it is an estimate, and if the creditor has a different opinion of the value of goods they should be allowed to indemnify the court/enforcement agent to cover costs of removal and sale
valuation should be at the discretion of enforcement agent, who also determines the reserve
the proposal is desirable but impractical; it is therefore best to deal with the issue of the estimate as is done now (informally), with the additional preparation of a detailed inventory
there should be no obligation to provide an estimate, but sale should not proceed if there are insufficient goods.
NO. 41 respondents answered No, broken down as follows:
24 on the basis that the process was too difficult
four on the basis that it was too difficult and lost the threat of enforcement,
eight without further comment
one on the basis that the threshold must relate to the value of the warrant
one on the basis that the present position ought to remain
one on the basis that the current rules for council tax are sufficient
two argued that if the net sale will not cover the costs of enforcement one should not proceed.
Further suggestions included:
if it had to be done, then the figures should be increased from £50 to £100
two respondents argued that goods not be sold unless the process covered expenses and 10% of debt or £50, whichever was the lesser
three respondents suggested codes of conduct issued by a regulatory authority should cover this issue.
YES. nine respondents clearly answered Yes.
The overwhelming majority of respondents expressed doubts as to the ability of enforcement agents to value goods on premises. LCD's main concern is that introducing such requirements would not be beneficial to the debtor. In particular, we are concerned by the prospect of the enforcement agent passing an additional charge to the debtor that is likely to be in the minimum region of £50 or £75 plus charging for the time it takes to complete. One of the most positive benefits of introducing valuations could be the resultant specific training in valuation and assessing that enforcement agents would need to undertake in order to avoid accusations of under or indeed over-valuation. We recognise the difficulties in requiring a professional appraisal of each item (particularly a qualified valuer). This might cause delay and would certainly add to costs, which it would be in all parties' interest to avoid. However, to some extent bailiffs already have to form a view of the overall value of the goods they are seizing, since they risk liability for damages for excessive distress if they seize goods worth more than the amount owed. Although this recommendation is not at present considered suitable for implementation in legislation, it is certainly suitable for guidance (or Code of Practice). All enforcement agents should be concerned to avoid either excessive distress or the situation where the proceeds of a sale are so small that they are entirely or almost entirely swallowed up by the costs of the distress and the sale, so that the debtor is deprived of his possessions (as are other creditors) but there is little or no reduction in the amount owed. All debtors will have the right to ask for an independent valuation of seized goods at their own expense upon making a written application. |
|---|
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? |
Many respondents to this question repeated or referred to their answer to the previous question.
General comments included:
six respondents from across the spectrum argued that this point should not be governed by legislation but by a Code of Practice and/or guidelines issued by a Commission.
if there is no possibility of a sale there should be no levy
goods should be removed and sold if they cover the cost of removal and sale
the concept of illegality if goods do not realise their apparent worth should be removed.
NO. 13 respondents answered no, many using the same arguments outlined under No in Question 22.
Further suggestions included:
using a definite figure rather than a percentage figure
if prevented from following this course there must be provisions within the regulations to recover costs of withdrawal from creditor
the test should be that it significantly reduces the debt
where it proves impossible to cover the expenses, the bailiff should be entitled to a percentage of sale proceeds after the deduction of the auctioneer's commission and costs, with 25% of net sale proceeds passed to the creditor.
