Council Tax Liability Order Applications Court Costs – Test Case

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Thanks for the link.

I remember another article (related) at around the same time in the Telegraph. I had a search and think this is the one:

How bailiffs reap the fraudulent rewards of their 'phantom visits'

[Smiffy]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Have been following this thread and just joined as a result

Inspiring stuff!

Not sure if its been seen but here's a link which may be of interest - £1.22 for a final reminder and £80 for the next 2 documents

http://www.telegraph.co.uk/comment/c...on-a-year.html

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

It doesn't take much to arrive at the conclusion that these conveyor belt style prosecutions function as a financial prop to the justice service which the government it seems aims to supply self financing to UK citizens.

If the only way to dispute the bench's decision and get a second opinion is for a defendant to risk his home in what is the casino of civil litigation, the government must feel pretty confident that the £millions in court fees it receives each year from local authorities paying application fees is safe.

In the case of the "magistrates courts capacity to scrutinise costs", there is possibly a case to argue, but when magistrates' courts don't question how they've been determined and the effects of benefit reforms highlights such disproportionate costs, there are serious issues which need addressing.

[three rivers of corruption]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Keep up the good work outlawlgo.
As you point out the central issue is a failing of the magistrates courts in their duties.
You could argue that the magistrates courts capacity to scrutinise costs is probably limited , particularly with as complicated a case as council tax summonses. With a nationwide issue like council tax enforcement , the widespread abuse of the costs by local authorities and the public interest at stake, you would think that somebody in authority would step in and dictate a fair figure , because the system at present is clearly not acting in the best interest of the people or the reputation of the court system.
It is quite bizarre that the only way to get the costs scrutinised is to go through the rigmarole you are , whereas , if the magistrates courts were acting legitimately, it would be done as a matter of routine.

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

bizzybob, You're right. That's probably behind why the Magistrates' court has, so far, dragged the procedure out to state a case for the opinion of the High Court for almost a year now.According to the Criminal Procedure Rules, 64.3(7), the court should have delivered the signed case around three weeks ago. It would serve no useful purpose contacting the court to enquire why it hasn't conformed with the procedure rules as it ignores any correspondence.

[bizzybob]

Re: Council Tax Liability Order Applications Court Costs – Test Case

If these were companies raising revenue unlawfully it would be regarded as fraud, these councils should be spanked hard for these interpretations, on what can only be interpreted as a break even scenario

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Council Tax prosecutions hit new high as benefit reforms take hold

Controversial reforms to the benefit system have highlighted, inadvertently of course, local authorities inappropriately generating income from enforcing council tax to meet expenditure in its general administration.

It comes in the light of the High Court ruling against Barnet Borough Council which had budgeted for a surplus of income from residential parking schemes to be used to meet other transport expenditure. There are similarities between this and how councils use income generated from court penalties to pay for administering Council Tax.

A recent decision by Solihull Borough Council had been to increase court costs for householders struggling to meet Council Tax payments. The West Midland's Council admitted to income from court costs going "directly to the council and is used to support the costs of collection of Council Tax". Reasons for recommending the increase – the report to the Council's leader explained – had been that there would be additional income for this purpose. Coincidentally, in terms of disposable income (disregarding oddments) the revised penalty equalled the weekly allowance to which a jobseeker aged 25 or older is entitled (£71.70).

The City of Westminster Council took its admission a stage further by openly stating in the financial summary to a cabinet report that it was "estimated that the proposed increase in court costs [would] generate approximately £320,000 additional revenue in a full financial year" which was £200,000 in excess of the annual budget.

The approach varies on a theme, for example some authorities view setting the penalty at a level that not only enables funding other services, but serves to influence behaviour as Haringey clarified in its scrutiny panel review of income collection – "The Review Panel found that other councils had obtained agreement to raise Court Costs recharged to non-payers by a significant level. This charge is intended to act as a deterrent to both late and non-payers".

