07 July 2021

Pursuing business rates through the county court

Routinely, local authorities will obtain liability orders for unpaid business rates. However, under the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989, where a liability order has been obtained for unpaid business rates, you are prohibited from obtaining a charging order for the unpaid liability and you can only obtain a voluntary charge under certain conditions.

Insolvency, distress or commitment to prison aren’t always routes that you may want to pursue and therefore issuing a county court claim for the unpaid business rates opens up the alternative enforcement option of a charging order followed by an order for sale application (where appropriate).

There are pros and cons for issuing a county court claim and pursuing a charging order, but this can be a useful tool for you. For example, where the company is located overseas making insolvency proceedings much more complex (or not an option if the company is based in certain jurisdictions).

We have recently successfully concluded proceedings for unpaid business rates against a limited company based in Anguilla.

The company owned a property, which sat empty in the local authority’s area, we issued a claim to obtain county court judgment with a view to securing the debt and then forcing the sale of the property. The action resulted in payment of the debt and ceasing the ongoing liability issue.

The county court route can also be more advantageous than more commonly used processes in scenarios such as dealing with absent landlords where service is an issue, progressing cases where the asset position is unclear, and where there may be vulnerability issues.

One of our solutions is to take a list of cases in spreadsheet format and efficiently identify where the creditor can reasonably expect a positive outcome, if action were to be taken.

This can be applied to any debt type. Please contact us if you wish to explore this further.

Applications to set aside liability orders

Magistrates Courts are now starting to list applications to set aside liability orders again, after many months of simply adjourning matters whilst they dealt with their backlog.

We have a wealth of experience in dealing with these applications and are currently responding to many on behalf of local authorities. It is important that you respond to these applications robustly because if the liability orders are set aside amidst your recovery action, this can expose you to adverse costs both in the Magistrates Court and in the County Court.

There is often confusion over costs in the Magistrates Court. As a result of the vagueness within the Magistrates Court Act 1980, local authorities are often reluctant to instruct solicitors to deal with these applications.

Some clarity was given in the case of R. (on the application of Khan) v Feltham Magistrates’ Court [2017] EWHC 3042 (Admin) in that the losing party can be ordered to pay the successful parties costs. If a local authority instructs a solicitor and is successful in their case, there is no reason why those costs cannot be recovered.

Please contact us to discuss any cases you have concerns on, so the team can advise whether action and potential recovery is viable.

Paul Bowden


01472 265982 Mob: 07780 336983 paul.bowden@wilkinchapman.co.uk

Alexandra Ottley

Senior Solicitor

01472 253946 alexandra.ottley@wilkinchapman.co.uk

Paul Bowden, Wilkin Chapman LLP
Need help?

Contact Paul to discuss this further.

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