tce level 2.pdf

HIGH COURT ENFORCEMENT OFFICERS ASSOCIATION LIMITED Taking Control of Goods Guidance for Enforcement Agents 1 All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior permission of the Chartered Institute of Credit Management and the High Court Enforcement Officers Association Limited. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without prior consent of the Chartered Institute of Credit Management and High Court Enforcement Officers Association Limited. © Chartered Institute of Credit Management 2023 edition – 03.05.23./V13 2 3 Contents Introduction 5 Chapter 1 Role of enforcement agents within the profession 7 Chapter 2 Law relevant to enforcement agents 20 Chapter 3 Practice of taking control of goods 28 Chapter 4 Practice of removal and sale of goods 40 Chapter 5 Customer care 49 Chapter 6 How to manage conflict situations 56 Conclusion 65 How to book your qualifying exam 66 Appendix index 67 Appendix A The Art of answering online questions 68 Appendix B Sample questions 70 Appendix C Answers to sample questions 74 Appendix D Data Protection factsheet 78 Bibliography 82 4 Introduction As an enforcement agent, you are important to society and the economy because you support the functioning of the legal and credit system. This booklet is designed to help you work towards your Level 2 qualification which is required for all involved in the practical work of ‘Taking Control of Goods’ under Sections 63 and 64 Tribunals Courts & Enforcement Act 2007. If you are going for re-certificate, you can use the online version with practice multiple choice questions to test yourself and print a certificate to prove to your employer or a judge that you have kept up-to-date. The detail of what is needed for certification is set out in The Certification of Enforcement Agents Regulations 2014 where it states that the judge issuing the certificate must be satisfied that: 3(b)(ii) the applicant possess sufficient knowledge of the law and procedure relating to the powers of enforcement by taking control of goods and of commercial rent arrears recovery to be competent to exercise those powers. Also Practice Direction 84 – Enforcement by Taking Control of Goods sets out the evidence required to support this knowledge in Rule 84. 18 2.1(e)(i) which must accompany an application for the issue of a certificate. (e) proof that the applicant: (i) has achieved at least a qualification on Taking Control of Goods at (or above) Level 2 on the qualifications and Credit Framework (QCF) or equivalent as determined by a nationally accredited awarding body. In association with the Chartered Institute of Credit Management (CICM), which is an Ofqual accredited awarding body, the High Court Enforcement Officers Association (HCEOA) has produced a suitable qualification, approved by the Ministry of Justice, which is available for all enforcement agents and not just for those undertaking High Court work. The qualification is called the ‘Level 2 Award in Taking Control of Goods’ – see the CICM syllabus for more details. These guidance notes are to help you prepare for your qualifying exam and in conjunction with a multiple-choice test to prove that you have kept up to date. HCEOA, Local Authority Civil Enforcement Forum (LACEF) and Civil Enforcement Association (CIVEA) endorse the qualification and review the guidance annually. The guidance has six chapters setting out the areas of knowledge required, and you have access to an online version with practice multiple choice questions which are the same standard as the final qualifying exam. You can practice answering the 60 practice questions in one go to help decide when you are ready for the exam. You can also print a certificate to show your practice test score to prove your continuous professional development (CPD). The last part of this guidance provides advice about how to prepare for your qualifying exam. Appendix A gives tips on the art of answering online questions. Appendix B and C lists covers questions a District Judge may ask you when you go for certification, and answers to these questions. Appendix D offers guidance on data protection legislation. You will find these appendix items at the back of this study guide. 5 The qualifying exam The one-hour qualifying exam involves 60 multiple choice questions and is available on demand at home (depending on meeting system requirements) or at a Pearson Vue test centre (depending on centre availability), where you may have taken your DVLA driving theory test. Once you are ready to take the exam, register as a studying member with the CICM and provide personal information, which is necessary to verify your identification at the test centre of your choice and book your appointment online (see fees on CICM website and exam booking link). Please allow at least 48 hours for your studying member application to be processed before booking online. See Taking Control syllabus for full details. CICM runs the Level 2 exam on demand or in test centres based in most towns around the country. (See CICM website for up-to-date details.) Appointments fill up quickly and so book early to avoid disappointment. You can book up to three months ahead. Testing centres have strict ID requirements so please read the requirements carefully to avoid being turned away and losing your exam fee. You can find out more about exam booking arrangements toward the end of this study guide and in the syllabus. You will need to pass the qualifying exam and, if further study is needed, should book a further exam to achieve this. Download a syllabus from the CICM website to find out more, including useful information such as timescales for results and certificates, study support and reasonable exam adjustments, e.g., for dyslexia. The HCEOA, LACEF and CIVEA hope that you will enjoy your studies, which will underpin your day-today work. CPD Certification After two years you will need to prove to a judge that your knowledge is current. The simplest way to achieve this is to revisit this guidance, which is regularly revised by the HCEOA, LACEF and CIVEA, and produce a certificate to prove your knowledge. In addition, if you are registered as a CICM member you have access to a wide range of additional information and learning resources to keep you up to date. CICM will certificate this free of charge. Remember that your role is important to support the legal and credit system. Unless there is prompt and efficient enforcement of the authority of the courts, the effectiveness of penalties and public confidence in the justice system are undermined. You are involved in essential and challenging work which brings you in contact on a daily basis with a range of people, sometimes vulnerable. Take pride in your role and keep up to date with regulations to raise your professionalism and the reputation of the sector. 6 Chapter 1 Role of enforcement agents within the profession Introduction In this first chapter, key questions will help you to understand the role of the enforcement agent within the enforcement profession. Learning Objectives At the end of this chapter, you be able to: explain the purpose of the enforcement profession describe the structure of the enforcement sector explain the role and responsibilities of enforcement agents in accordance with legal requirements explain the meaning of commonly used terminology. Why is the enforcement profession important? Unless there is prompt and efficient enforcement, the authority of the courts, the effectiveness of penalties and public confidence in the justice system are undermined. The main purpose of the enforcement profession is to ensure that: local authority, taxes and business debts are collected private citizens have a mechanism to enforce their rights against individuals or institutions The Role of Enforcement Agents within the Enforcement Profession The enforcement profession therefore has an important role in society and the economy and underpins the legal and credit system. Enforcement action is necessary when a debtor fails to pay a debt or negotiate a reasonable instalment payment with their creditor. Creditors are entitled to collect what they are owed because debtors not paying their debts could result in creditors themselves facing financial difficulties. Creditors have 7 several enforcement options depending on the type of debt, most of which require the assistance of an enforcement agent. A creditor normally undertakes a range of debt collection activity before deciding to commence formal enforcement action. This may include: issuing an invoice Issuing reminders issuing a letter before taking legal action commencement of legal action Therefore, the debtor has had at least four opportunities to settle the debt before any enforcement action is taken. Similar opportunities to settle will also have been given for outstanding council tax, rates, income tax and