HCEO fees: Parliamentary question raised in the House of Lords!!!

[tomtubby]

The following has appeared on Hansard today.

 

 

 

Courts: Fees

 

House of Lords

 

Written answers and statements, 3 November 2009

 

 

All Written Answers on 3 Nov 2009 Next answer » « Previous answer

 

 

 

 

Lord Lucas (Conservative) To ask Her Majesty's Government in what circumstances High Court Enforcement Officers are permitted to charge debtors who owe hundreds of pounds costs of several thousand pounds; and what assessment they have made of the impact of such costs.

 

 

 

 

Lord Bach (Parliamentary Under-Secretary, Ministry of Justice; Labour) The fees chargeable by a High Court enforcement officer are contained in Schedule 3 of the High Court Enforcement Officers Regulations 2004. The regulations provide for reasonable costs to be charged as the individual circumstances of the case dictate. Any such reasonable costs can be the subject of detailed assessment upon application to the High Court. The Ministry of Justice is undertaking a detailed examination of the cost of High Court enforcement with the intention of setting a new fee structure with the implementation of Schedule 12 to the Tribunals, Courts and Enforcement Act 2007.

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[Guest Happy Contrails]

Thanks for that, its also on DeHavilland. Lord Bach hit the nail on the head.

 

The actual wording in the legislation is reasonable costs. It means the law provides reasonable costs for attending an address with a view to transporting goods in a van. If no goods are transported in the van then the van fee (or other non-descript fee) is NIL. This is because the HCEO has already charged separate statutory fees for collecting the debt.

 

 

In short, HCEO's cannot make a monetary gain for himself or another by transporting goods in a van and selling them at auction, only Reasonable costs.

[sherbrook]

Thanks for that, its also on DeHavilland. Lord Bach hit the nail on the head.

 

The actual wording in the legislation is reasonable costs. It means the law provides reasonable costs for attending an address with a view to transporting goods in a van. If no goods are transported in the van then the van fee (or other non-descript fee) is NIL. This is because the HCEO has already charged separate statutory fees for collecting the debt.

 

 

In short, HCEO's cannot make a monetary gain for himself or another by transporting goods in a van and selling them at auction, only Reasonable costs.

 

HC, can you point me in the direction any legislation that explains the 'cannot make monetry gain' part. Before we started using HCEO's to collect my business debts we had detailed discussions with them about their fees and they showed us their last 2 quarters running costs saying the fees are based on those.

 

I understood that any business is allowed to make a reasonable profit and have been advised that for Solicitors this is deemed at 33%. As HCEO's are private companies, would this not apply to them also?

[Guest Happy Contrails]

HC, can you point me in the direction any legislation that explains the 'cannot make monetry gain' part.

 

The legislation says 'sums actually and reasonably paid'. Reasonably being the operate word.

 

 

The High Court Enforcement Officers Regulations 2004

 

A. Fees chargeable on execution of writs of fieri facias

(3) For -

 

(a) the removal of goods;

(b) the storage of goods which have been removed; and

© where animals have been seized, their upkeep while in the custody of the enforcement officer, whether before or after removal

 

the sums actually and reasonably paid

 

I understood that any business is allowed to make a reasonable profit and have been advised that for Solicitors this is deemed at 33%. As HCEO's are private companies, would this not apply to them also?

 

If you can negotiate that with your client or your clients debtor then you can charge 33% according to contract. The law doesnt provide for you to impose charges of 33% on anything under a pretence it is a statutory fee prescribed in law.

[tomtubby]

HC, can you point me in the direction any legislation that explains the 'cannot make monetry gain' part. Before we started using HCEO's to collect my business debts we had detailed discussions with them about their fees and they showed us their last 2 quarters running costs saying the fees are based on those.

 

I understood that any business is allowed to make a reasonable profit and have been advised that for Solicitors this is deemed at 33%. As HCEO's are private companies, would this not apply to them also?

 

I had assumed from your previous posts that you were an HCEO. Am I wrong ??

[sherbrook]

I had assumed from your previous posts that you were an HCEO. Am I wrong ??

 

Nope, I do use them regularly to recover monies for my company (family run) when people dont pay on judgment. Unfortunately the building trade today is full of crooks who lie on their credit application forms, receive the goods/services they order and then dont pay.

 

I have never been on the recieveing end of HCEOs so cannot confirm some of the horror stories detailed on here. I would say that they have recovered an awful lot of money to me without which I would have had to put many people out of a job.

 

I work closely with the HCEO I use and would consider them a friend which is why, on occasions, I have defended some of their actions.

Edited November 4, 2009 by sherbrook

[Guest Happy Contrails]

Unfortunately the building trade today is full of crooks who lie on their credit application forms, receive the goods/services they order and then dont pay.

 

Why dont you do anything about it?