Coming into force earlier this year, regulations including changes to the way Council Tax benefit is administered and the under-occupancy penalty (the 'bedroom tax') have predictably seen numbers unable to meet council tax payments escalate, leaving councils little option than to seek court orders to enforce payment, adding court costs and often bailiff fees to the debt.

Already the subject of multiple applications for judicial review, the 'bedroom tax' reduces housing benefit if a rented dwelling is considered under occupied. Entitlement is cut by 14% for Council or housing association tenants with one extra bedroom, if two or more are spare, this rises to 25%. Add to this claimants previously exempt from paying Council Tax will now in most cases pay between 5 and 30% – a measure taken to combat central government reducing available budgets by 10%, implemented simultaneously to responsibility being shifted to local authorities to set their own criteria for assessing claims.

Both described benefits have already been subjected to means testing and deemed by the government to be the minimum amount necessary to get by frugally, but new reform measures are taking benefits below that level. Hardly surprising then are reports of prosecutions soaring for non-payment of council tax with Magistrates' courts unable to cope with extra demands.

What this highlights, is that already disproportionately high court applications for non-payment of council tax are increasing to unprecedented levels and if Magistrates continue awarding unrevised costs in respect of each individual, local authorities will almost certainly be benefiting from inappropriate profit. With this in mind, it's feasible an appeal would have merit if put before the High Court with similar grounds of appeal to the case in which Barnet Council were ruled to have raised revenue by improperly operating parking schemes.

Data obtained from Leeds City Council reveals that despite the reforms drastically increasing prosecutions, the authority continued applying £70 costs for each account summonsed with further £20 on the court granting an order. In terms of income, according to figures disclosed, costs raised between July and September in 2012, compare with the same period in 2013 at £0.76 million and £1.263 million respectively. If like the law dictates, costs were in line with expenditure "reasonably incurred" before benefit changes, then the majority of the revenue raised above this must be considered improper gains if the half million pounds surplus goes to fund Council Tax administration.

In the same vein, corresponding data was obtained from North East Lincolnshire Council, though unlike Leeds which charge summons and liability order costs in line with the law, only a single inflated penalty is impose. In a 2011 review, NELC made the decision to front load liability order costs to the summons having the overnight effect of increasing the penalty by 120%. It appeared the council had been given free rein by the Magistrates' court to set its own levels which when applied for at the hearing would be granted by the bench with no questions.

Similarly to Leeds, NELC continued applying the same costs on issuing summonses. Presumably because of differences in administration, the effects of the reforms were apparent sooner so the comparison made between the two years for the months May to August. In 2012, costs raised in that period were a third of a million pounds, whilst for the same months subsequent to the reforms the figure increased by 67% to over half a million.

Measures to increase revenue through court costs were taken before the reform's effects which like Leeds, have added substantially to NELC costs raised because of the staggering volume of new business put through court. If applications maintain a level 67% higher than before reforms, the projected costs raised over a year would be £1.36 million, which compares with before the 2011 review at £0.575m. Viewed another way, the council must have satisfied the court that it had incurred 137% more expenditure, with the bench awarding these levels without so much as flinching.

Magistrates' courts must be held to account for allowing the situation because although councils may notify the court of the costs they will apply for, it doesn't mean they're agreed in advance. When making an order for costs, the court must be satisfied that the sum it orders has been reasonably incurred by the council. Notifying the Court merely makes it aware of the level of costs that the Council would request at the hearing. The power therefore, as to whether costs are awarded and to the level, is always the Courts.

Assuming, before benefit reforms, costs truly reflected expenditure reasonably incurred by the two authorities, these would need revising to much lower levels in order to: a) be within the law with regards council tax regulations; and: b) ensure a surplus was not being used to fund the collection of Council Tax. Balancing increased revenue by offsetting a realistic amount of additional costs; calculations returned for Leeds a combined Summons and Liability Order penalty of £56 where currently this is £90, whilst NELC's £70 single cost would need trimming by 37% to around £44.