rent. How does an enforcement agent’s role fit into legal process? The enforcement agent’s role is to enforce any writs of the court, warrants, liability orders or demands for non-payment by using the procedure of taking control of the debtor’s goods. What are the key functions and duties of enforcement agents? The key function of any enforcement agent is to identify, take control and if necessary, remove and sell a debtor’s goods in order to pay money owed to a person or organisation. In some cases, enforcement agents may also have authority to conduct evictions and arrest people. In all circumstances, agents have responsibilities to all parties to ensure rules and regulations are adhered to, particularly in relation to vulnerable persons (see Chapter 5 for advice about customer care). Enforcement must therefore be conducted in a competent, reasonable and effective manner. Goods taken into control give the enforcement agent more leverage when recovering debts. If debts remain unpaid, generally the enforcement agent will remove the controlled goods and sell them by auction to satisfy the debt and costs incurred. What are key developments of the enforcement profession? The enforcement profession dates back to Anglo Saxon times and there have always been two streams with laws and regulations which relate to each. The first deals with enforcing court judgments and the second with other forms of authorised enforcement, for example related to taxes, fines and local authority debt. 8 In 2007 the government introduced a major change by unifying various methods of enforcement under the Tribunals, Courts and Enforcement Act 2007. This included a certification requirement for all enforcement agents who are involved in taking control of goods. The Government implemented these changes on 6 April 2014 and from 6 August 2014 all enforcement agents were required to hold a qualification in taking control of goods at Level 2 or above on the Qualifications and Credit Framework (QCF) 1, or equivalent, in order to obtain their certificate from a District Judge. In addition to these developments, the enforcement profession agreed Government National Standards for enforcement agents in 2002 (revised 2012 and 2014) which outline best practice in enforcement activity. How is the enforcement sector structured? The enforcement sector is split into those who have the authority to enforce Civil Court judgments and those who can carry out other forms of enforcement. Only enforcement agents who are authorised High Court Enforcement Officers or County Court Bailiffs employed by His Majesty’s Courts and Tribunal Service have the authority to enforce Civil Court judgments. Other enforcement agents work in either the private or public sector. Private enforcement agents will receive work from companies tendering for contracts for the enforcement of magistrates’ court fines, local authority council tax and business rates, child maintenance arrears, penalty charge notices and from landlords for commercial rent arrears. Public enforcement agents are employed, for example by HMRC, local authorities and magistrates’ courts. The following flowchart in fig.1.1, shows the structure of enforcement sector. 1 Note the Government has now replaced the ‘Qualifications and Credit Framework’ (QCF) with the ‘Regulated Qualifications Framework’ (RQF) 9 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 the peace. The police officer’s presence would be to prevent a breach of the 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 illegal. Police officers attending should first check the enforcement agents’ authority to 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 enforcement officer, or a person acting under the officer’s authority, 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? When an enforcement agent undertakes the procedure to take control of a debtor’s 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 20232 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. The definition of ‘can reasonably be exercised at the same time’ means, in particular, the 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 bodies’ codes of conduct and good practice guides. Enforcement agencies should ensure that audited accounts are available as required by law. An audit of agency’s accounts by independent accountants should be undertaken at 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 both professional indemnity and other risks including employer’s liability and public 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 debt. This generally applies to council tax in England (but not Wales) and magistrates’ fines. Controlled Goods Agreement - The controlled goods agreement is similar to the former ‘walking possession agreement’ which involved the process of securing goods seized by 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) - A CCB is a person employed by His Majesty’s Courts & 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: ‘plaintiff’, ‘claimant’ or ‘judgment creditor’ and describes an individual, company, partnership or firm issuing a court claim, or an authority collecting taxes or fines. In some proceedings a creditor may be described as an ‘applicant’. Creditors also include 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 a ‘defendant’ or in some cases, ‘judgment debtor’. 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 Enforcement Officers Regulations 2004 (SI 400). The Officer’s work comes from civil 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 dispense the King’s Justice. In civil proceedings, most orders are made by District Judges. Liability Order - A liability order is an order issued by the magistrates’ court to a local 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 in the magistrates’ court dealing mainly with local authority debt and fines issued for 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 - Warrants of control were formerly called ‘warrants of execution’. They include County Court warrants, commercial rent arrears recovery instructions, magistrates’ warrants and penalty charge notices. Writ of Control - The writ of control was formerly called a ‘Writ of Fieri Facias (FiFa)’. The writ gives the authority to a High Court Enforcement Officer to take control of and sell a debtor’s goods, in appropriate circumstances. Fig. 1.4 Commonly used terminology in the enforcement profession 18 Summary In this chapter you have learned that: The EA’s role is to enforce court writs, warrants, liability orders or demands for non- payment using the taking control of goods procedure. Authorised High Court Enforcement Officers or County Court Bailiffs employed by HM Courts and Tribunal Service have the power to enforce Civil Court judgments. The enforcement agent may recover fees from the debtor, based on the stages of enforcement that have been supplied. A police officer may assist by preventing a breach of the peace, but they will not assist in the controlled goods process. All enforcement agents must keep auditable accounts for legal, tax, regulatory and contractual purposes. 19 Chapter 2 Law relevant to enforcement agents Introduction In this chapter key questions will help you to understand the law relevant to enforcement agents. You will become familiar with the law and regulation relating to the authorisation of High Court Enforcement Officers. This includes human rights laws, data protection regulation and post-authorisation requirements. Learning objectives: At the end of this chapter, you will be able to: identify the powers and obligations conferred by relevant Acts and regulations. identify aspects of human rights legislation that are relevant to enforcement. identify enforcement agents’ obligations in respect of data protection legislation. state possible consequences of not complying with legislation and regulations. Tribunals, Courts and Enforcement Act 2007 (TCE) To identify their powers and obligations, all enforcement agents must become familiar with the Taking Control of Goods Procedure outlined in TCE Schedule 12 paragraphs 4 to 69 as amended by the Crime & Courts Act 2013 S25 and detailed in the Taking Control of Goods Regulations 2013. The powers and obligations under TCE and associated regulations are discussed in this chapter. They relate to authority to act, premises, powers of entry, force, duty to goods and fees. What is an enforcement agent’s authority to act? An enforcement agent is granted authority under a power given by an enactment, writ or warrant to use the Schedule 12 procedure to take control of goods and sell them to recover a sum of money – Section 6 TCE. They also have authority if they hold a Certificate under Section 64 TCE or they are exempt – Section 63 TCE. An individual is exempt if they are: a police constable an officer of HM Revenue and Customs (HMRC), or 20 a court officer or staff employed by