London Motorists Action Group

HANDLING BAILIFFS version 1 (16/11/05)[1]

Introduction

1. Unfortunately the bailiffs trade is booming courtesy of some London Boroughs’ traffic enforcement and Transport for London’s congestion charging. In 2004/05 Camden alone issued 72,394 warrants - for bailiff action on parking enforcement – repeat 72,394 warrants, while for the year from 2004 Qu4 to 2005 Qu3 Tfl issued warrants to recover £38m. The number of PCNs that are registered as a debt in London increased by 50% between 2001 and 2004 to 875,000 warrants. Some councils are behaving as the benefactors of bailiffs.

2. The office of bailiff is one of the oldest legally defined positions in England and Wales. Bailiff law dates from the Statute of Marlborough 1267 which remains on the statute book to this day. Originally bailiffs were employed by landowners to administer their estates and collect rent, and they were authorised to levy distress and to distrain on and seize goods for unpaid rent. The term ‘to distrain’ refers to the power of a bailiff to notify the debtor as the owner of specified goods that title to those goods now rests with the bailiff by authority of the warrant issued. Such goods are said to be in the custody of the law whilst the distraint is in force and, although there is much legislation and case law to protect the owner/debtor’s rights, effectively the bailiff has the right to dispose of the goods if the debt is not settled.

3. Nowadays, in addition to executing warrants for landlords, bailiffs increasingly act for magistrates courts for unpaid fines and for local authorities for council tax and parking penalties. Anyone can call themselves a bailiff, but legislation makes it unlawful for warrants to be executed for certain categories of ‘public’ debt by anyone who is not a certificated bailiff. (The warrant of execution for a PCN says “This warrant can only be enforced by a bailiff carrying a certificate issued by a judge under the “Distress For Rent Rules 1998”). The issuing of a bailiff’s certificate is not an automatic process. An applicant must show to the judge evidence of financial probity and of good character. A certificate will not be issued if the applicant has unresolved county court judgments and/ or a criminal record. The applicant appears before the judge in person and may be asked to demonstrate his/ her knowledge of the laws of distress and other matters. A certificate is issued for two years, and before renewal the applicant has to re-prove probity, character and knowledge. The judge has power to withdraw a certificate on proof of improper actions and to order the bailiff to compensate a complainant if appropriate.

4. A warrant authorises the bailiff anywhere in England & Wales to accept payment of the debt together with reasonable fees or to remove the debtor’s goods. If the debtor (who in the case of PCNs is generally the registered keeper of a vehicle) wishes to dispute any charges made, (s)he can do so by requesting a 'taxation order' (also referred to as detailed assessment proceedings) at his/ her local county court. The court may require the debtor to pay a fee for such an order.

5. Statutory and case law relating to distress is considerable (see www.bailii.org), complex, and confusing. The then Lord Chancellor announced a review of bailiff law in March 1998, and invited Professor Beatson QC of the University of Cambridge to undertake an Independent Review of Bailiff Law: Report, which was published in June 2000. The Government published a green paper in July 2001 "A single piece of bailiff law and a regulatory structure for enforcement" and accepted Professor Beatson’s recommendation for a single new piece of legislation to regulate bailiffs and to enshrine the principle for their fees in primary legislation. Unfortunately that is where the matter rests – banning foxhunting and other “initiatives” and “modernizations” have had higher priority.

Controls on bailiff’s behaviour

6. There are two types of bailiff 1) court bailiffs who are employees of a county court and are consequently part of a structured management and supervisory system; and 2) certificated bailiffs, who are private bailiffs. Although some private bailiffs work on their own account, many work for companies such as Equita, Drakes, and CCS Enforcement Services. Certificated bailiffs are regulated in fairly sloppy ways:-

· The statutory instrument which governs bailiffs’ certification and challenge to charges are set out in the latest version of an ancient law Distress For Rent Rules 1998

· Their charges are regulated by Statutory Instrument 2003 No. 1857 (L.31) The Enforcement of Road Traffic Debts (Certificated Bailiffs) (Amendment) 2003 (it may help to see the original which sets out things more clearly The Enforcement of Road Traffic Debts (Certificated Bailiffs) 1993

. The Statutory Instrument states among other things:-

“The fees to be charged by certified bailiffs for the enforcement of certain road traffic debts in accordance with section 78 of the Road Traffic Act 1991 £11.20 for sending a letter…for levying distress…the fee is increased from 25% to 28% on the first £200 and on any additional sum over £200, the fee is increased from 5% to 5.5%”.

Paragraph 6 to schedule 1 allows the bailiff “For removing goods, or attending to remove goods where no goods are removed, reasonable costs and charges”. VAT is added to a bailiff’s charges.