YES. 31 respondents answered Yes, again many using the same arguments as outlined in response to Question 22. Further suggestions included:
if it was reasonable to remove goods and they did not meet resale value, charges and fees should be recoverable from the debtor
this proposal can only apply retrospectively, and requires a rule providing for minimum payment from proceeds of sale
This proposal was considered as an alternative to the proposal in Question 22 above, therefore some of the issues have already been addressed. However, there is still a concern that for a seizure of goods to reach the stage of sale and then not to be sold leaves the debtor in even further debt, the creditor still without the money due, and the agent possibly out of pocket. In addition, the detail will produce practical difficulties especially in relation to large debts, e.g. an agent may seize and sell goods worth £1000 if the debt was £10,000 but would not be able to do so if the debt is £20,000. We agree that there is a need for proportionality and therefore suggest that we will consider this fully alongside regulation rather than including it in legislation. |
|---|
Q.24 Should an enforcement agent be able to take walking possession without the written agreement of the debtor? |
YES. 42 respondents clearly answered Yes, with the following suggestions:
there should be a signature where possible and full written inventory left
two argued that any reasonable person ought to be able to sign
it would need to be clear who is responsible for goods in these circumstances
two argued that the debtor must be aware of what is taking place, and stricter terms should apply where consent is refused.
NO. 11 respondents clearly answered No, with the following qualifications:
three argued that failure to sign should lead to immediate removal
one argued that in commercial circumstances a partner or manager should be able to sign, and the agent should have power to remove immediately if there is a refusal to sign.
General responses covered the following points:
two argued that the concept of walking possession should be abandoned, and one that the concept would become redundant if Professor Beatson's recommendations were accepted
the concept of seizure itself should be simplified to one of taking legal control
walking possession should not be relinquished after 6 months.
One respondent could not decide how to answer.
The purpose of this question was to explore further Professor Beatson's proposals for taking legal control of goods. We agree that the refusal to sign an inventory certainly suggests that the goods should be removed from the premises, but that any decision would rest with an enforcement agent. As we stated in the Green Paper we agree in principle with Professor Beatson's recommendations regarding legal control of goods. We do not consider however that we can take this forward until there is some form of regulation in place which would monitor the use of taking control of goods without a signed agreement. As Professor Beatson stated, in the absence of such agreement, the bailiff's powers of re-entry could be dependent on the regulatory system. |
|---|
Q.25 How do you think valuation of goods on the debtor's premises might objectively and fairly be achieved? |
Three respondents expressly had no view and one could not decide.
Approximately 21 thought the proposal was too impractical or too difficult to pursue, but two of those thought there should be a provision for the debtor to request appraisal at any point between levy and sale, for which they should pay.
Other suggestions included:
the enforcement agent could give a minimum value estimate
there should be a standard list of common items and range of possible values; another suggested national guidance on average auction prices; another that there should be a database of average retail prices less depreciation
five respondents expressly suggested training for enforcement agents in this area
an agent should be qualified to undertake an inventory, and if they are not qualified to make inventory then they should instruct a valuer at their own expense; another suggested that an inventory made by a bailiff should be passed to a valuer, but made no mention of costs
by taking into account the views of the debtor and the creditor
two suggested that it should be left to the discretion of the enforcement agent
one local authority respondents thought the aim should be to coerce payment
one respondent suggested monitoring complaints against bailiffs who undervalued and taking out sanctions against them; two suggested that the creditor ought to rely on the experience of agent but with some form of liability for gross undervaluation
one respondent argued that valuations should be based on enforcement officers' local knowledge and where possible agreed with the debtor; training from local auctioneer should be available, and if debtor fails to agree and states that their items will fall below the threshold, they should have the option of paying for valuation, and if the valuer agrees the agent should refund the money
two respondents suggested enforcement agents should be paid to have professional qualifications
two respondents suggested that valuation should always be carried out by a qualified auctioneer or expert.
Four respondents argued that the current system works well; two expressly referred to Wakeman v Lindsay, and one to Davies v Property and Reversionary Co Ltd [1929].
See responses to questions 23 and 24. It should be the responsibility of all enforcement agents and their employers to ensure that there is a well-trained industry with high standards. An Enforcement Commission and codes of practice should ensure that the training of enforcement agents (in valuation) is encouraged. |
|---|
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? |
YES. 31 respondents clearly answered yes, but with the following caveats:
if it is clearly explained
but if this remedy fails because of poundbreach or rescue, then judicial authority should be taken into account
one respondent clearly argued that poundbreach and rescue should be abolished
three said Yes to simple damages only (rather than simple penal damages).