HM Courts and Tribunal Service (HMCTS) acting in the course of duty What are relevant premises? It is deemed relevant premises if the enforcement agent reasonably believes that they are at the place, or one of the places, where the debtor usually lives or carries on a trade or business – Schedule 12 para. 14(6). For Commercial Rent Arrears Recovery – CRAR (Section 72(1) TCE) the only relevant premises are the demised4 premises. You will learn more about CRAR shortly. What are an enforcement agent’s powers of entry? Without a warrant, an EA has the power to enter relevant premises, subject to any restrictions in the regulations – Schedule 12 para. 14. If the EA has a warrant issued by the court, they have the power to enter specified premises as authorised – Schedule 12 para. 15. You will find more detail about enforcement agent rights of entry and re-entry in Chapter 3. Do enforcement agents need a warrant to enter or re-enter commercial premises? For HCEOs, no warrant is required to enter commercial premise – Schedule 12 para. 18A. For all enforcement agents re-entry is permitted without a warrant, following the taking control of goods, provided the required notice is given – Schedule 12 para. 19A. What force can enforcement agents use against goods, property or persons? Generally, reasonable force may be used against goods and property. This does not include a power to use force against people. In some cases, such as entry to domestic property, a warrant issued by the court is required. Reg 28 Taking Control of Goods Regulations 2013 – Schedule 12 para.20 – 22. As part of issuing a warrant to enter premises, the court may authorise use of reasonable force to enter or to do anything for which entry is authorised. The conditions the court 4 Demised premises relate to the property the tenant rents under lease. 21 must be satisfied about, are set out in Reg 28(2) Taking Control of Goods Regulations 2013. What are enforcement agents’ duties in respect of goods taken into control? They must take reasonable care of any removed controlled goods – Schedule 12 para. 35. They must also comply with any provision or regulations about care while they remain controlled goods. What fees are enforcement agents entitled to change? Enforcement agents must charge fees strictly in accordance with the Taking Control of Goods (Fees) Regulations 2014. The Schedule under Reg. 4 has two tables, one for the majority of enforcements and one for High Court Writ enforcement. The regulations provide for a Compliance Stage, an Enforcement Stage (in High Court Enforcement 1 & 2 Stages) and a Sale Stage. Additional disbursements are limited to: cost of storage cost of a locksmith court fees, in respect of any applications needed Any further (exceptional) disbursements can only be charged with the consent of the court. What is CRAR? CRAR or Commercial Rent Arrears Recovery is the power of a landlord, under a lease of commercial premises, to use the Taking Control of Goods procedure under Schedule 12 to recover from the tenant rent payable under the lease (Section 72 TCE). This power replaces the common law right to distrain5 for arrears of rent which was abolished by Section 71 TCE. 5 Distraint is a remedy that allows a property owner to take a tenant’s goods until rent payment is made or an agreement is made. 22 It defines: Landlord Lease Commercial premises Rent The rent recoverable The position of agricultural holdings The position of sub-tenants How does CRAR differ from the previous procedure? The procedure’s differences include the following: The lease must be in writing and relate only to a business premises (CRAR cannot be used where the lease relates to a mixture of commercial and domestic premises) The landlord may not exercise the power in person Only rent may be recovered and not, for example, insurance premiums or management charges (whether or not called rent in the lease) Any provision in a lease claiming to include any amounts (other than rent) due from the tenant to be recoverable as rent are void (Section 85 TCE) The contents of the written authorisation by the landlord are specified in Regulation 51 of the TCG Regulations but there is no prescribed form The minimum amount of unpaid rent for the power to be exercised is an amount equivalent to seven days’ rent Notice of enforcement (a prescribed form) giving the tenant seven clear days’ notice must be served on the tenant by enforcement agents before they attend to enforce under the Taking Control of Goods procedure. What aspects of Human Rights legislation affect enforcement? It is important to understand how Human Rights legislation impacts the work of enforcement. Most of you will have heard of the Human Rights Act, This is borne from the European Convention on Human Rights and Fundamental Freedoms 1950 (ECHR). However, not all of this legislation is relevant to the work of an HCEO. The specific areas relevant to the enforcement agent are: 23 Article 8 Right to respect for private and family life. Under Article 8(1), everyone has the right to respect for their private and family life, their home and their correspondence. Article 8(2) states there shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic wellbeing of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. The First Protocol, Article 1 Protection of Property Every natural or legal person is entitled to the peaceful enjoyment of their possessions. No one shall be deprived of their possessions except in the public interest and subject to the conditions provided for by law and the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties. Enforcement Agents must be prepared to confirm their authority to act in a manner which might be in breach of a debtor’s human rights if they did not fall into the exceptions categories above. Evidence suitable for a police officer should be readily available. This would include ID and documentary authority for the proposed action. Proportionality: under ECHR, an EA’s action must be: o prescribed by law o be necessary in a democratic society o not discriminatory Enforcement agents: o must act fairly and in good faith o have respect for the individuals (and their property) with whom they deal in their work. What are enforcement agents’ data protection obligations? Data Protection legislation is designed to maintain the correct use and security of personal data. Personal data relates to any information, as a singular piece or in a pool of other information, which can identify a living individual. Under present legislation, this does not apply to companies. There are many situations in which an Enforcement Officer collects, stores, processes, retrieves and destroys personal data. By its nature, all data held by enforcement agents 24 is confidential and should be respected as such. Some ‘special category’ data may be particularly sensitive and will be subject to greater care. Disclosing confidential information to a third party unconnected with the purpose the data was obtained is in breach of the DPA 2018 and renders the offender liable to prosecution. Individuals may make a ‘Subject Access Request’ to any organisation which they believe may hold their personal data and gain a copy of that data. The primary legislature governing an EA’s actions in all these situations, is the Data Protection Act 2018 (DPA2018). The DPA2018 is derived from the EU’s General Data Protection Regulation and was updated in 2021 following the UK’s exit from the European Union. Part 2 of the Act retains the six core principles of GDPR, namely: 1. To handle data lawfully, fairly and transparently 2. To collect data for a specified purpose and keep until the purpose is fulfilled 3. To minimise the volume of data to safeguard its use 4. To correct inaccurate or incomplete data promptly, within 30 days 5. To delete any stored data that is no longer required 6. To process data securely to avoid loss, destruction, damage or unlawful use You can find out more about Part 2 in the Information Commissioner’s Guide to the UK GDPR. At the time of writing this can be accessed at https://ico.org.uk/for- organisations/guide-to-data-protection/guide-to-the-general-data-protection- regulation-gdpr/ (retrieved 15.05.23.) Law Enforcement Processing Any personal data processed for the primary purpose of law enforcement, is regulated under Part 3 DPA2018. The principles under Part 3 are similar to those under Part 2 but allow for reduced transparency so that any lawful process is not undermined. You can find out more about Part 3 in the Information Commissioner’s Guide to Law Enforcement Processing. At the time of writing this can be accessed at https://ico.org.uk/for- organisations/guide-to-data-protection/guide-to-le-processing/ (retrieved 15.05.23.) The High Court Enforcement Officers Association offers guidance and best practice toward the use of data, in their HCEOA Privacy Policy. At the time of writing, this can be found at www.hceoa.org.uk/privacy-policy (retrieved 21.11.22.) 