 

Theft Act 1968 (c. 60)

 

 

If your clients are builders, there is only so much an HCEO can do. With a criminal conviction it adds weight when you apply for an order under the 1979 Charging Orders Act, and Third Party Debt orders.

 

The great thing about Third Party Debt orders, the debtor doesn't know he has paid you until afterwards.

[sherbrook]

Why dont you do anything about it?

 

Theft Act 1968 (c. 60)

 

 

If your clients are builders, there is only so much an HCEO can do. With a criminal conviction it adds weight when you apply for an order under the 1979 Charging Orders Act, and Third Party Debt orders.

 

The great thing about Third Party Debt orders, the debtor doesn't know he has paid you until afterwards.

 

HC, many years ago we tried prosecuting a client for theft but after months of my time the Police were useless and I've never done ot since.

 

I was approached by the HCEO company in 2005 and, for us at least, this has proved the most cost effective way to get our money. Our cases average around £1000 - £1500.

 

I have occasionally obtained 'charging orders' against defendants (when they are indiviuals) but this is only a back up. The costs for doing so get added to the judgment and the HCEO collects them anyway. Of the few I did get, the properties are now in negative equity anyway and have other preferential charges before me.

 

We currently get 1 in 3 paid by the HCEO. The other two cost me £69 to abort the enforcement (apparently they have to charge this by law).

 

I was advised by my Solicitor that 3rd party debt orders can be difficult to get and can be costly?

[Guest Happy Contrails]

I think you need to revise your business model.

 

Your current one is causing too much loss and you need better client vetting before granting them credit. You really need to look at curbing your potential losses before they happen.

 

I have a 49% non-exec partnership (I am just an investor in the business) in a BP Connect petrol station franchise, our biggest losses are from drive-offs - about 25 a month. It used to be well over 100 a month and recovery rate was less than 20%. With our Honeywell ANPR cams on the forecourt and on the exits, plus the Gilbarco pump cam taking a mugshot. I find police very cooperative, their recovery rate is about 18 cases a month and that includes catching customers using false number plates. Stolen cards are a problem, much harder to combat if the bank accepts the transaction at the point of sale. Its always best to prevent losses in a business.

[sherbrook]

I think you need to revise your business model.

 

Your current one is causing too much loss and you need better client vetting before granting them credit. You really need to look at curbing your potential losses before they happen.

 

I have a 49% non-exec partnership (I am just an investor in the business) in a BP Connect petrol station franchise, our biggest losses are from drive-offs - about 25 a month. It used to be well over 100 a month and recovery rate was less than 20%. With our Honeywell ANPR cams on the forecourt and on the exits, plus the Gilbarco pump cam taking a mugshot. I find police very cooperative, their recovery rate is about 18 cases a month and that includes catching customers using false number plates. Stolen cards are a problem, much harder to combat if the bank accepts the transaction at the point of sale. Its always best to prevent losses in a business.

 

HC, I would agree. Unfortunately, when times have been hard we have taken on riskier business as a result and this by it's very nature means we end up getting knocked more often.

 

Aside from contract work (usually with Ltd companies - dont get me started on them:mad:) we get a fair bit of joe public coming in our shops off the street and whilst we do credit checks where possible, the system isnt foolproof.

 

Thanks for your advice though and I like the ANPR story.

[danboy381]

I think you need to revise your business model.

 

Your current one is causing too much loss and you need better client vetting before granting them credit. You really need to look at curbing your potential losses before they happen.

 

I have a 49% non-exec partnership (I am just an investor in the business) in a BP Connect petrol station franchise, our biggest losses are from drive-offs - about 25 a month. It used to be well over 100 a month and recovery rate was less than 20%. With our Honeywell ANPR cams on the forecourt and on the exits, plus the Gilbarco pump cam taking a mugshot. I find police very cooperative, their recovery rate is about 18 cases a month and that includes catching customers using false number plates. Stolen cards are a problem, much harder to combat if the bank accepts the transaction at the point of sale. Its always best to prevent losses in a business.

 

 

Happy, what about the 'VIPER' - seen this installed in a station in surrey somewhere, where the spiked rail springs from the station floor exit and puctures all 4 car tyres. Install one of these, and your drive off losses will be exactly £0.00!

 

db

[Guest Happy Contrails]

Happy, what about the 'VIPER' - seen this installed in a station in surrey somewhere, where the spiked rail springs from the station floor exit and puctures all 4 car tyres. Install one of these, and your drive off losses will be exactly £0.00!

 

db

 

Unfortunately I cannot do that because I (the BP Garage owner) would be liable for a claim, and a criminal prosecution under Section 1 of the Criminal Damage Act.

 

There is no means to activate such a device - the drive-off would be long gone, plus, it can also go off or be activated accidentally. I am not prepared to take the risk.

