The Tribunals, Courts and Enforcement (TCE) Act 2007

Part Three of The Tribunals, Courts and Enforcement Act 2007 brings significant changes to the way in which seizure of goods can be used to enforce judgments. It also affects the ability of commercial landlords to recover rent. This article will focus on the enforcement of judgments, but for more information on the changes relating to Commercial Rent Arrears Recovery (CRAR), please see this article: CRAR Update.

The Tribunals, Courts and Enforcement Act 2007 is the primary legislation that will give rise to regulations on the powers of bailiffs engaged in both enforcement of judgments enforced in the High Court and ‘non-High Court’ matters, including bailiffs enforcing public sector debts and commercial rent arrears.

Last year the Ministry of Justice produced a consultation paper entitled Transforming Bailiff Action. Following a consultation with the Enforcement Sector, the Advice Sector and the Judiciary, the Government published its response to the consultation.

The Government were broadly in agreement with the recommendations in the consultation paper and signified an intention to produce a final set of regulations that would bring into force Part Three of the TCE Act. The main recommendations from the Government response to Transforming Bailiff Action are set out below:

New Fee Structure

One of the primary reforms will be on the charges that can be levied by bailiffs. It has been suggested that the Fee Structure will be based on a clearly defined ‘staged’ approach, with bailiffs only entitled to charge fees for each stage when certain ‘trigger’ actions have been completed. This is intended to give all parties more certainty as regards charging and to avoid penalising those who readily engage with Enforcement Officers. There are two separate proposed fee scales in the consultation document, one for High Court debts and another for non-High Court debts.

Competence Requirements

Whilst the Government appears to favour self-regulation of the bailiff industry, there are likely to be changes in the competency requirements for bailiffs. This is intended to give rise to a more consistent approach to certification process for bailiffs and the knowledge they will be required to demonstrate.

Complaints Handling

The intention is to provide a clear route for raising complaints against Enforcement Officers.

National Standards for Enforcement Agents

The Government has signified a commitment to further developing the National Standards for Enforcement Agents. This is likely to include an increased focus on the issue of treatment of vulnerable persons (although a strict definition of vulnerability is not likely to be forthcoming).

Powers of Entry

It is anticipated that these will remain unchanged and that Enforcement Officers will be permitted to use reasonable force, where necessary to enter commercial premises. Enforcement Officers will also continue to have the power to use reasonable force to secure entry to residential premises where a defendant fails to abide by the terms of a walking possession agreement (to be known as a ‘controlled goods agreement’).

Notice of Enforcement Action

One of the most controversial aspects of the TCE Act was requirement to provide notice to a defendant of Enforcement Action. Nevertheless, the Government appears committed to the introduction of a ‘Compliance Stage’ that will provide the defendant with a final attempt to make payment of the debt. The consequence is likely to be that Enforcement Officers will need to provide seven days’ notice of intended action before taking control of goods.

Modes of Entry Common law currently provides authority for bailiffs to gain entry to premises via several ‘less conventional’ means – including through open windows/skylights. This is likely to change and the final regulations are expected to stipulate that a door or usual mode of entry will need to be used.

Days and Times

There are currently several rules derived from case law that provide for times of day and days of the week when bailiffs are permitted to act. These rules are likely to be clarified in the regulations. The proposal is that bailiffs will now be able to enter premises between 6am-9pm on any day of the week. A revised set of National Standards is also likely to consider the need to observe cultural and religious holidays.

Exempt Goods

Certain goods (broadly speaking those that are necessary for an individual in meeting basic domestic and vocational needs) are currently exempt from seizure. The regulations are likely to provide a revised list.

Nominating a signatory of on a Walking Possession Agreement (Controlled Goods Agreement)

The position as regards nominating another person to sign a controlled goods agreement is unlikely to change; a defendant will still be able to nominate a third party at an enforcement address to sign such an agreement. On business premises, any person in apparent authority will be permitted to sign a controlled goods agreement.

Securing Goods on Commercial Premises

It is the Government’s intention to allow an Enforcement Officer who considers it necessary to seize all goods contained on commercial premises to secure the entire premises where he considers that the goods seized may be at risk.

Securing Goods on the Public Highway

The consultation document considered that there should be a minimum period of 24 hours for which a vehicle must remain secured before being removed from a public highway. The intention is to give the defendant an opportunity to pay before losing a vehicle. This has prompted some complaint from those in the enforcement sector, who considered that this was likely to result in immobilisation devices being damaged and vehicles being moved to avoid enforcement. The Government is apparently committed to providing some notice to a defendant before a vehicle can be removed from a public highway, although the notice period is yet to be decided.

Sale of Goods

The new regulations are likely to include the introduction of a seven day period of notice before sale of goods will proceed.

The regulations will include a provision setting out that insufficient funds will be distributed on a pro rata basis between the creditor and the enforcement agent, after deduction of any auctioneer’s costs.

The High Court and County Courts Jurisdiction Order 1991

The Government is apparently considering whether or not to remove the current restrictions on enforcement methods available where the judgment falls below a certain monetary threshold or where it arises from a Consumer Credit Act regulated agreement. The Government consultation stated that further consideration on the impact of Enforcement Officer costs was required before committing to a decision on this issue.