North East Lincolnshire Council
Civic Offices Knoll Street
North East Lincolnshire
DN35 8LN
Ref: NG/CTR/12912
17 September 2012
Dear Ms ......
Re: Council Tax Reminder, Summons and Recovery – Account 550xxxxxxx
Further to my 16 September correspondence I wish to add further to the issues raised.
I’ll begin by asking under whose authority, can the council impose predetermine costs for issuing a summons; for example the stated £70 in the reminder letter. Additionally I’m going to introduce my concerns regarding the legality of increasing and front loading these penalties.
Determining costs imposed before case is heard
Local Authorities setting costs themselves at predetermined levels will facilitate a greater degree of automation in processing liability orders; however, this is the responsibility of the court. The Council should not be deciding the amount it thinks should be taken from residents in costs, though it is obvious why authorities favour doing this. It enables rubber stamping orders in their thousands, rendering the Magistrates’ need to award appropriate costs at the hearing redundant.
An appropriate amount of costs awarded to the Council will not be known in advance and therefore cannot, with any credibility, be agreed in advance. To fix court costs over an indefinite period would appear unlawful, because neither the council nor the court will know the income level with respect residents paying these costs. The number applied for and consequently rubber stamped at the bulk hearing varies, and so should the costs if they’re to be claimed in accordance with Regulation 34 of the Council Tax (Administration and Enforcement) Regulations 1992.
The liberties taken go a step further with the free rein the council is given by the Magistrates’ court for determining its own level of costs as revealed in the council’s letter to the courts Deputy Justices’ Clerk.
Grimsby Magistrates' Court
North East Lincolnshire
DN31 1NH
Dear Deputy Justices' Clerk
Court Costs for Council Tax and National Non Domestic Rates
I am writing to advise you that North East Lincolnshire Council has taken the decision to increase the court costs which it charges to tax payers for the non payment of Council Tax and National Non Domestic Rates.
The costs to be charged for a summons for Council Tax and National Non Domestic Rates will be £70.00. There will be no additional costs for the liability order. The increase will take effect from 1st April 2011.
If there is any further information you require then please don't hesitate to contact me directly on 01472 ****** or via e mail at *****.
I would like to take this opportunity to express my thanks for your continued cooperation and support.
Yours Sincerely
North East Lincolnshire
DN31 1NH
Dear Deputy Justices' Clerk
Court Costs for Council Tax and National Non Domestic Rates
I am writing to advise you that North East Lincolnshire Council has taken the decision to increase the court costs which it charges to tax payers for the non payment of Council Tax and National Non Domestic Rates.
The costs to be charged for a summons for Council Tax and National Non Domestic Rates will be £70.00. There will be no additional costs for the liability order. The increase will take effect from 1st April 2011.
If there is any further information you require then please don't hesitate to contact me directly on 01472 ****** or via e mail at *****.
I would like to take this opportunity to express my thanks for your continued cooperation and support.
Yours Sincerely
As the process of initiating and producing reminder, threatening letters and summonses, is automated, the costs attributable for each individual will not remain constant over a variation in court application numbers. In other words, the council’s incurred costs would not increase in direct proportion with the number of summons issued, and is key to why costs cannot be fixed lawfully in advance.
As an example:
Fixed costs including staff, computer program etc., are £400 per annum. 100 summonses having variable costs for stationary and postage of £1/document are produced in a year. Costs incurred to the council will be £500. If costs were set at a level of £5 per summons then this would be reasonably incurred.
If applications doubled to 200 in a year, then the incurred cost to the council per summons would be £3. However, because the cost imposed on the debtor is set at £5, a disparity exists between the costs incurred by the council and those imposed on the debtor. This would have to be considered inappropriate profit.
Therefore a claim for costs should be presented with supporting evidence at each bulk application and awarded only if the court found them to have been reasonably incurred.
If applications doubled to 200 in a year, then the incurred cost to the council per summons would be £3. However, because the cost imposed on the debtor is set at £5, a disparity exists between the costs incurred by the council and those imposed on the debtor. This would have to be considered inappropriate profit.
Therefore a claim for costs should be presented with supporting evidence at each bulk application and awarded only if the court found them to have been reasonably incurred.
Clearly there should be no reference to any agreed fixed costs on neither reminder letters nor summons documents notifying the defendant to attend court. This should be determined at the court hearing.
If due process were to be followed, then the council would need to itemise the time and effort expended on each element of the case after which Magistrates would need to use discretion in awarding the appropriate costs. This would essentially take into account the number of defendants incurring penalties.
The majority of costs currently claimed by the council would likely be identified as inappropriate profit, especially when applications exceed certain levels. With this considered, and discounting costs which would be incurred regardless of the applications being made, then only those specific to the claim would be awarded.
Increasing and front loading penalties
I have a copy of the council’s standard computer generated reminder which was sent out to its residents prior to the composition change to costs, detailed in the letter to the Magistrates court above.
The relevant paragraph read as follows:
If recovery action is taken there will be costs of £32.00 if a summons is issued, and further costs of £25.00 if an application is made to the Magistrate’s Court for a Liability Order.
The corresponding paragraph now reads:
If payment is not received a summons will be issued without any further notice being given to you and you will incur £70.00 costs.
This represents a hike of almost 120% in costs imposed on householders for issuing a summons, and an overall increase of costs in connection with the application of 23%.
I will be dealing with this in more depth in a future correspondence and enquiring into the legality of hiking costs for the purpose of propping up its finances, front loading all costs to the summons (apparently breaching Council Tax Regulations) and the historical reasons detailed in various Cabinet documents for increasing these costs.
Yours sincerely
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