In the US, a court gave permission in March for the Federal Trade Commission to serve documents on five India-based defendants through email and Facebook. There is also currently a bill in progress in Texas, which, if passed, will make it the first state to approve substituted service via a social media website if the court finds that "defendant could reasonably be expected to receive actual notice" through the site.

It’s already happening here

Here in the UK, the High Court gave legal firm Memery Crystal permission to serve a High Court order via Facebook in February 2012. This followed a similar ruling in March 2011 for the County Court and permission to serve an injunction via Twitter in 2009.

The Tribunals and Courts Act 2007 – part 3 is still not yet fully enacted, but is likely to be during 2014 – allows for Notice of Enforcement to be served by "fax or other electronic means”. While this almost certainly just meant email at the time the legislation was first drafted, this would clear the way for more widespread service via social media.

But is this a good thing?

There are many cases when defendants appear to “fall off the radar” in their attempts to avoid any part of the legal process. Sometimes, social media is the only place they can be found, and it is relatively straightforward to find out how actively it is being used. Depending on privacy settings, you can also often find out where the person is – we have been able to disprove “I’m not in the country” claims by checking on social media.

Social media is becoming mainstream in business – as a communications tool, for marketing and customer service, market research and recruitment, to name just a few. This is only likely to increase and as systems continue to develop which allow organisations to analyse increasingly large volumes of data from multiple sources (the imaginatively named “big data”), more formal and official interactions with individuals are going to take place within social media.

So, I certainly believe it is an inevitable change. A good one? It certainly needs to be handled professionally and sensitively. A private message, not a public posting; a clear communication of what the defendant needs to do as a result of the service; due diligence checks to have a reasonable degree of certainty that the service will be received and in a timely manner.

Provided the process server has clear guidelines and procedures, then I believe the enforcement industry should use social media to reach defendants they could not otherwise access.

I also think that in five years’ time, people will look back with surprise that we weren’t already doing this in 2013!

Firstly you will want to stop them doing what they are doing, and remove all instances of the infringement. Secondly you may also want to be paid damages and costs.

Help is at hand

In October 2012, suing for smaller trademark and copyright infringements became far easier, with the launch of the small claims track within The Patents County Court (PCC), which was set up in 1990 to provide a less costly and less complex alternative to the High Court Patents Court.

So there are now two tracks within the PCC – the multi-track and the small claims track (but no fast track). All claims are automatically allocated initially to the multi-track, then moved to the small claims track if they meet the criteria. If the claimant wants it allocated to the small claims track, then he can do so in writing as part of the Particulars of Claim. Claims are started using Form N1.

Enforcement of judgment

Once judgment is awarded, in either track, it is enforceable in the same way as any County Court Judgment (CCJ), including transfer up to the High Court for enforcement by a High Court Enforcement Officer (HCEO).

If damages or costs have been awarded, then these can be enforced under a writ of fieri facias (fi fa).

If the claim concerns physical counterfeit goods that the claimant wants seized and removed so that no one else can buy them and stop any further potential damage to their brand and reputation, then this is done under a writ of delivery using form No 65. The writ of delivery instructs the HCEO to seize the actual items or collect damages and costs.

If, however, you want to recover the goods and collect damages and costs, form No 64 is used, so that only one writ of delivery is required to enforce all aspects.

PCC small claims track

Here are some key points about the small claims track:

• It is for claims with a value of up to £5,000
• Claims will concern copyright, trademarks (UK and Community registered trademarks), passing off and unregistered design right (UK and Community unregistered design right)
• Costs orders are highly restricted
• All remedies available in the High Court are available in the PCC including preliminary and final injunctions, damages, accounts of profits, delivery up and disclosure

PCC multi-track claims

And here are the key points for the multi-track:

• There is a limit on damages of up to £500,000
• Costs orders are proportionate to dispute, with a cap of £50,000
• As well as copyright, trade mark and passing off, it also handles patent claims and registered design rights
• As well as the remedies mentioned above, interim injunctions, search and seizure (Anton Piller) and asset freezing (Mareva) orders are also available in the multi-track (but not the small claims track)

You can read more on the PCC in this Ministry of Justice guide.

The HCEOA was formed 125 years ago and its principal aim is to represent all its members and to provide a voice to Government. The Association has been prominent in advising Government on the Transforming Bailiff Action consultation.

On being elected, Chris commented:

"I am honoured to have the opportunity to be more closely involved with the work of the HCEOA. I look forward to working with my fellow directors, especially at this time of great change in the industry."

Chris joins Peter Watt, Chairman of The Sheriffs Office, on the Board of the HCEOA. Peter was elected to Board in May 2011.

Chris started his career in High Court enforcement eleven years and was appointed an Authorised HCEO in 2007. Chris has extensive experience in the industry, in particular in dealing with Court applications at the Royal Courts of Justice, including interpleader proceedings, tools of the trade and sale by private treaty applications. He also has a wealth of experience in managing specialist and high profile writ executions.
 

The website for the event says “Location TBC”. Given that the site goes on to explain that they will “facilitate Open House, from securing the building through to providing food and co-ordinating the workshop schedule,” it doesn’t sound as though they are planning on paying a booking fee.

Will it be your empty building they are planning to “secure”?

Squatting as a form of social protest

As I have commented before, empty commercial property is increasingly at risk from organised groups of squatters. For many of these, squatting is more about protesting about housing shortages and social and economic inequality, than it is simply about somewhere to live.

I am sure you will remember Occupy London’s various occupations, most notably at St Paul’s. And they are not alone. Here are some other groups we have come across, undoubtedly representing the tip of this iceberg.

• Self Organise London – we recently removed this group from Eileen House in Elephant and Castle. They are probably on the lookout for a new site
• Squat the Cull – a new group set up to support the Stop the Cull group, protesting against the cull on badgers by squatting
• The ongoing protests against the Hastings Bypass
• Oubliette – an art house group that occupied seven empty properties and set up art spaces between 2009 and 2011

And there are many more smaller, local groups protesting against specific proposals, such as the eviction we carried out in March at Battersea Park playground.

How can you protect yourself?

Where possible, we advise not leaving property empty for long periods of time. If this cannot be avoided, then site security is a must. Ideally this will be a combination of alarms and CCTV, as well as physical security on site, such as guards and dogs.

In the case of buildings, regularly check to make sure there are no points of access. If the property will be empty for a long time, consider bars on windows and doors. Turning of power and water services may also deter some occupiers. However, if you already have squatters in your building, you should take legal advice before cutting off any services.

You may also want to consider legitimate occupants such as property guardians or short term tenants.

In the case of land, do all you can to secure the perimeter and bar entrances to prevent vehicle and caravan access.

If squatters do break in, take action quickly. The damage done to properties can be extensive – I have seen utter devastation in some properties where we have evicted squatters.

You can obtain a court order for possession against “persons unknown” and transfer it up to the High Court for enforcement by an HCEO (High Court Enforcement Officer).

Open House hosts

The organisers of Open House 2013 are undoubtedly scouting around for a venue as we speak. They probably have a short list in mind.

The event only lasts a week, but there is no guarantee the group will move out once it is over.

So, I leave you with this question - are there any properties in your portfolio that might be on their list?
 

As the process differs somewhat in each case, this article gives guidance on each situation.

Residential trespassers

Squatting in residential property is now a criminal offence under the Legal Aid, Sentencing and Punishment of Offenders Act 2012. To remove squatters from residential property, call the Police who will attend, arrest and remove them.

Residential repossession

If a landlord wishes to repossess his property from his tenants, he must apply to court for an order of possession. Most private tenancies started on or after 28th February 1997 are assured shorthold tenancies (AST) – read more about the repossession of assured shorthold tenancies.

Orders for possession can be enforced by a County Court Bailiff (CCB) under a warrant, but many private landlords are finding this can take some time. It is possible to apply under Section 42 of the County Courts Act 1984 to transfer the order to the High Court for enforcement by a High Court Enforcement Officer (HCEO). 

