The claim was against a broker who was proving difficult to locate, but who had an active Facebook profile.

Facebook is routinely used to serve claims in Australia and New Zealand, and could now become the norm in the UK as well.

I think this a positive step forward in the greater use of electronic media – in fact the current consultation paper on bailiff action proposes that notice of enforcement action may also be given by electronic communication.

The option to use social media to locate elusive debtors when all other avenues have failed, is good news for creditors. 

Published in: Commercial and residential property Credit management In the news Judgment enforcement Tracing

This consultation follows on from the recently published updated National Standards for Enforcement Agents (certificated bailiffs, bailiffs and High Court Enforcement Officers) and builds on these by transforming elements of the voluntary code into a legally binding regime.

The consultation paper also needs to be read in conjunction with Part 3 of the Tribunals, Courts and Enforcement Act 2007 (the TCE Act). This has yet to be implemented and will unify the existing law relating to seizure and sale of goods for most purposes. It prescribes the new procedure to be followed by enforcement agents when seizing goods, which is to be known as taking control of goods.

The act will also abolish the current common law right to distrain for commercial rent.

I welcome the MoJ’s work in applying consistency and clarity to an industry that is often confusing and ambiguous, with some legislation being hundreds of years old, as well as attempts to set a fee structure fit for the 21st century, not the 1920s!

However, I do have some concerns about some areas where there is a potential negative impact on creditors. The law and cultural climate is more on the side of the debtor at the moment, with some die-hard “won’t pay” debtors out there. In particular I am concerned about:

• Debtors will be afforded more protection, which might well mean fewer creditors getting paid, for example the requirement to send a 7 day letter before High Court enforcement would allow debtors time to hide and sell goods
• The requirement to leave a car clamped for 24 hours before removal would see many clamps cut off and cars gone
• Many aspects of enforcement would require applications to court, and the time delay could become seriously long, particularly as many courts are closing and those still open are short-staffed already
• While I welcome a review of the fees, the structure proposed would require a significant remodelling of most business in the industry and may see the Enforcement Agents becoming essentially post men

I am still working through the various long-term implications of the consultation paper and will be writing another post with more feedback shortly. 

Published in: Commercial and residential property Credit management In the news Judgment enforcement

High Court Enforcement Officers, as sheriffs are now called, enforce unpaid county court judgments (CCJ) and High Court judgments and orders.

So what do you have to do to get the sheriffs to come round?

• Firstly, choose not to pay the money you owe (either individually or as a business) to your creditor
• Then ignore their letters and phone calls, including the Letter Before Action
• When summonsed to court, you decide to ignore the summons, so judgment is awarded by default
• Or perhaps you decided to contest, but judgment was still awarded

But all is not lost!

Although you are being charged interest on the unpaid debt on a daily basis, you still have 14 days to pay from the date of judgment (unless the court has stipulated otherwise) and the CCJ will be cleared and won’t be registered against your name.

However, if you still really want the sheriffs to come round, you need to completely ignore the CCJ and hope it will all go away.

During this time, the judgment creditor will have instructed the HCEO, formerly known as the sheriff, to enforce the judgment and recover from you the full amount he is owed, plus interest, court fees and all the enforcement costs.

Now, at last, your wish will come true and you will get a visit from the sheriff, as he attends to seize your goods, which will be sold at auction to recover the debt, unless you finally pay in full.

Sheriffs are the last port of call for many creditors in their attempts to recover the money they are owed from debtors who won’t pay. A visit from the sheriff is easy to avoid – you will have plenty of opportunities to pay before it reaches that stage – and it will cost you less in the long run. 

Published in: Credit management Judgment enforcement

However, they are also commonly used by landlords for rental property, both commercial and residential, and may be requested by a supplier of goods or services as part of the contract.

Whilst some high value personal guarantees to a bank may be secured against the guarantor’s property, this is far less common for guarantees to landlords and suppliers.

Personal guarantees for property

This situation would arise when the landlord is concerned about the risk of rent arrears and wants to ensure that a person, the guarantor, can be obliged to pay any arrears the tenant incurs.

In the case of a business renting commercial premises, the landlord is likely to ask for a personal guarantee from one or all of the directors of the business.

In the case of residential accommodation, it might be that the landlord insists on a guarantor for someone with little or no credit rating, for example a student or someone moving from overseas.

