Having attended two industry events over the last week with presentations by various people in the industry and from the Ministry of Justice, I thought you might appreciate an update on where we are in regards to the introduction of Part 3 of the Tribunals, Courts & Enforcement Act 2007 which is set to come into force on 6th April 2014.
Schedule 12 of this Act covers the process of taking control of goods.
There are several pieces of legislation already released:-
- The Taking Control of Goods Regulations 2013 - how we seize, remove or sell goods
- The Taking Control of Goods (Fees) Regulations 2014 - what fees we can charge and when can we charge them
We are still awaiting two further regulations and some guidance on others issues.
- Certification Regulation - what criteria each Enforcement Agent (EA) will need to carry out his role
- Transitional Arrangements Regulation – how the change from old regulations to new will work
- VAT Guidance – whether VAT be charged on Enforcement Agents fees
One of the most important items still to be clarified is the transitional arrangement, i.e. what happens to those cases that are in the process of being enforced on 6th April. It had initially been suggested that enforcement would stop and restart under the new regime.
Clearly this is impractical and our current understanding is that any case that has been attended and goods seized before 6th April will remain under the current structure. Anything after that date would fall under the new Regulations. We hope that this will be confirmed shortly and MoJ sources suggest this will be clarified before the end of February.
The Regulations published in January 2014 make no mention of whether VAT is to be charged. We’re told that the HMRC did not want anything put in the Regulations itself.
Disappointingly, it seems likely that it will be charged in High Court enforcement matters only. Quite why an individual debtor who owes Council Tax and a Judgment is charged VAT on one debt and not the other doesn’t make sense to us.
Again, we are advised that the HMRC will give the Ministry of Justice guidance on VAT before 6th April. Nothing like leaving it until the last minute!
Third party claims to goods (Interpleader)
The current proposals are that a third party laying claim to goods that have been seized under a writ of control (the term that will replace writ of fieri facias) will have to pay into court a sum of money to the value of the item/s being claimed.
In the event of high value items, which are more often than not the type of items that do go to interpleader, is seems a high burden to place on the third party and one which may preclude many from making the claim.
However, if the process is followed to the letter this could see significant costs for many innocent parties, something the MoJ seems to have missed.
Opinion is that in practise these payments are unlikely to be made, but until the first claims are made we will have to wait and see. We believe that an amendment will be made to the Regulations changing the current intended process.
At present anybody can enforce a Writ with the authority of an authorised High Court Enforcement Officer. The new Regulations will change this but the finer details are still not confirmed (a common theme perhaps?).
We do know that any Enforcement Agents (EA) will have to be certificated in what is likely a very similar way to current Bailiff Certification. This will mean completing an application to court, and going before a District Judge and being asked questions about the laws. However the EA will no longer have to advertise his application in his local press (often costing in excess of £600) and instead the details will be published on a new government webpage. Once granted, the certificate will be valid for two years.
There is likely to also be an element of formal training required with an accreditation exam.
Our recruitment criteria for EAs stipulate a minimum of two years’ certificated bailiff experience, so the new certification will not have any great impact on us, although I do believe the industry will benefit as a whole from these standards to help remove that minority of officers whose conduct and skills are not up to scratch.
It is expected that the new certification practice will not be ready until at least 6 months after implementation of the Regulations on 6th April.
We are currently working through all the fine detail of the new Regulations and will be preparing detailed briefings to present to you as soon as we are able. There is plenty of detail!
We will also be updating and re-publishing our eBook Guide to Enforcement.