It will be at the Court’s discretion as to whether they allow the order to be transferred to the High Court.

Commercial repossession

A commercial landlord can apply for an order for possession against tenants, but in our experience, the majority use the Common Law remedy of forfeiture of lease, which can be used once the rent is overdue by the period specified in the lease.

The landlord will normally appoint a Certificated Bailiff to enter the premises, change the locks and take back possession of the property.

If the tenant had absconded owing rent, the landlord can repossess under Common Law, then apply for a County Court Judgment (CCJ) for the rent arrears, which is then enforceable by an HCEO under a writ of fieri facias (fi fa).

Trespassers in commercial property

It is becoming increasingly common for squatters to occupy empty commercial premises since the criminalisation of squatting in residential property.

In this case, the landlord can apply for an order for possession, which will be made out against “persons unknown”. In the majority of cases, the order will be made in the County Court local to the property in question.

However, transferring the order for possession to the High Court for enforcement (using Form N293A) does not require permission from the Court as section 42 does not apply. Once the order has been transferred, a writ of possession will be issued, which the HCEO will then enforce. This article provides more information on transferring up an order for possession.

HCEOs are not required to give notice of enforcement – there are sometimes circumstances where it is advisable to do so, but if giving notice will adversely affect the eviction, then it does not need to be given.

Trespassers on land

As with trespassers in commercial property, the order for possession is made against “persons unknown”. It is normally started in the County Court, but there are circumstances where the action may be started in the High Court.

The order can be transferred to the High Court for enforcement using form N293A. The HCEO will normally conduct a risk assessment on all large scale evictions of trespassers – from property or from land – to ensure that all the necessary specialists and equipment are available to complete the eviction safely. Once the writ of possession is issued, the HCEO will enforce, normally without giving notice.
 

Our client had previously used County Court Bailiffs to repossess the property. However, because they have to give notice, members of the group turned up to try and stop the repossession. And on at least two previous occasions, the defendant broke back in after repossession.

Not surprisingly, our client was unhappy with this state of affairs, so turned to The Sheriffs Office. As HCEOs, we do not have to give notice. We attended, gained entry, secured the property and left a security guard there - all within three hours.

Our client has since told us that, although someone keeps leaving notes to say the security guard is there illegally, no one has broken back in and it remains secure. So, to avoid a void repossession and Void Mortgages, get The Sheriffs Office on the case!
 

However, there are proposed changes to how an enforcement officer may gain access to the debtor’s home to enforce a judgment against them.

Currently the officer may do the following to gain access to residential property while enforcing a writ of fieri facias:

• Climb a perimeter wall or fence
• Enter through an open door
• Enter through an unlocked door by opening it without the use of force
• Enter through an open or partly open window (but not by unfastening a closed window, even if unlocked)

The Transforming Bailiff Action consultation has proposed that the rights of entry be changed so that the enforcement agent will no longer be able to gain access via a window. It is not clear whether this change would also relate to commercial premises.

This concerns me somewhat. In the vast majority of cases, entering through a window is not necessary because access is either gained via a door, or the enforcement is satisfactorily concluded outside the main premises.

But there are some cases where the debtor is determined to go to great lengths to prevent the execution of the writ. It is in these situations that this proposed change to the rights of entry will have a negative impact on the enforcement of a writ, and therefore also on the claimant.

We had just one such example last week. When our enforcement officer knocked on the door, the debtor claimed to be someone else, although our officer knew this was not the case. The debtor then shut and locked the front door, remotely shut and locked the external gates and sat down to continue eating his breakfast, leaving our officer locked inside the grounds!

Our officer called the police, who duly arrived and told the debtor to open the gates to let him out. However, our man found an open upstairs window and a ladder and advised the police that he would be entering that way. He did gain entry, and, as the police told the debtor, it was lawful. We obtained payment of a sizeable portion of the debt, which was for tens of thousands of pounds.

This is an unusual situation, but it does clearly demonstrate that removing a peaceable entry option makes the work of enforcing against a debtor who is determined to avoid paying the money a court has judged that he owes, that much harder.
 

The first step in the process, if requests for payment and a letter before action have not resulted in payment, is to obtain a judgment. You can make your own claim via the Government’s Money Claim Online service (MCOL).

However, if the claim is involved, for a high sum of money or is disputed, we strongly advise seeking legal advice. When the claim is made without a solicitor, there are sometimes errors made which can prevent successful enforcement. Getting the debtor’s details 100% accurate in all paperwork is particularly important.

Most cases are started in the County Court. If using MCOL, the case will be handled via a bulk centre. If defended, it may be transferred to the County Court local to the debtor. If your claim is made directly (using Form N1), this will be to the County Court local to the debtor.

Award of judgment

If the judge accepts your claim, you will be awarded judgment. If the debtor does not put in a defence, it will be a judgment by default.

Once awarded, the debtor is instructed to pay within 14 days. Should this not happen, you might choose to enforce the judgment.

Methods of enforcement

You can choose to have the judgment enforced by a County Court Bailiff under a warrant of execution, which costs £100, if it is for £5000 or less. However, if it is for £600 or more, you may find a High Court Enforcement Officer (HCEO) more effective - you can read more about how to choose which type of enforcement in this article.

If you decide to use an HCEO, check that they have enforcement officers in the area where your debtor is located and that they have a strong track record. You can appoint an HCEO directly yourself, such as The Sheriffs Office, or ask your solicitor for a recommendation.

Transferring up your judgment

HCEOs operate under a High Court writ of fieri facias (fi fa). In order to obtain the writ, your County Court judgment will need to be transferred up. This is done via Form N293A. Once you have completed the form and instructed your HCEO, they will manage the process of sending the form to Court to obtain the writ.

What it costs

There is a £60 court fee – payable to HMCTS – which needs to be sent with the transfer up request (Form N293A). Most HCEOs do not charge for managing the transfer up process on your behalf.

The court fee, along with judgment interest and enforcement costs, is added to the judgment debt. If enforcement is successful, all these will be recovered from the judgment debtor.

If enforcement is not possible – perhaps the debtor has no assets or cannot be located – then all you pay is an abortive fee, which costs £60 plus VAT.

Enforcement

Once the writ is received, the HCEO will send an enforcement agent to attend the debtor’s premises – work or home, or anywhere there is good reason to believe the debtor might have assets. It is a good idea to provide the HCEO with as much information as you have about the debtor – addresses, phone numbers, vehicle registration, photographs. They all help.

The enforcement agent is instructed under the writ to seize assets belonging to the debtor. If he is concerned that the assets are at risk, he might decide to remove them. Once seized, the debtor will be asked to sign a Walking Possession Agreement, which means that the items are now under the control of the HCEO and may not be removed or sold by the debtor.

In most cases, the debtor will make a payment – either in full (75% of our enforceable cases are made by a single full payment) or they may offer payment by instalments. The HCEO will seek your agreement to such an arrangement.

If goods are removed, they are normally sold at auction and the sums raised will be used to satisfy the writ.

Payment

Once payment has been received, either from the debtor or the proceeds of a sale, they are retained by the HCEO for 14 days (this is a legal requirement), then payment is made to you.

Once the debt has been fully paid – including interest and fees – then the Walking Possession Agreement is discharged and the debtor regains control of those items previously seized (assuming they weren’t removed).

Find out more

If you would like more information on High Court Enforcement, you can download our eBook “Guide to Enforcement” or give us a ring on 0845 688 9757.

You can also downlaod a PDF of this document.
 

The appeal centred on the remoteness of damages in a case of breach of contract and focused on the following point:

Can a developer of land, whose development scheme is delayed by the failure of a contractor to perform tasks which he has contracted to perform by an agreed date, recover damages for the loss he suffers thereby from a decrease in the market value of the development which occurs during the period for which its completion is delayed?