NO. 14 expressly disagreed, with 10 believing contempt, imprisonment, criminal prosecution or the threat of committal were more appropriate.
two local authority respondents raised the point that fines were inappropriate when the debtor was unable to pay in the first instance
one public interest group respondent representative offered 'No comment.'
It continues to be LCD's position that where debts are being enforced other than by current officers of the court the appropriate penalty should be simple damages. |
|---|
Q.27 Do you agree that a much simplified remedial structure would be practical and acceptable to debtors, creditors and enforcement agents? |
YES. 49 respondents clearly answered Yes to this question. However, many of those attached a caveat, or further refined their answer:
one respondent was in favour of simplification but only if there were no reduction in remedies
two argued that remedies must cater for avoiding distress by transfer of ownership of goods
one argued that simplification should occur only if warrants remain with magistrates
one gave a detailed breakdown and analysis of remedies and reform which is currently being considered by the Review Team and the Inter-Departmental Working Group on Bailiffs, but is too long to be included in this analysis
one respondent argued that there would need to be a clear set of guidelines which delineate where enforcement agents/courts accept responsibility - responsibility should not be offloaded to the creditor.
NO. One respondent answered No.
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? |
YES. 38 respondents clearly answered Yes to this question. However, many of those attached a caveat, or further refined their answer:
there should be restrictions to prevent abuse with transfer of ownership between connected parties
legislation should clearly set out offences
two respondents argued that a single claim to seized goods should replace interpleader
goods clearly belonging to third parties should not be available for seizure, but the onus should be on the debtor to provide evidence that this is the case; ideally enforcement agents ought to have access to credit reference agency information relating to hire purchase status
unlawful seizure and property belonging to married couples should be clarified
an upper limit should be placed on penalties relating to value of goods and three respondents argued that agents should be entitled to the court's protection against vexatious claims
four respondents, from both enforcement agents and judicial groups, argued that each case and penalties should be decided on its merits.
Two responded with a 'Possibly'; one stated 'No comment'; and one local authority respondent did not respond positively or negatively, but stated that there should be limits to the amounts of damages awarded.
NO. six respondents clearly answered No to this question, but two respondents from the enforcement agent group argued that greater simplification than that proposed in the Green Paper was possible.
This response covers questions 27 and 28. LCD agrees with Professor Beatson's views and the remedies available, but would prefer to see a much-simplified remedial structure to provide the same regimes:
We accept that many of the issues raised by respondents, such as transfer of goods to avoid distress, ensuring clearer definitions of responsibility for the enforcement agent and the creditor, and the protection of creditors from vexatious clients, need to be taken into account in creating a simplified structure. As indicated in our responses to Questions 1 to 3, LCD would prefer to see a scheme of statutory compensation, but believes that a court process should remain as an alternative or as part of the appeal process. Access to remedies must be simple and straightforward for all concerned and it is LCD's position that there should not automatically be a need for these cases to be dealt with automatically by a court procedure. The Inter-Departmental Working Group is focusing on how a structure would work within an enforcement services commission or within a regulatory structure which would not otherwise rely solely on court regulation. |
|---|
Q.29 Should magistrates' courts have the power to suspend or withdraw a distress warrant? |
YES. 42 respondents clearly answered Yes to this question. However, many of those attached a caveat, or further refined their answer:
one public interest group respondent suggested that this should be the case where it is clear that the debtor has no available income
16 respondents argued only if the costs of enforcement incurred up to the point of withdrawal or suspension were met, with a series of variations on that
- one suggested the cost should be added to the debt if it were reasonably incurred - two argued the power to withdraw should be given only where the Magistrates Court pays - one suggested the enforcement agent should apply to the court for recovery of costs
one suggested that it should take place within the context of an appropriate fee structure
two argued that suspension should be allowed to establish facts
one agreed, provided it was done by application with the applicant in person
two local authority respondents argued that suspension or withdrawal should take place if the actual issue of the warrant were incorrect; if it was correct at the time of issue and the debtor subsequently experienced a change of circumstances it should not be withdrawn or suspended.
