Government announces enforcement sector consultation

The Government has announced in a Written Ministerial Statement that the Ministry of Justice will be consulting on how to implement regulation of the enforcement sector.

The Government says the review will aim to increase protections for those facing debt enforcement action and raise fees recoverable by bailiff firms. Setting out plans to overhaul to the way sector operates, the Government says it will consult on plans for greater regulation of bailiff firms, including oversight from an independent body accountable to Parliament. It will also. encourage earlier and cheaper settlement of debt, reducing the number of “doorstep visits” and avoiding the accumulation of enforcement fees.

The Government says it will increase fees bailiff firms can collect for the first time since 2014 to ensure a sustainable sector while better supporting people in debt. The threshold which bailiff firms can charge an additional fee will also be raised to reduce the number of people in debt paying this additional fee.

Minister of State for Courts and Legal Services Minister Sackman, said “Debt recovery must be fair to everyone. If you’re an organisation or individual who is owed money you should be able to get it back. And if you fall into debt you should be treated fairly and supported to get back on your feet.

“That is why we are reforming the enforcement sector – to safeguard debtors and creditors alike whilst building a more sustainable system.”

The consultation will also seeks views on the role an independent statutory regulator should play in enforcement. This includes how the regulator could work with other regulatory bodies, and how it would be held to account by the Government.

While most bailiff firms have already signed up to the Enforcement Conduct Board’s voluntary accreditation scheme, the government proposals would see all bailiff firms regulated to the same standards and overseen by the same independent body, ensuring greater protections for vulnerable people.

To reduce the number of doorstep visits and help prevent people from falling into more debt through accrued enforcement fees, reforms will increase the minimum notice period which must be given before enforcement officers can visit those in debt to 14 days (from seven) – and to 28 days if requested by a debt advisor.

This will give people more time to access debt advice, and/or set up a payment agreement.

To support a fair, viable, and effective enforcement system, the fees bailiff firms can collect from those facing action will be uplifted by 5%. This is the first fee increase since 2014 and reflects the impact of rising costs on bailiff firms. To protect the interests of financially vulnerable individual, it will be made clear that creditors should not share the profits made from the use of bailiff firms and the charging of fees.

Minister of State for Local Government and English Devolution, Jim McMahon OBE said “These reforms will help make sure those facing the enforcement system are properly protected and supported in dealing with their debts – and we won’t just stop here.

“We will shortly be consulting on improvements to council tax administration including the way council tax is collected and enforced, so people can have their say in delivering a fairer system to support both vulnerable households and local councils.”

Vikki Brownridge, Chief Executive Officer at StepChange, said “The Government’s announcement that it will consult on how to regulate the bailiff industry is a welcome step forward following over a decade of StepChange advocacy and campaigning work. Whilst the voluntary Enforcement Conduct Board has made progress in this area, we continue to call for it to be placed on a statutory footing by the Ministry of Justice.

“We are ready to use our insight from supporting people through debt advice and financial difficulty over the last three decades to work with the Government and enforcement sector to ensure that the consultation, and crucially, implementation of statutory regulation of the bailiff industry is a success, ensuring an effective and proportionate regulator.”

The Civil Enforcement Association (CIVEA) has welcomed the government’s decision to increase the fees businesses in the sector can recover from those facing enforcement.

Responding to the Justice Secretary’s announcement that the enforcement fee is to be uplifted and further reforms implemented, Russell Hamblin-Boone, Chief Executive of CIVEA, said “This is the first time in 12 years that enforcement fees have been reviewed. While it does not reflect the huge amount our industry has invested in leading edge technology, it does help us to continue to responsibly recover over £1 billion pounds a year from those who seek to evade payment of taxes and fines, while supporting vulnerable people who struggle to pay. The money recovered on behalf of our councils is vital in providing the essential public services we all benefit from, such as libraries, swimming pools, parks, schools, community halls and leisure centres.

“Our industry established and funded the Enforcement Conduct Board, which since 1 January has provided independent oversight of our work and adjudication of complaints. We do not oppose statutory regulation, but there is not yet sufficient evidence of its effectiveness so it is too early to make a decision on its legislative status.

“We will continue our work with the government to lead reform and we hope to see an inflation-based review mechanism to ensure that the statutory fees are revised on a regular basis in future.”

Alan J. Smith, Chair of the High Court Enforcement Officers Association (HCEOA), said “We welcome the Government’s update on enforcement fees, which brings much-needed clarity to an area that has seen little progress in recent years. We would, however, also like to see a stronger commitment to more frequent fee reviews moving forward.

“The Association remains dedicated to supporting a fair, effective, and accountable enforcement system, and sees this consultation as a crucial opportunity to ensure the regulatory framework reflects the needs of all stakeholders, including creditors, debtors, enforcement professionals, and the wider public. We will also be engaging directly with the Ministry of Justice regarding the Government’s response to the 2023 consultation to provide feedback on its proposals to help ensure they are as effective as possible.”