TCE Level 2 Test 2 PDF

MAIN TYPES OF ENFORCEMENT CIVIL COURT POWERS JUDGMENTS ( Warrants, Liabili...

MAIN TYPES OF ENFORCEMENT CIVIL COURT POWERS JUDGMENTS ( Warrants, Liability Orders and other instruments) PUBLIC HIGH COUNTY PRIVATE EMPLOYEES COURT COURT COMPANIES High Court County Court Enforcement Bailiffs ( Tendering for Officers contracts or ( HCEO ) instructed on CRAR) In-house Local Magistrates Court HMRC Authority Enforcement Officers Enforcement Officers (CEO) Officers Enforcement Enforcement Agents Agents Fig 1.1 structure of enforcement sector What is the role of police when called by an enforcement agent or debtor? The primary role of the police is to prevent a breach of the criminal law and to assist enforcement agents, where necessary, under the regulations. Under the Tribunals Courts and Enforcement Act 2007, Schedule 12 Taking control of goods Part 2, paragraph 68, a person is guilty of an offence if they intentionally obstruct a person lawfully acting as an enforcement agent. And a person is also guilty of an offence if they intentionally interfere with controlled goods without lawful excuse. 10 A person guilty of an offence is liable on summary conviction to imprisonment for a term not exceeding 51 weeks, or a fine not exceeding the standard level 4 scale, or both. A police officer may be called by an enforcement agent to attend premises to prevent a breach of t peace only and not to assist in the taking of control of the goods. The police officer is not there to negotiate on behalf of either party or to prevent a lawful act. Debtors often call for police assistance mainly due to a lack of belief that enforcement agents have the powers they do and that they must, therefore, be doing something act documentation is valid and that they should only enter the property at the invitation of the occupier or to prevent a breach of the peace. If the police reasonably believe that a breach of the peace is being committed, or is about to be committed, on private property, they may use their common law power to enter the property without a warrant in order to stop or prevent the breach. Where the enforcement is conducted in the High Court under the Courts Act 2003 Schedule 7 paragraph 5, it is the duty of every constable, at the request of an to assist the officer or that person in the execution of a writ or warrant. It is not uncommon for the police to be called during enforcement, where there is conduct which may give rise to a breach of the peace or where an assault has taken place. The role of the police is to ensure that there is no breach of the criminal law, but in general terms they must support properly authorised and conducted civil enforcement. The leading case on the role of the police in relation to civil enforcement is the Court of Appeal decision in Bibby v Chief Constable of Essex Police (2000) EWCA Civ 113 (6 th April 2000) where the court was generally supportive of enforcement agents and clarified the approach the police should take when presented with conduct likely to cause a breach of the peace. However, enforcement agents are not above the criminal law and must conduct themselves accordingly, particularly where they have the authority to use reasonable force in the enforcement. What are the obligations of the debtor when taking control of goods? goods, the debtor is obliged to co-operate with the enforcement agent. This means that under Schedule 12 paragraph 68, the debtors would be guilty of an offence if they intentionally: obstruct a person lawfully acting as an enforcement agent interfere with controlled goods without lawful excuse. 11  A debtor or person guilty of such an offence is liable on summary conviction to: (a) imprisonment for a term not exceeding 51 weeks, or (b) a fine not exceeding level 4 on the standard scale, or (c) both. How are fees and charges applied at various stages? The enforcement agent may recover from the debtor, fees indicated in the Schedule, in accordance with The Taking Control of Goods (Fees) Regulations 2014. The fees are recoverable by reference to the stage, or stages, of enforcement related services that have been supplied. Fees are categorised into two parts: enforcement of non-High Court writs and enforcement of High Court writs. Fee scale for majority of enforcements The relevant stages of enforcement are applied as follows: Compliance stage comprises all activities relating to enforcement. This may begin with receipt by the enforcement agent of instructions to use that procedure in relation to a sum to be recovered, through to (but not including) the commencement of the enforcement stage. Enforcement stage comprises all activities relating to enforcement from first attendance at the premises in relation to the instructions, up to (but not including) the commencement of the sale or disposal stage. Sale or disposal stage comprises all activities relating to enforcement from first attendance at the property for the purpose of transporting goods to the place of sale, or from commencing preparation for sale if the sale is to be held on the premises, until the completion of the sale or disposal Percentage fees Fee Stage Fixed Fee £0 - £1,500 >£1,500 Compliance £75.00 0% 0% Enforcement £235.00 0% 7.5% Sale £110.00 0% 7.5% Fig 1.2: fee scale for the majority of enforcement 12 Fig 1.2, above, shows the May 2023 2 fee scale for the majority of enforcement. Therefore, enforcement for amounts greater than £1,500: Percentage fee = amount to be recovered - £1,500 x appropriate % Example On a debt with a value of £7,500: Percentage