NO. Eight respondents clearly answered No, but one then clarified this to support the position outlined above in which a warrant could be withdrawn only where the Magistrates Court pays the costs of enforcement and suspended to establish the facts.
Two responded stated that they were unsure, without elaborating further; three expressly offered no comment; and one said the issue was academic in the light of the Auld recommendations.
LCD acknowledges the extent of the positive response to this question. However, a final policy on this issue depends upon the outcome of the consultation on the recommendation made by Sir Robin Auld, in particular Recommendation 151. We will continue to work closely with colleagues in Criminal Justice on this issue. |
|---|
In addition, a number of respondents proposed their own recommendations in response to the subject areas covered in the chapter, in particular:
LCD should consider introducing the offence of impersonating a person qualified to carry out distress, in order to prevent potential abuses of vulnerable people. This suggestion, arising out of bailiff law and practice, was one of many relating to the need to protect the vulnerable raised by a particular respondent.
Under section 40 of the Administration of Justice Act 1970 a person commits an offence under this section if, with the object of coercing another person to pay money claimed from the other as a debt due under a contract, he-
harasses the other with demands for payment which, in respect of their frequency or the manner or occasion of making any such demand, or of any threat or publicity by which any demand is accompanied, are calculated to subject him or members of his family or household to alarm, distress or humiliation;
falsely represents, in relation to the money claimed, that criminal proceedings lie for failure to pay it;
falsely represents himself to be authorised in some official capacity to claim or enforce payment; or
utters a document falsely represented by him to have some official character or purporting to have some official character which he knows it has not.
There is potential scope for this provision to apply in relation to enforcement action, although prosecutions in practice are rare. The section applies in relation to debts both before and after judgment, and both a creditor and an enforcement agent could be liable under it. The penalty on summary conviction is a fine of not more than level 5 on the standard scale. Therefore LCD does not believe there is a need to introduce a specific law. |
|---|
Three respondents specifically indicated their desire for the abolition of Crown Priority, one suggesting that timing should be the only trigger; one suggested the need for the issue to be reconsidered.
Originally the Inter-Departmental Working Group on Bailiffs had accepted Professor Beatson's recommendation that this priority be retained. However, two things have happened since the publication of Professor Beatson's Report. Firstly in the PIU report Lending Support: Modernising the Government's Use of Loans, published on 20 March 2002, a review of Crown Priority is suggested as part of their proposed feasibility study:
The priority of government debt compared with other debts. At present there appears to be little coherence between government departments in terms of the pecking order of debt repayment where somebody has a limited ability to pay all their outstanding debts.
Secondly, the Enterprise Bill, introduced this session states for the purpose of insolvency there will be abolition of crown preference.
In addition to his discussions around Crown debts and their priority Professor Beatson recommended that the priority accorded to landlords in respect of distress for rent should be abolished. LCD agree with Professor Beatson's position that if distress for rent should remain as a self help remedy for landlords without the need for a prior court judgment then it is no longer appropriate for landlords to have priority over other creditors who have levied distress.
It is likely at this time that we will follow the lead of DTI and abolish or remove the priority which crown debts have during insolvency procedures
As mentioned at the beginning of this paper we are taking a wide ranging approach in order to achieve a fundamental improvement. We propose a significant overhaul of enforcement and must ensure that a new fee structure, or scales within it, does not simply replace one bad system with another. There is a lot of work still to be done and we will be involving the Advisory Group on Enforcement Service Delivery, the bailiff industry and other interested parties. No policy decisions have been made but we have set out some of the issues that will have to be considered fully.
