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High Court Enforcement Officers fees....by JOHN KRUSE. (Posted by Tomtubby)

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The following article featured in the July issue of ADVISER Magazine which is a CAB publication. The article was written by JOHN KRUSE who is widely regarded as the foremost expert on bailiff law and he has written several books and articles on the subject, and lectures on the topic. One of his books is featured for sale by Consumer Action Group.

As this article could greatly assist many people, the Editor has given me permission to post a copy on the Consumer Action Group forum but he has stated that the article should not be downloaded or distributed without their permission. -Tomtubby.

Challenging High Court enforcement officers’ fees

JOHN KRUSE takes issue with the fees being charged by High Court Enforcement Officers.

Concerns have been growing recently about some of the astronomical fees being charged by some of the large, national companies undertaking High Court enforcement work.

In fact, this is by no means a new problem. As I described in Chapter 5 of my book, ‘Persons of no value?’(1), Sheriffs (as they used to be called)(2) and their bailiffs had a reputation for extortion in the past and we are, in a sense, merely returning to old areas of contention.

Consumer credit debts cannot be enforced in the High Court so advisers could be forgiven for thinking that they are unlikely to be called upon to advise on High Court issues. In fact, there are many kinds of other debts which can be enforced through the High Court. These include tax, water and utility debts, solicitors’ costs, business debts, school fees and funeral costs. The claims may be issued in the High Court or, even if originally issued in the county court, they may be transferred to the High Court for enforcement if the judgment exceeds £600 and must be transferred if it is for £5000 or more. It is important therefore that advisers are familiar with the rules and know what to look out for.

The Current Regime:

The costs recovered by High Court Enforcement Officers (HCEOs) are now set by Schedule 3 of the High Court Enforcement Officers Regulations 2004.(3) Regulation 13 allows fees to be recovered for levying writs of fieri facias (execution upon goods, also known as writs of fi-fa). It also provides that ‘An enforcement officer or a party liable to pay any fees under Schedule 3 may apply to a costs judge or district judge of the High Court for an assessment of the amount payable, by the detailed assessment procedure in accordance with the Civil Procedure Rules.’ We therefore have a clear fee scale and a right to dispute bills in court, in line with the principles discussed in my previous article on challenging bailiff’s bills in Adviser 135.

The permissible fees for executing writs of fi-fa for specific actions and expenses (mileage, seizure, possession, removal, dealing with claims to goods and sale) and also allow the HCEO to charge ‘poundage’, a percentage fee based upon the amount recovered which acts as a general reward for success. In addition Part C of Schedule 3, paragraph 12, allows ‘miscellaneous’ fees to be recovered- ‘For any matter not otherwise provided for, such sum as a Master, district judge or costs judge may allow on application.’

The current problem:

There are several abuses of the fee scale apparently current at present. As an example of the sorts of complaints coming to advisers, the box below shows a breakdown of the costs charged by an HCEO for the execution of a warrant issued by HMRC.

Judgment debt £750

Costs of HCEO £719.47

The costs break down as follows:

Poundage £23.80

Seizure fees £2.00

Mileage £46.69 (for 160 miles)

Possession £1.75 (7 days walking possession)

Levy fee £48.92

General charges £4.00

Debtor services fees £50.00

Financial management charge £135.00

Administration fee £150.00

Enforcement officer fee £150.00

VAT £107.31

The first four fees on this bill are specifically permitted by the scale in the 2004 Regulations and are calculated correctly in line with that. The only possible challenge would be the amount of mileage charged (you would need to check the distance travelled) or the length of the walking possession. More significant, though, are the other fees totalling £537.92 (plus VAT). These cannot be accommodated within any of the allowed expenses or activities of Schedule 3 and must, presumably, be justified as ‘miscellaneous’ extras. If this is correct, there is an immediate problem. These (on the face of it outrageous) fees have simply been added to the bill and deducted from the sums received. For these ‘Miscellaneous fees’ to be recoverable, it seems clear from Schedule 3 that specific application should be made by the HCEO to the Court for an order permitting these sums to be recovered. On this basis alone, the inclusion of these fees in the bill seems unjustifiable. It would certainly be appropriate to ask the HCEO for a copy of the application to the Court and the subsequent order upon which these charges are based.

Typically these ‘miscellaneous’ fees seem to add a minimum of some £700-800 to a judgment debt. What is more, some HCEOs appear to charge all the fees permissible under the scale automatically at the outset of a case, even before a levy has taken place. The 2004 Regulations state that the fees connected with seizure and sale may be deducted from the proceeds of sale, it is true, but the principle that bailiffs should only charge for work actually and necessarily done applies just as much to HCEOs as to other private bailiffs.