fee (£7,500 - £1,500 = £6,000 x 7.5%) = £450 + Enforcement fee = £235 + Compliance fee = £75 £760 Enforcement under High Court writs There are additional stages when acting under a High Court writ of control. A table of the fees are set out next. Please note that the amounts displayed are shown net of VAT. A sum equivalent to VAT may be added where the Judgment Creditor is not VAT registered. Where the Judgment Creditor is VAT registered, the Judgment Debtor will not be liable to pay the VAT it is the liability of the Judgment Creditor. Compliance stage which comprises all activities relating to enforcement from receipt by the enforcement agent of instructions to use that procedure in relation to a sum to be recovered, up to but not including the commencement of the first enforcement stage. Enforcement stage one where the enforcement agent and the debtor enter into a controlled goods agreement, the first enforcement stage, which comprises all activities relating to enforcement from first attendance at the premises in relation to the instructions until the agreement is completed or breached. Enforcement stage two which comprises: (i) where the enforcement agent and debtor do not enter into a controlled goods agreement, all activities relating to enforcement from first attendance at the premises in relation to instructions, up to but not including the commencement of the sale or disposal stage. (ii) where the enforcement agent and debtor enter into a controlled goods agreement but the debtor breaches that agreement, all activities relating to enforcement from the time at which the debtor breaches the agreement, up to but not including the commencement of the sale or disposal stage. Sale or disposal stage which comprises all activities relating to enforcement from first attendance at the property for the purpose of transporting goods to the place of 2 It is important to check the latest fees in case they have changed since the time of writing. 13  sale, or from commencing preparation for sale if the sale is to be held on the premises, until completion of the sale or disposal. The following table (fig 1.3), shows the May 20233 fees for enforcement under a High Court Writ: Enforcement under a High Court Writ Percentage fees Fee Stage Fixed Fee £0 - £1,000 >£1,000 Compliance £75.00 0% 0% 1st Enforcement £190.00 0% 7.5% 2nd Enforcement £495.00 0% 0% Sale or Disposal £525.00 0% 7.5% Fig 1.3: fee scale for enforcement under a High Court Writ Therefore, for enforcement under High Court writs for amounts greater than £1,000: Percentage fee = amount to be recovered - £1,000 x 7.5% Example On a debt with a value of £7,500: Percentage fee (£7,500 - £1,000 = £6,500 x 7.5%) £488 (£487.50 rounded up) 1st Enforcement fees £190 Compliance fee £75 £753 + sum equivalent to VAT (if appropriate) Disbursements recoverable from the debtor Disbursements apply to all types of enforcement. Enforcement agents may recover disbursements from the debtor only in accordance with the regulation which provides for common disbursements. 3 It is important to check the latest fees in case they have changed since the time of writing. 14 These disbursements have to be reasonably and actually incurred and restricted to three sections: 1. Cost of storing goods which have been taken into control and removed from the premises or highway. 2. Cost of hiring a locksmith to gain access to premises when using reasonable force to enter them in accordance with Schedule 12, and to secure them afterwards. 3. Court fees in relation to any applications made by the enforcement agent in relation to the enforcement power which was granted. Exceptional disbursements On application by the enforcement agent, with the consent of the creditor in accordance with rules of court, the court may order that the enforcement agent may recover from the debtor exceptional disbursements associated with the use of the Schedule 12 procedure which are not otherwise recoverable under the Regulations. For example, the cost of specialist removal of a large or valuable item and additional insurance whilst it is in the control of the enforcement agent. The court may not make an order under an application for exceptional disbursements, unless it is satisfied that disbursements are necessary for effective enforcement of the sum to be recovered, having regard to all circumstances including a) the amount of that sum; and b) the nature and value of the goods which have been taken into control, or which are sought to take into control. More than one enforcement power available against the same debtor Enforcement agents must, as far as practicable, minimise the calculation of fees and disbursements recoverable from debtors. This applies when agents receive instructions to use the procedure under Schedule 12 for the same debtor for more than one enforcement power if those enforcement powers can reasonably be exercised at the same time. taking control of goods in relation to all such enforcement powers on the same occasion and selling or disposing of all goods taken into control on the same occasion, except where it is impracticable to do so. The enforcement agent may recover the compliance stage fee in respect of each enforcement power to which the instructions relate. Where the above applies, the fee recoverable in respect of the enforcement stage (or stages) and the sale or disposal stage respectively is to be calculated as follows: the fixed fee for each stage may be recovered only once, regardless of the number of enforcement powers to which the instructions relate 15  