 

I did consider the hydraulic ramp, but there is case-law (sorry cant recall precisely where) where a car park using such a device caused damage underside a car. The car park owner is liable for damages.

 

 

 

Its not really in the spirit of petrol stations to use such devices, and would deter customers from coming. I must present a friendly and welcoming atmosphere for customers.

[Dodgy Geezer]

 

I understood that any business is allowed to make a reasonable profit and have been advised that for Solicitors this is deemed at 33%. As HCEO's are private companies, would this not apply to them also?

 

One letter and 2 phone calls, £850 charges on a £1200 judgement.

 

I dont think so.

[danielr]

I think you need to revise your business model.

 

Your current one is causing too much loss and you need better client vetting before granting them credit. You really need to look at curbing your potential losses before they happen.

 

sadly, it's not that easy.

 

When you're selling petrol it's a definite point of sale transaction, people disappearing without paying are stealing.

 

when you own a merchant trade outfit (that has a buy now pay later -when you've been paid), or work on the basis that you're paid at the end of the job you've essentially offered a credit agreement with the customer.

 

that they can take materials now and settle up later

or that they can pay you when the job is complete.

 

sadly, never paying you is just defaulting on a credit agreement, not theft.

(which is why the police aren't too helpful).

[tomtubby]

HC, I would agree. Unfortunately, when times have been hard we have taken on riskier business as a result and this by it's very nature means we end up getting knocked more often.

 

Aside from contract work (usually with Ltd companies - dont get me started on them:mad:) we get a fair bit of joe public coming in our shops off the street and whilst we do credit checks where possible, the system isnt foolproof.

 

Thanks for your advice though and I like the ANPR story.

.

By your own admission, you have taken on "riskier business" which has resulted in your compnay "getting kocked" more often.

 

There is one well know builders merchant (who will remain nameless) who use the services of a HCEO company to recover debt primarily owed by individual self employed traders. We have endless such examples in our office and the following is a true breakdown of the charges applied to one such self employed carpenter recently.

 

Judgment Debt: £495

 

Judegment Costs: £107.43

 

Execution costs: £101.75

 

Interest @ 8% £ 8.06

 

HCEO charges: £2241.27

 

Total paid to HCEO: £2953.51

 

The HCEO charges inlcude the following:

 

Attending with a view to removal: £1217.70

 

Attendance fee: £300

 

Financial Management Fee: £135

 

Administration fee: £100

 

DVLA enquiry fee: £20

 

Debtor Services Admin Fee: £50

 

 

The building trade is in complete meltdow as a result of this dreadful recession and the above is a clear example of the price that self employer builders are having to pay because companies have allowed accounts to be opened for "riskier business" !!

Edited November 5, 2009 by tomtubby

[wonkeydonkey]

Unfortunately I cannot do that because I (the BP Garage owner) would be liable for a claim, and a criminal prosecution under Section 1 of the Criminal Damage Act.

 

There is no means to activate such a device - the drive-off would be long gone, plus, it can also go off or be activated accidentally. I am not prepared to take the risk.

 

I did consider the hydraulic ramp, but there is case-law (sorry cant recall precisely where) where a car park using such a device caused damage underside a car. The car park owner is liable for damages.

 

 

 

Its not really in the spirit of petrol stations to use such devices, and would deter customers from coming. I must present a friendly and welcoming atmosphere for customers.

HC

 

Believe it or not we have a local garage who still employs pump attendants, when I spoke with the owner recently he tells me he has a huge turnover and employing the attendants actually increased his profit as he has never had a drive away non payer? old fashioned but tried and tested!!

I use him in preference to a self fill as I dont have to leave the car unattended with my shopping on board or the grandchildren alone in the car when having to queue to pay (when the pay at pump is not working) and as he is only 1p litre dearer than the supermarkets I find it very welcoming and friendly.

 

Just a thought......

WD

[patrickq1]

Why dont you do anything about it?

 

Theft Act 1968 (c. 60)

 

 

If your clients are builders, there is only so much an HCEO can do. With a criminal conviction it adds weight when you apply for an order under the 1979 Charging Orders Act, and Third Party Debt orders.

 

The great thing about Third Party Debt orders, the debtor doesn't know he has paid you until afterwards.

as a contractor i have come accross more than my fair share of rouge builders who wont ipay regardless, when i was last working before illness a few years ago i lost approximately 28000 in the space of three months ,you cant use the theft act in those circumstances and if you are a supplier like sher says some of the credit apps are dodgy but sometimes you just dont know at that time so you take a chance but theft act dose nt work you have to go through the civil courts because most of the perpretators of the not paying will say cause they did nt get paid they cant pay you....so theft is out of the question

[sherbrook]

We have endless such examples in our office

 

TT, are you in the building trade too?

[woody1066]

TT, are you in the building trade too?

 

No TT runs a very succesful firm who are experts on baliff law and such. BTW TT is a she!