The proposal for establishing fee principles in law is generally supported across the range of respondents. However, very few respondents commented directly on the fee principles listed in Chapter 5 of the Green Paper. Views were specifically sought on five key principles, as were any additional suggestions; an analysis of the limited number of responses is detailed below.
Fees should only be chargeable for a provable enforcement activity or expense connected with it.
AGREE. Seven respondents agreed with the principle. However, many of those attached a caveat or further refined their answer:
this must embrace modern enforcement needs, e.g. tracing people and assets, and modern enforcement methods such as correspondence and payment by cheque or instalments
DISAGREE. No respondents recorded disagreement with the principle.
Fees may be based, in whole or part, on the value of the debt or the value of goods seized or sold or proceeds of sale.
AGREE. Nine respondents agreed with the principle. However, many of those attached a caveat or further refined their answer:
fees should either be commission based depending on size of debt with an upper fixed limit or fixed fee depending on size of debt
the fees should not be disproportionate to the debts being recovered
DISAGREE. No respondents recorded disagreement with the principle.
Fee scales should be transparent and enable debtors to understand their potential liabilities.
AGREE. Nine respondents agreed with this principle. However, many of those attached a caveat or further refined their answer:
overhead costs need to be recovered through fees and there should be a simple structure for a single fee to contribute to overhead costs and to cover necessary visits up to seizure. Thereafter further fees should become due as the enforcement process continues
this should be a flat fee (rather than a percentage) based on the amount of the debt. Basing the amount of the fee on the value of the goods seized is the least attractive option as the bailiff may have carried out a substantial amount of work before that is established
if fees reflect the effort involved there is little justification for a reduced fee for follow up visits
some debtors defer payment for as long as possible in order to maximise the benefit to themselves and a transparent fee scale will encourage payment.
DISAGREE. No respondents recorded disagreement with the principle.
Fee scales should be published and provided to the debtor.
AGREE. Nine respondents agreed with the principle. However, many of those attached a caveat or further refined their answer:
in addition there should be a requirement for the agents to lodge a copy with the regulator, who would have the power to query/investigate.
DISAGREE. No respondents recorded disagreement with the principle.
There was no dissension from the four proposals above. The issue of fees needs further careful consideration. Discussions will take place with the Advisory Group on Enforcement Service Delivery, the Inter-Departmental Working Group on Bailiffs and with departmental economic advisers and colleagues in Court Service. |
|---|
Fees between enforcement agency and creditors should be subject to negotiation and contract, but no fee shall be recovered from the debtor outside the statutory scheme.
AGREE. Nine respondents agreed with this principle. However, many of those attached a caveat or further refined their answer:
the 'no win no fee' practice which local authorities currently practice should cease
this will be subject to market forces
a basic up front fee should be allowed to cover basic administration and the agent should be able to negotiate a separate fee with the creditor, though the debtor should only ever pay the scale fees and no more
fees from creditors should remunerate agents for unsuccessful action.
DISAGREE. Three respondents disagreed with the principle, but for different reasons:
it might encourage contracts on a no win no fee basis
the best option is to have standard fees upon issue with no additional fees except in the case of removal, storage and sale of goods
one stakeholder group respondent stated that much of the abuse is created by the unsatisfactory relationship between the client and the bailiff. Both in the public and private sectors the bailiff negotiates contracts with clients based upon remuneration drawn only from fees. This practice fuels the misuse of the existing fee structures with the burden inevitably falling on the debtor.
The issue of negotiation and contract is the most contentious of all the principles and will need very careful consideration. The purpose of the proposal is to ensure transparency and to reduce possible abuse and allow for proper regulation. All of the concerns will have to be fully explored and all fee principles will have to be discussed with the Advisory Group on Enforcement Service Delivery, the Inter-Departmental Working Group on Bailiffs and departmental economic advisers. |
|---|
Q.30 Should the fee be a standard amount, or reflect the amount of the debt or the value of the goods seized? Or be a mix of both? |
YES. 27 respondents answered yes to a mix of both. The following additional requirements were suggested
:plus a value related amount
with a sliding scale.