Accordingly, if your client has been charged for a levy, walking possession, dealing with claims to goods, a valuation and the like, you should ask for the documentary proof, the inventory, walking possession agreement and so on. The debtor is plainly entitled to copies of these and, if the work has actually been done, the HCEO should have no problem supplying them. If the HCEO is unable or unwilling to provide copies of these documents, this might form the basis of a complaint to the officers professional body (see later). If readers encounter difficulties in obtaining the necessary information from the HCEO, they may find it helpful to involve the (solicitor for the) judgment creditor. As the claimant, they should have received copies of any key documents from the HCEO and they will also have a direct interest in ensuring that only the correct fees are deducted from the sums received. In serious cases, this conceivably extends to cooperating in an application for detailed assessment of the HCEOs bill (see later).

It is interesting at this point to contrast this aspect of High Court execution with the equivalent county court procedure. A judgment debtor facing a visit from a county court bailiff would see the judgment debt increase by £100. This would appear to be an example of greater privatesector inefficiency, or perhaps unbridled private sector greed!

Previous Case Law

The scale of fees allowed in the 2004 Regulations is, in fact, far from new. It is simply the latest version of a fee scale which may be traced back as far as the Sheriffs’ Act 1837.(4) The wording of the allowances has barely changed since, although the sums allowable have of course been increased. This being the case, we can refer to the case law developed in Victorian times to clarify what extras may be recovered by HCEOs.

The leading case is Slater v Hames (1841). The judgment creditor issued a claim for repayment against the sheriff because he had retained over £10 from the proceeds of sale to cover poundage and other legitimate expenses, but also to cover a range of extra amounts not permitted by the fee scale made under the 1837 Act. These included payments to carpenters employed in the removal of the goods, travelling expenses and auctioneer’s commission. The Court ordered the sheriff to refund nearly £8 of the money he had deducted on the basis that he could not charge more than statute allowed, even if he had been put to extra trouble and expense. Baron Parke demanded of counsel for the sheriff, ‘What does the sheriff do for his poundage? He surely must do something; he is very well paid by it, to enable him to meet incidental expenses and he must take the risk of that.’(5) Baron Parke was equally unsympathetic in a case in 1843 when a sheriff tried to challenge the sums allowed in a detailed assessment of his bill. The sheriff had incurred extra possession costs because various claims had been made for the goods seized and two men had had to guard the goods for an extended period. The court allowed only one man in possession for seven days. Baron Parke declared that this was reasonable and that nothing extra could be granted.(6)

It is also clear from earlier cases that, if any extra expenses are to be recovered, it is up to the officer to make an application for these to be allowed ‘by the favour and indulgence of the Court.’ These extra sums cannot simply be taken out of the sums received.(7)

When first introduced, the category of ‘miscellaneous fees’ was intended to cover very unusual ‘one-off’ expenses incurred as a result of the particular circumstances of an individual levy. They were not meant to cover the everyday administrative expenses of the sheriff, for which poundage is provided. The court was reluctant to allow anything but the most exceptional expenses over and above those specified on the scale.

The use of the Part C para.12 of the fee scale to recover everyday expenses which are not otherwise allowed for is of great concern. More serious is the seeming lack of any prior application to Court before such charges are made. Worse still, there is one HCEO company who take the misuse of this section even further. The fees for levying, walking possession and the like are quite modest. The firm in question charges for these actions, but not the amount prescribed in the scale. Instead, Part C para.12 is used to permit far higher sums to be exacted from judgment debtors. This seems very hard to justify as lawful.

Complaints & Challenges

In light of what has been said, it would appear that HCEOs:

* Should not normally expect to recover fees other than those allowed by the fee scale; and,

* Cannot recover any ‘miscellaneous’ fees except with permission of the court following an application for that purpose.

Individuals aggrieved at the large additional amounts being demanded from them would seem to be entitled to challenge them on the grounds that:

* They are unsubstantiated. The officer should be required to produce the supporting evidence of the prescribed walking possession agreement, inventory, claims to the goods from third parties, court orders etc.;

* The fees are illegal. Fees that are not allowed by the legislation should never be included in bills;

* They are irregular because they should only be recoverable under a specific court order;

* They are unreasonable in terms of the amounts charged for the work done;

* Their presence on the bill should be justified in detail by the HCEO. As I described in my previous article on the assessment of bailiffs’ fees, charges may only be made if they are actually and necessarily incurred. In addition, the enforcement agent should be capable of providing the court with a detailed breakdown of the calculation of each charge. What ‘general charges’, ‘debtor services fees’ and ‘financial management charges’ actually represent, let alone how they are arrived at, is a matter which the HCEO in receipt of poundage should be called upon to explain to the court; and,

* They are disproportionate. It is a key principle of human rights law that, even in the enforcement of a legal right, an undue burden should not be placed upon the debtor. Accordingly, even if the court decides that a certain fee is permissible, it should still have regard to the relationship between the debt outstanding and the extra amount being demanded of the debtor. In the example given earlier, the total fees including VAT nearly equalled the judgment debt and arguably should have been reduced for this reason alone.

