Bailiff fees and the correct procedure to follow if a debtor pays creditor direct.

[Bailiff Advice]

The countries expert on bailiff law; John Kruse has written in his latest Bulletin about the important subject of bailiff fees when debtors make payment to the creditor (i.e. Magistrate Court, local authority etc).

 

This is a subject that has been discussed often on the forum and thankfully, with the regulations now having been in place for two years, most local authorities understand that if a direct payment is received from a debtor after the account has been forwarded to the enforcement agent, that the Compliance fee of £75 needs to be deducted at source and the balance apportioned on a pro rata basis in line with regulations.

 

The position with Magistrate Court fines is very much simpler. If a debtor makes a direct payment to the court (either in person or on-line), after a warrant of control has been issued, all courts write to the debtor to advise that the entire payment has been forwarded to the enforcement agent so that they (the EA) can deduct their fees in line with legislation.

 

A extract from John Kruse's excellent article is copied in the next post:

 

PS: An detailed explanation of how direct payments are allocated and the pro rata distribution can be read here:

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?453047-Bailiff-enforcement-Setting-up-a-payment-arrangement-and-whether-you-can-pay-the-court-or-the-council-direct

[Bailiff Advice]

The following is a short extract from John Kruse's article:

 

 

What is the correct procedure to follow as to fees if the debtor pays the creditor directly?

 

This is an issue continually raised by both enforcement agents and debt advisers. It is problematic for two reasons- the vague and unsatisfactory nature of the relevant regulation and the ease with which debtors may now make online payments (in particular) to creditors.

 

It is inevitable that many debtors seek to evade payment of enforcement fees, which are simply inflating their already problematic debts. Whether by payment online, funds transfer, posting a cheque or just going onto an office to settle a debt, many will successfully pay the creditor directly and cut out the enforcement agent in the middle. The status then of the balance and the agent’s position is a source of regular concern.

 

 

After examining the Taking Control of Goods (Fees) Regulations 2014, Mr Kruse concluded by stating as follows:

 

 

That’s all fine- as long as the agent gets the cash. If it goes to the creditor, what then happens? I think that the assumption is that the creditor will pass on the sums received in order to allow the enforcement agent to make the correct distribution following the fee scale. This is their responsibility, not the creditor’s.

 

That said, it is perhaps asking a lot of a creditor to give up the lump sum they’ve just got their hands on. At the very least, the creditor must seek a breakdown of the fees calculation from the agency and transmit to them the amount due for fees.

 

But what of the balance? This must be regarded as the net amount remaining after the proper deduction of fees and expenses. It will predominantly comprise the debt.

 

Debtors like to think that by direct payment they have discharged the debt and left the bailiff without his fees, but this cannot be an honest interpretation of the wording or intention of the Regulations. There will still be a balance of the debt outstanding and this may still be quite properly enforceable- with extra fees of course being a possibility.

[ploddertom]

You have to remember that with HCEO fees etc that if the Judgment Creditor accepts payment from the Debtor then they can be held liable for ALL the fees the HCEO has incurred. It is permissible though to pass the payment over - similar to what happens with Court fines.

[Bailiff Advice]

You have to remember that with HCEO fees etc that if the Judgment Creditor accepts payment from the Debtor then they can be held liable for ALL the fees the HCEO has incurred. It is permissible though to pass the payment over - similar to what happens with Court fines.

 

Excellent point Ploddertom. I will ask JK later today if I can reproduce some further comments of his (in particular his comment about the Stage Two fee imposed when enforcing High Court debts).

[Peterbard]

Hopefully this will also dispel the silly "proceeds" argument which was used t encourage debtors to pay the creditor direct and evade fees

 

Any payment made while the debt is under and an enforcment poser is of course proceeds, no matter who it is paid to, and due to the EA, as John says.

Edited April 19, 2016 by Andyorch
Removed quote from external source

[ploddertom]

 

Excellent point Ploddertom. I will ask JK later today if I can reproduce some further comments of his (in particular his comment about the Stage Two fee imposed when enforcing High Court debts).