YES. Eight respondents answered yes the fee should reflect the amount of the debt.
YES. 13 respondents replied that it should be a standard fee with the following refinements:
or related to size of debt
three respondents agreed that there should be clearly defined fees for additional actions.
No respondents expressed disagreement but one respondent suggested that we should use the Council Tax fee structure.
One respondent did not answer the question but said that the Council Tax and Business Rates fees are too low since the cost of the service is not self-financing.
The fee can only reflect the value of the goods seized if the enforcement agent has the power to seize goods. That of course would not apply if the warrant is for arrest or committal. It will now be necessary for LCD to look at the finer detail of any possible fee structure. It is apparent that the fee structure will need to be streamlined. We will however have to consider whether there should be a separate structure for different types of warrants, for example warrants of arrest and warrants of distraint. |
|---|
Q.31 Should fees reflect the time taken to do a job or, perhaps more appropriately in the light of the proposed new regulatory structure and increased professionalism, the responsibility involved? |
YES. Five respondents answered yes to this question but were not specific.
YES. Nine respondents answered yes that the fees should reflect the time with the following refinements:
and equipment used
should be reviewable by taxation.
YES. 17 respondents answered yes that the fees should reflect both the time taken and the responsibility involved with the following refinements:
two respondents suggested that it must include an element of profit
two respondents suggested that the fees should be regularly reviewed.
NO. 13 respondents answered no to this question with the following reasons:
five respondents said that time taken should not be an element in calculating fees
four respondents answered that this should be a standard fee
one respondents answered that the fees should reflect the steps taken
one respondent answered that this would be open to abuse.
Two respondents did not answer the question but offered the following comments:
a public interest group respondent suggested that fee principles should reflect the time taken, fee levels should reflect a meritorious commercial return and the responsibility of undertaking the job
one local authority respondent suggested that it should be limited to an agreed limit as a percentage of the debt.
This particular proposal may enable us to consider the possibility of having a single fee structure, however, as indicated in the response to question 31 this will have to be fully explored. One of the intentions of having a single fee structure is to enable proper regulation and protect the debtor from possible abuse. |
|---|
Q.32 Should debtors in remote areas be cushioned from the high cost of travelling to them? |
YES. 29 respondents answered yes to this question with the following refinements:
seven respondents said that there should be a standard attendance fee regardless of distance
financial incentives such as a public subsidy may be required
standard rate for travelling to premises should be introduced.
NO. 20 respondents answered no.
One respondent did not answer the question but commented that debtors should not be penalised because a court/enforcement agent happens not to have a local base.
This is closely linked to the removal of any geographical monopolies. It is important that the enforcement agent is recompensed for the tasks he undertakes but it is also important that debtors are not unfairly penalised. All of the concerns will have to be fully explored and will have to be discussed with the Advisory Group on Enforcement Service Delivery, the Inter-Departmental Working Group on Bailiffs and departmental economic advisers. |
|---|
Q.33 Should there be a fixed fee for making an inventory, or removing goods, or should there be an element based on an hourly rate? |
YES. 12 respondents answered yes there should be a fixed fee.
YES. 20 respondents answered yes there should be an element based on an hourly rate with the following refinements:
seven respondents answered that it should only be for making an inventory
one respondent said that it should only be available on removal attendance
subject to a maximum fee based on proportionality test
with safeguards of regulation by the Commission.
YES. Seven respondents answered yes for a fixed fee for removal, and of those four thought there should be an additional hourly rate for protracted removals.
YES. Three respondents answered yes there should be a fixed fee for making an inventory.
NO. One respondent answered no as the fee should be related to the amount of the debt.
Three respondents did not answer the question but offered the following comments:
levy fees for NNDR and Council Tax should apply to all; an upper limit for removals
it would be preferable to have a realistic attendance fee to cover the taking of an inventory
there should be a mix.