· The Enforcement of Road Traffic Debts Order 1993 sets out the procedure to be followed before taking enforcement proceedings, and the arrangements for enforcement of a debt by seizure of goods

· From 3 May 2005, anyone clamping, towing away or blocking vehicles on private land for a fee will need a 'Vehicle Immobiliser' licence from the Security Industry Authority. The Private Security Industry Act 2001 outlines a system for the statutory regulation of the private security industry

· Their behaviour is subject to a voluntary code published by the Department of Constitutional Affairs titled National Standards for Enforcement Agents

· Their behaviour is also subject to the Office of Fair Trading Debt Collection Guidance (July 2003)

Unfortunately the government has not yet consolidated the statutory instruments (let alone brought forward primary legislation), and so it is difficult for a layman (and expensive for a lawyer) to comprehend the legal framework.

7. The law is set out in “Bailiffs Powers: A Debtor’s Guide” by John Kruse available on www.amazon.co.uk.
Other sources of information are:-

Debt basics - Handling Bailiffs from the Insolvency helpline

Citizens Advice Bureau Bailiff Guide

Chapter 6 on Debt Recovery and 7 on Enforcement by Bailiffs in the Office Procedures Manual for Parking Operations and Penalty Charge Notice Processing by Lancashire County Council sets out good practice

8. As has become apparent from the experience of the directors of LMAG and others, some bailiffs behave as though they are outside the law. They trade on people’s ignorance of the legal framework of this grubby little trade.

The mechanics of how councils instruct bailiffs

9. When a council wishes to instruct a bailiff it registers the debt electronically with the Traffic Enforcement Centre at Northampton County Court and the Centre automatically authorises it, and seven days later the council issues to the bailiff a warrant of execution, again electronically. A well mannered council will notify the debtor of the registration.

Procedure for recovery at the door

10. When a council issues a warrant to a bailiff and registers it through the Traffic Enforcement Centre at Northampton County Court (08457 045007), the bailiff is first supposed to write a letter notifying the debtor of the warrant and seeking payment, for which the bailiff is entitled to charge £11.20 (excluding VAT). The letter should generally be seeking recovery of £166.20 (£168.16 including VAT) for a parking PCN made up of:-

The amount the council seeks (generally £150 in London) + £5 for the warrant paid by the council + £11.20 for the bailiff’s letter + VAT of £1.96

11. According to the National Standards for Enforcement Agents when a bailiff visits a debtor:-

· Enforcement agents should always produce relevant identification on request, such as a badge or ID card, together with a written authorisation to act on behalf of the creditor[2].

· Enforcement agents must act within the law at all times, including all defined legislation and observe all health and safety requirements in carrying out enforcement. They must maintain strict client confidentiality and comply with Data Protection legislation and, where appropriate the Freedom of Information Act

. · Enforcement agents, for the purpose of distress or execution shall, without the use of unlawful force, gain access to the goods. The enforcement agent will produce an inventory of the goods seized and leave it with the debtor, or at the premises, with any other documents that are required by regulations or statute.

· Enforcement agents must carry out their duties in a professional, calm and dignified manner. They must dress appropriately and act with discretion and fairness.

· Enforcement agents must not misrepresent their powers, qualifications, capacities, experience or abilities.

· Enforcement agents must not discriminate unfairly on any grounds including those of age, disability, ethnicity, gender, race, religion or sexual orientation.

· In circumstances where the enforcement agency requires it, and always where there have been previous acts of, or threats of violence by a debtor, a risk assessment should be undertaken prior to the enforcement agent attending a debtor's premises.

Office of Fair Trading Debt Collection Guidance states:-

Under the heading of “False representation of authority and /or legal position”, it gives examples of “falsely implying or claiming authority…” “misrepresenting status or backing”.

Under the heading “charging for debt collection” the OFT gives examples of unfair practices, one of which is “applying unreasonable charges, e.g. charges not based on actual and necessary costs”.

12. On a first visit the bailiff should generally be seeking £212.74 (£220.88 including VAT)[3] comprising:-

£168.16 (PCN £150 & Court Fee £5 & £13.16 letter fee) x 28% = £47.08 (bailiff fee)

£48 (rounded up bailiff fee) x 17.5% Vat = £56.4 (£8.40 Vat) Total £224.56

When a bailiff appears at the door, do not let him in the premises, and keep cool. Bailiffs do not have the power to make forcible entry to a debtor’s premises, but if a bailiff has gained lawful and peaceful entry (e.g. invited in by the occupier) he has the right to use reasonable force to (a) inspect any part of the premises if refused access, and/or (b) resist being ousted from the premises. Refusal to grant peaceable entry is not an offence[4]. To gain entry a bailiff has to apply to a court for a warrant to force entry. Given these constraints, some bailiffs operate by bluster, bluff, and intimidation.Ask for:-

· Written authorisation to act on behalf of the council, which will most likely be a warrant of execution

· An itemisation of the charges

· Proof that he is a certificated bailiff licensed by a county court

13. Generally the bailiff will in the short term have the upper hand from having done the business before and knowing the tricks of the trade. The best policy may be to pay up under protest and then reflect. However, there may still be the opportunity in limited circumstances to use the Statutory Declaration process under certain circumstances. In due course we will provide an annex on the process.