The case

The case concerns a farmer, Mr Gubbins, who had planning permission to build residential housing on land in Cornwall. He appointed consultant engineers John Grimes Partnership to design a road within the site, which would then be approved, adopted and maintained by Cornwall County Council.

Both parties agreed the work would be completed by March 2007, but initial approval wasn’t obtained until February 2008. JGP was aware that the road was an essential part of the development.

Mr Gubbins wasn’t happy with JGP so appointed another engineer in May 2008 who redesigned the road and drainage, submitted it for full approval in June, which was granted within two days.

JGP had already been paid £20,000 in fees, but invoiced Mr Gubbins for another £2,893. When he refused to pay, they sued him, so he counter-claimed for the fees already paid (because the work had to be redone) and he sued for damages because the delay caused a reduction in the market value of the houses and an increase in building costs.

The first instance decision

The judge found that JGP’s breach of contract delayed the project by 15 months, during which time property values fell, and that JGP knew that the delay brought with it the risk of changes in the market. He ruled that JGP was liable and that the reduction in market valued needed to be assessed.

The appeal

JGP appealed the decision, saying it had no control over the property market. They said that it was necessary to establish that they could be said to have accepted responsibility for that kind of loss at the time the contract was made. JGP felt it should only be liable for the costs of the second engineer. They felt that loss due to the fall in property values was too remote.

The Court of Appeal dismissed the appeal and upheld the decision of the first instance judge. Because the property market does not change as quickly as other markets, there has to be a significant delay for there to be an impact and that JGP would have been aware of the potential impact of the delay. They also rejected JGP’s argument that the loss would be disproportionate to the fees paid.

Read more about the decision here.

What this might mean

• Delays can give rise to damages if there has been a decline in the market – it is likely that the delay would need to be significant though
• It would be dangerous to assume that this kind of loss is too remote
• There does not have to be express agreement to this liability from the contractor

Such cases as this are handled in the specialist Technology and Construction Court. Once an award has been made, it will be enforceable by a High Court Enforcement Officer.

Here are the main things you need to know before you use this enforcement option:

Court permission is not required

The landlord does not need any court order to distrain for rent against a tenant when the rent is overdue.

It must be a current tenancy

If the lease has expired or been terminated, distraint cannot be used. The same is true if the lease has been assigned to another tenant (assuming the landlord allowed this to happen when there were rent arrears from the original tenant).

The rent must be overdue

You cannot distrain (also known as levying distress) until the day after the day on which payments are due. The tenant can pay up to the last minute of the last day fixed for payments.

A certificate is necessary

An individual landlord may distrain in person, but in the case of a company, the director who wants to distrain must hold a certificate. In practice, the vast majority of landlords appoint a Certificated Bailiff to carry out the distraint.

Where distraint can take place

Only goods found on the premises in question can be seized (levied) unless the tenant agrees that other goods may be taken. If the landlord believes that the tenant has removed items fraudulently to prevent distraint, then this will be decided by the Court.

If you want to seize items held elsewhere, a County Court judgment that is transferred to the High Court for enforcement may be a better option, as this allows an enforcement officer to seize goods he believes may belong to the debtor, wherever they may be.

Absolute privilege

Some items are completely exempt from seizure. These include

• Goods already seized
• Items belonging to third parties and items on hire purchase agreements
• Tools of the trade
• Perishable items

CRAR

These rules will change once CRAR is brought into effect – please read my article on CRAR for more details.
 

I find that landlords are often ignorant of how poorly possession claims are drafted, and how it ruins their chances at court.

It can be a complicated area of law - any landlord who has ever looked at Section 21 of the Housing Act 1988 will see why they might consider getting professional help. Companies such as ours help landlords issue claims for possession at fixed fees and arrange for an advocate to go to court with the landlord on the day of the hearing.

Role of advocates

The advocates at court are mostly trained as barristers (often not fully qualified), and some are solicitors or legal executives. The advocates have to be skilled of course, and ready to carefully put the landlord’s case to the Judge. But the reality is this: when problems occur at court, it is as a result of mistakes in the way the claim has been drafted. So by the day of the court hearing, if the paperwork has been done badly, the lawyer’s hands are tied.

Paperwork mistakes in 90% of cases

The truth is that for more than 90% of the time there are mistakes in the paperwork – in the last ten hearings I did for well-known tenant eviction companies representing both landlord and tenant, I estimated that there were mistakes in all but one claim. The reality is that if mistakes are spotted at court by the Judge or a duty solicitor acting for the Defendant, the mistakes can defeat or delay the claim. Getting tripped up by ‘snakes’ in the paperwork can send you back to square one.

It does not matter if the tenant has not paid rent for months. If there are problems with the paperwork, the Judge will either adjourn the hearing, or strike out the claim. Either way, the landlord ends up paying by losing more rent, or having to start again and issue a new claim. All that effort in climbing metaphorical ladders to get your tenant out will have come to nothing.

It is common practice that when mistakes are made in the paperwork by companies issuing claims on behalf of landlords, the company fails to tell the landlord that it was their mistake which caused the Judge to act as they did. Instead it is left to the landlord to assume that the Judge has made a strange decision, that courts are random and unpredictable places, and that the law bends over backwards to help tenants over landlords, none of which is true.

Climb the ladders

Contrary to popular belief, Judges are perfectly happy to give possession to landlords so long as the paperwork has been done correctly, and the law observed. Judges are strict about the legal requirements for a landlord to get possession because they have to be. The law strikes a good balance between the right of someone to stay in their home and the right of the owner of the property to do what they want with their own property. Judges simply follow the law. But the evidence has to be correctly served, pleaded and presented. If there is not enough evidence, or there are procedural defences as a result of mistakes in the paperwork, the Judge will not make an order removing someone from their home.

Avoid the snakes

Whether or not the property is part of a portfolio, or a single one bedroom flat that is a future pension, or a nest-egg for the landlord, it is the landlord’s baby, and the landlord needs help in getting it back. But professional help should mean that the proceedings and notices are issued correctly, and are not flawed from the outset.

Ten typical snakes

1. The company fails to instruct a lawyer to attend the hearing - quite common, and the landlord pays for the lost rent until the next hearing
2. The tenants’ names are not spelt correctly on the particulars of claim – this can stop the eviction
3. The advocate is not sent all the papers
4. The evidence of service is insufficient
5. The Section 21 Notice has the wrong expiry date on it - even some duty solicitors do not seem to know the difference between a Section 21(4)(a) Notice and Section 21(1)(b) Notice
6. Reliance on Section 21 is not set out properly in the claim
7. The date of expiry on the Section 8 Notice is incorrect
8. The Particulars of Claim is not CPR 55 compliant - if in doubt about what information to give, provide more than is necessary
9. The dates of service are wrong - the lettings agent or company helping evict may not understand the rules for dates for service under Part 6 of the Civil Procedure Rules. Unfortunately, Judges do!
10. Arrears statements are wrong or confusing - many claims will get adjourned by Judges because credits, debits and arrears totals seem incorrect

The team from The Sheriffs Office comprised 40 enforcement officers, working together with 30 officers from the Met Police. Intelligence had advised that there were up to 50 squatters on the site, so we had ensured that the team was large enough to cope with a large scale protest.

The eviction

It was an early start! We forced entry into the building at 4 am thee entrance of which had been blockaded by the occupants. Our 40 officers were split into four teams, each with a clear remit – an entry and perimeter team, a roof team, and two search and clear teams.

It is a large building, with six floors plus the roof, basement and underground car park. There were plenty of places for people to hide, including a myriad of offices that all had to be checked.

We safely and successfully removed occupants from the roof and negotiated others to come out too. We found people hiding in various rooms, all of which we cleared. Once they had been removed from the building, some people tried breaking back in, but naturally we prevented them from doing so.

The whole operation was completed in 4.5 hours, to the satisfaction of the building owners, our clients.