Directors’ guarantees

With a limited company, the limited liability means that the directors have no personal liability for the debts of the business. However, when they sign a personal guarantee, this is permission for the creditor to pursue their personal assets to obtain payment.

It is becoming more commonplace for companies to ask for personal guarantees from company directors when supplying goods or services. They may include this as part of the contract (the contract should request that the director sign their agreement to that part specifically for it to be valid) or as a separate agreement.

As the supplier, you may choose to give your customer the option between a deposit and a personal guarantee. If asking for a guarantee, I strongly recommend taking legal advice to ensure the guarantee can be enforced if required.

Enforcing a guarantee

Should you need to enforce the guarantee, you will need to sue both the debtor and the guarantor. For a landlord this would be the actual tenants and the guarantor; for a company, you would sue the company itself and the guarantors, normally the directors.

Having sued both entities, you will receive your judgment, which you can then transfer to the High Court for enforcement via a writ of fi fa (fieri facias).

Alternatively you can obtain a charging order against the guarantor’s property. This does not prevent you from then proceeding with the enforcement of the writ of fi fa.

Once you have instructed a High Court Enforcement Officer (HCEO), he will attend the debtor’s premises to attempt to recover the debt.

It is normal practice for the HCEO to first attempt recovery from the debtor, before turning to the guarantor. If they do need to enforce against the guarantor, then their personal possessions are available for seizure to satisfy the writ. 

Published in: Commercial and residential property Credit management Judgment enforcement

High Court Enforcement Officers, as sheriffs are now called, enforce unpaid county court judgments (CCJ) and High Court judgments and orders on behalf of landlords against tenants.

So what do you have to do to get the sheriffs to come round?

• Firstly, choose not to pay the rent (residential or commercial) you owe to your landlord
• Then ignore their letters and phone calls
• When summonsed to court, ignore the summons, so judgment is awarded by default
• Or perhaps you decided to contest, but judgment was still awarded
• Your landlord may also have applied for a possession order to evict you at the same time

But all is not lost!

Although you are being charged interest on the unpaid rent on a daily basis, you still have 14 days to pay from the date of judgment (unless the court has stipulated otherwise) and the CCJ will be cleared and won’t be registered against your name.

However, if you still really want the sheriffs to come round, you need to completely ignore the CCJ and possession order and hope it will all go away.

During this time, your landlord will have instructed the HCEO, formerly known as the sheriff, to enforce the judgment and recover from you the full amount of rent he is owed, plus interest, court fees and all the enforcement costs. To save time and cost, he can even apply for a combined writ for the rent arrears and repossession.

Now, at last, your wish will come true and you will get a visit from the sheriff, as he attends to seize your goods, which will be sold at auction to recover the rent arrears, unless you finally pay in full, and possibly repossess your rented accommodation or offices at the same time.

Sheriffs are the last port of call for many landlords in their attempts to recover the money they are owed from tenants who won’t pay. A visit from the sheriff is easy to avoid – you will have plenty of opportunities to pay before it reaches that stage – and it will cost you less in the long run. 

Published in: Commercial and residential property

In the trial, 73% of the 10,000 cases were resolved and 98% of those surveyed were satisfied or very satisfied with the service. If the case isn’t resolved through mediation, the case will go to a hearing before a judge.

1.5 million disputes are handled by the courts each year, and the MoJ expects that up to 80,000 more cases will be diverted to mediation.

Further proposals

The Government’s response to its consultation Solving Disputes in the County Courts also includes plans to:

• Increase the limit of ‘small claims’ from £5,000 to £10,000 with a view to increasing it again to £15,000 subject to evaluation. All small claims will be automatically referred to the Small Claims Mediation Service, though mediation will not be mandatory. Cases proceeding to court will not need comprehensive legal preparation
• A single county court will be introduced, so all claims can be handled centrally and then be allocated across courts according to demand
• Some administrative form work will move from judges to administrators
• Restrictions will be lifted on High Court judges sitting in County Courts while waiting to take cases in the High Court
• Improve the enforcement of court decisions so that more creditors receive what they are owed: For example where a court-ordered payment instalment plan is already in place, creditors will also be able to apply for an order to secure an unsecured debt. This would stop certain instances where a debtor might benefit from the sale of a property without paying off the debt
• Debtors will no longer be at risk of losing their home over consumer credit debts of less than £1,000
• Only non-personal injury claims above £100,000 will be heard in the High (previously £25,000)
• The value of property above which equity cases need to be referred up to the High Court will be raised from £30,000 to £350,000, reflecting the rise in house prices since the level was last set in 1981
• Extending a web-based scheme which controls legal costs for the majority of personal injury cases: The costs are pre-set in a way which encourages early settlement. Following evaluation of its current use in road accident cases worth compensation of up to £10,000, the scheme will be extended to road accident cases worth up to £25,000 and also to employer and public liability personal injury cases 