Recovery of outrageous demands

14. If the bailiff has demanded an outrageous sum of money for his charge, the first step is to write to the bailiff’s company enclosing £10 and asking for details the company holds about you under the Data Protection Act. An illustrative letter is:-

Data Protection Officer
Bailiff Company

Dear Sir or Madam

Subject: access request under the Data Protection Act 1998

your reference XYZ

I enclose £10 and would be grateful if you would please supply a full set of your paper & computer records connected in any way with these matters.

I would also be grateful if you would ensure all efforts are made to fully comply before the 40 days allowed under the Act.

Also, if the bailiff did not provide an itemised account of the charge they were levying, ask for one.

SEND ALL CORRESPONDENCE BY RECORDED OR REGISTERED DELIVERY AND KEEP ALL ENVELOPES FROM BAILIFFS.

15. The return of the record of your case may indicate that the bailiff company is claiming that it sent a bailiff’s letter (which may not have been received) and that a bailiff made one or more prior visits and left one or more letters to that effect. Perhaps these letters were not found in the hall. If so, they may have been phantom visits to boost the bailiff’s fee, which increases with each visit as the debt compounds. Thus, while the fee for the first visit is £56.4 if not recovered the debt then becomes £224.56, and the fee to recover that equals £58 and the debt becomes £282.56[5] (+ VAT of £10.15 gives £292.71[6]). It is very nice work if you can get it.

16. In the Henney case (link) it took 4 letters and 2½ months to obtain from Equita a statement of how the charge of £609[7] was made up, and to discover that the charge included “£222+VAT attendance charges for attending with a vehicle to remove goods”. Since the bailiffs came to collect money (and did not have a warrant), and it only costs £85 including VAT to hire a Bedford van for a day and one could hire a 7½ ton pantechnicon including driver for 5 hours for the sum charged, the proposition that this was a “reasonable cost and charge” is far fetched. With no further ado Equita returned the money as a “gesture of goodwill” – and pigs can fly.

17. In 2003, according to accounts filed at Companies House, Equita made the remarkable pre-tax profit of £5.46m on a turnover of £14.13m, a margin of 40%; it made a pre-tax return on £10.8m capital employed of 50%[8]. We suspect Equita could not make such a return by issuing bailiffs’ letters for £11.20 each, nor by collecting numerous debts of £166.20 for £46.54 (excluding VAT) as per the regulations. It must have some financial magic up its sleeve.

Complaints against bailiffs

· If bailiffs misbehave, then the OFT can be asked to revoke the credit licences of a bailiff company if it has one. But it requires more than one complaint for the OFT to revoke a credit licence

· Complaints against the conduct of individual bailiffs can be made to the court which authorised a bailiff’s certificate. We will report on such a complaint in due course[9]

· Complaints against bailiffs and their companies can be made to either or both of the bailiffs clubs, The Enforcement Services Association and the Association of Civil Enforcement Agencies . Since monks do not reform monasteries do not hold your breath

· Under The Enforcement of Road Traffic Debts (Certificated Bailiffs) 1993 debtors can challenge the charges by applying to a county court for a detailed assessment of the charges (also described in Distress For Rent Rules 1998). There are two routes – 1) a taxation order via the registrar of the local county court where the distress was levied[10], and 2) the small claims court which settles disputes involving less than £5000. One of the directors of LMAG is using the small claims court, and we will be reporting on the episode after the hearing on 21/12/05

· In view of 1) the behaviour of Camden Council in advising that it would issue a warrant unless it was paid, when in fact it had already registered a debt and the issue of the warrant was automatic; and 2) its failure to ensure that the alleged behaviour of its agent, Equita, was appropriate, LMAG director Alex Henney has made a Formal Complaint to Camden that it has acted maladminstratively. If satisfaction is not achieved, the matter will be referred to the Local Government Ombudsman

Annex Debt registration by London local authorities for recovery parking and congestion charge debts

A recent Association of London Government Transport and Environment Committee report Debt registration at the Traffic Enforcement Centre at Northampton County Court shows the number of penalty charges that are registered as a debt at the Traffic Enforcement Centre at Northampton County Court as follows:- Number of Debt Registrations and the percentage increase on the previous year.

