Reforms to Bailiff and Enforcement Regulations
On 6 April 2014, the long-awaited reforms to the ‘bailiff and enforcement’ regulations and costs became law. The new regulations deal with when a debtor’s premises can be entered and what goods can be taken or not taken.
On 6 April 2014, the long-awaited reforms to the ‘bailiff and enforcement’ regulations and costs became law. The new regulations deal with when a debtor’s premises can be entered and what goods can be taken or not taken. They also cover how a repayment scheme can be made; and how goods can be sold if the debt remains unpaid.
The reforms to the regulations have been introduced to ensure transparency in relation to seizure and sale of goods and clarity regarding cost structures .The new regulations set out the procedure that enforcement agents acting on behalf of trade creditors must follow, when taking control of customers’ goods and also makes provisions for ‘vulnerable’ debtors.
For High Court Enforcement there are 4 stages:
Administrative Stage
Enforcement Stage 1
Enforcement Stage 2
Sale Stage
With the use of a staged approach is hoped this will support the concept of early compliance by debtors as they will be fully aware of the costs implications if they do not.
The new law deals with when a debtor’s premises can be entered; what goods can be taken, or not taken; how a repayment scheme can be made; and how goods can be sold if the debt remains unpaid.
It makes special provisions for ‘vulnerable’ debtors to give them more time to get help.
Certain goods belonging to a debtor are exempt. The updated regulations now include basic things like a cooker, fridge, washing machine, medical aids, etc, but also office equipment for the debtor’s personal business such as computers, tools, phones - even vehicles - as long as they don’t exceed a value of £1,350. Above that sum they may be subject to ‘taking control’.
The enforcement agent must give 7 clear days’ notice of his intention to take control of the debtor’s goods. (The Court can order a shorter period on application by the creditor if it thinks the goods might be removed or disposed of before the enforcer can take control).
The notice can be given by almost any means, including electronic communication (email, text, fax).
Children and vulnerable people get special protection.
Writs are automatically extended where a payment arrangement is in place.
A controlled goods agreement may be made with the debtor. This means the costs are limited (unless the debtor breaches the agreement).
Taking control must occur within 12 months of the Notice to take control. This can be extended by application to court.
As part of the reforms, the fees for when a High Court Enforcement officer attends the debtor’s premises, and secures a ‘controlled goods agreement’ with the debtor, have been clarified. Providing there is no subsequent breach by the debtor – the fees are limited to:
Administration stage - compliance fee of £75
Enforcement Stage 1 - enforcement fee £190, plus 7.5% of amount recovered over £1,000
Enforcement Stage 2 - enforcement fee of £495 (no % charged)
Sale Stage – enforcement fee of £525, plus 7.5% of amount recovered over £1,000
If a second visit is required, then the fees increase with a higher fixed fee .The Enforcement Officer may also recover certain disbursements properly incurred and considerably more fees if the goods have to be sold.
The new regulations now incentivise the debtor to pay as early as possible and provide complete transparency on fees.
If you would like to know more about the new reforms and any other aspect of our debt recovery services, please contact Mark Taylor, Partner, at mtaylor@wilkinchapman.co.uk