This of course is speculating that no surplus existed before. The need for guesswork would be lessened if like the Government advises, Local Authorities were to provide breakdowns showing how their costs are calculated.

This would prove difficult largely because they attribute substantial expenditure to monitoring accounts in the run up to issuing summonses. The process is automated so any correspondence the defendant receives in connection with the authority's application to the Magistrates' court will have been generated entirely as a consequence of parameters set on the council tax software package.

North East Lincolnshire Council states it has a £10 minimum amount that customers will be summonsed for because a parameter is set for that amount in its council tax system. Evidence that the procedure is automated is supported in the response to a freedom of information request which revealed NELC issued 82 court orders for debt of less than £10 between 2006 and 2011 including 45 for debt less than £5 and three for just one penny.

Reference to parking appeal: Attfield, R (on the application of) v London Borough of Barnet [2013] EWHC 2089 (Admin) (22 July 2013)

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

North East Lincolnshire Council as "interested party" to the Judicial Review claim (defendant to Case stated) has made representations.

The auditor's response will be interesting (see link in comments)

From: NELC (Gov Connect)
To: All parties
Sent: September 09, 2013
Subject: xxxxxx and Grimsby Magistrates and North East Lincs Council CO Ref: CO7281/2013

Dear Sir/Madam

I have been instructed to forward to you the attached comments, received from our Local Taxation and Benefits Service in respect of this matter.

Assistant Legal Officer, Resources - Legal, North East Lincolnshire Council

North East Lincolnshire council Liability order costs

North East Lincolnshire council(NELC), an interested party in this action, fully supports HMCTS submission. The costs are raised under the Local Government finance Act 1992 which allows for costs reasonably incurred by the applicant billing authority in obtaining that order.

NELC is currently in talks with the district auditor to justify the reasonable level of costs that it incurs in bringing cases to liability order. NELC contends that £70 is a reasonable figure to cover the expense of brining an account to court for a liability order. The figure is in line with other local authorities in the area and lower than many Nationally. The Grimsby Magistrates Court has also agreed that these costs are reasonable given the work required to obtain a Liability order.

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

The appellant's notice (form N161) along with supporting documents require lodging with the appeal court within 10 days of the Magistrates' court serving the Case stated.

There's likely to be a hitch as the relevant Civil Procedure Rules Practice Direction 52E (appeals by way of case stated) stipulates that among other papers, the appellant must lodge the stated case and a copy of the judgment, order or decision in respect of which the case has been stated which means the council tax liability order. How it's going to be possible to lodge a liability order sealed by the court when one was never served I don't know.

A request was made to the Justices' Clerk for a copy to be sent of the liability order, stamped by the court, for the purposes of complying with the Civil Procedure Rules. As normal, the correspondence went completely ignored, not even an acknowledgement.

Not forgetting the claim for mandatory order.....this is the latest:

"
In the High Court of Justice
Queen's Bench Division
Administrative Court Leeds

In the matter of an application for Judicial Review

The Queen on the application of xxxxx xxxxxx

Versus

GRIMSBY MAGISTRATES’ COURT (Defendant)
NORTH EAST LINCOLNSHIRE COUNCIL (Interested Party)

On the application by the claimant for judicial review

Following consideration of the documents lodged by the parties

Order by His Honour Judge xxxx xxxxx QC sitting as a judge of the High Court

The defendant undertook to serve a draft of a Case stated on the claimant within 14 days of the Acknowledgement of service (8 Jul 13). It is noted the claimant asked for a case stated by letter 29 Apr 13 under s 111 MCA 1980. The court would like to know what has happened. The fourteen days have now expired.

Reasons

As indicated



Signed 14 Aug 13
__________________________________________________ _________________________________________________
Sent to the claimant, defendant and any interested party / the claimants, defendants and any interested party's solicitors on (date): 03.09.13

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Justices' Clerk for Humber & South Yorkshire
Doncaster Magistrates Court
PO Box 49
The Law Courts
College Road
Doncaster DN1 3HT


19 August 2013


Dear Mrs .....