[1] DISCLAIMER. PLEASE NOTE THAT LMAG LIMITED HAS NOT HAD THE
RESOURCES TO HAVE THIS LEGALLY CHECKED AND SO ASSUMES NO LIABILITY FOR THE
ADVICE. WE HAVE, HOWEVER, ATTEMPTED TO
ENSURE THAT IT IS ACCURATE.

[2] The most likely authorization would be a warrant of
execution. It should include the date
and time when the request to issue the warrant was made and the date and time
when the warrant was issued to the enforcement officer is invalid.( The Enforcement
of Road Traffic Debts Order 1993 Article
5(3).

[3] Note
that some bailiffs not only round up, they add the VAT to the debt so that they
can show a higher recovery.

[4] According to Debt
basics - Handling Bailiffs from the Insolvency helpline:
Can
a bailiff force his/her way into my house?
Most
bailiffs do not have the right to force their way into your home to seize your
goods. The only exception is that bailiffs from the Collector of Taxes (Inland
Revenue) can get a warrant to force entry, but this is very rare.
All
other bailiffs have a right of peaceful entry only. This means that they cannot
use force to enter your home, for example, by breaking a window or a door.
However, they can enter your property through an open door or window (front and
back) and can climb over fences and gates, but cannot break them down.
You
do not have to let a bailiff into your house. A bailiff cannot force their way
past you if you answer the door. If all your doors and windows are securely
closed they will not be able to gain peaceful entry to your house unless you
let them in.
Bailiffs
are well aware of their limited powers and may use a variety of different means
to gain entry peaceably. They may attempt to walk in as soon as a door is
opened. They may ask if they can use your telephone to check if an arrangement
is satisfactory with their office. They may simply ask you if you would prefer
to discuss matters inside. You do not have to go along with any of these
methods.
Can
I be arrested or imprisoned for not letting a bailiff into my house?
No.
If a bailiff is accompanied by the police, they are only there to prevent a
breach of the peace. You cannot be arrested for refusing to allow a bailiff
into your home. You cannot be imprisoned for not paying your debts.

[5] £292.71 = £224.56
+ £56 (= £200.00 x 0.28%) + £1.35 (= £24.56 x 5.5%). = £57.35 fee rounded up to
£58 + Vat (£10.15) = £68.15

[6] Note
that some bailiffs add the VAT to the debt and then use that figure in the
compounding. This is a scam.

[7]
The original charge was £750 to recover a £310 debt to the council. On initial challenge Equita returned £141 for
a “reason” set out in gibble gabble, leaving £609.

[8] Note this is undoubtedly too low
figure for the return from bailiff activities because virtually all of the
capital represents investments in other businesses.

[9] Distress For
Rent Rules 1998 rule 8 States Complaints as to
fitness to hold a certificate

(1) Any complaint as to the conduct or fitness of any bailiff who
holds a certificate shall be made to the court from which the certificate
issued.

(2) Upon receipt of any such complaint as is referred to in
paragraph (1), the proper officer shall send written details of the complaint
to the bailiff and require him to deliver a written reply to the court office
within 14 days thereafter or within such longer time as the court may specify.

(3) If the bailiff fails to deliver the reply within the time
specified, or if upon reading the reply the Judge is unsatisfied as to the
bailiff's fitness to hold a certificate, the proper officer
shall issue a notice summoning the bailiff to appear before the Judge on a
specified date and show cause why his certificate should not be cancelled.

(4) The proper officer shall send a copy of the notice to the
complainant and any other interested party.

(5) At the hearing:—
(i) the
bailiff shall attend for examination and may make representations, and
(ii) the
complainant may attend and make representations.
(6) The procedure to be followed at the hearing,
including the calling of evidence, shall be such as the Judge considers just,
and he may proceed with the hearing notwithstanding that the bailiff has failed
to attend).

[10] The Distress For
Rent Rules 1998 rule 11 states:-

(1) In
the case of any difference as to fees, charges and expenses between any of the
parties, the fees, charges and expenses shall upon application be taxed by the
Registrar of the county court of the district where the is distress is
levied, and he may make such order as he thinks fit as to the costs of the
taxation.

(2) Where
the court in which the taxation is conducted is not the court in which the
bailiff was granted his certificate and the Registrar is of opinion on the
taxation that there has been overcharging of such magnitude as to call into
question the fitness of a bailiff to hold a certificate, the proper officer
shall send to the court in which the bailiff was granted his certificate a copy
of the taxed bill endorsed with a note of the Registrar's opinion.

(3) The
receipt of a bill under paragraph (2), shall be treated as a complaint under Rule 8

Published on: 2005-10-22 (19965 reads)

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