Whenever new legislation is introduced by Parliament, (in this particular case; The Taking Control of Goods (Fees) Regulations 2014), the relevant government department responsible for the specific legislation (in this case; the Ministry of Justice) will also issue a statutory notice called an Explanatory Memorandum. This page is about the Taking Control of Goods (Fees) Regulations Explanatory Memorandum.
What is an Explanatory Memorandum?
An Explanatory Memorandum (EM) is a statutory document introduced by Parliament to assist MP’s and the general public to understand why the legislation was introduced and how it is intended to operate. An Explanatory Memorandum should be a short document, written in plain English to help people who may know nothing about the subject to quickly gain an understanding of the legislation (in this case; the Taking Control of Goods (Fees) Regulations 2014).
Item 7.3 of the Taking Control of Goods (Fees) Regulations Explanatory Memorandum
Item 7.3 of the Explanatory Memorandum is of vital importance. It concerns the setting up of a payment arrangement in relation to judgments that have been passed to a High Court Enforcement company (see below).
Setting up a payment arrangement with a High Court Enforcement Officer.
With the vast majority of debts enforced by bailiffs/enforcement agents, a payment arrangement can be set up during what is called the ‘Compliance Stage’. This is the period outlined in the Notice of Enforcement by when payment in full or a payment arrangement must be set up. If a payment arrangement is set up and does not default, a personal visit by a bailiff will be avoided and the only bailiff fees that you will have to pay will be the Compliance Fee of £75.
If a County Court judgment over £600 has been awarded against you, and has been passed to a High Court Enforcement company to enforce, you will not be able to set up a payment arrangement during the ‘Compliance Stage’. Instead, a High Court Enforcement Officer MUST make a personal visit to your home. This visit will incur an Enforcement Stage fee of £190 plus VAT. The reason is outlined under Item 7.3 of the Taking Control of Goods (Fees) Explanatory Memorandum which states this:
The personal liability of the High Court Enforcement Officer has necessitated the need for High Court enforcement to have first and second enforcement stages with the associated fees. The fee structure for High Court cases also introduces an incentive to enter into, and adhere to, an affordable controlled goods agreement.
Unless a debtor pays IN FULL at the compliance stage, the enforcement agent is obliged to visit the debtor IN EVERY High Court case in order to take control of goods, thereby triggering the first enforcement stage fee.
Item 8.3 of the Taking Control of Goods (Fees) Regulations Explanatory Memorandum
Item 8.3 of the Explanatory Memorandum outlines why the bailiff companies Compliance fee of £75 must be deducted first from any payment made and the balance (if any) apportioned on a ‘pro rata’ basis.
Bailiff companies Compliance Fee of £75 must be deducted first from any payments made.
Sadly, there is a great deal of misinformation on the internet encouraging debtors in receipt of a letter or visit from a bailiff to visit either the local authority or Magistrates Court website to make an online payment (minus bailiff fees). It is claimed that this supposedly ‘revokes the enforcement power’. Such a claim is a myth. Item 7.3 of the Taking Control of Goods (Fees) Explanatory Memorandum explains why the Compliance fee should be deducted first.
The consultation response stated that in cases where the proceeds of enforcement are less than the amount outstanding, they should be distributed on a pro-rata basis between creditor and enforcement agent.
However, it has since been demonstrated that this would cause enforcement agents to operate at a loss for some time before they recovered their fees. Without this, successful enforcement could potentially decline significantly and enforcement agents may be encouraged to act in an aggressive manner in order to try and recoup the entire debt.
It was therefore decided that enforcement agents should be paid the compliance stage in full first, followed by a pro-rata division of proceeds between enforcement agent and creditor.
Commentary from Bailiff Advice
If you have a question that you would like to ask us regarding any aspect of bailiff enforcement, you can email your question to Bailiff Advice in confidence using our online Enquiry Form. Alternatively, you can contact our free helpline. Please see our Contact Page for further details.