 

 

Here again is something I disagree with. Personally speaking I don't see why we have to have a separate tier of enforcement as more & more Judgments being transferred up are Utility Bills & the like. Using HCEOs for this type of thing is in my mind akin to making the situation worse & not better. I also disagree with the Two Stage fee that has been instigated. After all we see many that are now using "HCEOs for rent" in order to bump things up, particularly when those same people are insisting they can add Stage 1, Stage 2 & Sale Stage all at once & then insisting only payment in full is acceptable.

[brassnecked]

Here again is something I disagree with. Personally speaking I don't see why we have to have a separate tier of enforcement as more & more Judgments being transferred up are Utility Bills & the like. Using HCEOs for this type of thing is in my mind akin to making the situation worse & not better. I also disagree with the Two Stage fee that has been instigated. After all we see many that are now using "HCEOs for rent" in order to bump things up, particularly when those same people are insisting they can add Stage 1, Stage 2 & Sale Stage all at once & then insisting only payment in full is acceptable.

 

All it does in extremis is makes the debt completely unpayable as the debtor may be locked into payments for fees for at least 10 years if on benefits and a Sanction.

[Peterbard]

Very quiet on here and the advice section. Perhaps good news.

[unclebulgaria67]

Very quiet on here and the advice section. Perhaps good news.

 

Not if you are CAG. They need posts and visitors for chance of advertising income.

 

Plus it is quieter, if you don't involve yourself in skirmishes with opposing forces. You might enjoy a more peaceful life, without engaging with negative forces or what might be described as the 'dark force'. "Let the force be with you"

[Peterbard]

Just meant quieter as in less incidents ?

[Peterbard]

Here again is something I disagree with. Personally speaking I don't see why we have to have a separate tier of enforcement as more & more Judgments being transferred up are Utility Bills & the like. Using HCEOs for this type of thing is in my mind akin to making the situation worse & not better. I also disagree with the Two Stage fee that has been instigated. After all we see many that are now using "HCEOs for rent" in order to bump things up, particularly when those same people are insisting they can add Stage 1, Stage 2 & Sale Stage all at once & then insisting only payment in full is acceptable.[/QU

 

http://www.legislation.gov.uk/uksi/2014/1/pdfs/uksiem_20140001_en.pdf

 

I don't know if this helps. or if you have seen it PT.

 

While the fee structure applies across debt streams, there are two separate fee levels – one

for High Court Enforcement and one for non-High Court Enforcement, with the High

Court level containing higher fees. This reflects the findings in the 2009 independent

report5

that High Court Enforcement has a higher cost base due to the personal

responsibility of a High Court Enforcement Officer (who has writs addressed directly to

them) and the fact that they enforce higher value debts. The personal liability of the High

Court Enforcement Officer has also necessitated the need for High Court enforcement to

have first and second enforcement stages with the associated fees. The fee structure for

High Court cases also introduces an incentive to enter into, and adhere to, an affordable

controlled goods agreement. Unless a debtor pays in full at the compliance stage, the

enforcement agent is obliged to visit the debtor in every High Court case in order to take

control of goods, thereby triggering the first enforcement stage. If the enforcement agent

is then unable to enter into a controlled goods agreement (and has to take control of goods

in another manner) or a debtor defaults on a controlled goods agreement, the enforcement

agent will be under an obligation to remove goods and therefore the second enforcement

stage fee will also apply. For non-High Court debt there is no such obligation and

therefore we have introduced an incentive to enter into an agreement without taking

control of goods at the (earlier) compliance stage which avoids triggering the enforcement

stage with its larger fee.

[Bailiff Advice]

We seem to be going off topic as the thread is about the correct procedure that should be followed if if payment is made direct to the creditor. Thankfully, as detailed above, John Kruse has making a payment direct and thankfully, John Kruse has provided clarity on the subject.

 

I did promise to start a new thread about a comment that JK made in one of his earlier Bulletin's regarding the subject of 'implied licence' etc. I will get this arranged maybe later today or tomorrow.

[unclebulgaria67]

Most forums and other sites that don't charge subscriptions rely on advertising to pay for running costs. As I think Bankfodder said recently, the advertising revenues appears to be reduced because ad blockers are being used.

 

As for the rest that is just my warped sense of humour . Sometimes i find online forums a bit bizarre. So bizarre, in fact I am thinking of including situations i have witnessed in a novel. Not sure whether it will be a crime story or a comedy.

