Changes affecting enforcement by Sheriffs

On 6 April 2014 changes were made to The Tribunals Courts and Enforcement Act 2007 Part 3 in respect of the Taking Control of Goods Regulations which affect how Sheriffs can enforce Judgments.

Changes to terminology have been made as follows:

  • Sheriffs are renamed "Enforcement Agents" ("EA")
  • The term "debtor" is no longer allowed and they must be called "customers"
  • Writs of Fi Fa are renamed "Writs of Control"
  • Walking Possession Agreements are renamed "Taking Control of Goods Agreements"

What procedures must the EA follow ?

There is a new procedure the EA must follow, they can no longer turn up unannounced and must now send a letter to the customer notifying them of the visit.  If it is felt this will give the customer time to dispose of assets an application can be made to the Court for a visit to be made without prior notice being given.  If the first visit is not successful in recovering the amount due the EA must send a notice giving notice of a second visit.

How can the EA gain entry to premises?

The hours an EA can visit have been extended to between 6.00 am and 9.00 pm seven days a week (excluding Christmas Day and Bank Holidays) whether the customer is a business or an individual.  If attending business premises and they are only open outside these hours the EA can attend during the opening hours of the business.

The rights of entry of the EA have also changed.  In respect of commercial premises the EA can no longer enter through a window or any other opening other than the main entrance or a loading bay but they can force entry through the door even if locked provided the building it is not attached to a house.  They can also visit the home of a Director if this is the Registered Office of the company or the home of any Partners in a Partnership (provided they are named personally on the Judgment), they are then bound by the rights of entry in respect of residential premises below.

In respect of residential premises the EA can only gain entry through an unlocked front or back door i.e. a main entrance.  They can climb over a fence or wall to gain access to grounds of a house.  They cannot force entry through external doors but once inside can force internal doors and if ejected from a property can use force to regain entry through a main entrance.  They can also force entry into a garage, outhouse, stable, barn, etc if not attached to a house.  If they obtain a signed Controlled Goods Agreement they can force entry upon any future visits even via a locked door.

What goods can be seized ?

If the EA gains entry but does not recover payment they must prepare a Taking Control of Goods Agreement and list all assets that can be seized.  They must ask the customer or a "responsible adult at the premises" to sign the Agreement.  Once the Agreement is signed the EA can secure goods on the premises or remove goods.

Goods that can be seized have been extended to include vehicles including a boat or aeroplane, stock and machinery, household furniture, jewellery and art, money, banknotes and cheques, bonds, shares, deeds and securities, livestock and animals, firearms, jointly owned property of a married couple, items held by Police and goods on finance providing the finance company agree to the sale.

Goods which cannot be seized have been extended to include bedding, clothing, furniture and provisions required for a basic level of domestic life (the EA can also remove luxury items and replace them with cheaper items), items required for the care of a person under the age of 16, over the age or 65 or a disabled person, perishable goods, refrigerated goods and fresh flowers, vehicles with a valid disabled person's badge, vehicles belonging to the Police, Ambulance Service, Fire Department or displaying a British Medical Association Badge, assistance dogs, sheep dogs, guard dogs or domestic pets and art on loan to the UK from another country.

Tools of trade are no longer exempt and can be seized provided the customer is a sole trader (not a Limited Companies or Partnership), the tools must be used solely by the customer in their work and not by any other person and they must be worth at least £1,350.00.

Third party claims have also changed and it is now the responsibility of the third party to make an application to the Court for an Order that the EA must cease action, until this is obtained the EA can continue with enforcement.

How can seized goods be sold ?

The ways in which goods can be sold has also been extended to include public auction by a qualified auctioneer, private treaty, sealed bids, advertisement and independent online auctions such as Ebay.  If goods are to be sold at auction the EA must provide the customer with notice of the auction date and time and provide an estimated valuation of the goods in writing.

The EA can also sell goods on site by entering a shop (or standing behind a market stall) and taking over the sale of items.  They can also secure the goods on site and sell them on site.

What fees are payable ?

One of the major changes has been to the fees that are recoverable from the customer.  These are now limited to fixed fees set by the Court which include sending of the first letter to the customer, two visits and removal and sale fees.  The only additional fees that can be charged are storage charges and locksmiths fees where a Taking Control of Goods Agreement has been signed and fees if specialist equipment is required to remove a large asset such as machinery.  However an application would have to be made to the Court in respect of these fees and would only be granted in "exceptional circumstances" so where possible it would be preferable to attempt to sell such goods on site.

The life of the Writ of Control has been changed so that it is suspended if a repayment plan is entered into and re-starts if payments stop.  However EA's can no longer charger for collection by instalments so if payment is not received in a lump sum or goods are sold but do not cover the full amount due Claimants will be encouraged to collect their own instalments or pay the EA to do this for them.

Conclusion

There have been several reports in the news questioning what effect these changes will have upon the way in which Judgments are enforced.  For many, the changes will have little impact.  However, for those organisations who have, in the past, operated in a way which many would describe as "sharp practise", they will have to change their ways to ensure they operate within the new rules.

Posted on: 29/05/2014

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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