25 What are the penalties for non-compliance of legislation? TCE Section 63(6) makes it a criminal offence for a person to act as an enforcement agent, without being authorised to do so. An EA must be authorised to operate under a certificate granted by section 64 of the TCE Act 2007. If they do not hold a certificate, they are guilty of an offence. This will stand, whether they breached the legislation knowingly or recklessly. A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale. For High Court Enforcement Officers, under Part 3, Condition 6 of HCEO Regulations, non- compliance of the regulations can result in revocation of their licence. Authorisation can be terminated by the Senior Master of the King’s Bench on grounds of falsification, unprofessional behaviour or failure to satisfy conditions under Regulation 8. Legislation that sits beyond the TCG and HCEO Regulations, such as the ECHR and GDPR, hold their own penalties for non-compliance. Two other pieces of law – the Health and Safety at Work Act 1974 and the Equality Act 2010, demonstrate this point. Health & Safety at Work Act 1974 Under this legislation, an employer has a legal duty ‘to ensure, so far as reasonably practicable, the health, safety and welfare of their employees’ and employees have a duty to look after themselves and work colleagues. A failure by an employer can result in criminal prosecution and civil damages and by employees a reduction in damages by any contributory negligence on their part. In general terms, both must assess the risk of the work being undertaken to try to reduce it to an absolute minimum. In civil enforcement, this involves assessing likely risk at the outset and continually reassessing this by dynamic risk assessment as the enforcement progresses. Equality Act 2010 This legislation brings together the various provisions on discrimination (age, disability, ethnicity, gender, race, religion or sexual orientation) and provides for penalties for their breach. It provides the sanction for failing to follow the principle of proportionality under the Human Rights Act and any lapse of professionalism under the National Standards for Enforcement Agents. Whilst an enforcement agent with proper authority cannot be a trespasser (which is supported by TCE Schedule 12 Paragraph 66(2), where there is a breach or defect giving rise to a remedy to a debtor), an agent may be liable in civil law for any damage caused as a consequence of enforcement action. The enforcement agent and subcontractors would normally carry insurance to cover this potential liability. 26 Summary In this chapter you have learned that: enforcement officers must gain certificated authority to act but there are exemptions for the police, HMRC officers and court officers employed by (HMCTS) enforcement agents with a court warrant can enter specific premises and even without a warrant they may enter relevant premises subject to regulatory restrictions Reasonable force is allowed against goods and property but not against people Fees can be charged for Compliance, Enforcement and Sale Stages of enforcement, along with disbursements for storage and locksmith costs, and court fees. Articles 1 and 8 of the Human Rights Act expect enforcement agents to grant respect for private and family life and peaceful enjoyment of possessions The UK’s Data Protection Act 2018 follows GDPR principles of handling lawful, fair, transparent data which is purpose-specific, minimal, accurate and secure. Non-compliance toward enforcement legislation carries a criminal penalty. 27 Chapter 3 Practice of taking control of goods Introduction Chapter 3 focuses attention on the practice of taking control of goods. Key questions will help you with the practical elements of your work. Learning Objectives At the end of this chapter, you will be able to: identify categories of legally exempt goods explain an enforcement agent’s rights of entry and re-entry describe how to deal with common types of ownership and exemption disputes explain the process of taking control of goods in accordance with legal and regulatory requirements. What are the categories of legally exempt goods? The Taking Control of Goods Regulations 2013 defines exempt goods as: a) items or equipment (for example, tools, books, telephones, computer equipment and vehicles) which are necessary for use personally by the debtor in the debtor’s employment, business, trade, profession, study or education, except that in any case the aggregate value of the items or equipment to which this exemption is applied shall not exceed £1,350. b) such clothing, bedding, furniture, household equipment, items and provisions as are reasonably required to satisfy the basic domestic needs of the debtor and every member of the debtor’s household, including (but not restricted to) the following: a cooker or microwave a refrigerator 28 a washing machine a dining table large enough, and with sufficient dining chairs, to seat the debtor and every member of the debtor’s household beds and bedding sufficient for the debtor and every member of the debtor’s household one landline telephone, or if there is no landline telephone at the premises, a mobile or internet telephone which may be used by the debtor or a member of the debtor’s household any item of equipment reasonably required for: - the medical care of the debtor or any member of the debtor’s household - safety in the dwelling-house, or - the security of the dwelling-house (for example, an alarm system) or security in the dwelling-house sufficient lamps or stoves, or other appliance designed to provide lighting or heating facilities, to satisfy the basic heating and lighting needs of the debtor’s household any item of equipment reasonably required for the care of: - a person under the age of 18 - a disabled person - an older person c) Assistance dogs (including guide dogs, hearing dogs and dogs for disabled persons), sheep dogs, guard dogs or domestic pets. d) A vehicle on which a valid disabled person’s badge is displayed because it is used for, or in relation to which there are reasonable grounds for believing that it is used for, the carriage of a disabled person. e) A vehicle (whether in public ownership or not) which is being used for, or in relation to which there are reasonable grounds for believing that it is used for, police, fire or ambulance purposes. f) A vehicle displaying a valid British Medical Association badge or other health emergency badge because it is being used for, or in relation to which there are reasonable grounds for believing that it is used for, health emergency purposes. Also, goods which are also premises and occupied as the only principal home of the debtor are exempt goods, examples would be a caravan or canal boat. 29 What are enforcement agents’ rights of entry and re-entry? Rights of entry and re-entry are affected by: a) the means to entry b) the occupiers of the premises c) the use of the premises d) court order. a) Means to Entry: An enforcement agent may enter relevant or specified premises only by: any door, or any usual means by which entry is gained to the premises, for example, a loading bay to premises where a trade or business is carried on; or any usual means of entry, where the premises are a vehicle, vessel, aircraft, hovercraft, a tent or other moveable structure. This means that an enforcement agent cannot, for example, enter through an open window or skylight. b) Occupier of the premises: An enforcement agent may only enter or re-enter relevant premises if: o the debtor is not a child, or o a child or vulnerable person (whether more than one or a combination of both) is not the only person present in the premises which the enforcement agent proposes to enter or re-enter. c) Use of premises: Where the premises are wholly used for business or trade, an enforcement agent enforcing a High Court Writ may use force to gain entry. d) Court order: An enforcement agent may use reasonable force to enter the relevant premises if they are acting under an enforcement power conferred by a warrant of control under section 76(1) of the Magistrates Courts Act 1980 (c.43) for the recovery of a sum adjudged to be paid by a conviction. In all other types of enforcement, including when acting for a landlord under CRAR, an enforcement agent must enter peaceably, unless authorised by a court order. An enforcement agent may re-enter the premises. However, they must give the debtor notice in the prescribed form under the regulations. 