Published in: Credit management In the news Judgment enforcement

The employer will then pay the required amount directly to the court, which will then transfer the money to the judgment creditor.

An AEO cannot be made against a member of HM Armed Forces, nor can it be applied to disability payments or social security benefits. It also cannot be used against a person who is self-employed or a partner who takes his share of profits through drawings on account.

Earnings are defined as anything paid to the employee as wages or salary, so this would include overtime, bonuses and commission payments, statutory sick pay and pension payments, including annuities.

When you might consider using an AEO

The threat of their employer finding about the CCJ through the order may be enough to encourage the debtor to pay the creditor. The debtor has 14 days from the date the order is awarded to arrange an alternative method of payment. If this is satisfactory to the creditor, then he will suspend the order until the payment is made in full.

If you know that the judgment debtor has a high salary or pension, then this might be a good route. However, it is worth considering the long term employment prospects of the debtor, particularly given the current state of the economy and job market.

What if they lose their job?

Once the debtor loses their job, the payments will stop until the debtor finds a new job, when the creditor can apply for payments to start again. But there is no way of telling when they will find a new job, particularly given that they have a CCJ against them.

If you suspect that the debtor has found a new job but has not declared it, you can apply to the court to order the debtor to file a statement of means.

Can you combine it with other forms of enforcement?

HMRC’s guidelines are that other forms of enforcement should be tried first before applying for an AEO. 

The Attachment of Earnings Act 1971 states that “so long as the [attachment of earnings] order is in force, no execution for recovery of the [judgment] debt shall issue against any property of the [judgment] debt without the leave of the Country Court.”

Therefore using an AEO may preclude other forms of enforcement such as a writ of fieri facias (fi fa), warrant of execution, third party debt order or charging order.

The pros and cons

Pros

• As long as the debtor is employed, the money is deducted automatically
• The threat of the order may be sufficient to gain payment

Cons

• You cannot undertake other forms of enforcement at the same time as an AEO
• If the debtor loses their job and cannot find another, then you will receive no further payment
• The debtor must have been sued as an individual
• The court will decide the amount to be deducted each month
• It can only be used when the debtor is on PAYE

In conclusion

My advice, therefore, would be to pursue other forms of enforcement first, and only if they are unsuccessful, to then apply for an AEO.

Naturally, my first recommendation would be to transfer the judgment to the High Court for enforcement by an HCEO, as we believe this is the most effective method! 

Published in: Credit management Judgment enforcement

Since the Solicitors Regulation Authority (SRA) was added to the list of licensing authorities at the start of January 2012, they had received 96 applications by early February.

Aside from the opportunity the ABS may afford a business wishing to enter the legal market and provide reserved legal activities, there are many opportunities the ABS offers traditional law firms and, by extension, their clients.

For example, as an ABS, a law firm can, for the first time, seek external investment to fund growth. It can also provide opportunities to build the business by adding affiliated services to extend their scope, as the ABS allows the company to include senior managers and interest holders who are not lawyers.

However, the flip side of the coin is that increased opportunity brings increased competition, which was part of the reason why ABSs were introduced in the first place – to give customers more choice and to stimulate innovation.

The impact on HCEOs

It is early days for predictions on what impact ABSs will have on litigation, debt recovery and the seeking of judgments and orders.

We have seen a dramatic rise in the number of litigants in person, i.e. creditors representing themselves at court to obtain their judgment. This is understandable during a time of recession where creditors are looking for lower cost solutions and it is quite possible that ABSs will provide an alternative, possibly more cost-effective, to litigation in person. As we have found in many cases, the creditor acting without legal representation can miss many of the essential finer details which may lead to a failed enforcement of the judgment.

