Setting enforcement fees for commercial rent recovery for enforcement agents subscribing to regulations and procedures in Schedule 12 of the Tribunals Courts and Enforcements Act 2007.
Commences 6th April 2014.
In summary, enforcement is split into stages, being:
- Compliance stage – Added to system, £75.00
Disposal of goods £110.00
- Compliance stage – Added to system, £75.00
Enforcement £235.00 + 7.5%
Disposal of goods £110.00 + 7.5%
Enforcement of High court writs have a different scale and slightly different rules.
Existing fee regulations for local taxation, traffic debt enforcement and appendix 1 of the Distress for Rent Rules 1988 and have not been repealed by these regulations.
These regulations do not apply to Magistrates Court fines, a fine is a criminal sentence and not a "debt" and the person ordered to pay is a "defaulter" and not a "debtor" therefore do not follow the remit or descriptions given by these regulations prescribed for commercial rent revocery.
** http://www.legislation.gov.uk may still yet update existing fee regulations to reflect these regulations. An Act of Parliament cannot be amended by these regulations.
They are currently limited to commercial rent recovery and enforcement of high court writs.
The charge can only be made at each stage is completed, but not if the stage has been started and abandoned, or enforcement action ceases to be exercisable.
The compliance stage is defined as being instructed by the creditor.
The enforcement stage is defined as being the first attendance and the point goods are put on sale.
Disposal for goods stage is defined as being the sale of goods (but not for the return of goods)
Disbursements can be recovered from the debtor, but they have to have a reason and be the actual cost incurred. Nothing in this rule can be used for making a profit for storing goods, locksmith and court application fees.
If goods have been sold, the fees can be recovered from the proceeds of sale.
There is a provision for exceptional disbursements (sum not defined) the bailiff can apply to a court for these to be recovered.
With the exception of the £75 compliance fee, fees cannot be charged to the same debtor for the enforcement of multiple debts simultaneously.
No fees are recoverable from any debtor who is a vulnerable person or can any goods be removed until the debtor has been given an opportunity to seek advice in relation to the use of civil enforcement against him.
If the proceeds of the sale of goods is less than the debt, then the actual cost of sale (internet auctions not allowed) is paid first, then the compliance fee is deducted, then the balance remaining is divided pro rata between the principal debt and the enforcement fee.
A breakdown of disbursements is required to be documented and delivered to the debtor without him asking for it.
If the debtor pays the sum outstanding before sale, then the goods must be returned.
Disputes about ownership of goods can be challenged by the owner in the county court and the goods (or sum as the case may be) returned to the owner by order of the court.
Debtors can dispute the fees or the bailiff’s expenses and recover them under county court rules.
Statutory fees do not attract VAT unless a provision is made for it, for which there is none in these regulations.
Potential flaws and exploitations
1. If the debtor pays the creditor direct, it prevents any further fee being charged. Regulation 17, otherwise Regulation 4 allows for bailiffs to continue enforcement to settle his bill.
2. Vulnerable households cannot have enforcement action executed until the bailiff has withdrawn from the property. Its disputed what constitutes a vulnerable person, depression pills or person with no limbs.
3. The enforcement stage fee is not payable until the bailiff completes the work needed for his attendance under the Taking Control of Goods Regulations 2014.
4. Non-compliance with any applicable regulation of the Taking Control of Goods Regulations 2013 revokes everything up to that point, meaning all fees paid for non-compliant enforcement is recoverable. Its not known who makes the refund, the creditor.
5. There is no provision for low-income households to be means tested and no exemptions or remissions provided.
6. There is a conflict with Regulation 5 of The Council Tax and Non-Domestic Rating (Amendment) (England) Regulations 2006 et-al and Enforcement of Road Traffic Debts (Certificated Bailiffs) (Amendment) Regulations 2003 which stand un-repealed. At present, these regulations would continue to apply and only apply to unpaid commercial rent and high court writs.
7. These rules do not apply to Court fines (unless his goods are taken, which then the cost of distress is recovered from the proceeds of sale) if the defaulter has not been means tested for his ability to pay.
8. Regulation 4(1) allows for fees to be recovered by way of implementing the stages as described, which results in new fees being imposed in respect of the recovery of previous fees and the cycle can be repeated ad-infinitum. There is no provision limiting the number of times this cycle can be repeated or recurred against the same debtor (other than a claim for abuse of process).