Why the protesters were there

The site is due for redevelopment into new homes, including some that will be affordable and available to local people, plus office and retail space and a new public open space. The plans are just waiting for final approval by the GLA. The old building used to be home to the Department of Health & Social Security and later occupied by South Bank University.

On 19th February, a splinter group of Occupy London called Self-Organised London illegally moved into Eileen House in protest at the development plans. They set up events such as talks and workshops. The group is also squatting in other sites around London.
 

© Copyright Stephen Richards and licensed for reuse under this Creative Commons Licence

At The Sheriffs Office we have enforced judgments against almost all of the major high street banks at one time or another, one such enforcement featuring on the first series of The Sheriffs are Coming in March 2012.

And with the economy the way it is it comes as no surprise that we are all looking at our bank charges with much greater scrutiny these days. Some, despite written requests for refunds, may still have to take their bank to court either through their solicitor or using the Government’s own Money Claim Online system (MCOL).

If you have a judgment against a bank, perhaps for mis-selling, for example PPI claims, or unlawful charges, and it remains unpaid, then providing that judgment is over £600 (including court costs) you can transfer the judgment to the High Court for enforcement.

Enforcement will be conducted by a High Court Enforcement Officer (HCEO) such as The Sheriffs Office, acting under a writ of fieri facias (fi fa).

This will often mean going to the Head Office or even a local branch, as the goods within will be usually owned by the debtor bank. We have previously seized goods in Barclays Towers and have even been into the vaults at RBS Head Office!

What do we seize?

We can seize any assets belonging to the bank as judgment debtor. This could be computer systems, office equipment, bullion or even cash, for example.

What we cannot do is seize any money or assets belonging to the bank’s clients. So all safe there, and no need for a run on your bank!

The legislation already covered both business to business transactions and business to public authority transactions. If the debt remains unpaid after the date specified in the contract, then the creditor can write to demand.

If there is no contract, then interest will accrue after 30 days, from the later of receipt of the invoice or receipt of goods or services

Changes

The main changes of the new legislation are:

• A creditor can choose to not charge interest to a business customer, but when the money is owed by the public sector, they MUST pay charges and late payment interest if they don’t pay on time (set at 30 days)
• The recommended payment terms within the Act are 30 days, however contracting up to 60 day terms, in exceptional circumstances, is permissible.
• Invoices not paid after 60 days (on both business to business and business to public sector) will be deemed as being “grossly unfair"
• Payment terms in breach of these limits will mean that interest will incur after 30 days, regardless of what the agreed terms state
• Unlike the old directive, you cannot now contract out of paying late payment interest
• Each Government can set their own rate of interest

Interest

Under the old Directive, interest could be claimed at 8% above the Bank of England in the UK and 7% above the European Central Bank for European debts. This new directive permits each government to set their own rate of interest for late payment, however, the minimum rate they are allowed to charge is 8% above the European Central Bank rate. 

Compensation

Under the new Directive the minimum sum which must be claimed is 40 Euros regardless of the size of the debt and each member state must set its own levels. The levels in the UK will remain as currently, i.e. £40/£70/£100, depending on the size of the debt. 

What is new is that, if the creditor's reasonable costs in recovering the debt are not met by the fixed sum, the creditor will now also be permitted to claim a sum equivalent to the difference between the fixed cost and those reasonable costs expended. "Reasonable" has not been determined!

What you need to do

The Regulations do not apply retrospectively, so you do not need to review your existing contractual arrangements. 

However you will need to ensure that any supply contracts you enter into from 16 March 2013 onwards reflect the requirements set out in the Regulations.

This moratorium on legal action, including enforcement, also extends to the business as a tenant of the property/properties it leases. This includes action under Common Law, i.e. distraint for rent or forfeiture of lease, as well as court action, such as a writ of fieri facias (fi fa) or writ of possession.

Exceptions to the rule

The only way the landlord is permitted to forfeit a lease after the tenant has entered into administration is with the agreement of either the administrator or the court.

The court or administrator will normally give permission if forfeiture will not negatively impact on the mission of the administrator.

Lazari GP Ltd v Jervis (2012)

In his role as administrator of Game Retail (UK) Ltd, Jervis of PWC had agreed a “pre-pack” sale of its business and granted the buyer of Game a licence to occupy Game’s stores. The buyer accepted the risk associated with the fact that Lazari, the landlord, may subsequently refuse to assign the lease to them.

Because the buyer was a new company with no credit rating (set up specifically to buy Game), Lazari found a new alternative tenant. The new tenant wanted to move quickly, so Lazari needed permission to forfeit the lease if they wanted to complete the new lease. Forfeiture was necessary because the buyer of Game was continuing to trade from the Game stores

As the administrator, Jervis, refused permission, Lazari (the landlord) went to court and won their case. The court ruled that forfeiture would not negatively affect the administration because:

• The administrator had done his job – he’d found a buyer for the business
• The buyer had accepted the risk associated with the assignment of the lease
• Lazari faced a financial loss if their new tenant withdrew from the negotiations

The silver lining to a pre-pack

Pre-packs can be bad news for creditors, especially when the “buyer” is the owner or director of the failing business setting up a new company to take on the assets, but not the debts, of the old. This is not true of all pre-packs, but it is the case with many, and certainly a situation we regularly come up against in the course of our work.

However, the silver lining is that many pre-packs agreements will include a requirement that the buyer accepts the risk that the landlord may not consent to the assignment of the lease.

If the buyer has accepted this risk, then the landlord may well be in a position to forfeit the lease during the administration moratorium.
 

In the case of residential possessions, it is recommended that the possession application also include a request to have it enforced using HCEOs, under Section 42 of the County Courts Act 1984. You can read more about this in my article on Section 42.

Most orders for possession are issued in the County Court local to the property or land. In some circumstances, for example against trespassers where there is a substantial risk of public disturbance or harm to persons or property, the possession claim may be started in the High Court.

Once you have your possession order, you can have it enforced by a County Court Bailiff or an HCEO.

This article is going to look at the procedure for enforcement by an HCEO under a writ of possession. The claimant will need to transfer his order for possession, issued in the County Court, up to the High Court for enforcement.

Transfer up procedure

• You must have a final order for possession, not an interim order
• Give the tenant notice that you are applying for a writ of possession (RSC Orders 45 and 46), so that he has the opportunity to apply to the court for relief
• If money has also been awarded via a judgment or order, this can be added to the writ, so that it becomes a combined writ of possession and fieri facias (fi fa)
• Apply for the transfer using Form N293A, then send it to the court, or your selected HCEO – most HCEOs will manage the transfer up process on your behalf for no fee
• Form N293A is used to apply for both a writ of possession and a combined writ
• You will need to also send payment for the court fee, currently £60 payable to HMCTS
• In a similar way to the transfer up of a money judgment, the N293A is sent to the County Court that issued the judgment or order for sealing
• The writ of possession is then applied for (normally by the HCEO on your behalf) using Form 66A which is sent to the High Court of District Registry for sealing

Enforcement

Once the sealed writ is returned, enforcement can commence. Depending on the circumstances of each case, there may be a need for some advance planning. For example, we had a case recently where the tenant had blocked up some walls, so we took a builder in to enable us to gain access.

In the case of eviction of protesters - such as our recent eviction from the adventure playground in Battersea Park, where protesters wanted to prevent the refurbishment of the playground - we undertook a risk assessment and planned the eviction carefully in advance with the Police and Parks Police.

Once the writ of possession has been executed, the HCEO will endorse the writ, normally by asking the claimant, or their representative, to confirm that they now have possession of the property and/or land.

Commercial tenants

Where a commercial landlord wishes to repossess his property from his tenant, he will normally act under Common Law to forfeit the lease using a Certificated Bailiff – you can read more about this in my article on forfeiture.

Common Law

If a landlord has trespassers on his land, he may use Common Law to remove them. If the landlord is a Local Authority, the Government guidelines recommend they use a writ of possession and not Common Law.