The introduction of an hourly rate could be open to abuse, however, this will have to be considered fully as it is the intention that fee structures are to be open and transparent. |
|---|
Q.34 If more than one call is required to the same debtor in order to, for example, serve the enforcement notice, how should this be remunerated (e.g. Scottish approach - after first call, later calls at 50% of original fee)? |
YES. 17 respondents answered yes to this question but one respondent suggested that it would need to be regulated.
NO. 20 respondents answered no to this question.
A number of respondents did not answer the question directly but offered comments:
one fee, regardless of number of calls, to discourage repeat visits and encourage efficiency. If there were to be charges, they should be at disbursement not profit level
no one off fee approach
two respondents suggested that there should be a flat charge repeatable for each occasion
one local authority respondent referred to the rates in the Council Tax and Business Rate statute as reasonable
remuneration for first two visits with further visits made with no remuneration (as under current Council Tax regulations)
a first call charge, a second call charge based on a percentage of the first call
an hourly rate should be set
This is a particular issue of contention. Anecdotal evidence indicated that where there are charges for more than one visit the enforcement agent invariably records that they were unsuccessful on the first visit. It will be necessary to look at all the issues and in particular whether there should be a standard fee for a limited number of visits. |
|---|
Q.35 If the enforcement agent cannot enter the premises on a first occasion to remove the property, how should subsequent visits be remunerated? |
two respondents agreed there should be a separate transportation fee
two respondents agreed that it should be dealt with in the contract
seven respondents agreed that each unsuccessful visit should attract a standard statutory fee
one respondent suggested that there should be additional fees, a note of which should be left at the premises
nine respondents agreed that there should be a flat charge which would be repeatable for each occasion
two respondents agreed that there should be one fee for attendance to remove but without removal, one for actual removal, but there should be an upper limit of visits.
six respondents agreed that there should be a reduced fee for justifiable visits
one respondent suggested that this should be based on mileage and the hourly rate
one respondent suggested there should be a limit on the number of visits
two respondents agreed that actual costs should be charged
two respondents agreed that an hourly rate should be charged
one respondent suggested there should be a nominal charge
LCD believes that this fee should be linked to the notice that enforcement agents should be obliged to give to the debtor, otherwise this is yet another fee that could be open to abuse. |
|---|
Q.36 Should fixed fees be increased for unsociable hours (e.g. Scotland: additional 33 1/3% if procedure takes place between 5-10pm; additional 75% if procedure takes place on public holidays or weekends (where authorised))? |
YES. 19 respondents answered yes to this question. However, many of those attached a caveat, or further refined their answer:
three respondents agreed that there should be a mechanism to discourage misapplication
two respondents agreed that this should be contained in the contract with the creditor and should not be passed on to the debtor
should require authority from creditor.
NO. 29 clearly answered no, but for a variety of reasons:
four respondents argued that this would be open to abuse
two argued that bailiffs should be able to deal within hours suggested
three argued that the fee level should take account of this when set.
One local authority respondent did not answer the question directly but commented if this were adopted it could lead to abuse but would also increase the hit rates.
The main concern in this area is that it would be open to abuse. As already mentioned the creditor chooses the enforcement agent he employs and the enforcement agent chooses which job he will do; we would question why a debtor should pay more for enforcement action purely because he trades during unsociable hours. LCD believes that it would be preferable for the fee for unsociable hours to be a contract issue and be borne between the creditor and the enforcement agent and not passed on to the debtor. |
|---|
Q.37 Some legal systems allow the enforcement agent to negotiate a fee with the creditor for any work that is unusually time consuming (e.g. if the agent has to be on call to deliver an urgent document). This fee cannot be passed on to the debtor. Would this approach be desirable? |
YES. 31 respondents answered yes to this question.
NO. 10 respondents answered no to this question.
POSSIBLY. Two respondents commented that this could possibly be desirable but offered no other comments.
