In last years spring/summer briefing we wrote about the new laws relating to bailiffs that were introduced in Part 3 of the Tribunals, Courts and Enforcement Act on 06 April 2014.
The aim of the legislation was to make the law more straightforward for both creditors and debtors. The main changes included limiting the tools of the trade which were exempt from being seized. The legislation introduced a cap of £1350, so any goods with a value above this are no longer exempt. A letter giving prior notice to the debtor was introduced which is now sent to them 7 clear days before the enforcement agents attended their premises. Ease of access was also restricted, preventing agents from entering through open windows. Entrance now has to be through a door or other usual means of entry and not before 6am or after 9pm. The new legislation introduced a clear set of fees that are imposed on a staged basis and it was hoped that this would encourage early cooperation from debtors.
Only authorised High Court Enforcement Officers (HCEO’s) and their nominated Enforcement Agents, who now have to be certificated, are permitted to enforce High Court Writs on behalf of the court. Wayne Whitford, Director of Court Enforcement Services says that the new rules have given businesses greater confidence in instructing HCEOs as there is less room for misunderstanding on fees, communication and processes, which in the past have been a cause for much complaint by the debtors, solicitors and their clients alike. Wayne states “It means that legal professionals and their clients now have greater confidence in a positive outcome when instructing court Enforcement Agents. Moreover, a High Court Enforcement company with a modern approach is likely to ensure and safeguard their client’s reputation”.
Wayne went onto say that the impact of the new law is being felt in both the public and private commercial sector. “For the latter, one key effect is that it has brought the issue of bad debts and cash flow to the forefront of businesses. It has also highlighted that although there are adequate resources in the High Court to effectively carry out the enforcement of writs, County Court Judgments and orders are taking longer and longer to enforce in the County Court, generally owing to the fact that the County Court bailiffs have a higher workload and limited powers. He states that solicitors are therefore increasingly advising clients that Judgments over £600 can be transferred to the High Court. The higher Court having a stronger record of recovery rates, easily justifies the £60 court fee. Court Enforcement Services manage the transfer up of the Judgment at no charge”.
The cap of £1350 for exempt tools of the trade gives Enforcement Agents more options when seizing goods and the transparent process and fee scale might have encouraged debtors to pay up early. The new process has certainly made it clearer for solicitors and their clients. However the letter giving debtors 7 days notice might prompt them to conceal goods before the Enforcement Agent arrives or they may simply not be at the property. These obstacles, coupled with the restrictions of entry and the times the enforcement agents can enter may have caused problems.