Discussion on Payment direct to Council vs paying the bailiff fees

[Jim Bowen]

Re: Default Notice of immobilisation sticker but no clamp?

It would help visitors if you would provide a link to both sections. I will then gladly assist you with my interpretation.

PS: I'm on a train at the moment and having to rely upon my mobile phone.

Schedule 12:

1(1) Using the procedure in this Schedule to recover a sum means taking control of goods and selling them to recover that sum in accordance with this Schedule and regulations under it.

(2 )In this Schedule a power to use the procedure to recover a particular sum is called an “enforcement power”.

http://www.legislation.gov.uk/ukpga/2007/15/schedule/12

__________________________________________________ _____________

Tribunals, Courts and Enforcement Act 2007

62 Enforcement by taking control of goods

(1) Schedule 12 applies where an enactment, writ or warrant confers power to use the procedure in that Schedule (taking control of goods and selling them to recover a sum of money).

(2) The power conferred by a writ or warrant of control to recover a sum of money, and any power conferred by a writ or warrant of possession or delivery to take control of goods and sell them to recover a sum of money, is exercisable only by using that procedure.

http://www.legislation.gov.uk/ukpga/2007/15/section/62

[Milo]

Re: Default Notice of immobilisation sticker but no clamp?

A copy and paste from NE Derbs - long one:

Clearly the accurate response from North East Derby has been influenced by an article written in a media publication by a senior member of the enforcement industry. The article appears to have been written in response to your many FOI requests.

I have permission to post the full article here:

Who is entitled to “Direct Payments”?

This might seem an odd question, but it is topical one as a large number of Local Authorities have received FOI requests challenging their authority to pay the sums received by them directly, to the Enforcement Agent who is executing an enforcement power on their behalf. This principally refers to Council Tax recovery.

The payments that are being discussed have been made to the LA as a consequence of actions taken by the enforcement contractor and those payments are made under the compulsion of the enforcement power – without the actions of the EA no payment would have been made.

Those who are challenging an LA’s duty to account to the EA for these payments are not motivated by any sense of CIVIC duty, rather they are simply trying to frustrate the collection of local taxes. These ‘activists’ would perhaps be more gainfully employed utilising their time and energy to help individuals address the root cause of their indebtedness.

I am sure that no LA officers have any sympathy with the arguments being advanced, but anyone tempted to use this challenge or any other proposition, such as accounting rules, as a reason to retain payments without the required distribution, should remember that one of Governments principal aims for the reforms was the creation of a sustainable fee structure for enforcement businesses. If that fee structure is undermined Government will be forced to revert to its initial position that creditors should be responsible for funding the compliance fee in unsuccessful cases – a principal that was introduced for High Court Enforcement.

In regard to the FOI requests and the challenge to the principle that an LA must account for a direct payment, it is clear that where an enforcement power confers a right to take control of goods and sell them to recover a sum of money, then the enforcement must be conducted in accordance with the procedure in schedule 12 Tribunals, Courts and Enforcement Act 2007 and the TCE regulations.

Paragraph 1(2) of schedule 12 defines an “enforcement power” as a power to use the procedure in schedule 12 to recover a particular sum. The definition is wider than the physical taking control of goods.

The TCE enforcement regime requires a Notice of Enforcement to be issued as the first stage in the enforcement process, prior to goods being taken into control, subject to an exception where a court order has been obtained. This “compliance stage” is therefore an integral part of the TCE enforcement “procedure”.
It is therefore not necessary for goods to be taken into control for the provisions of the TCE to apply and this includes with regard to the distribution of monies.

The “amount outstanding” is defined at paragraph 50(3) of schedule 12 as the sum of:

The amount of the debt which remains unpaid;

Any amounts recoverable out of proceeds in accordance with regulations under paragraph 62 (costs)

The proceeds from the exercise of an enforcement power must be used to pay the amount outstanding: paragraph 50 (1).

Proceeds are defined as any of -

Proceeds of sale or disposal of controlled goods

Money taken in exercise of the power.

The compliance stage fee is, in accordance with regulation 5 (1) (a) of the TCOG (Fees) Regulations 2014, due and payable from receipt by the EA of the instruction to use the schedule 12 procedure. Therefore, from the point in time when the EA receives the instruction, the sum required to settle the liability includes the appropriate fee.

Money paid to a client following the issue of an instruction to an Enforcement Agent, is clearly money paid, and taken, under compulsion of the Enforcement Power and accordingly any such payment is subject to the TCE procedures.

The distribution of funds where an amount less than the full sum outstanding is paid is governed by regulation 13 of the TCOG (fees) regulations and where relevant to a direct payment, this regulation directs that the payment should be allocated in the following order, compliance fee and then pro rata in payment of the debt and fees.