30 What are common types of ownership and exemption disputes? When taking control of goods, an enforcement agent may receive claims of ownership to those goods. Examples of common types of ownership are: Family members (husband/wife) Hire purchase Lease purchase On site displays Rental agreements Banks Fixed and floating charges Sale or return goods Liens Retention of Title Directors loans Personal loans Claims from subsidiary Companies When taking control of goods of a debtor, the debtor may claim that those goods are exempt from taking control. Common types of exemption disputes are: Tools of Trade, hand tools, machinery Motor vehicles, where the debtor claims the vehicle is required for trade or business Vehicles used for a disabled person How should enforcement agents deal with ownership disputes? Where an enforcement agent receives a claim from a person or organisation claiming ownership of the goods that have been taken control of, then any such claim should be in writing from the person making such claim. If the goods have been removed for sale, then the claim must be made within seven days of the removal of the goods. The claim should contain the following: the claimant’s full name and address, and confirmation that such address is their address for service a list of all those goods in respect of which they make such a claim the grounds of their claim in respect of each item. On receipt of such a claim, the enforcement agent should within three days of receipt send the claim to the creditor for them to admit or dispute. The creditor has a further seven days to respond to the enforcement agent whether they admit or dispute the claim. 31 If the creditor admits the claim, then the enforcement agent should withdraw from control of the goods which have been taken control of and allow the person claiming the goods to collect them. Where the creditor disputes the claim, the enforcement agent should write to the person making the claim within three days of receipt from the creditor advising them that their claim is disputed. The obligation is then on the person making the claim (called a third-party claimant) to issue an application to court for the exemption claim issue to be decided and to arrange for payment of the value of the goods claimed into court, to allow the goods to be released, if they have been removed. How should enforcement agents deal with exemption disputes? Where an enforcement agent receives a claim that goods taken control of are exempt then the claim should be made in writing to the enforcement agent by the debtor within seven days of removal of the goods. The claim should contain: the claimant’s full name and address (their address for service) a list of all those goods in respect of which they make such a claim the grounds of the claim in respect of each item. On receipt of the claim the enforcement agent should, within three days of receipt, send the claim to the creditor for them to admit or dispute. The creditor has a further seven days to respond to the enforcement agent whether they admit or dispute the claim. If the creditor admits the claim, then the enforcement agent should withdraw from control of the goods which have been taken control of and allow the debtor to collect the goods. If the creditor disputes the claim, the enforcement agent should write to the person making the claim (the debtor) within three days of receipt from the creditor advising that the claim is disputed. The obligation is on the debtor to issue an application to court for the exemption claim issue to be decided within 7 days of receiving notice from the enforcement agent. What is the process of taking control of goods? The process of taking control of a debtor’s goods commences with the receipt of an instruction from the creditor to use the taking control of goods procedure. The enforcement agent must issue a Notice of Enforcement to the debtor prior to taking control of goods. The Notice of Enforcement must give the debtor seven clear days in which to pay the outstanding amount. The enforcement agent must exclude Sundays, Christmas Day, Good Friday and Bank Holidays in the seven clear days; they should also not include the day of service and also, if posted by 1st class post, allow two days for service. 32 If the debtor fails to pay in full or agree an arrangement, then an enforcement agent will attend the debtor’s premises to take control of goods. Enforcement agents may take control of goods anywhere in England and Wales. Enforcement agents can only take control of goods if: they are on premises that they have power to enter, or on a highway. they have a reasonable belief that they are goods of the debtor. Enforcement agents may not take control of goods whose value is more than the amount outstanding and an amount in respect of future costs. However, enforcement agents can take control of goods of a higher value on premises or on the highway, provided they are the only goods they have access to. What are the different ways of taking control of goods? An enforcement agent may take control of goods in the following ways: secure the goods on the premises on which they find them if they find them on a highway, secure them on a highway, where they find them or within a reasonable distance remove them and secure them elsewhere enter into a controlled goods agreement with the debtor. When securing goods of the debtor on the premises on which they are found, an enforcement agent may secure the goods: in a cupboard, room, garage or outbuilding in the case of goods on premises (or on a part of the premises) which are not occupied for residential purposes, by the enforcement agent remaining on the premises to guard the goods of the debtor of which the enforcement agent has taken control by fitting an immobilisation device (which must be provided by the enforcement agent) by securing the whole of the premises, where the premises are occupied solely for the purpose of a trade or business; or such part of the premises, where the premises are occupied for residential and trade or business purposes, that is occupied solely for the purpose of a trade or business 33 The enforcement agent may not secure goods in any of the ways listed where any person (whether or not the debtor) in occupation of premises where they live, or any part of the premises, which would result in them being deprived of adequate access to essential facilities. This includes exempt goods, or adequate means of entering and leaving the premises, including means of emergency entry and escape. Who can enter a Controlled Goods Agreement (CGA)? A Controlled Goods Agreement can only be entered into with: a debtor who is not a child a person, aged 18 or over, authorised by the debtor to enter into a controlled goods agreement on the debtor’s behalf; or a person in apparent authority who is on the premises, where those premises are used (whether wholly or partly) to carry on a trade or business. An enforcement agent may not enter into a controlled goods agreement with the debtor or another person who doesn’t understand its effect. This applies if it appears (or ought to appear) to the enforcement agent that the person does not understand its effect. Any such person would not be capable of entering into a CGA agreement. What are the obligations of enforcement agents when taking control of goods? The enforcement agent may take control of goods on any day of the week. This includes, Sundays, Christmas Day, Good Friday. However, the enforcement agent may not take control of goods: after the expiry of a period of 12 months beginning with the date of notice of enforcement, unless the matter was held following an arrangement being entered into. before 6am or after 9pm on any day except where the premises are wholly used for trade or business. if the debtor is a child if a child or vulnerable person (whether more than one or a combination of both) is the only person present in the relevant or specified premises in which the goods are located if the goods are also premises in which a child or vulnerable person (whether more than one or a combination of both) is the only person present. if an item which belongs to the debtor is in use by any person at the time at which the enforcement agent seeks to take control of it, and such action is in all the circumstances likely to result in a breach of the peace. 