As we reach the six month mark since the regulations came into force, the changes to High Court enforcement are quite significant, so here are the ten key changes that you might want to be aware of. This article was first published in the September 2014 issue of CCR Magazine.
The good news is you no longer need to work out how to pronounce or spell either fieri facias or fi fa, as this is now called a writ of control.
Seized goods became controlled goods, and the walking possession agreement is renamed a controlled goods agreement.
The abortive fee is now a compliance fee and the bailiff is an enforcement agent (EA).
Enforcement is now split into four clear stages.
- Compliance stage – sending the notice of enforcement. Enforcement does not proceed if the debt is paid in full in this stage
- Enforcement stage 1 – the EA attends the debtor’s premises to take control of goods. If the debt is paid in full or via a payment arrangement, that concludes enforcement
- Enforcement stage 2 – if the debtor does not pay, or subsequently breaks a payment arrangement, then all enforcement action from the first enforcement stage to the sale or disposal stage triggers enforcement stage 2
- Sale or disposal stage – the point at which the EA removes or makes arrangements to remove controlled goods to be sold to recover the debt
Each of the four stages has a set fee, removing the previous situation where there was much confusion as each HCEO company would likely have different miscellaneous charges. The new stages are:
- Compliance stage - £75
- Enforcement stage 1 - £190 plus 7.5% of the sums to be recovered over £1,000
- Enforcement stage 2 - £495
- Sale or disposal stage - £525 plus 7.5% of the outstanding debt over £1,000
If enforcement is not successful, the creditor will pay the HCEO the £75 compliance fee, which replaces the old abortive fee.
Some exceptional fees, such as the specialist removal of a yacht, can be applied for via a simple court application.
4. Dates and times of enforcement
EAs are now permitted to enforce seven days a week, between 06:00 and 21:00. If the debtor is a commercial entity trading outside those hours, for example a night club, then the HCEO can enforce outside the prescribed hours.
5. Entry to the debtor’s premises
Entry is permitted via any open or unlocked door, or any usual means by which entry is gained to the premises – this could include French doors or a loading bay for example.
6. Tools of the trade
Tools belonging to individuals for their exclusive personal use remain exempt, however, now only to the value of £1,350. Any tools above that value or owned by a company may be taken into control.
7. Notice of sale
Seven clear days’ notice of a sale must now be given to the debtor, whereas previously no notice needed to be given; the goods just needed to be advertised for three clear days.
8. Pro-rata split of part payment
When part payments are received, the compliance fee is paid first, then the remaining proceeds are divided pro rata between the creditor and the HCEO, giving the creditor their fair share of anything collected and the EA an incentive to collect the sums due in full.
9. Third party claims to goods
If a third party wishes to make a claim against controlled goods, he must do so in writing to the HCEO within 7 days and also pay a sum equal to the value of the disputed goods into court.
10. Training and certification
All enforcement agents must now undertake formal training and certification in order to work as an EA, bringing a level of experience and professionalism to everyone working in the industry.
If you would like to learn more about enforcement, you can download our free ‘Guide to Enforcement’ eBook