Bailiff action to restart and what this means for advisers

Graham O’Malley explains how legal changes affect advice, and looks at industry guidance that might help clients.

How bailiff action was paused

From 25 April, legislation temporarily paused bailiff visits in relation to taking control of goods in residential homes and highways. Bailiffs couldn’t re-enter residential homes either, for instance if a controlled goods agreement is broken during lockdown. The changes do not apply to eviction work.

The Taking Control of Goods (Amendment) (№2) (Coronavirus) Regs 2020 confirmed the pause ended on the 23 August.

We’ll look at the impact of the legal pause ending in a second. During the second lockdown in England and the Welsh ‘firebreak’ a letter from government was sent to the High Court Enforcement Officers Association, County Court bailiffs and to the Civil Enforcement Association (CIVEA). Both the firebreak and lockdown are now over and England and Wales have re-entered the 3 tier system in place previously. An earlier letter from government, dated 21st October 2020, asked for taking control of goods in premises (not highways) to be paused in tier 2 and tier 3 areas. It’s not been confirmed if this request applies again, or whether a new request has been made.

Subject to any further informal agreement then, the rest of this article looks at the impact of the end of the legal pause on the 23rd August 2020.

Extension of time limit to take control

In many cases, the regulations also extended the period in which a bailiff can take control. The end date of the power to take control usually falls ‘after the expiry of 12 months’ from:

• the date on the notice of enforcement
• any other date set by the court following application by a bailiff or
• where a payment arrangement was agreed and then defaulted, the date that the arrangement failed

To help clients know if an extension applies to their case, we need to find what’s called the ‘relevant day.’ To work this out, take the date the power to take control would have ended, and take a month off. If this date falls:

• on or after 26 February but
• before 23 August 2020

the period to take control is extended by another 12 months from the original expiry date. Any period that was originally due to expire between 26 March and 22 September 2020 will be extended. Any other period will not be extended.

Example A:

The notice of enforcement is dated 23 September 2019. The period to take control would expire on midnight of the 22 September 2020. The ‘relevant day’ for the new regs is 22 August 2020 which falls before 23 August. The period to take control will be extended from 22 September 2020 to expire at midnight on 21 September 2021.

Example B:

The notice of enforcement is dated 1 January 2019. A payment arrangement is made on 2 January 2019 but the client defaults 23 September 2019. The period to take control would have expired at midnight on 22 September 2020 (12 months from the date of the default). The ‘relevant day’ for the new regs is 22 August 2020, which falls before 23 August. The period to take control will be extended from 22 September 2020 to expire at midnight on 21 September 2021.

Example C

The notice of enforcement is dated 1 October 2019. No payment arrangement is entered. The time period to take control would expire on midnight of 30 September 2020. The ‘relevant day’ for the new regs is 30 August 2020 which falls after 23 August. The time period to take control will not be extended.

In cases where a client can afford to pay something to the bailiffs, the extension might give advisers more time to negotiate. If it’s now affordable for your client to repay over the additional 12 months, advisers should argue this is a fair arrangement that shouldn’t be refused. However in many cases, the extension just means the bailiff might have the case much longer.

Note that a controlled goods agreement (CGA) won’t extend the period to take control. A CGA is a way of taking control of goods, so the 12 months would have stopped when the CGA was entered.

If bailiffs have said their power has been extended, check that this view is correct (using the steps outlined above).

Check if payment arrangements were made or broken in lockdown

Not everything is paused. Bailiffs are still making contact, assessing vulnerability and looking for payment. It’s likely that payment arrangements will have been made or broken during the pause, extending the time to take control as above.

Civil Enforcement Association (CIVEA) commitments

In addition to the legal pause (as set out above), CIVEA, the trade body for certificated bailiff firms, has announced a post lockdown plan. Their member firms will not take control in homes at this stage (this doesn’t include highways though). All visits will be socially distanced. There will be a ‘reconnection letter’ with a 30 day period before any visit for cases that were paused. In practice these letters were sent in July with the 30 days expiring on or around 23rd August. Firms will also assess vulnerability and client circumstances prior to attendance.

Vulnerable people or those ‘severely impacted financially’ by the pandemic will:

• be offered signposting to debt advice (where appropriate)
• have their case put on hold and monitored before next steps
• be referred to their creditor (where appropriate) for support

The guidance says fees will remain in place.

Refresher training on vulnerability, mental and public health must be undertaken before any visits.