We have decided to see if we can help by raising some money for Red Nose Day. We have set up a fundraising page on JustGiving.

And, as a thank you for your donation, we will send you a link (via JustGiving) which will give you access to a photo gallery of shots of the team taken during the filming of The Sheriffs Are Coming.

We really hope you will join us in supporting this great cause - simply click on the JustGiving button below!

Whilst the actual amounts have not yet been finalised, bailiffs and HCEOs will have different fee scales, and the HCEO fees will be higher. This is due to the complexity of High Court enforcement, the higher value of the debts to be enforced and the level of personal responsibility of the authorised officer to the creditor and their duty to the court.

The fee scales will be reviewed after the 1st and 3rd year (and the 5th if necessary). They will also take into account inflation.

The new fee scales will be allocated according to the different stages of the enforcement process:

The proposed fees for High Court Enforcement Officers (HCEOs) are as follows – please note that these are not yet finalised and there is no set date for when they will come into force:

Exceptional costs will be handled via a process similar to the one already in place for High Court Enforcement Officers (HCEO). The creditor will now need to indicate their approval to the application for these.

The abortive fee, payable by the judgment creditor if enforcement is unsuccessful, will be raised from £60 to £75 plus VAT.

The MoJ is also proposing that, when there is a part payment, the monies received should be distributed on a pro rata basis between the creditor’s debt and the enforcement agent’s costs.

Impact on creditors

The introduction of the compliance stage should encourage some debtors to pay at this point or agree a payment plan, which will benefit the creditor in terms of starting to receive payment as quickly as possible.

The sharing of monies recovered in the case of part payment will benefit creditors for those cases where some HCEOs recover 100% of their fees before any payment is made to the creditor.

Impact on debtors

This will provide clarity and transparency to debtors. With set fees, debtors will know what they will incur if they do not pay at each stage.

With the compliance stage expected to encourage more payments, debtors will be able to prevent additional charges from being made, which they would be liable for.

It will be harder for debtors to slow the enforcement process by going to court to challenge enforcement fees.

Impact on HCEOs

The current fee structure is decades out of date and are set at such a level that HCEOs could not provide this service based on those. As a result, many charges are made under miscellaneous Fee 12 which have been accepted by the Masters over time. These fees are still challengeable by assessment should a party not accept them.

Set fees that take into account the average cost of running an HCEO firm will remove the need for these charges, which are generally the main cause of disputes relating to fees.

The new fees are not designed to increase income levels for HCEOs. Those firms that are inefficient in the way they operate or do not have a volume of work may need to make significant changes to stay in business.

However, for the majority of HCEOs, the fee reforms will provide a level playing field, where service levels and effectiveness become the true differentiator – as they should be!

Not necessarily.

Limitation Act 1980

Section 24 of the Limitation Act 1980 states that:

• An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable
• No arrears of interest in respect of any judgment debt shall de recovered after the expiration of six years from the date on which the interest became due.

Lowsley v Forbes

This situation was considered by the House of Lords in the case of Lowsley v Forbes where the claimant wished to enforce the judgment 11.5 years later, when the defendant returned to the country.

The Lords ruled that the legislation barred the bringing of a fresh action, but that execution of the existing judgment did not count as a fresh action. Therefore the claimant was able to take enforcement action.

However, the Lords did rule that the limit of six years’ interest did still apply.

Impact of delays

The main impact of a long delay in enforcement will be whether the judgment debtor can be located, has sufficient assets and is solvent. In the case of a business, it may have been wound up or gone into insolvency.

There will also be the fact that only six years’ interest can be recovered.

Permission will be required from the Court to obtain a writ of execution on a judgment more than six years old under RSC Order 46, rule 2(1)(a). The Court is likely to ask why there has been such a delay and will take this into account when making its decision.

The judgment debtor may also challenge enforcement on the basis of delay. However, he will have to provide compelling evidence of the extent of prejudice to the debtor by reason of the delay.

In conclusion

There are cases where a judgment previously considered unenforceable becomes viable, and can still be enforced beyond the six year period. However, we strongly advise that you take enforcement action as soon as it becomes necessary to increase the chances of success.
 

The trade name is different from the name in which it has been registered. A company incorporated in England and Wales or Scotland may only be registered with one name.

However, in addition to the company's registered name, it may also have business or trading names. The provisions on business names are set out in Part 41, Companies Act 2006 (CA 2006).

A business name is a name used by any person, partnership or company for carrying on business which is not the same as their own name. In the case of a company, it means a name that is not its registered name. Business names are not registered under CA 2006, but they must comply with the provisions of Part 41 and the regulations made under it.

Disclosure of registered name

Under section 82(1) of CA 2006 and regulation 6 of the Companies (Trading Disclosures) Regulations 2008 (the Regulations), a company must disclose its registered name in:

• Business letters, notices and other official publications.
• Bills of exchange, promissory notes, endorsements and order forms.
• Cheques and orders for money, goods or services signed by or on behalf of the company.
• Bills of parcels, invoices and other demands for payment, receipts and letters of credit.
• Applications for licences to carry on a trade or activity.
• All other forms of business correspondence and documentation.
• Its websites.

Use of business name when contracting

It follows from the Regulations that a company must include its registered name in its written contracts - of course, a contract can be made orally, or by conduct.

As a matter of good practice, the company's registered number should also be included, as this is the only thing identifying a company that never changes.

Enforceability of contract containing business name only

The other aspect to this question is whether a contract entered into by a company incorporated in England and Wales or Scotland be enforceable against that company when the only name mentioned in the contract is the business name of the company rather than its registered name.

The simple answer is that such a contract will be legally enforceable provided that the use of the business names does not create any confusion as to the identity of the party in question, and providing all other elements for the formation of a contract are present.

The identity of the parties to a contract is fundamental to the formation of a contract.

However, if there is a dispute over who the true parties to the contract are, the courts will consider what the parties said to each other and what they did in the period leading up to forming the contract to determine who the parties were intended to be. This will be a matter of interpretation.

Section 83 CA 2006

In addition to the common law rules, section 83(2) CA 2006 provides that, where a company is seeking to enforce a right arising out of a contract made in the course of business in which it was in breach of the requirement of disclosure under section 82, any legal proceedings will be dismissed if the defender to the action can show that he has a claim against a company which he has been unable to pursue because of the breach or that the company's breach has caused him to suffer financial loss.

In other words, where a company is in default of any disclosure requirement under section 82, it will have no rights against any person who can demonstrate some actual prejudice caused by the breach. If the defender cannot show such prejudice the contract is enforceable.
 

One of the provisions in the act (section 71) is the abolition of distraint, i.e. when landlords can take action against tenants to recover rent arrears under Common Law.

Distraint will be replaced by CRAR - Commercial Rent Arrears Recovery. Section 72 will allow a commercial landlord to use Schedule 12 (taking control of goods) of the TCE Act to recover rent payable under the lease from the tenant, without needing to go to court.

An overview of the CRAR proposals

CRAR will only apply to the rent (and any interest and VAT) payable under the lease. This means that items not directly attributable to the tenant’s possession and use of the premises, such as services charges, will not be recoverable through CRAR.

If the landlord wants to use CRAR, he will have to give the tenant a notice of enforcement after the rent is due. This has recently been amended from 14 days down to 7 days. The rent must still be unpaid at the time the notice is served, as well as immediately before any goods are seized. Once notice has been served, the tenant may apply to court for a set aside or delay of execution.

There will have to be a written lease in place to use CRAR. Any contract or lease that seeks to amend or avoid the CRAR provisions will be void.

It must be possible to calculate the rent due with certainty and it must be for a minimum amount. This is called the “net unpaid rent” and part of the consultation was to consider what amount this minimum should be. The proposal was seven days’.

The net unpaid rent is what is owed once interest, VAT and any permitted deductions are made. These are deductions, recoupment or set-off that a tenant would be entitled to claim if the landlord takes rent arrears action.