The explanatory note to the TCOG (fees) regulation explains regulations 13 as follows,

“Regulation 13 provides for the order of application of proceeds where the amount recovered is less than the amount outstanding. Any fees and expenses owed to an auctioneer, and the compliance stage fee for the enforcement agent are prioritised, with the remaining proceeds being divided pro rata between the debt and payment of the remaining fees and disbursements due to the enforcement agent”

The provisions of the TCE stipulate that the fees are due to the Enforcement Agent and also direct how any payments must be allocated, with priority being given to the payment of the compliance stage fee in its entirety , with a pro rata distribution thereafter. This gives effect to the central policy aim of creating a sustainable fee structure.

As detailed above, an Enforcement Agent is entitled to the compliance stage fee upon receipt of the instruction and accordingly any payment made after this date must in accordance with the provisions of the TCE be allocated firstly against the relevant fee, regardless of whether an EA has attended and taken control of goods, as the procedure in schedule 12 commences upon receipt of the instruction and the issue of a Notice of Enforcement.

The statutory rules governing the distribution of money taken in exercise of the power apply to whoever a payment is made to. Money “taken in exercise of the power” includes any payment made by or on behalf of the debtor.

I would submit that there is no exception that would allow a client to deal with a direct payment other than in accordance with the rules detailed within the TCE and the above regulations.

[Amethyst]

Re: Default Notice of immobilisation sticker but no clamp?

Might be better to post the source link - http://dukescouncil.co.uk/wp-content...ews-Spring.pdf ( page 8 & 9) dated Spring 2015 by Paul Caddy, Phoenix Commercial Collections.

So .....

Perhaps we could get back to some practical advice for the poster?

[ploddertom]

Re: Default Notice of immobilisation sticker but no clamp?

Can this thread be split as it is not helping the OP with their problems.

[Jim Bowen]

Re: Default Notice of immobilisation sticker but no clamp?

The article appears to have been written in response to your many FOI requests.

I'm afraid not Milo. In my original FoIs in 2015 several were actually quoting from Paul Caddy's article, word for word. In fact I believe he may have written that interpretation in late 2014.

As you know, the split at the time between those that did pass on fees and those that did not was about 20/80. They were relying on the interpretation (for that is what it is) of a Director of a bailiff company - clearly he wouldn't have a vested interest in interpreting it that way.

However, I asked for your interpretation of the first section of schedule 12 - you have yet to provide it, depsite assuring us that you were not avoiding answering it.

Interestingly, as I said the split was 20/80 early last year - of the 20 recent ones, 4 have said they will pass on fees. That is still a 20/80 split.

[Jim Bowen]

Re: Default Notice of immobilisation sticker but no clamp?

Oh dear, it seems I must have done 21 FoI's as I've just had a late response from Brighton & Hove.

FOI7023: RESPONSE PROVIDED

Good morning

Further to your email with query. The department have responded to say:

“We do not pass the payment to the company, they will reduce the amount payable when we inform them, so if the whole debt is paid, that would just leave the costs.”

Thank you.


Wendy Kassamani| Information Governance Officer (Information Governance Team) | 4th Floor | Bartholomew House | Bartholomew Square| Brighton | BN1 1JE | Tel: 01273 296636 | Information Security: x5959 |Email:

[Jim Bowen]

Re: Default Notice of immobilisation sticker but no clamp?

To me it's clear - an EA can only collect his fees from the proceeds of what he's recovered in using the schedule 12 procedure. A direct payment has simply not been recovered using the procedure.

This is not to say the fees are not due, and this has never been the argument. The fees are due - but they cannot be taken from a payment made direct to a creditor; legislation simply doesn't allow for it.

[Fred Astaire]

Re: Default Notice of immobilisation sticker but no clamp?

I agree with you Jim.

Paragraph 50(3) of the schedule is perfectly clear.

I'd still like to see why Milo disagrees with it.

[Milo]

Re: Default Notice of immobilisation sticker but no clamp?

Sending Freedom of Information requests to local authorities in order to try to see which one of them may or may not be dealing with 'direct' payments in accordance with legislation. As strange as it may be, the responses are far better than I would have anticipated.

Of far more importance is that of the almost 2 million council tax cases that are administered by enforcement agents, only a very small proportion of debtors pay the council instead of the enforcement company. You appear to be trying to create controversy where in fact....none really exist.

Posts on another forum. The following is from the poster Mark1960 (Tuco);

"Jason-I know all that rubbish he has posted originates from you. I just put it down to yet more incorrect information that you hadn't yet removed from the site.

The paying creditors directly is a very dangerous game. We've already seen EVERY single court fine that you & others have advised to pay direct, come back and bite the debtor on the bum. The Cam case over council tax all kicked off AFTER he had paid the original debt.