34 if the enforcement agent finds relevant goods on a highway. What documentation must be completed when taking control of goods? When an enforcement agent takes control of a debtor’s goods, they must complete the required prescribed forms as found in The Certification of Enforcement Agents Regulations 2014, as shown in fig.3.1, below: Taking Control of Goods Use Documents Advise debtor the amount they owe and to Notice of whom, their obligations, details about any 1 enforcement removal of goods to secure storage or for sale, and advice on payment. Controlled Goods Lists goods taken in control and details of 2 Agreement debtor and persons in the agreement. Warning of 3 Should be affixed on any immobilised goods. immobilisation Notice that goods Separate inventories required for goods have been owned by co-owners to identify goods owned 4 removed for by the debtor and each co-owner, and goods storage or sale without a co-owner. Standalone form which details goods taken 5 The inventory into control so that debtor or co-owner can identify them correctly. Fig. 3.1. TCG Prescribed Forms 1. The Notice of Enforcement The first document the enforcement agent must complete is the issue of the Notice of Enforcement (NoE) to the debtor in accordance with the regulations. The NoE: advises the debtor of the amount they owe and to whom they owe it provides the debtor with the methods of payment so that they have opportunity to pay before the expiry of the Notice of Enforcement warns the debtor of the consequences of non-payment and the fees that will be charged if an enforcement agent has to visit their premises 35 2. The Controlled Goods Agreement Where an enforcement agent takes control of the debtor’s goods and enters a Controlled Goods Agreement with the debtor this must be in the prescribed form found in the regulations. The prescribed form contains the following: the name and address of the debtor the reference number or numbers and the date of the agreement the names of the persons entering into the agreement a contact telephone number and address at which, and the days on which and the hours between which the enforcement agent or the enforcement agent’s office may be contacted a list of the goods of which control has been taken with a description to enable the debtor to identify the goods correctly, including, where applicable: - the manufacturer, model and serial number of the goods - in the case of a vehicle, the manufacturer, model, colour and registration mark of the vehicle - the material, colour and usage and (where appropriate) any other identifying characteristic of the goods - the terms of the arrangement entered into between the enforcement agent and the debtor for the repayment, by the debtor, of the sum outstanding. 3. Warning of Immobilisation Where an enforcement agent fits an immobilisation device then the agent must provide a written warning to the debtor in accordance with the prescribed form. This Warning of Immobilisation form must be fixed in a prominent position on the immobilised goods. The notice must contain: notice that the enforcement agent has immobilised the goods the date and time of immobilisation a statement that the goods have been immobilised because the debtor has failed to pay the sum outstanding a telephone number, which is available 24 hours every day, for enquiries to contact the enforcement agent the enforcement agent’s reference number or numbers. 36 4. Notice that Goods have been removed for storage or sale Where control is taken of goods of the debtor and are removed to storage or for sale, the notice of enforcement must also contain the following information: that the enforcement agent has removed controlled goods to secure storage or for sale a list of the goods removed the date of removal of the goods to storage or for sale the daily or weekly storage charge payable, where the goods are removed to storage the procedure for collection by or on behalf of the debtor of goods of which control has been taken on payment of the sum outstanding or on part payment of the sum outstanding, where an agreement is made between the enforcement agent and the debtor. Where an enforcement agent takes goods which are owned by a co-owner then the enforcement agent must instead provide the debtor as soon as reasonably practical with separate inventories of goods owned by the debtor and each co-owner and an inventory of the goods without a co-owner. 5. The Inventory The Inventory is a stand-alone prescribed form and is in The Certification of Enforcement Regulations 2014. This should not be confused with other prescribed forms which contain inventories. The inventory must be in writing, be signed by the enforcement agent and contain the following information: the name and address of the debtor the enforcement agent’s name, the reference number or numbers and the date of the inventory the name and address of the co-owner if any that the enforcement agent has taken control of the goods of the debtor or of the debtor and the co-owner as specified in the inventory a list of the goods of which control has been taken with a description to enable the debtor or the co-owner to identify the goods correctly, including, where applicable: - the manufacturer, model and serial number of the goods - in the case of a vehicle, the manufacturer, model, colour and registration mark of the vehicle. 37 Why is it important that documentation is completed accurately and legibly? It is important for enforcement agents to complete documentation accurately and legibly because any failure to do so may result in the enforcement agent breaching the Taking Control of Goods Procedure. In such circumstances, the debtor can bring an action against the enforcement agent. This could result in: an order that the goods be returned to the debtor an order that the enforcement agent or a related party pay damages in respect of loss suffered by the debtor as a result of the breach Why is it important to provide information about payment opportunities and consequences of non-payment? This will give the debtor the opportunity to pay at an early stage in the enforcement process and avoid incurring unnecessary additional costs. The prescribed forms all give the debtor details of how much they owe and how they can pay at the different stages of enforcement. 38 Summary In this chapter you have learned that: there are a range of items that are classified as exempt from a control of goods, including goods required for employment and education, items that meet basic domestic needs, and goods required to meet medical and safety requirements. entry and re-entry restrictions include not entering premises through a window or entering premises where a minor or vulnerable person resides. if a third party claims they own the goods there is a time restricted process that allows them to submit their claim to ownership. If the enforcement agent secures goods on the premises, they can immobilise them, lock them in a safe area such as a cupboard, secure the whole premises or stay with the goods to guard them. A Controlled Goods Agreement cannot be entered into with a minor or someone who does not understand its effects. The prescribed forms to use when taking control of a debtor’s goods are stipulated in The Certification of Enforcement Agents Regulations 2014 39 Chapter 4 Practice of removal and sale of goods Introduction In this chapter, key questions will help you to understand the practice of removal and sale of goods. Learning Objectives At the end of this chapter, you will be able to: Explain the process of removal of goods in accordance with legal and regulatory requirements. Explain the process of sale of goods in accordance with legal and regulatory requirements. Describe the implications of the sale of controlled goods on those involved. What is the process for the removal of controlled goods? Where a Controlled Goods Agreement has been entered into by the debtor and the terms have been broken, enforcement agents can remove goods for sale. The process involves: Serving a Notice of Intention to re-enter premises. Allowing the expiry of the notice period of two clear days. Attending the debtor’s premises to enter and remove the goods, by force if necessary. Preparing a notice that goods have been removed for storage or sale and leaving a copy for the debtor which lists all goods removed. This should include those not included in the agreement. The notice must detail the procedure for collecting the goods if the debtor pays in full. You will learn more about this later. 