Unlike under distraint, only Certificated Bailiffs will be able to seize goods, not the landlord.

The Government response to the consultation

In terms of the information required from a landlord for authorisation to an enforcement agent, this will now also include:

• The amount of rent to be recovered
• The period for which the rent is owed
• An indemnity from the landlord to the enforcement agent for any potential action due to a wrongful instruction being issued

In terms of the minimum net unpaid rent, the Ministry of Justice decided that it was not necessary to extend the seven day period. However, they did decide that there were strong arguments in favour of retaining the period of 1 day as it currently exists, especially where the debtor is on the verge of insolvency or such a time period introduces delays into rental payments.

The conclusion on the time period is that the Ministry of Justice will work with creditors and the enforcement industry to consider the consequence of the time period.

The main point of the response is the enactment of Part 3 of the Tribunal, Courts and Enforcement Act 2007 (TCEA 2007) and this is likely to be in either April or October 2014. This will see significant changes to the fee structure and a variety of processes that will affect everybody involved.

In the circumstances, I shall be writing a series of articles focusing on each of the key issues that I believe are raised by the new regulations.

In this first article, we look at the requirement to give notice of enforcement.

7 day letter to debtors before first attendance

Upon instructing an HCEO with the soon to be renamed Writ of Control (currently a Writ of Fieri Facias), the HCEO will be required to send the judgment debtor a ‘Notice of Enforcement’ prior to attending the debtor’s address to take control of goods (seize).

This is in line with current regulations applied to County Court Bailiffs.

The Government believes that this will allow the debtor time to make a suitable payment arrangement without incurring the unnecessary fees of an attendance by an Enforcement Officer.

Whilst the final version of the Notice of Enforcement has yet to be seen, the Government has already produced its first draft in its consultation paper. This notice will give clear details of the debt, including the sums due and how and where to make payment.

The notice will be charged at £75 plus VAT (£90) and will be sent out seven days prior to the Enforcement Officer’s first attendance.

If no response is received by the HCEO’s office, then an Enforcement Officer will attend the debtor’s address.

Pros

This in itself should see an increase in online or telephone payments and arrangements being set up without the need for an Enforcement Officer to attend. It will also keep the fees to a minimum for vulnerable debtors.

Cons

Those who have no intention of paying, and have already had many letters requesting payment, may take the opportunity to remove, hide, sell or transfer assets prior to the Enforcement Officer’s impending visit.

Next time, we will look at the impact the new fee structure will have on creditors, debtors and HCEOs.
 

The issue of squatting boils down to our right to property ownership - the scope of the word ‘property’ in this context extends far beyond bricks and mortar and is synonymous with ‘possessions’. By taking possession of a property without the homeowner’s permission, squatters are violating our fundamental right to property ownership.

It is inconsequential whether or not a property was occupied, since this ultimately remains the prerogative of the homeowner. The homeowner should have the right to choose to do whatever they wish to do with their property (so long as it is in accordance with the law) and the state should be protecting the rights of homeowners to that effect.

The right course of action?

In my opinion, it was definitely correct to bring in criminalisation. Landlords have been requesting this for years.

It does not solve the underlying problem the Government has with homelessness, shortage of council properties and the empty houses issues. Proponents of squatting could point to an ineffectual system, where long waiting lists for social housing are the norm. Their concerns in this area are valid and these sorts of issues do need to be seriously looked at by the Government. However, they still do not justify the act of squatting.

Why it was necessary

Landlords are essential to meeting the demands for UK property. They have been calling for a fair regime that supports investment within the sector, whilst minimising risks, for some time now. Criminalising squatting will not solve all of the issues, but will help to mitigate a part of this risk and give investors more confidence to invest in this sector.

We supported a petition to criminalise squatting which we delivered to Downing Street in October 2011. It was filed for motion at Parliament by Mike Weatherley, MP for Hove and Portslade, and the law came into effect, within a year, on the 1st September 2012.

Under Section 144, squatting in England and Wales is punishable by up to six months in jail and fines up to £5,000.  The first squatter to be convicted was Alex Haigh, who was arrested for squatting in a flat in Pimlico in Central London.  He was sentenced to 12 weeks in prison, after pleading guilty.

The new law does not cover commercial premises.

The impact on commercial premises

I believe the criminalisation on squatting will be a deterrent to squatters considering residential properties and we will see a massive decrease. 

However, I do believe that squatting will continue to rise dramatically in commercial buildings, forcing landlords to take the standard court procedures to remove them.

This is naturally not an ideal situation and landlords should take measures to prevent squatters occupying their vacant commercial property, such as a security alarm system, re-enforced defences to doors and windows etc., on-site security, and perhaps taking on property guardians on a short lease to look after the property.

The Sheriffs Office welcomes this much needed reform and will work with the Government and other stakeholders to ensure that the finer details are dealt with before its implementation, which we believe is likely to be April 2014.

David Carter, Joint Managing Director said

"Much of the reform is welcomed and long overdue; however we must ensure that the hands of HCEOs are not tied to the detriment of unpaid judgment creditors. There is a lot to go through and some changes will clearly need to be made before Part 3 of the TCE Act 2007 is formally brought in, but we hope these can be concluded as soon as possible."

It is clear that much of the reform is aimed at companies that predominantly work in the recovery of debts for Local Authorities (e.g. Council Tax and Parking Fines) and HMCTS Court fines. However, High Court Enforcement and the recovery of commercial rent arrears (CRAR) also features significantly.

The Sheriffs Office does not enforce for unpaid Council Tax, Parking Fines or Court Fines.

The Sheriffs Office are Authorised High Court Enforcement Officers who enforce judgments and orders under a High Court writ of execution on behalf of individuals and companies. We also undertake the recovery of commercial rent arrears on behalf of landlords using our own Certificated Bailiffs. We pride ourselves on the professionalism of our highly trained Enforcement Officers in dealing with what is often a difficult task.

The role of the executor

Where the deceased has made a will, they appoint one or more people to act as their executor, also known as a Personal Representative (PR). The PR, normally with the support of a solicitor, settles all matters surrounding the estate, pays inheritance tax and arranges for distribution of the estate to the beneficiaries.

As part of this role, the PR will seek to ensure that any money owed to the estate is recovered, as well as settling any claims against the estate.

If there is no will, then the court will have to appoint a PR to wind up the estate under a Grant of Administration. This takes place after the deceased’s death and no one can act on the estate’s behalf until that point.

A claim has been made and judgment awarded

In this case, the PR can commence enforcement action on behalf of the estate if payment has not been made. This includes the option to transfer up the judgment to the High Court for enforcement by a High Court Enforcement Officer (HCEO), where enforcement is carried out under a writ of fieri facias (fi fa) in the same way as all other HCEO enforcement.

Where no claim has been started

The will gives the PR the legal right to bring a claim on behalf of the estate, so, if the deceased was owed money, the PR can start a claim in the County or High Court, as approaprite, to obtain a judgment.

Assuming the judgment is awarded, the PR will then take enforcement action if necessary, including the transfer up to an HCEO for enforcement under a writ of fi fa.

Death of the judgment debtor

It is also possible to enforce a writ against a deceased judgment debtor. You can read more about this in another article - Writ enforcement where the judgment debtor is deceased.

It is worth bearing in mind that the executor of the judgment debtor’s estate can be held financially responsible for any loss caused by failing to carry out their responsibilities, including the responsibility to pay the debts and liabilities of the deceased and to settle any claims against the estate.

More information

If you would like to read more about this subject, it is covered in the Civil Procedure Rules Part 19.8.

The first point to clarify in this instance is to check who the claimant had a contract with, as that is the entity that they will need to sue.

Separate legal entities

The law treats parent companies and their subsidiaries as separate legal entities, each responsible for the management of that business, including separate finance, management, recruitment etc. As each is a separate entity, then one company, including the parent, cannot be held liable for the debts of another company within the group.

