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© High Court Enforcement Group

“Judgment Enforcement Time for Change?”

Alan J SmithAuthorised High Court Enforcement Officer

Director of Corporate Governance, High Court Enforcement Group


JUDGMENT NUMBERS INCREASE

According to figures released by Registry Trust

369,989 consumer county court judgments (CCJs) in the first half of 2015

An increase of 23,000 (7%) compared with the judgments recorded in the same period in 2014

The figures brought the average value of a consumer CCJ in England & Wales down to £2,164, a 6% reduction compared with 2014

The total value of all debt judgments against consumers in the first half of the year was £934m to which CCJs contributed £801m*Data from Registry trust


JUDGMENT NUMBERS DECREASE

According to figures released by Registry Trust

51,872 business county court judgments (CCJs) in the first half of 2015

A decrease of 7% compared with the judgments recorded in the same period in 2014

The average value of a CCJ against businesses was £3,283, 6% less than the same period last year

The total value of business CCJs was £170m, 12% less than in the first half of 2014*Data from Registry trust


Current Position

High Court Enforcement

•Any judgment over £600 – non regulated•Employment Tribunal/ACAS Awards – Any value•Only possession against trespassers, unless otherwise with Courts permission

County Court •All judgments up to £5000 - If the debt is £5,000 or more it must be enforced in the High Court by HCEOs•All consumer regulated judgments•All possession orders


WHY THE RESTRICTION?

The restriction is due to a judgment made in the case of Forward Trust Plc v Whymark (1990) The enactment of The High Court and County Courts Jurisdiction Order 1991 which prevents High Court Enforcement Officers (HCEO’s) from enforcing CCA regulated judgments

Amendment to the Jurisdiction order was brought about following the case regarding interest on interest of a Regulated judgment.


(1A) A judgment or order of a county court for the payment of a sum of money in proceedings arising out of an agreement regulated by the Consumer Credit Act 1974 shall be enforced only in a county court

JURISDICTION ORDER

The High Court and County Courts Jurisdiction Order 1991


JURISDICTION ORDER

Article 8 of the High Court and County Courts Jurisdiction Order 1991 imposes limitations on the kinds of claim that may be transferred to the High Court for Enforcement:

Subject to paragraph (1A) a judgment or order of a county court for the payment of a sum of money which it is sought to enforce wholly or partially by execution against goods—

(a) shall be enforced only in the High Court where the sum which it is sought to enforce is £5,000 or more; (b) shall be enforced only in a county court where the sum which it is sought to enforce is less than £600; (c) in any other case may be enforced in either the High Court or a county court.


Parliament

There does not appear to have been much debate about this provision when it was laid before Parliament. On 16 December 1994, Lord MacKay is recorded in Hansard as noting that:

“The effect of the second amendment is that judgments given in proceedings arising out of the Consumer Credit Act 1974 may only be enforced in a county court, whatever enforcement method is chosen. It is inappropriate that such judgments should be enforceable in the High Court because this creates problems of "interest on interest".


INTEREST

It is not easy to see why “problems of interest upon interest”, if they arise, could not be dealt with in a similar way to the provision in s.35A(4) of the Senior Courts Act 1981

Provides that interest will not be awarded under that section for a period during which, for whatever reason, interest on the debt already runs


CONSULTATION

Under the consultation paper Transforming Bailiff Action the MOJ sought in a green question the opinion of whether the Order should be amended

As part of their proposal to encourage more flexibility in bailiff collections, they sought early views on possible changes in the future to offer creditors more choice in the jurisdiction of enforcement from the county court

The QuestionDo you consider that the jurisdiction order should be amended?


MOJ RESPONSEThe majority of respondents were in favour. While a clear majority of the enforcement sector, public creditors and debtor responses were in favour, responses from other sectors were mixed

Those in favour welcomed a move to a single system which would be easier to understand and would provide creditors with greater choice

Those opposed had a number of concerns. The High Court system was viewed as less effective, difficult to challenge and disproportionally expensive for the debtor

Some respondents were concerned that this move would eliminate protections outlined in the Consumer Credit Act 1974 Other respondents were willing to consider the change but only on the condition that the level of HCEO fees were revised downwards.