40 What is the process for the sale of controlled goods? Before the removed goods are prepared for sale, the enforcement agent must give the debtor seven clear days’ notice of the sale of goods using the Notice of Sale form which provides a deadline to make payment. The notice of sale must be given by post, fax, email or by hand delivery. The enforcement agent must always sell goods by auction unless the Court orders otherwise. Para 41 (2) of Schedule 12 allows the enforcement agent to apply to court for an order for sale by a method other than by auction. The Court may on application allow the enforcement agent to sell by Private Sale, sealed bids, advertisement and any other methods that the Court considers appropriate. What duty of care does the enforcement agent have when removing and selling controlled goods? If goods have been removed, the enforcement agent has a duty to maintain and keep the controlled goods in a similar condition they were found in before removal/taking control. Where goods are removed, they must be taken to storage. The storage conditions must be secured, and goods must be stored so that they will not suffer any damage or deterioration during this storage period. The enforcement agent must not remove the controlled goods to a place where they would be at risk of damage or to a place where there would be a contravention of any prohibition or restriction. What documentation must the enforcement agent have when removing and selling controlled goods? Where goods have been removed, the enforcement agent must complete a form called Notice that goods have been removed for storage or sale which details: a list of all goods removed (including those not included in the agreement) date and time of removal daily rate of any storage charges that will be incurred the balance how to collect the goods if payment is made. 41 After removal, the enforcement agent must complete and serve a Notice of Sale form which provides the debtor with the following information: list of goods which may be sold estimated valuation completed by the enforcement agent advice that the goods subject to control may be sold as the balance outstanding has not been paid notice of the date of the auction where the goods removed will be sold deadline for making payment and confirmation of the balance due procedure for collection of the goods if payment is made prior to this deadline details of how to collect the goods if payment of the outstanding balance is made. A flow diagram for the removal and sale of controlled goods can be seen in fig. 4.1: 42 Notice of Intention to re-enter premises 2 clear days after expiry of notice period Remove goods Copy left for debtor Notice that goods have been removed for storage or sale 7 clear days notice of sale required Notice of Sale gives deadline to make payment After any third party claims are resolved Independent valuation of goods Goods sold by public auction unless otherwise agreed by the Court Itemised statement of goods sold and details of sale proceeds Fig 4.1. removal and sale of controlled goods 43 What are an enforcement agent’s responsibilities for making or obtaining a valuation of controlled goods? Where controlled goods are removed, the enforcement agent must make or obtain a valuation of the goods. They must: Give the debtor and any co-owner the opportunity to obtain an independent valuation of the controlled goods. Provide a copy of the valuation to the debtor and to any co-owner. The valuation must: Be in writing Signed by the enforcement agent Contain a separate value in respect of each item Where an independent valuation is obtained, the enforcement agent must only instruct a qualified, independent valuer and provide a copy of the valuation for the debtor and the co-owner. What methods of selling removed controlled goods can an enforcement agent use under current legislation? An enforcement agent must sell goods by public auction. They can apply to Court for leave to sell by a method other than by public auction and on application may obtain an order from the Court to sell in the following ways: Private contract Sealed bids Advertisement and Any other method that the court considers appropriate. What are an enforcement agent’s responsibilities for selling removed controlled goods under current legislation? The enforcement officer has an obligation to sell or dispose of controlled goods in a manner that will allow the best price to be obtained. 44 This involves selecting the appropriate auction house and type of sale use. This will depend on the goods that are being sold. Examples of good practice High value antiques or art should be sold by an auctioneer specialising in antiques and art rather than a general auctioneer. Specialist items such as aircraft or yachts may need to be sold by private treaty in order to obtain the best price. What are the implications of sale of controlled goods on those involved? (a) Implications for the Enforcement Agent focuses on their obligation to: 1. sell at the best price in the right way, 2. manage any claims to goods appropriately 3. follow procedures correctly 1. Sell at the best price in the right way The enforcement agent has an obligation to sell goods for the best possible price. This involves selecting the appropriate auction house and type of sale to use. This will depend on the goods that are being sold and can be affected by their nature, size, value, and expected buyer market. The enforcement agent must also decide whether the goods should be sold by public auction or by private contract. This decision will also depend on the type of goods involved. 45 2. Manage any claims to goods appropriately Where there is a dispute about who owns goods the Third-Party Claims procedure (formerly known as Interpleader) must be used. You learned about this in the previous chapter. The issue of the claim to the goods must be resolved before any sale can take place. After the goods have been sold, the enforcement agent must provide the debtor and any co-owner with an itemised statement of the goods sold and the details of the sale proceeds achieved in respect of each item. Where insufficient proceeds are achieved, the proceeds achieved must be applied on a pro-rata basis in order to cover payment of the sum to be recovered, plus fees and disbursements payable to the enforcement agent. 3. Follow procedures correctly An enforcement agent has an obligation to follow the correct procedure and serve the correct notice prior to any sale. Failure to serve a notice of sale in the correct manner may lead to the goods being classed as abandoned which would result in the issue of a Notice of Abandonment. If this happens, the goods are released from the custody of the enforcement agent (b) Implications for the Debtor focuses on their obligation to: 1. Pay the debt. Where the sale proceeds achieved do not satisfy the balance outstanding, the debtor will still be left with an outstanding balance that needs to be paid. As a result, additional goods that are owned by the debtor may be subject to further enforcement. The debtor should arrange to pay the remaining balance to prevent further enforcement action being taken. (c) Implications for the Auctioneer focuses on their obligation to: 1. Conduct the auction. Where controlled goods are sold by public auction, the sale must be conducted by a qualified auctioneer. 46 2. Preserve the condition of the goods As the agent of an enforcement agent, the auctioneer has an obligation to maintain the goods in a similar condition to that at the point of delivery by the enforcement agent to the auctioneer’s premises. There is no longer an obligation under the regulations specifying the period of time that the auctioneer has to advertise the control of goods prior to sale. (d) Implications for the Purchaser focuses on their ownership rights: A purchaser of controlled goods will acquire the ‘title to the goods’ unless: The goods were not owned by the debtor at the time of the sale and the purchaser, the creditor, the enforcement agent or related party has notice of this; or a claimant to controlled goods has made an application to Court in relation to their interest in the goods. You can access further reading about ownership rights by looking up the Civil Procedure Rules 1998 Part 85. 47 Summary In this chapter you have learned that: Notices of intent are an integral part of the control of goods process. This includes a Notice of Intention to re-enter premises before goods are removed, and a notice of sale before goods can be sold. An enforcement agent (EA) has a duty of care to the goods they have taken, and must take appropriate steps to keep them in a stable condition and safe from harm or deterioration The EA must sell controlled goods by public auction but can use alternative methods if they have a court order. Failure to follow correct procedures could result in the EA losing custody of the goods under a notice of abandonment. A debtor is obliged to pay the remaining balance if the sale of goods does not cover the balance. A qualified auctioneer acts as agent to the EA and as such, are bound by the obligation to maintain the condition of the goods in their custody. A buyer of goods that have been sold following a control of goods order, gains title to the goods unless they did not own the goods or there was a third-party claim to interest in them. 48 Chapter 5 Customer Care Introduction In this chapter key questions will help you to understand relevant aspects of customer care, including handling vulnerable people, dealing with complaints, and meeting national standards and regulations. Learning Objectives At the end of this chapter, you will be able to: Describe how an enforcement agent can deliver good customer care Describe how to deal with vulnerable people Describe how to handle complaints Explain how to meet these elements of customer care in line with national standards Who are an enforcement agent’s customers? From the aspect of offering a contracted service, an enforcement agent’s customer