Re: North East Lincolnshire Council V ........

Grimsby and Cleethorpes Magistrates' Court - 2 November 2012
Application to State a Case

In accordance with Rule 77 (2) of the Magistrates' Courts Rules 1981, there is enclosed, representations made on the content of the draft case.

May I respectfully draw to your attention that in accordance with rule 78 of the Magistrates' Courts Rules 1981 you have within 21 days after the latest day on which representations may be made under rule 77 to state and sign the case.

Yours sincerely

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

......There is no "prescribed amount" in regulation 34(8) of the Council Tax Regulations.

http://www.legislation.gov.uk/uksi/1...lation/34/made


The regulation states "costs reasonably incurred". I understand prescribed to mean a specified sum, or could it also refer to an unspecified sum, albeit described as reasonable?

I'm not sure, it could be that Communities and Local Government minister, Baroness Hanham, has mislead councils when debating amendments to the Local Government Finance Bill in the House of Lords (ref: 24 July 2012 : Column GC283).

Baroness Hanham stated:

"....Under the Council Tax (Administration and Enforcement) Regulations 1992, bailiffs can be used to recover unpaid council tax-that is, levy distress-only where a magistrates' court has made a liability order. That was the point made by my noble friend Lord Lucas.

The local authority is allowed to apply for only reasonable costs, and those are capped at £70.....

In a FoI made on the "whatdotheyknow", platform to the Department of Communities and Local Government, it was confirmed that the court costs relate only to Wales, they are not relevant to England where there's no cap on reasonable costs.

The relevant amendment for Welsh Local Authorities is the Council Tax and Non-Domestic Rating (Amendment) (Wales) Regulations 2011

3.—(1) The Council Tax (Administration and Enforcement) Regulations 1992(1) are amended as follows.

(2) In regulation 34 (application for liability order)—

(a) in paragraph (7)(b), after “the order” insert “(which costs, including those of instituting the application under paragraph (2), are not to exceed the prescribed amount of £70)”; .

(b) in paragraph (8), after “the application” insert “(which costs, including those of instituting the application under paragraph (2), are not to exceed the prescribed amount of £70)”.

Which would then mean, only for Welsh councils, that Regulation 34(8) does have a prescribed amount capped at £70.

(8) Where the sum payable is paid after a liability order has been applied for under paragraph (2) but before it is made, the court shall nonetheless (if so requested by the billing authority) make the order in respect of a sum of an amount equal to the costs reasonably incurred by the authority in making the application (which costs, including those of instituting the application under paragraph (2), are not to exceed the prescribed amount of £70).

Re: Council Tax Liability Order Applications Court Costs – Test Case

I think they're trying to say they did not exceed any costs reasonably incurred. I believe they're lying, but that's what they're trying to claim.

[Ref]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Perhaps this has already been spotted.

DRAFT(Redacted pdf)

3. The following is a short statement of the representations made to us by the parties:-

a) The respondent stated that the amount of the claim for costs was the same as that sought in all similar proceedings commenced by the respondent, a sum which had previously been notified to the Grimsby and Cleethorpes Magistrates' Court under cover of correspondence dated 4 March 2011 for cases arising on or after 1 April 2011.

b) The level of costs sought by the respondent did not exceed the prescribed amount described in regulation 34(8) of the Council Tax (Administration and Enforcement) Regulations 1992.

There is no "prescribed amount" in regulation 34(8) of the Council Tax Regulations.

http://www.legislation.gov.uk/uksi/1...lation/34/made

(8) Where the sum payable is paid after a liability order has been applied for under paragraph (2) but before it is made, the court shall nonetheless (if so requested by the billing authority) make the order in respect of a sum of an amount equal to the costs reasonably incurred by the authority in making the application.

The regulation states "costs reasonably incurred". I understand prescribed to mean a specified sum, or could it also refer to an unspecified sum, albeit described as reasonable?

