Judgment Creditors should use Writs of Control as a way to compel payment of the judgment debt and all the additional charges that come with this enforcement power.
The authority embedded in the Writ gives the named High Court Enforcement Officer the power to sell the goods if payment is not made either in full or in a satisfactory payment arrangement.
But what are the mechanics of this compulsion and how do they affect the competing interests of creditor and debtor?
The Escalation to Sale
High Court Enforcement Agents and Enforcement Agents working in their name go out to visit addresses with the intention of securing payment in full as soon as possible.
When taking goods into legal control, the value of the goods or one single item is very important.
Exempt Goods and Goods which are clearly “tools of the trade” are not going to be removed for sale.
They will be noted on an inventory and be part of the body-worn camera evidence of the attending enforcement agents, but it does not make sense to remove these for sale if goods which are not tools of the trade and are not exempt are available.
So as the Enforcement Agents make their way through a property to assess the goods inside, they will be starting to build a picture of what should and should be included in their inventory of goods listed for sale.
Under the Taking Control of Goods Regulation 2012, an Enforcement Agent can only attend at two types of address for a named judgment debtor. These are the Judgment Debtor’s business premises or their residential address. Companies do not have a residential address, but the director probably does.
So, the type of address – residential or business – will often dictate the type of goods that are available to be sound.
Residential Addresses
Most domestic addresses follow the same sort of pattern. There are the everyday goods inside which are exempt – one set of lounge furniture, one dining set, domestic appliances in the kitchen and for laundry, beds, clothes and bedding. But alongside this, there are goods that are not considered exempt.
This may include a large flat-screen TV, A PlayStation, Laptop, Tablet, Jewellery, Artwork, Collectibles, Gardening Tools, Caravan, Boat, Garden Furniture and BBQs.
Goods that are not exempt, and which have some sort of value, will be listed and form part of the Enforcement Agent’s Inventory.
Business Addresses
The list here is wider because exempt goods are unlikely to be present, although tools of the trade could be on site. However, the value of these class of goods is £1350 – so that’s the upper limit of the value that will be exempt if an Enforcement Agent finds tools at the address. This may include a business vehicle but only if it is for the sole use of the Judgment Debtor. It is important to also remember that companies cannot claim “tools of trade”.
Everything from the reception desk, to the workshop, factory, car park, yard, board room, and additional depots and offices can be included under the command within the Writ to take the goods into legal control.
The Number of Goods for Sale
Goods to the value of the Writ can be removed and sold. The Writ itself will include the Judgment amount (usually including the costs), the interest running on the judgment amount, and the fees of the High Court Enforcement Officer.
High Court Enforcement fees are set by statute and in Paragraph 6 of the Taking Control of Goods (Fees) Regulations 2014.
If the Judgment Debtor cannot or will not pay the amount due under the Writ, then the fees will escalate even on the first day of attendance to include the Sale & Disposal fee.
On top of these fees, if a Writ escalates to the point of sale, then auctioneers’ fees will be payable on top, and exceptional disbursements for storage, maintenance, insurance, and even security can be approved by the Court and added to the value outstanding under the Writ.
The more complex the goods the more likely they will end up moving to sale with applications being made to Court by the High Court Enforcement Officer to ensure all exceptional disbursements are approved.
Avoiding Sale
Unless an item is very valuable, then the sale is rarely a satisfactory outcome for either party – be it creditor or debtor when it comes to selling everyday goods.
Parallel to the enforcement of the Writ, the parties should keep talking and negotiate a settlement if they can, remembering of course that fees of the High Court Enforcement Officer are payable as soon as attendance has been made.
If goods do have to be sold the High Court Enforcement Officer will look to sell these in the most cost-effective way, which is usually by public auction which can be held at the auctioneer’s premises or on-site. A recent sale of farm machinery achieved over £500,000 from a sale on-site at the farm with buyers being able to view the machinery a week before the auction day.
In Shergroup we pride ourselves on being able to source the best Create Sales environment for the goods which need to be sold. We are not aligned with any auctioneers, and we can pick from a market of expert auction houses depending on the goods that need to be sold.
Recent cases which have been sent to us for enforcement include
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Farm machinery and tools
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A collection of Japanese artworks
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A David Hockney painting
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A Yacht
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A Rolls Royce motor car
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The contents of an entire jewellery shop
The Sale of Vehicles
Taking vehicles into legal control remains the most routine item that we see most days on our visits to people’s homes and businesses. Only this week we have found a Porsche parked a couple of streets away to avoid being taken into legal control, but it was clamped, and then when we visited the Judgment Debtor, he quickly came to a sensible payment arrangement. His Porsche will not be sold.
If we do take a car into legal control, then provided it is not on finance, it will escalate towards a sale. If it has the V5 and service history along with the keys it should do well at a secondhand auction. Without some or all of these items, the value will drop.
Fees and charges for selling seized goods
As per the table above, when goods are taken into legal control, and no payment or offer is made to stop the goods being sold, then all fees will be added to the Writ up to Sale & Disposal Stage.
The High Court Enforcement Officer can also add additional fees under the Regulations for storage, locksmith and auctioneer fees (see Taking Control of Goods (Fees) Regulations 2014 Paragraphs 8, 9, 10. These additional fees cover the commission of the Auctioneer which should not exceed 15%, along with the Auctioneer’s out-of-pocket expenses, storage charges and locksmith fees where used.
Making a controlled goods agreement
The controlled goods agreement should consist of:
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your correct name and address
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the total debt you owe – check the amount is correct
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any fees that have to add – bailiff fee charges etc.
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the repayment plan you’ve agreed to.
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Inventory which bailiffs have taken control of: Listed items
If you don’t sign the controlled goods agreement the bailiff has the power to remove your belongings and sell them to pay your debt.
Summing Up
The sale of goods is the ultimate consequence of a Writ of Control being issued. Sales are not routine, but they do happen. The more valuable the goods, and the less willing the Judgment Debt is to pay in full or come to an arrangement, then the more likely it is that the goods will be sold.
Ultimately the Court offers overview and scrutiny of the process of adding fees when a High Court Enforcement Officer submits a Bill of Costs to the Court for a Fee Review. Body-worn camera video gives a contemporaneous record of the events that led to the escalation of the process towards the sale.
For everyday goods, sale does not always provide the outcome that the Judgment Creditor may have wanted. This is why using a High Court Enforcement Team with the operational skill of Shergroup is vital, so the right decisions are made on when to remove goods for sale, and then how to sell them to achieve the best possible price.