One argument regarding money paid direct is one that we see Peter posting on a weekly basis. It is a valid argument and should not be ignored. He claims that once fees are added, they become part of the amount outstanding.

Where there is a little grace is that councils are not dividing direct payments pro-rata. What I envisage happening is that they will simply tell debtors that they are. Once this happens, an amount will always remain outstanding.

Mark1960 (Tuco) then refers to an email that he sent to a local authority. This was their reply:

Our understanding is that Regulation 13 (of The Taking Control of Goods (Fees) Regulations 2014) clearly provides for the distribution of funds received where less than the full amount is paid.

Regulation 13(1) refers to ‘the proceeds from the exercise of an enforcement power’. We do not agree that Regulation 13 has the very narrow meaning so as only to affect the distribution of funds raised by sale of goods at public auction.


The regulation clearly provides for auctioneers fees (where incurred) to be paid first, followed by the compliance fee and then by a pro-rata split of the remaining proceeds between the sum due to be recovered and any other fees incurred by the enforcement agent.

To treat a payment made directly to the Council by a debtor any differently to a payment made directly to the enforcement agent would, in our view, be acting against the statutory rules.

Mark1960 concluded by stating this:

I have no doubt in my mind that the intention was for fees to become payable once bailiffs are engaged.

We can argue the case for paying directly, using reg 13 but debtors need to be aware that paying direct MIGHT not stop enforcement. There have been no test cases either way as yet.

The advice should always be to those who want to avoid fees is to not pay a penny-Stick it in an ISA & wait for the debt to be returned"

[Jim Bowen]

Re: Default Notice of immobilisation sticker but no clamp?

That's all very nice Milo. It doesn't detract from this post five days ago from you though:

It would help visitors if you would provide a link to both sections. I will then gladly assist you with my interpretation.

Still we wait.

[Jim Bowen]

Re: Default Notice of immobilisation sticker but no clamp?

To refresh the memory, here are the two sections of legislation that I asked Milo for their interpretation:

Schedule 12:

1(1) Using the procedure in this Schedule to recover a sum means taking control of goods and selling them to recover that sum in accordance with this Schedule and regulations under it.

(2 )In this Schedule a power to use the procedure to recover a particular sum is called an “enforcement power”.

http://www.legislation.gov.uk/ukpga/2007/15/schedule/12

__________________________________________________ _____________

Tribunals, Courts and Enforcement Act 2007

62 Enforcement by taking control of goods

(1) Schedule 12 applies where an enactment, writ or warrant confers power to use the procedure in that Schedule (taking control of goods and selling them to recover a sum of money).

(2) The power conferred by a writ or warrant of control to recover a sum of money, and any power conferred by a writ or warrant of possession or delivery to take control of goods and sell them to recover a sum of money, is exercisable only by using that procedure.

http://www.legislation.gov.uk/ukpga/2007/15/section/62

This is what I say:

To me it's clear - an EA can only collect his fees from the proceeds of what he's recovered in using the schedule 12 procedure. A direct payment has simply not been recovered using the procedure.

This is not to say the fees are not due, and this has never been the argument. The fees are due - but they cannot be taken from a payment made direct to a creditor; legislation simply doesn't allow for it.

We await Milo's take.

[Jim Bowen]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Thank you for tidying up Ame.

[Amethyst]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

That's okay. I would prefer it not to be necessary of course.

[Amethyst]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Just so I'm clear exactly what you are arguing about ( to help with tidying up) the question is ( very basically) ' Do bailiffs have the right to continue enforcement for just their fees after the full debt has been been paid direct to the council' and so far the answer is ' Yes they have the right but tend not to ' ??? (or in any case there's been no case law to date as to whether they can continue enforcement for just their fees )

I think the question of do the councils pay the bailiffs enforcement fees out of direct payments made to them for the debt was sorted out ages ago and the answer was no, the council keeps the money and tells the bailiffs the debt has been paid, so the bailiff is left just collecting its fee from the debtor.

[Jim Bowen]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

I think the question of do the councils pay the bailiffs enforcement fees out of direct payments made to them for the debt was sorted out ages ago and the answer was no, the council keeps the money and tells the bailiffs the debt has been paid, so the bailiff is left just collecting its fee from the debtor.

Well, that's what I say, but Milo insists this is not the case and that 'nearly all' councils are passing on direct payments to EAs. My FoIs are showing this is simply untrue.

I've asked Milo to interpret those 2 parts of the legislation - an EA must use schedule 12 to enforce a debt; this schedule quite clearly says that means taking and selling the debtor's goods. The EA then collects his fees from the proceeds of doing that. Direct payments have not been collected using the schedule 12 procedure so cannot be deemed proceeds.