Changes affecting enforcement by Sheriffs

On 6 April 2014 changes weremade to The Tribunals Courts and Enforcement Act 2007 Part 3 inrespect of the Taking Control of Goods Regulations which affect howSheriffs can enforce Judgments.

Changes to terminology havebeen made as follows:

• Sheriffs are renamed"Enforcement Agents" ("EA")
• The term "debtor" is nolonger allowed and they must be called "customers"
• Writs of Fi Fa are renamed"Writs of Control"
• Walking Possession Agreementsare renamed "Taking Control of Goods Agreements"

What procedures mustthe EA follow ?

There is a new procedure theEA must follow, they can no longer turn up unannounced and must nowsend a letter to the customer notifying them of the visit. Ifit is felt this will give the customer time to dispose of assets anapplication can be made to the Court for a visit to be made withoutprior notice being given. If the first visit is notsuccessful in recovering the amount due the EA must send a noticegiving notice of a second visit.

How can the EA gainentry to premises?

The hours an EA can visit havebeen extended to between 6.00 am and 9.00 pm seven days a week(excluding Christmas Day and Bank Holidays) whether the customer isa business or an individual. If attending business premisesand they are only open outside these hours the EA can attend duringthe opening hours of the business.

The rights of entry of the EAhave also changed. In respect of commercial premises the EAcan no longer enter through a window or any other opening otherthan the main entrance or a loading bay but they can force entrythrough the door even if locked provided the building it is notattached to a house. They can also visit the home of aDirector if this is the Registered Office of the company or thehome of any Partners in a Partnership (provided they are namedpersonally on the Judgment), they are then bound by the rights ofentry in respect of residential premises below.

In respect of residentialpremises the EA can only gain entry through an unlocked front orback door i.e. a main entrance. They can climb over a fenceor wall to gain access to grounds of a house. They cannotforce entry through external doors but once inside can forceinternal doors and if ejected from a property can use force toregain entry through a main entrance. They can also forceentry into a garage, outhouse, stable, barn, etc if not attached toa house. If they obtain a signed Controlled Goods Agreementthey can force entry upon any future visits even via a lockeddoor.

What goods can beseized ?

If the EA gains entry but doesnot recover payment they must prepare a Taking Control of GoodsAgreement and list all assets that can be seized. They mustask the customer or a "responsible adult at the premises" to signthe Agreement. Once the Agreement is signed the EA can securegoods on the premises or remove goods.

Goods that can be seized havebeen extended to include vehicles including a boat or aeroplane,stock and machinery, household furniture, jewellery and art, money,banknotes and cheques, bonds, shares, deeds and securities,livestock and animals, firearms, jointly owned property of amarried couple, items held by Police and goods on finance providingthe finance company agree to the sale.

Goods which cannot be seizedhave been extended to include bedding, clothing, furniture andprovisions required for a basic level of domestic life (the EA canalso remove luxury items and replace them with cheaper items),items required for the care of a person under the age of 16, overthe age or 65 or a disabled person, perishable goods, refrigeratedgoods and fresh flowers, vehicles with a valid disabled person'sbadge, vehicles belonging to the Police, Ambulance Service, FireDepartment or displaying a British Medical Association Badge,assistance dogs, sheep dogs, guard dogs or domestic pets and art onloan to the UK from another country.

Tools of trade are no longerexempt and can be seized provided the customer is a sole trader(not a Limited Companies or Partnership), the tools must be usedsolely by the customer in their work and not by any other personand they must be worth at least £1,350.00.

Third party claims have alsochanged and it is now the responsibility of the third party to makean application to the Court for an Order that the EA must ceaseaction, until this is obtained the EA can continue withenforcement.

How can seized goodsbe sold ?

The ways in which goods can besold has also been extended to include public auction by aqualified auctioneer, private treaty, sealed bids, advertisementand independent online auctions such as Ebay. If goods are tobe sold at auction the EA must provide the customer with notice ofthe auction date and time and provide an estimated valuation of thegoods in writing.

The EA can also sell goods onsite by entering a shop (or standing behind a market stall) andtaking over the sale of items. They can also secure the goodson site and sell them on site.

What fees are payable?

One of the major changes hasbeen to the fees that are recoverable from the customer. These are now limited to fixed fees set by the Court which includesending of the first letter to the customer, two visits and removaland sale fees. The only additional fees that can be chargedare storage charges and locksmiths fees where a Taking Control ofGoods Agreement has been signed and fees if specialist equipment isrequired to remove a large asset such as machinery. Howeveran application would have to be made to the Court in respect ofthese fees and would only be granted in "exceptional circumstances"so where possible it would be preferable to attempt to sell suchgoods on site.

The life of the Writ ofControl has been changed so that it is suspended if a repaymentplan is entered into and re-starts if payments stop. HoweverEA's can no longer charger for collection by instalments so ifpayment is not received in a lump sum or goods are sold but do notcover the full amount due Claimants will be encouraged to collecttheir own instalments or pay the EA to do this for them.

Conclusion

There have been severalreports in the news questioning what effect these changes will haveupon the way in which Judgments are enforced. For many, thechanges will have little impact. However, for thoseorganisations who have, in the past, operated in a way which manywould describe as "sharp practise", they will have to change theirways to ensure they operate within the new rules.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.