[outlawlgo]

Re: Council Tax Liability Order Applications Court Costs – Test Case

Thanks! In complete agreement with above posts.

Will incorporate into written representations of draft (21 day limit) and/or submitted argument when lodging the case at the Administrative Court.

On the subject of paragraph 3.4 of the new DCLG guidance, I should think the council/Court may consider itself safe that this came out after the liability order hearing and had no obligation to justify its costs. However, the same existed in guidance from September 1993 in the form of the Department for Environment's Recovery and Enforcement Council Tax Practice No 9 under heading Liability Orders.

"3.18...The order will include the costs reasonably incurred by the authority in securing the order. Whilst it is likely that authorities will have discussed a scale of fees with the Clerk to Justices it should be recognised that the Court may wish to be satisfied that the amount claimed by way of costs in any individual case is no more than that reasonably incurred by the authority.

There's much scope for making representations upon the content of the draft case. One cause for concern is it states at paragraph 2 that "The court did not hear evidence in the matter as the appellant admitted the following facts...." The evidence submitted to the court was in excess of 40 pages.

I only assume the bench has not passed on details to the "stand in" Justices' Clerk, or the focus has been turned away from the purpose of the hearing which was to challenge the level of costs and how they are implemented, not that I was disputing liability.

Another cause for concern is it states at paragraph 6 "We were not referred to any case authority". However, Regina v Brentford Justices ex parte Catlin [1975] QB 455 was referred to in an item of evidence disputing the level of expenditure attributed to monitoring and control.

It was argued that over a five year period, a total 3,528 Liability Orders had been issued for initial debt of £50 or less despite being policy for the council to pass accounts to enforcement for amounts over £50. This along with summonses containing incorrect and out of date information issued on 3,361 accounts for a hearing of 2 June 2011 pointed to neither the Magistrates’ court nor more crucially the local authority incurring costs in respect of monitoring liability order applications.

From the 1975 case:

"....before a summons or warrant is issued the information must be laid before a magistrate and he must go through the judicial exercise of deciding whether a summons or warrant ought to be issued or not. If a magistrate authorises the issue of a summons without having applied his mind to the information then he is guilty of dereliction of duty...

Another observation is at paragraph 4 the argument put forward for disputing costs had been condensed to the point around 95% has been omitted.

The statement at paragraph 3(b) suggests that an accurate transcript of the hearing is essential to verify that regulation 34(8) of the Council Tax (Administration and Enforcement) Regulations 1992 was in fact referred to by the respondent. This is crucial to the appeal because one question in law focuses on the composition of costs in this area.

Costs would have been awarded in accordance with Regulation 34(8) had the outstanding liability alone been paid after the liability order was applied for but before it was made. The appeal concerns circumstances, where on the strength of substantial research, a reasonable sum of costs had been paid as well. Regulation 34(8) was therefore not relevant because the council took the option of pursuing a liability order in the face of the liability being settled plus a payment for reasonable costs.

In the circumstances, the relevant costs in dispute were those described in Regulation 34(5)(b) which were only in respect of those incurred up until the summons issue. This has relevance to the point in law questioned which is the matter of all costs now being front loaded.

On a similar theme, Haringey Magistrates' court is presently in the news.

[charitynjw]

Re: Council Tax Liability Order Applications Court Costs – Test Case

"9. The question [see original] for the opinion of the High Court is:-

Were we entitled in the circumstances of this case to order payment of the full amount of the costs requested by the respondent and make the liability order which followed as a consequence thereof?"


With special reference to Para 3.4, etc
No
This implicitly acknowledges that the full amount is the legitimate full amount.
The issue being queried is that the amount charged is wrong.
The respondent seems to be inclined to argue that the costs charged are what have allways been charged and nobody has ever objected before and therefore its ok.
That is not an acceptable arguement.
The issue at this point is that NELC should be required to substantiate their figure for costs.
Something that magistrates court should routinely do but clearly when the council have hired the court they overlook to do.

That should clinch it.