is the client or creditor. However, when it comes to customer care, a more realistic current approach is to view all of your stakeholders as your customers. Any party that you come into contact with, be they the client, debtor or a third party, should be offered the best customer care. Although it is the client who instigates the action and the debtor who has a liability to pay the fees, you have a duty to both when it comes to upholding standards of behaviour and actions. How can an enforcement agent deliver good customer care? a) To the client It is increasingly important to deliver good service to clients, in order to secure repeat business. This often involves: producing clear case reports to update on actions making prompt and regular payment of funds received providing access to information by telephone and the web 49 One of the main drivers around the introduction of the Tribunals, Courts and Enforcement Act 2007 (TCE) was to improve the way that enforcement agents and their agencies interact and liaise with their customers and to ensure that the customer is able to obtain information from the enforcement agent in a timely manner. b) To the debtor It is not just the client who requires information. The debtor also needs advice, including: guidance on what is happening answers to any queries, for example about the case or fees supply of clearly completed forms and notices It is good customer care to respond, where appropriate, in writing. This should use plain English to fully explain the position without using jargon. c) To a third party Customer care must be shown toward third parties too. You should work on the basis that the third party is trying to be helpful: If you find that the third party is actually trying to interfere with the enforcement, you should make a polite request to stop doing so and to go away, based on your duty of confidentiality to the debtor. If the third party is acting on behalf of the debtor, explain that authority to discuss the details of the case from the debtor, either verbally or in writing, is needed. If the third party is making a claim to goods taken into control, guidance on the procedure under the rules of court will need to be given and in particular that, if the claim is disputed by the creditor, the third party will need to make an application to court. A third party is entitled to complain if their involvement is not treated with courtesy and respect. It is often difficult to preserve the confidentiality of the debtor during enforcement, but every effort should be made to do so. What are the National Standards for enforcement agents? The National Standards lay out the minimum standards expected of enforcement agents when carrying out enforcement and should be considered the minimum. 50 National Standards key requirements cover the following areas: 1. Professionalism and conduct 2. Complaints and discipline 3. Information and confidentiality 4. Time and hours 5. Vulnerable situations Although the standards are voluntary, they provide a solid framework for delivering on standards and customer care and enforcement agents are expected to abide by them. They have been recognised by the courts as a basic standard in enforcement. 1. Professionalism and conduct Every enforcement agent and agency have an obligation to: clearly identify themselves and produce relevant identification conduct themselves in a calm and professional manner be suitably dressed not use deceitful or misleading suggestions not falsely imply or suggest actions before it is possible to know whether such an action would be permissible or appropriate when carrying out an enforcement. For example, that the Police may be called to arrest a debtor for failure to make payment. 2. Complaints and discipline Every enforcement agent’s business has an obligation to hold a written complaints policy that should be available on request. This policy should be clearly written with timelines for actions and escalation points in the case of dissatisfaction. In every instance, if at the end of the process the complainant is still unhappy, then the complainant should be directed to seek action by the appropriate professional body or court. In the case of an individual enforcement agent, this complaints process may operate through the appropriate professional body or court. 3. Information and confidentiality When corresponding with the debtor, all correspondence should be clearly written in easy 51 to understand English, avoiding technical terms. Prior to incurring additional costs, information should be made available to warn the debtor, if appropriate, in advance. All contact with the customers should be treated in strictest confidence and not made available to third parties or the public. This is in line with the data protection laws you looked at earlier in your studies. Enforcement agents or agencies should only correspond or speak with the relevant parties if this has been specifically authorised by the debtor. 4. Time and hours Attendance times should always be made in accordance with the regulations para 12 and 13 of the Taking Control of Goods Regulations 2013. This allows for attendances between 6am and 9 pm, seven days a week, although consideration should be given to avoid attending on religious days. 5. Vulnerable situations Enforcement agents and their agencies will regularly come into contact with vulnerable individuals or people who may be in vulnerable situations. All enforcement agents and agencies must seek to recognise this situation. This means taking active steps to identify vulnerability. They must always act in the best interests of the vulnerable. Who might be vulnerable during the enforcement process? The list of people who might be vulnerable is well established (see below), but enforcement agents should remember that these are people who might be vulnerable not who are vulnerable. Also, the list is not exhaustive – others may be vulnerable. It is an important responsibility of enforcement agents to assess each situation and circumstances for vulnerability and make decisions based on this assessment. 52 People who may be vulnerable includes, but is not restricted to: children (minors under the age of 18) the elderly people with a disability those who are seriously ill the recently bereaved people with mental and social incapabilities single parent families pregnant women the unemployed those who have obvious difficulty in understanding, speaking or reading English. What actions should enforcement agents take in situations where vulnerable people are involved? Minors: Where the only occupant of the premises at the time of attending is a child, an enforcement agent should leave the premises. The enforcement agent may make brief enquiry, perhaps, as to when someone might be in. However, if the child is thought to be under 12, the enforcement agent should leave without making any enquiries. If the child under 12 is alone, the enforcement agent has a duty to decide whether to notify the authorities. Others: In other situations, it can be difficult to know in advance if the person seen is vulnerable, but enforcement agents need to be aware of the possibility. If a debtor has been identified as vulnerable, the enforcement agents should notify the creditor and discuss next steps because it may be necessary to allow some time to pass before taking further action as enforcement may be inappropriate due to a current situation, such as illness or bereavement. Complaints Every enforcement agent has an obligation to deal with complaints or potential complaints, but these complaints should be limited to actions taken by the enforcement agent or agency, rather than complaints about the legal process. 53 At all times, enforcement agents should remember that they are acting as independent agents and have duties of care and to act responsibly at all times. Many complaints can be avoided by spending a little time explaining actions taken to the potential complainant. Often, complaints occur because of a lack of understanding as to what or why a particular action is happening. How should complaints be handled? And can they be escalated? An enforcement agent or agency is obliged to: take all complaints seriously follow their complaints process abide strictly to timescales for dealing with and responding to complaints. Where a complaint cannot be resolved by the enforcement agent or agency, the complainant has the right to escalate the complaint to the appropriate enforcement association to deal with. Further reading Taking Control of Goods: National Standards April 2014 About bailiffs and enforcement officers EX345 54 Summary In this chapter you have learned that: An enforcement agent should view every stakeholder as their customer, and handle them using appropriate customer care The National Standards for Taking Co

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