Potential issues that could arise where bailiffs don’t comply with the guidance, or at least the spirit of the guidance, include:

• not allowing for the full 30 period to pass before visiting.
• vulnerability requirements being set too high, so advisers should be ready as ever to argue the case
• vulnerable and ‘severely impacted financially’ might be artificially separated out, when in fact people might be both at the same time. This has implications if a client is classed as financially impacted rather than vulnerable, as Reg 12 of the ‘Fees Regs 2014’ will not apply to protect them. This regulation makes it unlawful to recover enforcement fees from vulnerable clients unless they’ve been given chance to get advice
• different interpretations of a ‘severe’ financial impact, when it’s ‘appropriate’ to signpost to debt advice, or to refer back to creditors for support. Be prepared to argue both grey areas, but see below and the existing National Standards for protocols with creditors
• bailiffs saying they can take control of goods to pressurise, when the guidance prevents this, or just focussing on vehicles as they’re on the highway. This could lead to goods being taken with a value that exceeds the debt
• bailiffs visiting without the mandatory CIVEA-approved refresher training. We’re told bailiffs are issued certificates, so proof could be requested

Additionally, nothing in the CIVEA guidance says goods already taken control of cannot be removed. On public health grounds, there is little difference if this means a bailiff has to enter property and cannot maintain social distancing. Advisers could raise this point.

The Local Government and Social Care Ombudsman (LGSCO) is the only place to escalate complaints if the debt is owed to a council (or Transport for London). The LGSCO is now accepting new complaints. They will take account of this new guidance and how councils are supervising that bailiffs follow it.

High Court Enforcement Officers Association (HCEOA) commitments

The HCEOA says their members will abide by the ‘letter and the spirit’ of guidance and the law related to public health.

Measures include assessing the impact of the pandemic on clients individually, and making contact before any visit to identify vulnerability. They will not enter premises to take control where someone is isolating or has coronavirus (this might exclude highways). As with CIVEA, members will refer those who are vulnerable or ‘severely impacted financially’ for debt advice. Controlled Goods Agreements and payment arrangements are encouraged so that the second enforcement fee is not added.

HCEOA members must undergo training as with CIVEA members, before recommencing visits.

Potential issues to the HCEOA’s guidance are similar to with CIVEA but also there are some additional considerations:

• It’s hard to know the difference between the letter of the law or the spirit. When is the spirit of the law enough or not? This is ambiguous and there is no law (only guidance) on social distancing
• There is no extra reconnection period offered here. New writs will get the standard notice of enforcement and existing writs will be assessed case by case for vulnerabilities, but no extra time
• Asymptomatic spread will not be stopped if HCEOs only refrain from taking control where there is an active case of coronavirus, or a client is isolating
• Encouraging those that cannot pay in full to enter a CGA just to avoid additional fees, could contradict previous HCEOA guidance. To add the second enforcement fee, HCEOs must show no CGA (or arrangement) is entered into AND there has been a clear refusal to agree an arrangement. Advisers should argue that clear refusal is not the same as inability to pay, so the second fee shouldn’t be added in many cases

What the law and guidance already gives us

Whether someone has coronavirus, has shielded or has seen a drastic impact on their income, the pandemic has made people vulnerable. The current bailiff law and guidance says:

• a bailiff cannot take control of goods where the only people present are vulnerable, children, or a combination of both
• items needed for the care of disabled people (or anyone over 65) are exempt from seizure
• enforcement stage fees and disbursements cannot be recovered unless a vulnerable person has been given an adequate chance to get advice. This only applies where:
• goods have been taken control of already but…
• before goods are removed

The National Standards require:

• creditors to alert bailiffs to any vulnerabilities when referring a case to bailiffs
• bailiffs to alert creditors when they identify vulnerability, and follow ‘relevant legislation’
• clear protocols between creditor and bailiff to deal with vulnerability
• that a creditor be prepared to recall vulnerable cases
• that bailiffs (and creditors) have a role in protecting vulnerable people
• an understanding that vulnerability is not always immediately obvious, and there is also a non-exhaustive list of indicative vulnerable situations

Let’s see how the extra guidance goes

Some parts of the guidance appear helpful but there are gaps. As ever, there is no regulator enforcing the standards. We’d encourage using the LGSCO and HCEOA complaints processes when needed, and reporting cases through evidence forms. This will be crucial to Citizens Advice’s ability to monitor practice.

A reminder that Adviser online has a 2 part bailiff complaints article that advisers might find useful.

Graham O’Malley is a debt expert in the Expert Advice Team at Citizens Advice