[Bailiff Advice]

Coming back to the subject matter of the thread (Bailiff fees and the correct procedure to follow if a debtor pays the creditor direct) there are many wild theories posted on the internet about the position with payments being made direct and whether or not swearing on oath that a Notice of Enforcement had not been received will lead to any additional fees being invalid.

 

These ‘theories’ are based upon a wholly inaccurate interpretation of the judgment in the case of M v Mrs W and concern the enforcement of a writ of control by a High Court Enforcement Agent.

 

To ensure that only accurate information is given, the following is the correct position:

 

Mrs W could not afford to pay a judgment and applied to court (on an N245) to pay by instalments. Her application was heard a month later before a Judge. Her request (to pay by instalments) was refused (unfortunately, this happens very often). Exactly 7 days later, a certificate of judgment was granted and costs of execution (of £111.75) added.

 

In court, Mrs W was able to provide

unchallenged evidence

that five days after the certificate of judgment was granted, that she (or more accurately her husband) had made a personal visit to the creditor’s home and

hand delivered him a cheque to satisfy the judgment

. It should be noted that the amount of the cheque did not include the cost of execution of £111.75. Mrs W was unaware of this cost at the time of making her payment.

 

Three days after

handing the cheque to the creditor, a

writ of control was sealed

by the court.

 

Crucially, the creditor did not promptly bank the cheque (it seems that

he waited almost three weeks

) but more serious, was that he did not reveal to the enforcement company that he had received payment. In fact, it was a staggering

five weeks after

he had received the cheque, that he informed the enforcement company. By this time, enforcement agents has made visits to Mrs W's property and taken control of a motor vehicle.

 

The Judge considered that his (the creditors') actions were incompetent.

 

Although Mrs W had

provided evidence

to the court that she had not received a Notice of Enforcement, this was a very minor point given that the judge found that if the cheque had of been paid into the bank promptly as it should have been, that it would have cleared well within the period outlined in the notice of enforcement.

 

The court were satisfied that evidence proved that payment had been made

before

the writ of control was sealed by the court and accordingly, the Judge quite correctly revoked the warrant.

 

Mrs W was ordered to make payment of the the cost of execution of £111.75.

 

Both parties were ordered to pay their own (significant) costs.

Edited April 26, 2016 by honeybee13
Name Mrs M changed to Mrs W.

[Bailiff Advice]

I have made quite a few errors in my above post in that I have wrongfully stated that the debtor is Mrs M. In fact, she is Mrs W (and not Mrs M).

 

I was caught out by the 10 minute edit facility....again !!

[Bailiff Advice]

 

I did promise to start a new thread about a comment that JK made in one of his earlier Bulletin's regarding the subject of 'implied licence' etc. I will get this arranged maybe later today or tomorrow.

 

With a second response being published yesterday in response to JK's article, I though it best to send copies to regular posters as opposed to printing them on the forum. There is now little doubt that an implied licence is not required and cannot be 'removed'.

[AndyOrch]

With a second response being published yesterday in response to JK's article, I though it best to send copies to regular posters as opposed to printing them on the forum. There is now little doubt that an implied licence is not required and cannot be 'removed'.

 

I think it would be more beneficial in general to the Forum/Members if you were to post it here BA on the open Forum.

 

Regards

 

Andy

[Peterbard]

With a second response being published yesterday in response to JK's article, I though it best to send copies to regular posters as opposed to printing them on the forum. There is now little doubt that an implied licence is not required and cannot be 'removed'.

 

I agree BA . It is I hope not against forum rules to agree with another poster.

 

Having read it several weeks ago , I see nothing on there that we have not said several hundred times before. I see no need to subject its author to the same childish abuse we had to endure.

People on here know the score anyway.

[ploddertom]

Coming back to the subject matter of the thread (Bailiff fees and the correct procedure to follow if a debtor pays the creditor direct) there are many wild theories posted on the internet about the position with payments being made direct and whether or not swearing on oath that a Notice of Enforcement had not been received will lead to any additional fees being invalid.

 

These ‘theories’ are based upon a wholly inaccurate interpretation of the judgment in the case of M v Mrs W and concern the enforcement of a writ of control by a High Court Enforcement Agent.

 

To ensure that only accurate information is given, the following is the correct position:

 

Mrs W could not afford to pay a judgment and applied to court (on an N245) to pay by instalments. Her application was heard a month later before a Judge. Her request (to pay by instalments) was refused (unfortunately, this happens very often). Exactly 7 days later, a certificate of judgment was granted and costs of execution (of £111.75) added.

