Lovetts publishes guide to ‘bailiff and enforcement’ regulations
Helping businesses prepare for a major change in bailiff and enforcement regulations coming this April, Lovetts Plc, the debt recovery law firm has created a 10 point guide on the new regime.
The guide is accessible from the Knowledge Base section of the Lovetts website.
On 6th April 2014, the long-awaited reforms to the ‘bailiff and enforcement’ regulations and costs become Law.The new law deals with when a debtor’s premises can be entered and what goods can be taken or not taken. It also covers how a repayment scheme can be made; and how goods can be sold if the debt remains unpaid.
Charles Wilson, CEO of Lovetts, comments “Currently, the law and cost structure relating to the seizure and sale of goods is complex, unclear and confusing. This has resulted in a small but well publicised number of cases where debtors became victims of bailiffs using poor practice to seize goods.
“The new regulations are welcome in that they set out the procedure that enforcement agents acting on behalf of trade credit managers must follow, when taking control of customers’ goods and also makes provisions for ‘vulnerable’ debtors, bringing some clarity to an area that has been overly complicated. It should certainly smooth the process of levying execution of goods for Trade Credit Managers.
Lovetts’ Top 10 Highlights of the New Taking Control of Goods Regulations 2013 [SI 2013 No. 1894]
- The existing law is very historic, and contains many anomalies on practice and fee- charging. It clearly needed modernisation.
- The new law deals with when a debtor’s premises can be entered; what goods can be taken, or not taken; how a repayment scheme can be made; and how goods can be sold if the debt remains unpaid.
- It makes special provisions for ‘vulnerable’ debtors to give them more time to get help.
- Certain goods belonging to a debtor are exempt. This is not new, just updated. They now include basic things like a cooker, fridge, washing machine, medical aids, etc, but also office equipment for the debtor’s personal business such as computers, tools, phones – even vehicles – as long as they don’t exceed a value of £1,350. Above that sum they may be subject to ‘taking control’.
- The enforcement agent must give 7 clear days’ notice of his intention to take control of the debtor’s goods. (The Court can order a shorter period on application by the creditor if it thinks the goods might be removed or disposed of before the enforcer can take control).
- The notice can be given by almost any means, including electronic communication (email, text, fax).
- Children and vulnerable people get special protection.
- Taking control must occur within 12 months of the Notice to take control.
- A controlled goods agreement may be made with the debtor. This means the costs are limited (unless he breaches the agreement).
- There are many detailed regulations relating to taking control of goods on a highway (vehicles, mainly), rights of entry to premises, removal for sale, etc.
As part of the reforms, the fees for when a High Court Enforcement officer attends the debtor’s premises, and secures a ‘controlled goods agreement’ with the debtor, have been clarified.
Charles Wilson concludes: “We hope our top 10 highlights will help trade credit professionals understand what the changes mean for them and their clients. With 3 months to go, there is time to prepare and ensure businesses, where necessary, can take advantage of these new rules to recover unpaid debts.”If a second visit is required, then the fees increase with a heftier fixed fee, but no increase in the percentage. The Enforcement Officer may also recover certain disbursements properly incurred and considerably more fees if the goods have to be sold. It now incentivises the debtor to pay as early as possible.