Exceptions when the corporate veil is lifted

This separation of the legal entities is commonly referred to as the “corporate veil”. There are some instances when a court may lift this veil and hold the parent company liable for the actions of a subsidiary.

These instances normally relate to circumstances where there has been fraud committed, such as the improper transfer of assets or shares and other fraudulent means to avoid the subsidiary company’s liabilities, or impropriety in the duty of care. There is a recent health and safety case (Chandler v Cape plc) where the claimant, Mr Chandler, successfully sued the parent company for the asbestosis he suffered while working for their subsidiary fifty years ago.

Judgments for money

However, in the case of a judgment against a subsidiary, it is highly unlikely that the court would allow the lifting of the corporate veil for the claimant to pursue their claim against a parent without substantial evidence that fraud had been committed or that subsidiaries had been set up as a fraudulent façade to hide assets from the creditor.

Unfortunately, if the debtor company with which the creditor had the contract is unable to pay, in almost every case there is no further option.

Here are some of the stories being featured on the show this week and next, including the story of several thousands of pounds worth of diamonds!

Janet’s night-mare horsebox

Janet bought a horsebox for her daughter, a promising young dressage rider, but it turned out to be a nightmare. The head lights failed one December night leaving them to drive through country roads in the dark. The mechanic said the electrics were and everything would go up in flames if driven. Janet took the seller to court and won. But when the Sheriffs arrive, the he is less than pleased to see them and calls the police.

Diamonds are forever

When a couple found out the engagement ring they had just bought was not quite as it seemed, they ended up having to take the jeweller to court, where the Judge agreed that he has misrepresented the ring and had to pay them back. When he still refused to pay they called in the Sheriffs. Did the Sheriffs seize the diamonds? Did they put the sparkle back into love’s young dream?

Turbine trouble

Graham runs a pub on the edge of Dartmoor; with sky high electricity costs and frequent power cuts, he needs another option. He chose to use revolutionary wind turbines. But after waiting a year for them to be installed and then finding out they didn’t work, Graham had had enough and took the supplier to court to get his money back. He asks the Sheriffs for help, but will they be blown away with excuses?

A clean sweep

Kieron was let go from a cleaning company without any notice and no holiday pay. When his former employer didn’t even show up to the employment tribunal hearing, the Judge found in Kieron’s favour. Even then they simply didn’t pay. Kieron contacted the Sheriffs and asked for their help. Could they clean up for Kieron?

Want to watch?

The Sheriffs Are Coming is on BBC One at 11 am every weekday morning until Friday 1st February 2013 and is repeated every morning at 7.05 on BBC Two until Monday 4th February. It is also available on iPlayer.

Follow us on Twitter @sheriffsonline to catch up on the latest episode.

You may be asking yourself why there was a builder present – not the first person you normally call in when enforcing a writ of possession.

During a previous visit to the property, a surveyor had noticed that part of the flat was missing! The room was too short and the windows had disappeared. It sounded like a scene from a Harry Potter film!

However, the wall was solid, not studwork, which was why the builder and his sledgehammer were there.

It turns out that same person owned flats 16 and 17 and had decided to enlarge #16  with the rear of flat 17 taking some 3 metres out of it. We knocked on the front door of #16 to tell him we were going to break through the wall so he could remove any possessions first.

So we knocked through and found the rest of the room, with a doorway, now blocked up to hide his efforts, into #16. We secured the doorway into #16 and changed the front door lock for #17 and the possession was complete.

Here are some photos of this unusual case:

The new wall	Inspection hole	Access!	On the other side	The doorway to #16

However, that is not necessarily the case. In modern Britain, it is very difficult to disappear without a trace. There are many data sources available - some accessible to all, others for specialist trace companies - that can prove invaluable in tracing all kinds of debtors, including absconded tenants.

So how can they be found?

The date of birth is perhaps the single most useful piece of data. This makes tracing people much easier. Even if they’re not currently on the electoral roll, we can search marriage records to find a current address for their spouse.

We can search jointly for couples, married or co-habiting, to find details for one or the other. We can also look for any association with the tenant and trading names, either a sole trader “trading as” or a limited company.

Phone numbers are very useful too – we can reverse look up landline numbers. While we cannot get account holder details for mobile phones, we can check whether the phone is currently registered on the mobile network in the UK – very helpful in disproving claims that the tenant has gone to live abroad!

What legal action can you take?

Naturally for commercial landlords, once your tenant has absconded, you will no longer be able to use the Common Law remedies of distress or forfeiture. However, you can undertake court proceedings, normally by applying for a County Court Judgment, which can then be enforced, if necessary by High Court Enforcement Officers (HCEO).

Residential landlords will also need to apply for a CCJ against their former tenant. As long the CCJ is for £600 or more, it can be enforced by an HCEO.

The new fifteen-part series will air daily (Monday to Friday) on BBC One at 11.00am, from Monday 14th January and concludes on Friday 1st February. It is repeated the following morning on BBC Two at 7.05 am, and will also be available on iPlayer.

The second series features the dynamic duo Lawrence and Kev, along with Marc and Pete, plus some new faces - Dave, Darryl, Mark and Tony - taking on the challenge to recover debts on behalf of people owed thousands of pounds by debtors who think they can get away with not paying.

The programme explores a number of cases where individuals and business owners have won judgments against third parties but have been unable to retrieve any of the money awarded to them. The debtors range from rogue traders right up to well-known multinational corporations.

After transferring their judgments to the High Court for enforcement, they’ve turned to Croydon-based Authorised High Court Enforcement Officers, The Sheriffs Office, to get them their money back.

Throughout the series, viewers will meet some of The Sheriffs Office’s clients as they recount their stories. The cameras then follow some of the Sheriffs as they visit the debtors in an attempt to execute the writ and recover the debt. Most of the debtors are reluctant to pay up despite their legal requirement to do so, and the Sheriffs have to employ a number of tactics to get the debt paid.

Armed only a High Court writ and their trusty chip and pin machine, the Sheriffs often travel in teams of two as not all debtors are pleased to see them. If payment isn’t forthcoming they have the authority to seize goods, cars, jewellery, or any other asset of value. Frequently they’ll get their money, but not before some difficult confrontations.

Week one programme highlights include:

Brian, one of the country’s best and fastest sheep shearers, who was employed by a neighbouring farmer to shear almost 3000 of his sheep. After waiting three months for payment, Brian got a Court Judgment and put the Sheriffs on the case, but would they have to seize 3000 sheep?

Elderly Mrs Parton wanted a new driveway and paid a builder upfront out of her life savings. After an independent surveyor inspected the drive, he told her it all needed taking up and redoing. So Mrs Parton decided to take him to court, using up the rest of her life savings, to cover the costs of having it completely re-laid.  She won her case, got a High Court writ and asked the Sheriffs to help.

After a former employee won a judgment for a large sum of money against a major aeroplane manufacturer because his hearing was damaged as a result of the work. He calls the Sheriffs in to land payment at last.

The strategy is set out under four themes, one of which is transforming services. Within this area, they have specified the aim is to make it easier for individuals and businesses to file civil claims, specifically money and possession claims.

While there are no details of what this will entail as yet, I am cautiously optimistic that this will make it easier for claimants and landlords to file these claims, although it does all depend upon the quality of the execution, as we have seen with other recent MoJ changes.

If you would like to read more, the full strategy document is available on the MoJ website.

Low court fees

Many claimants are put off taking this step because of concerns about the cost. However, the court fees for obtaining a County Court Judgment (CCJ) are set in proportion to the size of the debt and interest accrued, starting at £25, and enforcement costs are also very low, starting at £60.

Obtaining a CCJ

You can see the full schedule of fees here in form EX50. The fees start at £25 for a judgment below £300 obtained via Money Claim Online (MCOL).