 

In court, Mrs W was able to provide

unchallenged evidence

that five days after the certificate of judgment was granted, that she (or more accurately her husband) had made a personal visit to the creditor’s home and

hand delivered him a cheque to satisfy the judgment

. It should be noted that the amount of the cheque did not include the cost of execution of £111.75. Mrs W was unaware of this cost at the time of making her payment.

 

Three days after

handing the cheque to the creditor, a

writ of control was sealed

by the court.

 

Crucially, the creditor did not promptly bank the cheque (it seems that

he waited almost three weeks

) but more serious, was that he did not reveal to the enforcement company that he had received payment. In fact, it was a staggering

five weeks after

he had received the cheque, that he informed the enforcement company. By this time, enforcement agents has made visits to Mrs W's property and taken control of a motor vehicle.

 

The Judge considered that his (the creditors') actions were incompetent.

 

Although Mrs W had

provided evidence

to the court that she had not received a Notice of Enforcement, this was a very minor point given that the judge found that if the cheque had of been paid into the bank promptly as it should have been, that it would have cleared well within the period outlined in the notice of enforcement.

 

The court were satisfied that evidence proved that payment had been made

before

the writ of control was sealed by the court and accordingly, the Judge quite correctly revoked the warrant.

 

Mrs W was ordered to make payment of the the cost of execution of £111.75.

 

Both parties were ordered to pay their own (significant) costs.

 

Sounds very much like a case that has been discussed before but appears to be at odds with what was originally said?

[Bailiff Advice]

Sounds very much like a case that has been discussed before but appears to be at odds with what was originally said?

 

If you are referring to the case having previously been discussed on here, then yes...the above version is indeed different. The reason for the difference would have been because, when I initially posted about this case (in 2014), I would have only been able to rely upon the 'version' as outlined by the individual who had represented the debtor in court. It has seen been found that his version of events was not accurate.

 

If a member of the public wishes to, they can obtain a transcript of the hearing. There is naturally a fee to pay. In many cases, it is well worth the cost (as was the case with the 'Tom Crawford' transcript !!

 

PS: The above is an accurate reflection of the case.

[Bailiff Advice]

 

If a member of the public wishes to, they can obtain a transcript of the hearing. There is naturally a fee to pay. In many cases, it is well worth the cost (as was the case with the 'Tom Crawford' transcript !!

 

PS: The above is an accurate reflection of the case.

 

 

Plodderton. Check your email. Copy sent.

[ploddertom]

Thank you, have now had time to read & digest + compare with what waws said at the time. It is vastly different & couldn't even be put down to artistic licence - appears Hans Christian Anderson is alive & well if he can tell stories like that.

[Peterbard]

Hi

Someone wanted to know where the ability to retain a compliance fee resided in the TCEA, the answer was inappropriate on that thread.

 

But just for information since it is on topic here:

 

Application of proceeds where less than the amount outstanding

 

http://www.legislation.gov.uk/uksi/2014/1/regulation/13/made

 

(3) Following the payment at paragraph (2), the enforcement agent may then recover the compliance fee.

 

Please read in concert with John K's comments earlier in this thread.

[Schindler]

It was appropriate as Shailesh Vara was reported to have said it was in the TCEA by Bailiff Advice. Couldn't have been more appropriate really. Your link goes to a different Act, I assume that's just a mistake so await the correction with link to the right Act

[Peterbard]

It was appropriate as Shailesh Vara was reported to have said it was in the TCEA by Bailiff Advice. Couldn't have been more appropriate really. Your link goes to a different Act, I assume that's just a mistake so await the correction with link to the right Act

 

This is really basic stuff, but.

 

An SI has no power of its own it draws it from its parent act and is enabled via a section of that act. Mention of an act refers to all subsidiary regulations as well, as they are part of it. In the above case here :

 

50(1)Proceeds from the exercise of an enforcement power must be used to pay the amount outstanding.

(b)any amounts recoverable out of proceeds in accordance with regulations under paragraph 62 (cost

 

Incidentally, this is why i did not want to start mentioning regulations on the other thread as i knew I would end teaching you all this basic stuff.