However, for larger more complex cases going to county court or High Court for judgment, I think it is unlikely we will see a dramatic switch away from the use of traditional law firms by creditors in the short to medium term.

However, those firms must ensure that they are offering competitive and market leading services. Because you can be absolutely certain that an ABS intent on winning market share will put in place the measures they need to compete and succeed in those areas where they see opportunity. 

Published in: Credit management In the news Judgment enforcement

Whilst Government guidance to local authorities is that they seek a court order to remove trespassers from land owned or managed by the local authority, private landowners have more choice. They can still go down the court route of obtaining an order for possession, then transferring it to the High Court to obtain a writ of possession that is enforced by High Court Enforcement Officers, or they can use the ancient remedy of Common Law.

In fact, the landowner can obtain a court order and still choose to remove the trespassers under Common Law. Halsburys Laws of England (Paragraph 1400, Volume 45, 4th Edition) state that:

“If a trespasser peaceably enters or is on land, the person who is in or entitled to possession may request him to leave, and if he refuses to leave, remove him from the land using no more force than is reasonably necessary. This right is not ousted if the person entitled to possession has succeeded in an action at law for possession but chooses not to sue out his Writ.”

Use of force

The landlord must first ask the trespasser to leave his land. If he refuses, the landowner can then remove the trespassers “using no more force than is reasonably necessary”.

However, if the trespasser enters with force and violence, then the landowner can remove them without having previously asked them to leave.

Certificated Bailiffs

Whilst the landowner can conduct the eviction himself, in most cases the landowner or his agent will instruct a Certificated Bailiff to conduct the eviction.

The advantages of this are that the Certificated Bailiff will know the relevant law and procedure and will act within those laws. He will also know how to conduct a risk assessment and follow health and safety procedure before and during the eviction. Finally, he will have the necessary resources and manpower available to conduct the eviction.

Police involvement

The Department for Communities and Local Government (formerly The Office of the Deputy Prime Minister or ODPM) Guidance on Managing Unauthorised Camping (February 2004) advises that the police should always be notified of an eviction and called in to stand by to prevent a breach of the peace, and that, if the police advise that it is inappropriate to carry out an eviction, it should always be delayed until an agreed time. A landowner who proceeds against police advice might lay himself or herself open to a damages claim if the eviction then resulted in assault, injury or damage to person or property.

Under s61 of the Criminal Justice and Public Order Act 1994, the police can, at their discretion, tell trespassers to leave land as long as reasonable steps have been taken by or on behalf of the landowner to ask them to leave and there are two or more people intending to reside on the land. Any one of three further conditions must be met:

• if any of those persons has caused damage to the land or to property on the land; or
• used threatening, abusive or insulting words or behaviour towards the occupier, a member of his family or an employee or agent of his; or
• those persons have between them six or more vehicles on the land 

Published in: Commercial and residential property

Where a physical item is counterfeited, the brand owner will want to achieve two key priorities - to stop the perpetrator and to remove all the goods from circulation. They should contact Trading Standards, and possibly the Police, in order to stop the counterfeiter.

Removing goods from shelves

However, the physical removal of goods from third party premises, such as shops and department stores, can be more difficult, particularly if the counterfeit goods are in many stores around the country. The complete removal of the goods may be a lower priority for Trading Standards and the Police than for the brand owner.

This is where High Court Enforcement comes in. Under law, the counterfeit goods are actually deemed to belong to the trademark owner, not the counterfeiter.

As such, they can be seized and removed under a writ of delivery. This permits the removal of specific items belonging to the claimant, so the HCEO (High Court Enforcement Officer) can attend one or multiple premises simultaneously to remove all counterfeit goods.

A good HCEO will do this discretely, so that the brand owner's relationship with the retailer is unaffected.

Claims for damages and litigation

Within the IP arena, there are also disputes between brands as to the ownership of intellectual property and trade marks (the decades long dispute between the two Apples being one example, and Apple vs. Samsung regarding tablets another). Such disputes may lead to a monetary award being made to the successful party.

Should the award remain unpaid, then the judgment creditor can instruct an HCEO and obtain a writ of fieri facias (fi fa), which will authorise the HCEO to attend the judgment debtor's premises to seize goods and assets to recover the debt.  

Published in: Judgment enforcement