A Reminder on Statutory Notices for High Court Enforcement Agents

As High Court enforcement professionals we work under a statutory licence granted by the Lord Chancellor. Our framework of operations was significantly updated by the introduction of Schedule 12 of the Tribunals Courts and Enforcement Act 2007 and HCEOA Code of Conduct the delayed introduction of the Taking Control of Goods Regulations in 2013 and 2014.

We believe these have been welcome developments in that a clearer process has been developed for the steps that enforcement agents take in seizing goods to pay court judgments.

We no longer “seize” instead we “take”.  The effect is largely the same but consistent information in the form of final notices summons is provided for in the statute and the regulations.  These liability orders and referrals are prescribed by law and must be provided in the form set out by the Regulations.  Here we are providing reminders, summons – which we have then added to with our comments as enforcement professionals.

Notice of Enforcement

A Notice of Enforcement, earlier known as a Distraint Order Notice, can be completed on you by creditors to recover funds owing to them. Although any creditor can serve a Notice of Enforcement, all apart from HMRC and landlords have to go through the courts to obtain one.

HMRC manage to use this path to deal with companies opposed to paying taxes owed, and, likely, you will now have obtained correspondence from them regarding unpaid liabilities.

What does a notice of enforcement achieve?

The high court enforcement notice will specify a period of time (seven days) in which the debtor must settle their debts, or reach an agreement to do so. If the debtor does not settle within seven days, the creditor’s next step is to seek a controlled goods agreement.

Obtaining a Notice of Enforcement is a serious concern. It must be acted upon quickly, otherwise, goods may be seized via a Controlled Goods Agreement, so taking action as soon as the high court enforcement Notice is served should be a preference.

What is a Controlled Goods Agreement (CGA)?

Previously known as a walking possession agreement, a CGA classifies the goods that can be sold to settle the debt. The agreement will include an estimate of the goods’ accurate values.

By signing a CGA, the debtor gains an extra seven days to pay their debts in full. Refusal to sign means that the creditor’s agent can arrange for the immediate removal of goods. The goods can also be seized if the debtor signs the CGA, but still fails to pay their debts in full in time.

1. The All-Important Notice of Enforcement

Of all the statutory notices, the Notice of Enforcement is the most important one.  It effectively gives the Judgment Debtor a breathing space and an opportunity to find the funds to pay the judgment.  The requirements on serving the Notice are strict and will be scrutinized by a Court if a case involving the enforcement process comes before the Master or District Judge.

The Notice of Enforcement or NOE is sent by the enforcement agency chosen to enforce the Writ of Control.  The Regulations provide for just one high court enforcement notice to be sent, although the better practise is for the Notice to be sent to each address where enforcement is likely to take place.  Debtors should not expect reminders of the high court enforcement Notice being sent. 

Notices can be sent by post or by email and we prefer to send ours by email wherever possible as we can add a delivered and read stamp to each email.  The NOE states the amount of the debt and includes a Compliance Stage fee of £75.  The NOE provides the precise date and time by which the amount set out in the NOE must be either be paid.  If the amount due (including the Compliance fee of £75 remains unpaid, or a payment arrangement is not set up by the date specified, a bailiff/enforcement agent will make a personal visit to your property.  The enforcement agent may take control of goods which is defined in the legislation as all property except land.  Here is a copy of the Notice of Enforcement.

2. Controlled Goods Agreement

Understanding that the debt has not been paid to the Enforcement Agent, a Controlled Goods Agreement (previously known as a Walking Possession Agreement) can be imposed that lists the goods to be taken for sale. This method was previously known as ‘seizure,’ but ‘taking control of goods is the phrase used now.

By entering into a Controlled Goods Agreement or control of goods agreement, a Judgment Debtor will be able to continue to use the goods listed and taken into legal control. The form replaces the old form of the “Walking Possession Agreement”.  When a Judgment Debtor signs this form, he or she is acknowledging that the goods listed are under the ‘control of the enforcement agent until the amount outstanding (including bailiff fees) is paid in full.  The Controlled Goods Agreement will state that if the Judgment Debtor fails to stick to the terms of the agreement the goods may be removed and sold.  This will incur a further fee.  Fees are now clearly set out in the Taking Control of Goods (Fees) Regulations 2014.

The Controlled Goods Agreement must be signed by either the debtor, a person authorized by the Judgment Debtor, or a person ‘in apparent authority. The Agreement must provide a detailed description of the items (e.g. computer, television, car, etc.)  together with the make and model (if known) and the relevant serial number, color, and any identifying marks. Here is a copy of the Controlled Goods Agreement.

3. Warning of Immobilization

This notice must be provided if the enforcement agent has fitted a clamp to a motor vehicle or even an aircraft. This notice only needs to be signed by the enforcement agent. Here is a copy of the Warning of Immobilization.

4. Notice of Intention to Re-enter Premises

This notice will be sent when there has been a failure by the Judgment Debtor to keep to the payment terms under the Controlled Goods Agreement.  The notice is to advise the Judgment Debtor that the enforcement agency intends to re-enter the premises to either inspect the goods or more commonly, to remove them for sale. This Notice must provide details of the Controlled Goods Agreement and explain how the agreement has failed. Here is a copy of the Notice of Intention to Re-Enter Premises.

5. Notice After Entry or Taking Control of Goods (on a highway) and Inventory of Goods Taken into Control

This notice will advise the Judgment Debtor of the action taken by the enforcement agent to enter premises or to take control of a vehicle on a highway. Details of how to make payment and the date and time by which the payment has to be made must be included in this Notice. The goods will be released on payment in full (or possibly in rare circumstances, may be released if the Judgment Debtor enters into a payment arrangement with the enforcement agent). This notice only requires the signature of the enforcement agent. Here is a copy of the Notice after entry or Taking Control of Goods (On a Highway).

6. Notice That Goods Have Been Removed For Storage or Sale

This notice must be provided when goods are actually removed. This notice must outline the fees charged to date including any ‘expenses’, and the daily or weekly storage fee. Payment in full (including any storage charges) will avoid the sale of the goods and the goods may be collected. This notice only requires the signature of the enforcement agent. Here is a copy of the Notice that Goods have been Removed for Storage or Sale.

 

7. Inventory

This notice is to advise that goods have been taken into control and once again, only needs to be signed by the enforcement agent. Here is a copy of the Inventory.

8. Notice of Sale

This notice must be provided prior to the sale of goods and must provide the name of the co-owner (if applicable), and details of all fees charged (including any expenses).  Daily storage charges must also be listed. The notice must provide the date, time, and place of the proposed sale.  If payment in full is made, the goods may be collected.  The notice must list the goods (model, serial number, etc.) and must also provide a valuation.  The sale is conditional on the reserve price being met. If this condition is not met, a new time and place of sale must be given on further notice. Here is a copy of the Notice of Sale.

Commentary

The changes introduced in recent years mean that the public can expect a level of consistency of the information they receive about the high court enforcement process.  This is a positive outcome from years of consultation by the Government with all the stakeholder interests.  Our plan is to now provide all parties to the enforcement process with online access to our high court enforcement services so that they can remind themselves where they are in the process. 

Our online platform will provide a portal for creditors and debtors to check in with the process, make a payment, and seek further support on their situation.  The statutory Notices are part of the timeline to the enforcement of a judgment and should be understood in the context of progressing a judgment from notice of its existence (Notice of Enforcement) through to sale (Notice of Sale).  In between, there are opportunities for the matter to be resolved and it is vital there is visibility on where people find themselves along a timeline that is not always straightforward.

Watch out for more news on Shergroup’s portal fondly known as “SHERPA” in the weeks ahead.