The Taking Control of Goods (Fees) Regulations 2014 have completely changed the way HCEOs work and the associated fees.
The enforcement process is set into four stages, with fees assigned to each stage. This certainly clarifies the process for all parties, especially for debtors.
HCEO fees are recovered in full from the judgment debtor when enforcement is successful. If enforcement is unsuccessful, as judgment creditor you only have to pay a Compliance fee of £75 plus VAT (£90) per notice of enforcement served. You do not pay any other costs associated with the enforcement of your writ. Please see below for further details.
The process starts with the compliance stage. Once the HCEO receives your instruction they will apply the fee for this stage which is £75 plus VAT (£90). Upon receipt of the sealed writ of control, the HCEO will send a ‘Notice of Enforcement’ to the judgment debtor.
The Notice of Enforcement must be sent or delivered to the debtor personally, giving them 7 clear days (excluding Sundays and bank holidays) to pay the sums due in full, at the place, or one of the places, where the debtor usually lives or carries on a trade or business.
If the debtor is a company or partnership the notice must be sent to the place, or one of the places, where the debtor carries on a trade or business or the registered office. Delivery can be by post, hand delivery, fax or other electronic means such as email.
If the debtor pays in full – the judgment amount, interest, court fees and the £75 plus VAT (£90) enforcement fee for the Compliance stage - after receiving the notice, the enforcement process is concluded.
Enforcement Stage 1
If the debtor fails to make contact with the HCEO or requests to pay by instalments during the Compliance Stage, an EA will attend their premises to take control of goods (the new term replacing ‘seizure’).
This stage is known as Enforcement Stage 1 and the fixed charge at this point is £190 plus VAT (£228) plus 7.5% of the sums to be recovered over £1,000, again plus VAT.
For example, if the outstanding debt was £3,000, the 7.5% plus VAT would only be charged on £2,000 (£150 plus VAT [£180]). The sums to be recovered are the judgment debt, court costs, execution costs and interest.
If, when the EA attends, the debtor pays in full immediately or agrees to an acceptable instalment arrangement, then the matter ends there.
Enforcement Stage 2
If the debtor refuses either to make any payment or to enter into an acceptable instalment arrangement covered by a controlled goods agreement (the term replacing walking possession agreement), then the matter moves to Enforcement Stage 2.
If a payment arrangement, with a signed controlled goods agreement, is subsequently broken, the EA will re-attend the property either under Enforcement Stage 2 or the Sale or Disposal Stage dependent upon the circumstances so far.
The fee for Enforcement Stage 2 is a flat £495 plus VAT (£594).
Sale or Disposal Stage
Should enforcement get to the point where goods actually need to be removed, the enforcement progresses to the Sale or Disposal Stage.
The fee for this stage is £525 plus VAT (£630) plus 7.5% of the sums to be recovered over £1,000, again plus VAT. The costs of removal are normally included in this sale stage fee.
However, if the HCEO anticipates exceptionally high removal costs far greater than the sale stage fee, for example specialist equipment and personnel to remove an aircraft, he can apply to the court to have these added to the amount payable by the debtor.
The only other fees chargeable (without application to court) are for disbursements such as locksmiths, storage and auctioneers fees.
There is a £66 court fee for transferring a CCJ to the High Court for enforcement, which results in the award of the writ of control. If successful, this fee is recovered in full from the judgment debtor.