LGO decision re Bailiffs: Vulnerability, Direct Payments and Pro-rata

Herbie21

The following LGO decision (which was only released this week) is a vitally important one as it deals with a number of misconceptions and inaccurate advice regarding bailiff enforcement.

For instance, this decision addresses the following misconceptions:

Whether an enforcement fee (of £235) can be charged to a ‘vulnerable’ debtor......yes it can.

Whether an enforcement agent can decide whether a debtor is ‘vulnerable’.......yes he can.

Whether evidence needs to be provided to support ‘vulnerability’.......yes it does

Whether the council should recall a ‘vulnerable’ case from the enforcement company......there is no reason to.

Whether the council was wrong to pass some of the payment made direct to the council over to the bailiff company....... the Council was following the law by passing the bailiffs a proportion of payment to clear the bailiff’s fees.

Herbie21

http://www.lgo.org.uk/decisions/bene...her/16-014-707

Fareham Borough Council

The following is a 'word' version of the decision:

The complaint

1 The complainant, who I shall call Mr J, says the Council did not take vulnerability not account when refusing to recall his debt from the bailiffs. He would like the Council to take the liability order back from the enforcement agents and refund him the fees he has paid.


What the LGO found

4 Mr J failed to pay his council tax and the Council took legal action against him. The court granted it a liability order, meaning the Council could take further action to recover the debt. As Mr J did not pay the debt or contact it the Council passed the debt to its bailiffs.

5 Mr J contacted the bailiff offering to pay the debt at £10 per month. In response the bailiffs said if Mr J sent proof of the benefits he said he claimed and a statement of his income and expenditure it could accept payments of £20 per month.

6 Mr J then contacted the Council to say he was getting a letter from his GP about his medical condition. He said he felt he was a vulnerable debtor and asked the Council to accept payments of £25 per month. The Council asked Mr J to contact its bailiffs as they were the ones dealing with the debt.

7 A third party contacted the Council, saying they were helping Mr J and would be sending a financial statement and an offer. In view of this the Council asked the bailiffs to hold action for 28 days.

8 After 28 days neither the Council nor the bailiffs had heard any further. So the bailiffs visited Mr J’s home.

9 Mr J said he would call the bailiffs to make an arrangement, but he did not. The third party then contacted the bailiffs with a financial statement and an offer of £40 per month.

10 A week later Mr J contacted the Council, sending a letter from his GP and making an offer of £20 per month. After some discussion Mr J and the Council agreed he would make an initial payment of £40 and then pay £20 per fortnight.

LGO comments

11 The law places some limits if bailiffs find they are trying to recover a debt from a vulnerable person. Bailiffs may not take control of goods, make a controlled goods arrangement, or re-enter premises if the only person on the premises is a vulnerable person. If the debtor is vulnerable the enforcement fee is not recoverable until the bailiff has, before taking goods into control, allowed the debtor an adequate opportunity to get assistance and advice. (Tribunals Court and Enforcement Act 2007, Schedule 12, paragraph 2 and Taking Control of Goods (Fees) Regulations 2014 paragraph 12)

12 Government Guidance says creditors should consider the appropriateness of referring potentially vulnerable debtors to bailiffs; have agreed protocols to cover such cases and be prepared to take control of a case themselves if a debtor is identified as vulnerable. The Guidance says bailiffs should use their discretion appropriately when dealing with a potentially vulnerable debtor. (‘Taking Control of Goods: National Standards’ Ministry of Justice April 2014.)

13 There is no definition of ‘vulnerable’ in the law or Government guidance. The law and guidance does not say debts may not be recovered from vulnerable debtors, but that such cases once identified should be handled with particular care.

14 Mr J says bailiffs do not have discretionary powers to decide whether a person is vulnerable for the purpose of civil enforcement. The law does not specifically say who should make this decision. Paragraph 76 of the Guidance which says “Enforcement agents should be aware that vulnerability may not be immediately obvious” implies bailiffs can make that decision.

15 When Mr J said he was vulnerable the Council and the bailiffs held action to allow Mr J to provide evidence and get help and advice. It was appropriate, when the information the bailiffs wanted had not arrived, for them to continue to take action.

16 The Council consider the information Mr J provided and agreed a repayment arrangement at the level the third party had suggested. There was no reason for the Council to recall the debt from the bailiffs.

17 Mr J says the Council was wrong to pass some of the payments he made direct to it, to the bailiff. He says by paying the Council the council tax outstanding he cleared the debt and so the bailiff fees are not enforceable.

18 The enforcement agent fee regulations say if a payment is made that is less than the total debt and fees outstanding first the Compliance Fee is cleared; the balance is split pro rata between the debt and the fees. Any further payments are split pro rata between the debt and the fees. (Paragraph 13 of The Taking Control of Goods (Fees) Regulations 2014)

19 Mr J was paying the Council directly. The Council was following the law by passing the bailiffs a proportion of these payments to clear the bailiff’s fees. Paying the Council directly does not mean the council tax debt is clear as the Regulations make clear any balance is made up of both the debt and the bailiff fees.

sourcrates

Are the rules on Bailiffs permitted actions not due for a shake up later this year ?

National_Debtline

Hello


The following is an excerpt from the www.bailiffreform.org website, published in March of this year.


The Ministry of Justice promised a staged process review of the 2014 bailiff reforms one year, three years and, if necessary, five years after they came into force. However, the outcome of the one year review has still not been published and it is unclear if further reviews will take place.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2016-10-07/46871/




Dennis
@natdebtline



Denis
@natdebtline

sourcrates

Maybe it should become an election issue Dennis.

Amazing how helpful politicians are around election time.

But then any promises made would almost be guaranteed to be broken further into the parliament, not a hot enough issue for most is it !!

CIS

Herbie21 wrote: »

http://www.lgo.org.uk/decisions/bene...her/16-014-707

Fareham Borough Council

The following is a 'word' version of the decision:

I was reading that on another forum (I suspect it was yourself who posted it).

It nicely confirms, once again, opinion on vulnerability and apportionment of monies - it's always nice when opinions coming out of official bodies tally.

Craig

Oldwood

Herbie21 wrote: »

The following LGO decision (which was only released this week) is a vitally important one as it deals with a number of misconceptions and inaccurate advice regarding bailiff enforcement.

For instance, this decision addresses the following misconceptions:

Whether the council was wrong to pass some of the payment made direct to the council over to the bailiff company....... the Council was following the law by passing the bailiffs a proportion of payment to clear the bailiff’s fees.

Herbie, is this an accurate account of the legal position with direct payments?