Credit, Collections & Insolvency News
The UK’s two leading enforcement association trade bodies the Civil Enforcement Association (CIVEA) and the High Court Enforcement Officers Association (HCOEA) and Just have welcomed the High Court judgment on non-entry Controlled Goods Agreements.
CIVEA, the HCEOA and Just have issued this joint statement which also invites the Ministry of Justice (MoJ) to review the judgment and, if appropriate, provide further guidance and/or amendments to the regulations.
The Taking Control of Goods Regulations, which came into force in 2014, set out the statutory code for any enforcement agent to take control of goods via a Controlled Goods Agreement (CGA) in order to avoid those goods being removed and sold whilst payments are made under the terms of the CGA.
The regulations currently say that a visit needs to take place before goods can be taken into control, but do not specify whether this has to be a physical visit.
The judgment today gives clarity on this matter saying “an enforcement agent may enter into a controlled goods agreement within the meaning of Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 with a debtor whether or not the enforcement agent has physically entered the premises on which the goods are located.”
The concept of remote contact is not new and CIVEA and HCEOA members already use multi-channel engagement tools as part of the compliance stage without applying additional fees
Russell Hamblin-Boone, Chief Executive of CIVEA, Andrew Wilson, Chairman of the HCEOA, and Nick Georgiades, Managing Director of Just said “We’re pleased the courts have reached this judgment on non-entry Controlled Goods Agreements. This is good news for creditors, debtors, members of both associations and Just as it was important to bring much needed clarity in this area of enforcement. The judgment was the appropriate procedure to follow before any new and untested practices are introduced for the enforcement of court orders and warrants.”
“Following this judgment, we invite the MoJ to review the judgment, and, if appropriate, provide statutory guidance on the processes to be followed if re-entry is required and any fees which might be applied. Whilst we recognise that members of the associations and Just will be well placed to conduct non-entry CGA’s with appropriate caution, we would like to safeguard the process from others who may not be so diligent. The two associations and Just have offered to assist the MoJ in completing this work, should it be appropriate.”
“The MoJ might also provide guidance on the compliance stage of enforcement process for high court writs, so that it is not undermined by this decision responding specifically to the claim by some high court enforcement officers that they are unable to enter payment arrangements during the compliance stage, due to the wording of the command on the writ.”
The trade associations and Just believe that clarity in this area would be useful for debtors and enforcement agents as the different stages of enforcement are closely linked to specific fee scales which set out the fees that enforcement agents may charge.
Responding to the announcement enforcement specialist Court Enforcement Services issued a statement “The (Tribunals Courts and Enforcement Act) regulations were drafted at a time when most of the current video technologies and applications such as Zoom, Teams and Skype had not yet been developed and so the option was not envisaged, anticipated or available at that time. In view of this, there was nothing in the regulations to say that visits by way of video calls could or could not be undertaken.”
“The regulations already provide the ability to enter into a payment arrangement in the compliance period, without the need for a visit or CGA, so we cannot see the benefit of requesting that a debtor go through the intrusive process of allowing a visit via video call to walk an Enforcement Agent around their house, when they have already engaged to agree settlement and a creditor has agreed to payment arrangements during an extended compliance period.
“We believe that fair communications are central to an effective enforcement process. We are proud that we successfully engage with 39% of our debtors during the compliance stage and we agree successful arrangements with 29% of cases that are fully paid during the compliance stage. There is no requirement for us to take control of goods in the compliance phase as we have agreements in place with our clients. We have been following this approach for the last 6 years. Our approach results in a lighter touch and delivers a fair resolution for both our clients and our debtors.”
“We also believe a video call can be more intrusive than a telephone call or visit and think that debtors may have understandable privacy concerns and prefer not to show themselves, but it can be an option for those that are happy to communicate in that way.”
“Despite this decision, we believe that this proposal requires clarifications from the Ministry of Justice, which we would need to have before we could consider taking control of goods by way of a video call.”
“In situations where we are unable to secure payment or an agreed payment arrangement during the compliance phase, we believe that it is necessary to visit the debtor’s residence or business location to secure engagement and, in these situations, it is most appropriate to conduct a personal visit and physically take control of goods if required.”
“Due to our highly successful compliance-based collections process, this decision will not affect our approach, which means it is business as usual at Court Enforcement Services, until such time as clarity is provided in the form of updated regulations on the conduct of such a visit and any fees that could be charged.”
“In any event, we believe it is highly unlikely that our clients would want us to use video calls to take control of goods as the feedback and opposition received from CCUA members suggests that they do not require this additional process.”
“We fully appreciate the importance of protecting our client’s brand and reputation and our duty of care in all our engagements. Despite the pandemic, national lockdown and restrictions on physical enforcement activity, we have still seen an increase of three percent more writs paid in full compared to the same period last year and this has been achieved without having to enter the debtor’s premises.”