You may have won your Court action and have been awarded a Money Judgment in your favour but what if the Debtor has not paid you the Judgment sum within the time ordered by the Court? Enforcing a Judgment needs careful consideration. Michael Mulcare looks at the different options when it comes to enforcing a Judgment.
What to Consider
First of all, you need to ask if it is actually financially worth while pursuing the debtor and enforcing the Judgment? Establish, for example:
- Whether the debtor works?
- Does the debtor own any assets which can be seized and sold?
- Does the debtor own property which you could enter a charge over?
- Do you have the debtor’s correct address?
- What is the cost of the enforcement compared to the value of the debt?
- Have you checked that the debtor is solvent?
Bailiff or High Court Enforcement Officer?
If you decide to enforce and you have a Judgment for a debt of between £600 and £5,000 (including court costs), then you can choose to enforce by using either a:
- County Court Bailiff; or
- High Court Enforcement Officer (HCEO).
What is the difference?
- Bailiffs are salaried civil servants employed directly by the court service.
- Only bailiffs can enforce judgments under £600 and those regulated by consumer credit legislation. However, both Bailiffs and HCEOs can enforce Judgments between £600 and £5,000.
- They work under the authority of a Warrant of Execution which can be requested from the County Court for a fee from £110.
- County Court Bailiffs will collect the judgement debt, court costs, warrant cost and interest from the debtor. If unsuccessful, there is no abortive fee.
- But, as Bailiffs are salaried, they have no financial incentive to collect.
ii) High Court Enforcement Officers
- Judgments for debts of over £600 can be enforced by an HCEO but only an HCEO can enforce debts of over £5,000.
- HCEOs earn their fees from the judgment debtor, but only when they collect. If the HCEO is unable to collect, there is an industry regulated compliance fee of £75 plus VAT paid by the creditor.
- Other than the compliance fee, the HCEO receives no income for an unsuccessful enforcement.
- As a result, HCEOs tend to have significantly higher collection rates than bailiffs.
Instructing a High Court Enforcement Officer
Assuming the debt is over £600, then the HCEO is often the best option
- HCEO’s (often known as “Sheriffs” before April 2004) are authorised by the Lord Chancellor and work privately.
- An HCEO is subject to the Courts Act 2003 and the High Court Enforcement Officers Regulations 2004 and is responsible for all actions taken under any writ in their name.
When it comes to enforcing a Judgment, it is common to instruct an HCEO where:
- a High Court Judgment is awarded and a Writ of Control is obtained;
- a County Court Judgment (CCJ) over £600 is registered at the High Court and a Writ of Control is obtained.
The CCJ is registered by “transferring up” the unpaid Judgment to the High Court. To do this, the Judgment has to be:
- over £600 (including the debt, court fees and interest) and
- less than six years old.
Most HCEO companies will “transfer up” the Judgment obtain the Writ of Control free of charge whilst only charging the applicable Court fee of £66.00. The transfer process normally takes between 5 to 21 days.
Once the Writ of Control has been obtained and the HCEO is instructed, then it is their duty to seek to collect the debt or take control of the debtor’s goods and this is governed by The Taking Control of Goods (Fees) Regulations 2014.
Section 6 of the Regulations imposed an enforcement process set into four stages, with fees assigned to each stage, adding clarity for both the creditor and debtor alike.
1. Compliance Stage
- The process of enforcing a Judgment starts with the Compliance Stage. Once instructed, the HCEO applies a fee of £75 plus VAT (£90).
- Once they have the sealed writ of control, the HCEO will send a ‘Notice of Enforcement’ to the debtor.The Notice of Enforcement must be sent or delivered to the debtorpersonally. It provides 7 clear days (excluding Sundays and Bank Holidays) to pay the sums due in full.
- The notice must be sent to the place where the debtor usually lives or carries on a trade or business or their registered office.
- If after receiving the notice the debtor pays the judgment amount in full (being interest, court fees and the £75 plus VAT (£90) enforcement fee for the Compliance Stage) then the enforcement process ends.
2. Enforcement Stage 1
- If the debtor fails to contact the HCEO or asks to pay by instalments during the Compliance Stage, the HCEO will attend their premises to take control of goods.
- The HCEO must only attend the address endorsed on the writ and remove goods at that address. If an alternative address is provided by a third party, then the HCEO may only attend the new address if they have written instructions to do so.
- The fixed charge at this point is £190 plus VAT (£228) plus 7.5% of the sums to be recovered over £1,000, again plus VAT. The sums to be recovered include the judgment debt, court costs, execution costs and interest.
- If the debtor pays in full immediately or agrees to an acceptable instalment arrangement, then the matter ends.
3. Enforcement Stage 2
- The matter enters this stage if the debtor refuses either to make any payment or to agree an acceptable instalment arrangement covered by a Controlled Goods Agreement (formerly known as a “Walking Possession Agreement”).
- If a payment arrangement, with a signed Controlled Goods Agreement, is subsequently broken, the HCEO will re-attend the property either under this Stage or the Sale or Disposal Stage, dependent upon the circumstances so far.
- The fee for Enforcement Stage 2 is a flat £495 plus VAT (£594).
4. Sale or Disposal Stage
- Should enforcement get to the point where goods actually need to be removed, the enforcement progresses to the Sale or Disposal Stage.
- The fee for this stage is £525 plus VAT (£630) plus 7.5% of the sums to be recovered over £1,000, again plus VAT. The costs of removal are normally included in this sale stage fee.
- If the HCEO believes that there may be exceptionally high removal costs, greater than prescribed under the sale stage, such as the need for specialist equipment and personnel to remove an asset, then they can apply to the Court to have these added to the amount payable by the debtor.
- The only other fees which can be charged without applying to the Court are for disbursements such as locksmiths, storage costs and auctioneers’ fees.
- If there are sufficient proceeds from the sale, these will be sent to you to satisfy the Judgment Order and the HCEO’s fees.
- If the enforcing the Judgment successful, the HCEO will collect your judgment debt, your court costs, your £66 transfer up fee, interest at 8% and their enforcement fees from the debtor.
- If the enforcement is unsuccessful, you only pay a compliance fee of £75 plus VAT (£90).
- You do not normally pay any other costs associated with the enforcement of your writ.
If you would like to discuss Enforcing a Judgment or need specialist advice when it comes to debts and enforcement, then please contact Michael Mulcare in our Litigation Team for an informal no-obligation discussion or email firstname.lastname@example.org
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