If you are a creditor trying to recover a debt, the bailiff was often your last port of call. The process had the reputation of being complex, expensive and slow. That’s all changed now (hopefully). Three new Acts and sets of regulations have changed over 400 years of English legal history. The Tribunals, Courts and Enforcements Act 2007, The Taking Control of Goods Regulations 2013 and The Taking Control of Goods (Fees) Regulations 2014 have made big changes to the law, and abolished the ancient office of bailiff on 6 April 2014. The intention is to make the debt recovery process simpler, quicker, fairer and cheaper.
There are significant advantages to creditors in using the High Court Sherriff, as HCEO fees are recovered in full from the judgment debtor when enforcement is successful and the enforcement process available to the High Court Sheriff is much more effective than using the County Court bailiff. If enforcement is unsuccessful, the judgment creditor only has to pay a Compliance fee of £75 plus VAT (£90) per notice of enforcement served (they do not pay any other costs associated with the enforcement of the writ).
Bailiffs are now known as “enforcement agents” and follow a new 3 stage process when enforcing debts.
The first step is to obtain a Judgment: if the case is in the County Court as most are, a simple and quick application will transfer it to the High Court for enforcement (the Sherriff’s Office will also deal with the transfer of the proceedings to the High Court). Once the case is transferred, the High Court produces a sealed “Writ of Control” which is returned to the Sherriff of the High Court.
There are 4 stages to enforcement which are worked through in sequence, and all of which attract fees (payable by the debtor in most cases).
Stage 1 Compliance stage; £75 (taking instructions and setting up administration)
Stage 2 First enforcement stage; £190 plus 7.5% if the judgment debt is over £1,000 (attending the debtor’s premises)
Stage 3 Second enforcement stage; £495 (seizure and transportation of goods to auction or sale)
Stage 4 Sale or disposal stage; £525 plus 7.5% if the judgment debt is over £1,000 (sale of goods).
If the process is being dealt with by the High Court Enforcement Officer, the HCEO sends a “Notice of Enforcement” to the Judgment debtor. This must be sent or delivered to the debtor personally, at the place where the debtor usually lives or carries on their trade or business. If it is a company or partnership, then it can be sent to the registered office and it can be delivered by post, by hand, by fax or by email. The Notice of Enforcement gives the debtor 7 clear days (which excludes Sundays and Bank Holidays) to pay the sum due in full (the judgment amount, any interest, Court fees and the fee for issue of the sealed Writ of Control). If payment in full is made, this concludes the process. If however the debtor fails to contact the HCEO or they request payment by instalments, the next stage begins.
First Enforcement Stage
An enforcement officer will attend the debtor’s premises to “take control of goods” (a new term replacing “seizure”). Any instalment arrangement is secured by a “controlled goods agreement” (the new term for “walking possession”). This stage attracts a fixed charge of £190 plus VAT plus 7.5% of the amount to be recovered plus VAT on sums over £1,000 (hence if the outstanding debt is £3,000 the percentage applies to £2,000 ie. £150 plus VAT). Again, if the debtor pays in full at this stage or agrees to an acceptable instalment arrangement this concludes the process.
Second Enforcement Stage
If no payment is made and no acceptable instalment arrangement is proposed, the HCEO attends the premises again and arranges for seizure of goods and their removal for auction.
Sale and Disposal
Goods are sold at auction to satisfy the debt. The fee for this stage is £525 plus VAT plus 7.5% of the sum to be recovered over £1,000 plus VAT: the fee for removal is normally included but if the HCEO anticipates exceptional costs (ie. because specialist equipment will be needed) the HCEO may apply to the Court to approve these further costs to be paid by the debtor. Disbursements may also be charged for without Court application such as locksmiths, storage and auctioneers fees.
There is a time limit of 12 months for the Enforcement Officer to take control of goods, but if a payment arrangement is entered into the period is suspended. If the payment arrangement is broken, the 12 month period re-starts.
Enforcement agents may visit premises on any day of the week (ie. including Sundays) but only between 6 a.m. and 9 p.m. They are obliged to identify “vulnerable persons” and refer them to sources of advice, and may now take control of “tools of the trade” with a value in excess of £1,350. Written notice of objects over which they have taken control must be given to both the defaulter and any co-owner. It is also an offence to interfere with controlled goods or to obstruct an enforcement agent in the legal course of their duties.