One of the public interest group argue that a fees scale should cover the full range of activities and question the need for 'unusual activities.'
One of the fee principles is that fee scales should be transparent, and LCD believes this should be the case for both the fees for the creditor and fees that are passed on to the debtor. We will be considering this issue when determining what activities the enforcement agent will carry out. |
|---|
Q.38 Should an enforcement agent be able to charge for enquiries, and if so should this be a fixed fee? Or on a time basis? Or negotiable? |
YES. 15 respondents answered yes to a fixed fee, and of these two suggested there should be a prescribed upper limit.
YES. Two respondents agreed that this should be time based.
YES. 15 respondents answered yes any fee should be negotiable.
YES. One respondent said that it should be fixed or negotiated but not time based.
NO. Four respondents answered no in general.
NO. Four respondents answered no, but for different reasons:
it should be included within the visit charge
it could create conflict as to what they should do and what they can offer for an extra fee.
Seven respondents did not answer the question directly but offered the following comments:
one public interest group respondent suggested that we could apply a fixed and meritorious fee for receipt and handling
five respondents suggested a fixed fee for non labour intensive enquiries (e.g., DVLA and DWP); others charged at hourly rate with disbursement at cost.
This is an issue that will need to be considered alongside the policy relating to the Data Disclosure Order and access to information. |
|---|
Q.39 Is it necessarily inevitable (or morally acceptable), that debtors who pay subsidise enforcement against those who do not? |
YES. 41 respondents answered yes to this question. However, many of those attached a caveat, or further refined their answer:
but efforts should be made to reduce the degree of cross subsidy
seven agreed that it is not morally acceptable and should be addressed in the reform of enforcement
cross subsidy is inevitable but the impact could be mitigated by the payment of up front fees.
NO. Six respondents answered no to this question, and of those, three respondents said it should be possible to devise a system where the creditor bears the cost of unsuccessful enforcement.
One respondent did not answer the question directly but commented that it is immoral to ask anyone but the debtor to bear the cost of his non-payment.
The majority of respondents agreed with this proposal; however LCD is concerned that it may give rise to possible social exclusion issues. As suggested by one of the respondents, these could be mitigated by an upfront fee. If the fee structure is based on the work done, the debtor would only be obliged to pay for the work the enforcement agent carried out in relation to the debt. |
|---|
Q.40 Are there economies of scale that can be realised in some forms of high volume work where a specific task is required? E.g. where the creditor has, or could have, ongoing contracts with the enforcement agent and can provide fairly reliable information about the debtor? |
YES. 23 respondents answered yes to this question. However, some of those attached a caveat, or further refined their answer:
two respondents suggested that this could be dealt with in the contract
bulk handling in heavily populated areas, with less work or input by the enforcement agent
one local authority respondent suggested scheduling multi-debt cases for one visit
should not affect the fee structures
should be subject to the Data Protection Act.
NO. 16 answered no but for a variety of reasons:
improve cost effectiveness by improving quality of information
this does not sit well with specific fee structure and could be open to misinterpretation and abuse
fee structures must be clear, straightforward and consistent and not dependent on external peripheral issues.
NO COMMENT. One respondent offered no comment.
One local authority respondent did not answer the question directly but offered the comment there is scope for lower fees to be applied in these types of cases.
This is an issue that will have to be considered carefully. LCD recognises there is a need for the enforcement agent to be recompensed for the work done and therefore advocate published fee scales, thereby ensuring charges will be transparent and reducing possible abuses. |
|---|
Q.41 Should an up-front nominal fee be charged to cover basic action irrespective of the amount, followed by an ad valorem element to provide an incentive to the enforcement agent? |
YES. 38 respondents answered yes to this question, with the following comments:
two public interest group respondents argued that up-front fees for both public and private creditors could mitigate cross subsidy. Wary of an ad valorem element
wary of ad valorem element as incentive it could mean an incentive to give larger debts priority at the expense of smaller creditors