If informal complaint to the HCEO does not work, aggrieved judgment debtors have two main ways of bringing challenges against excessive fees. Both involve litigation, as the High Court Enforcement Officers Association does not choose to deal with fees disputes. This is regrettable as the other private bailiff trade bodies are prepared to investigate such matters.(8)

Application for Detailed Assessment in the High Court

Detailed assessment is never a procedure to initiate lightly and an application to the High Court against officers of that court (who are frequently qualified solicitors) demands specialist advice and assistance. The fee for initiating an assessment can be high and the unsuccessful debtor might be made liable for the HCEOs legal expenses. Moreover, this inherent disadvantage is compounded by the fact that some HCEOs have tried to exert extra pressure upon potential litigants. It is reported that some complainants have been advised that an HCEO is on ‘good terms’ with the taxing masters of the High Court. It is obviously highly inappropriate for any suggestion of bias or favouritism to be used to discourage challenges to fees

To pay the fees demanded and then to issue a County Court claim to recover them.

It is established that it is extortion for an enforcement officer to charge fees which he is not permitted to recover and in such cases the debtor may take action to obtain a refund of the sums in dispute. A county court claim for repayment of the miscellaneous extras will almost always be for less than £5000 and therefore, if it is defended by the HCEO, it will be heard as a small claim in the county court. This has the advantages of reducing the fees payable by the claimant and of providing protection against liability for the defendant’s legal expenses in most cases.(9)

Another option could be to pay the debt and the agreed costs but refuse to pay anything else until the HCEO has made an application to the court, but the risk of this may be that HCEO will simply threaten to remove and sell the levied goods in order to enforce the fees demand.

In conclusion, we may have cause to regret the severing of the traditional link between the sheriff of the county and enforcement. Perhaps this has led to an increased emphasis upon commercial targets within the sector at the expense of standards of public service. Advisers may hope that the introduction of the new fee scale under the Tribunals, Courts & Enforcement Act 2007 will eradicate some of the problems described. A final note of warning should be sounded; from April 2012 we must anticipate substantially higher fees than those to which we have been accustomed, even if the new fee scale excludes some of the more extravagant ‘miscellaneous’ fees criticised here.

Footnotes:

1. Published 2009 by Wildy, Simmonds & Hill (http://www.wildy.com)

2. See ‘Who shot the sheriff?’, Adviser 116

3. http://tinyurl.com/2u35re7

4. 7 Will.IV & 1 Vict. c.55.

5. (1841) 7 M&W 413/ 9 Dowl 221; see too Jones v Robinson (1843) 11 M&W 758 for an illustration of the risk of loss the sheriff simply had to take on.

6. Davies v Edmonds (1843) 12 M&W 31.

7. R v Jones (1814) 1 Price 205; R v Fereday (1817) 4 Price 131.

8. See http://www.hceoa.org.uk.

9. See for example Phillips v Viscount Canterbury (1843) 11 M&W 619; Braithwaite v Marriott (1862) 1 H&C 591 & Halliwell v Heywood (1862) 10 WR 780. These were all cases in which fees not permitted by the scale were challenged and had to be refunded.

John Kruse is an adviser at Redbridge Citizens Advice Bureau. He has written several books and articles on bailiff law and practice.


Have a happy and prosperous 2013 by avoiiding Payday loans. If you are sent a private message directing you for advice or support with your issues to another website,this is your choice.Before you decide,consider the users here who have already offered help and support.

Advice offered by Martin3030 is not supported by any legal training or qualification.Members are advised to use the services of fully insured legal professionals when needed.

 

 

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Have a happy and prosperous 2013 by avoiiding Payday loans. If you are sent a private message directing you for advice or support with your issues to another website,this is your choice.Before you decide,consider the users here who have already offered help and support.

Advice offered by Martin3030 is not supported by any legal training or qualification.Members are advised to use the services of fully insured legal professionals when needed.

 

 

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