Category of respondent Yes % No % No response %

Advice Sector 27% 20% 53%Private creditor 19% 19% 62%Public creditor 26% 7% 67%Debtor 17% 0% 83%Enforcement sector 73% 11% 16%Judiciary 17% 0% 83%Members of Parliament 0% 0% 100%Members of the Public 13% 16% 71%Ombudsman organisations 0% 25% 75%Representative Bodies 33% 20% 47%Total 32% 12% 56%

MOJ MOJ RESPONSERESPONSE44% response rate

72.7% in favour of change


MOJ RESPONSE

MOJ ResponseConcern was expressed that the HCEO fees were disproportionally expensive to the debtorHCEO AnswerThe HCEO when working with the MOJ on the new fee scale made it clear that if we were given an opportunity for the Jurisdiction Order to be amended then the new fee scale could be looked at and amended.HCEO agreed to not have a % fee for judgments under £1000. Indeed if you look at the fee scale for a debt under £1000 where a defendant pays before attendance to remove then an HCEO is cheaper to the defendant than that under the bailiff fee structure.The fee scale is volume adjusted, the more writs then the fee scale would be reduced at Enforcement Stage 1, 2 and Sale Stage


HCEO VIEW

Less than half of respondents provided answers, the majority agreed that the order should be amended to give the creditor greater choice

Some were opposed and viewed that High Court Enforcement was less effective, we do not believe this came from the Court users, some also believe a change would take away the protection of the debtor

The jurisdiction order does not provide any protection, this is covered in the Consumer Credit Act 1974 (the only protection is from effective enforcement by High Court Enforcement Officers who want to enforce the judgments for their clients)


ORDERS FOR POSSESSION

Current procedure is for residential possession to be enforced through the County Court unless the matter is against trespassers

Creditors facing delays for possession in the County Court both corporate and litigants in person

Amendment of N293a to take away reference to trespassers would then allow creditor choice


WHAT CAN HCEOs OFFER?


WHAT CAN YOU EXPECT FROM A HCEO?

• Delivering a first rate enforcement service

• First time compliance and early payment• Convenient Payment Options• Firm but fair approach• Proven capacity to deliver a Nationwide Service• Experienced, Professional and Highly Trained Staff• The Latest Advances in Technology• Customer Care•Working with clients to agreed service levels (SLA)• Produces information in real time about the progress of

writs


PROTECTION OF CLIENT REPUTATION

•Treating Customers Fairly (TCF) Policy•Quality Management – ISO9001/27001•CRB and Credit Checks•Complaints Procedures•A provider with Diligence, Integrity and Honesty


AUDIT TRAIL OF HCEO’S ACTIONS

• Transparency in all their actions, this can be through a full online system

• Full transparency on the fees they charge the debtor and when will the fees be applied

• Charges fees under the Taking Control of Goods (Fees) Regulations 2014


Taking Control of Goods RegulationsFirst Year

• Prescribed Forms - duplication• Notice of re-entry – lack of ability to serve by

post• Attending third party addresses – no ability to

attend without a further court order• Third Party Claims – CPR silent on time limit for

action in the Court• Review of Fees – required to review how the

new regulations are working


FUTURE

•MOJ are listening to HCEOA about changes

•MOJ may do further consultation

• HCEOA are lobbying other industry organisations

• HCEOA have undertaken an online survey – Watch this space results to be published

• How long – who knows


MOJ RESPONSE

The MOJ have said they will wait to see the impact of the new fee regime before any final decision is made on whether to amend the Jurisdiction Order.

Why if the majority of respondents want change?

What do you think and want?


QUESTIONSAlan J Smith

Email: [email protected]: 07500 701357

mailto:[email protected]

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