Councils unlawfully charging Liability Order and Summons costs at the same time

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Many councils are charging liability order costs at the same time as those incurred at the summons stage of recovery. This action is effectively catching out a larger proportion of those residents who will become liable for both of these penalties.

 

However, the Council Tax (Administration and Enforcement) Regulations 1992 state under Regulation 34 that these fees must be incurred independently when the summons is issued and when the liability order is granted. It also states in Regulations R34(5)(b) and (7)(b), that the costs should be reasonably incurred by the authority.

 

 

 

Councils are therefore unlawfully collecting penalties from debtors settling their accounts prior to any court action. This procedure is not in accordance with Regulation 34(5) of the Council Tax Regulations, which requires that the authority shall not proceed with the application if the aggregate of the outstanding debt and costs reasonably incurred by the authority is paid or tendered to it.

 

Essentially authorities are not lawfully permitted to charge debtors the liability order costs detailed in Regulation 34(7)(b) in such circumstances, however, by charging these costs prematurely at the summons stage, they are doing exactly this.

 

This was covered in the Sunday Telegraph: We shouldn't let our Councils Cheat us out of 25 Billion a Year

 

Does this mean many of our local authorities could be open to criminal investigations?

 

 

That would only work if the council were specifically charging costs for a liability order at the summons stage - the council can charge a summons cost and may elect not to charge for the liability therefore the costs at the summons stage are for those incurred to that point.

 

If a person wishes to challenge the costs they can do at the liability order hearing.

 

 

(b) a sum of an amount equal to the costs reasonably incurred by the authority in connection with the application up to the time of the payment or tender,

 

The costs in applying for a liability order can be incurred prior to the liability order hearing and can be charge at the summons stage as the costs are incurred in preparing the hearing and the court will charge for each liability order the council applied for. The costs can include the admin costs in preparing the case.

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Would this not be specifically considered charging costs for a liability order at the summons stage? Especially as recent history of the charging structure provides evidence that this is the case.

 

I would expect the council would say that they have reviewed where in the systen the costs are incurred and that the vast majority are pre Liability Order stage therefore they are charging the new , revised, costs at that point.

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The council now consider 100% of its costs, up unto obtaining the liability order, are attributable to issuing a summons.

 

 

Or they have deciced that the level of costs in incurring the summons is the most they can feasibly recover and therefore wont charge for the Liability Order - there have been massive changes in council funding and many costs that were previously being absorbed or offset are no longer done so.

 

Also remember that there is nothing to require that they do charge for the Liability Order.

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Bailiff's are normally 'no cost' as they fund themselves through the fees collected by the council passing debt to them.

 

In any case council tax 'debt' begins once a person defaults on payment (more so if they fail to pay a reminder within 7 days). The cost of a council tax recovery section doesn't just start once a Liability Order has been issued.