the amount in relation to which the percentage fee for each stage, if any, is to be calculated is the total amount of the sums to be recovered under all enforcement powers. Recovery of fees from vulnerable debtors Where the debtor is a vulnerable person, the fee or fees due for the enforcement stage and any disbursements related to that stage (or stages) are not recoverable unless the enforcement agent has, before proceeding to remove goods which have been taken into control, given the debtor an adequate opportunity to get assistance and advice in relation to the exercise of the enforcement power. Why is it important to handle payments correctly? All enforcement agents have an obligation to ensure that they keep proper auditable accounts, not only for legal reasons and tax purposes but also under regulated and contractual obligations. The importance of this obligation is covered by the Taking Control of Goods Procedure, the Taking Control of Goods: National Standards 2014 and the appropriate professional Enforcement agencies should ensure that audited accounts are available as required by law. least once a year for all businesses. Enforcement Companies must comply with statutory obligations, for example: Companies Act HMRC provisions Data Protection Health & Safety Bribery Act Equality legislation. A separate account for money due to the creditor should be maintained and accurate books and accounts should be kept and made available to establish precisely the money owed to the creditor. Enforcement agencies must keep a complete record of all financial transactions in whatever capacity undertaken. Enforcement agencies must maintain suitable and comprehensive insurance cover for liability. Enforcement agents must always give receipts for cash paid by a debtor and make sure that this is banked promptly. Terminology At this point in your studies, you may find it useful to understand the meaning of common terms, used in the enforcement process. You will find these in the following table (fig. 1.4): 16 Commonly used terminology in the enforcement profession Committal and arrest - The committal and arrest of debtors can only apply when an order allows committal to prison if an enforcement agent has been unable to collect the fines. Controlled Goods Agreement - The controlled goods agreement is similar to the former an HCEO, CCB or enforcement agent. A controlled goods agreement allows goods to be retained and used subject to the terms of the agreement. County Court Bailiff (CCB) - Tribunals Service (HMCTS) and is responsible for enforcing court orders issued through the County Court. Creditor - Creditors have several former names which you may hear people using: partnership or firm issuing a court claim, or an authority collecting taxes or fines. In some proceedings a cr local authorities, government departments and commercial landlords. Debtor - Debtors are customers, either individuals or organisations, who owe money, for example tax or a parking fine. If they are subject to a court claim they are known as Enforcement - The lawful process under a writ or warrant of control or a liability order, following the taking control of goods procedure. When recovering money, an enforcement agent will attend the premises at the first possible opportunity to give the debtor a chance to pay the debt. If the debtor does not pay in full, where possible, the enforcement agent will take control of goods. Enforcement agent (EA) - Enforcement agents are persons authorised and certificated at court to take control of goods under section 64 of the Tribunals, Courts and Enforcement Act 2007. Enforcement agent business - Enforcement agents are normally employees or sub- contractors of companies which tender for contracts from local authorities, HMRC or government, or in the case of HCEOs, court judgments. Some enforcement agents specialise in commercial rent arrears recovery (CRAR). The size of businesses varies from one-person firms to companies providing work to hundreds of enforcement agents. High Court Enforcement Officer (HCEO) - An HCEO is a person authorised by the Lord Chancellor to enforce Writs of Control and Writs of Execution under the High Court claimants and their solicitors or agents and in the case of taking control of goods, involves the enforcement of money judgments over £600, other than Consumer Credit Act Judgments, entered in the County Court. Judge - A judge is a person appointed by the Lord Chancellor, on behalf of the King, to dispens Judges. Liability Order - 17 authority giving that authority the power to collect unpaid council tax and national non- domestic rates (NNDR). Magistrate - The magistrate is a person appointed by the Lord Chief Justice and operates criminal offences. Possession - A possession claim is a claim for the recovery of possession of land, including buildings or parts of buildings. Taking Control of Goods - Taking control of goods is the procedure under a writ or warrant of control or a liability order to secure the goods of a debtor. This involves taking an inventory of the goods and where necessary having a controlled goods agreement (CGA) relating to the use of those goods signed by the debtor. If no CGA is entered into or is broken, it may result in the removal and sale of those goods. Warrant of Control - They include County Court warrants, commercial rent arrears recovery instructions, Writ of Control - The w The writ gives the authority to a High Court Enforcement Officer to take control of and Fig. 1.4 Commonly used terminology in the enforcement profession 18