As an example, a claim for judgment of £2,000 would cost £95 (or £80 via MCOL).

These court fees can be added to the amount to be recovered from the debtor, along with judgment interest.

MCOL is the Government’s online service for applying for and managing your claim for money up to £100,000. It is most suitable for straightforward claims, where the claimant has chosen to not use a solicitor. For larger or more complex claims, we advise seeking legal advice.

Enforcement

If the CCJ is still not paid 14 days after it has been awarded, you can take enforcement action. You can either apply for a warrant of execution by a County Court Bailiff or, if it is for £600 or more, transfer it to the High Court for enforcement by a High Court Enforcement Officer (HCEO) under a writ of fieri facias, also known as a writ of fi fa.

There is a court fee to obtain the warrant/writ:

• Warrant of execution - £100
• Writ of fi fa - £60

This court fee can also be added to the amount to be recovered from the debtor, as are enforcement costs. When using an HCEO, if enforcement is not possible, for example the debtor has no assets, is insolvent/bankrupt or cannot be located, then there is an abortive fee of £60 plus VAT.

Don’t forget older debts

This process doesn’t just apply to current debts – you can still apply for a CCJ for debts up to six years old (if the debt is older, you will normally need to seek court permission to pursue it and have good reason for not having done so before).

You can also enforce CCJs up to six years old, even if you tried a form of enforcement before.

However, it is worth undertaking some simple checks first:

• Can you still locate the debtor
• Do they have assets
• Have they been declared bankrupt since the debt was incurred

In the case of a company, also check whether:

• They are still trading
• They are still operating as the same company, i.e. the same registration number at Companies House
• They are in administration
• They have assets
   

The execution fee is added to the amount to be recovered from the judgment debtor,  along with the £60 HMCTS court fee, and is fixed at £51.75 (there is no VAT on this fee). The fee  is payable upon successful enforcement of the writ.

Who can claim this fee?

Naturally, solicitors can claim this fee. However, if a solicitor is working internally for a company, be it a debt collection agency, Local Authority or any private company, they can also claim it.

However you must inform the HCEO that the instruction has come from a solicitor, so that they can add this fee to the debt.

RSC Order 46

RSC Order 46 rule 1 defines a writ of execution as follows:

“In this order, unless the context otherwise requires, ‘writ of execution’ includes a writ of fieri facias, a writ of possession, a writ of delivery, a writ of sequestration and any further writ in aid of any of the aforementioned writs.”
 

Dear Santa

This year for Christmas I would like an enforcement officer who:

• Works outside normal office hours – just like the man who owes me money
• Will remain calm, polite and professional, especially when exposed to language that would make my dear old granny faint with shock
• Is fit enough to climb over perimeter fences and won’t get stuck on any sharp pointy bits on the top
• Can visit my debtor at home and at work, or wherever else he might be lurking, anywhere in England and Wales
• Isn’t fobbed off easily – after all, the cheque is never in the post (and my other half assures me that one size never fits all either)
• Will take some of his stuff to sell if he won’t pay up – he’s got a couple of lovely motors that would fetch a bob or two
• Can get me some interest on the debt as well – it’s been a long time and time does cost money!
• Won’t cost me a penny because his efforts will be recompensed by the man who owes me money
• Will act quickly before the muppet goes bust on purpose and leaves me high and dry

I did think all this was impossible to find in one person, but I’ve been having a look on the web and think that a High Court Enforcement Officer might just fit the bill. So, dear Santa, I’ll have one of those please!

Thank you!

PS My other half has asked if he could also look like Daniel Craig please (don’t try too hard on that score though).
 

There has been quite a lot of coverage about these squatters in the Cross Keys after the pub was closed earlier this year by its owner and left vacant while planning permission was sought to convert it into residential accommodation.

And, just yesterday, I read of another empty London pub that has just been occupied as well. This is a story we are hearing more and more frequently – not just in pubs, but in all manner of empty commercial buildings as squatters seek to avoid arrest and imprisonment since squatting in residential property was criminalised September 2012.

From bad to worse

This situation is only likely to get worse. Criminalisation has afforded some protection to residential property owners, but does not change the fact that there are homeless people, as well as those who choose squatting as a lifestyle, looking for property to squat in. And why risk prison when there is empty, easily accessible commercial property available.

While the situation may be worst in London, the rest of the country is, by no means, escaping the problem.

Prevent it from happening to you

While it may not be possible to completely prevent squatters from gaining access, there is much that you can do as a commercial property owners can do, in particular increase security - such as guards and CCTV – and take steps to prevent leaving the property vacant in the immediate term.

Such steps may include short-term leases and property guardians, people occupying the premises on a very short-term contract for a minimal rent, in exchange for protecting the property from squatters, vandalism and general deterioration.

If it happens to you

If eviction does become necessary, you will have to obtain a court order for possession. Then instruct a High Court Enforcement Officer to act promptly to evict the squatters under a High Court writ.

At The Sheriffs Office, evictions are carried out after a thorough risk assessment, where the need for specialist entry teams and equipment can be ascertained, police assistance is secured and, most importantly, we advise you how to secure the site to prevent future occupation.
 

The effect of forfeiture is that the lease is terminated immediately.

Reinstating the lease

However, there may be circumstances when the tenant or both tenant and landlord want the lease to continue after the forfeiture. For example, the tenant has paid all the rent arrears and wants to remain in the building.

The process of reinstating the lease is called relief from forfeiture. The tenant must apply to the Court for relief under section 146 of the Law of Property Act 1925. If he does not and the landlord and tenant decide to continue their relationship without relief, their arrangement will be deemed to be a new lease.

This can have many disadvantages, especially for the landlord. The new lease would most probably not include any guarantees and may then automatically grant the tenant security of tenure as the new lease will not have been contracted out.

Who pays?

It is normal practice for the tenant to pay the court costs of both parties. In the case of Zestcrest Ltd v County Hall Green Ventures Ltd, the landlord agreed to the tenant seeking relief but insisted it be done through the court. The tenant felt the court process unnecessary so sought costs from the landlord. The court ruled that application to court was necessary and ordered the tenant to pay the landlord’s costs.

The court will normally grant relief to the tenant if he acts quickly, pays the arrears and landlord’s costs and remedies any breaches of covenant.

Time limits

If the landlord acted under a court order, then once he has enforced the order, the tenant loses the right to apply for relief.

The tenant’s right to apply for relief technically exists indefinitely, even after the landlord has changed the locks, although this is more in theory than in practice. However, if the landlord subsequently obtains an order for possession, then the right to apply for relief is lost.

New tenant already installed?

After forfeiture, the landlord may have let the property to a new tenant. In this case, the former tenant does still have the right to apply for relief, but the court will take into account factors such as the time delay in applying and whether the landlord acted quickly and unreasonably in granting the new lease.

If the court does rule in favour of the former tenant, then the new tenant becomes the former tenant’s landlord and the lease between the landlord and new tenant becomes an intermediate lease and the new tenant will have a claim in damages against the landlord.

In conclusion

The landlord should be aware of the tenant’s right to apply for relief when the lease is forfeited under Common Law and carefully consider whether he wants to continue the lease, especially if he is concerned about the tenant’s ongoing ability to pay the rent!

The debtor, Gary Burgess, who also uses the surname Knight, pleaded guilty to causing actual bodily harm and, on 26th November 2012, was sentenced to 8 months in prison.
Burgess initially denied the attack, but finally pleaded guilty when DNA evidence from the weapon matched the victim.

I am concerned that enforcement is getting more dangerous as threats are increasingly turning to violence. This is the third serious assault on an officer this year, and the second resulting in a custodial sentence for the assailant. Zulkar Ahmed from Cardiff was jailed for 12 weeks in May for obstructing an officer of the court after assaulting our officer while he tried to enforce the High Court writ.

I am pleased with the sentence and that the judge has taken this seriously. I only hope that it sends out a clear message to aggressive debtors.