Discussion on Payment direct to Council vs paying the bailiff fees

[Fred Astaire]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

I think I might be better at explaining the dispute.

The law says proceeds, where less than the amount outstanding are to be divided up between the bailiff and the creditor.

In other words. If the amount outstanding is £850 comprising of £420 fees (£75+£235+£110) and the balance is the debt itself, £430.

That is a ratio of 49%/51% for the fees/debt.

The law says it is divided "pro-rata". Its given under regulation 13(4) of the Taking Control of Goods (Fees) Regulations 2014.

It says (and I emphasise this bit) Application of proceeds where less than the amount outstanding

If the sum recovered from proceeds is only £523.59, then it is "less than the amount outstanding". It is divided pro-rata under regulation 13(4).

The creditor receives £257.03 and the bailiff keeps the balance.

Milo promotes a belief that "pro-rata" rules does not only apply to proceeds where less than the amount outstanding.

Instead, she promotes an idea that money paid to a creditor is also "proceeds where less than the amount outstanding", and it must be divided up under regulation 13(4) of the Fees regulations

Milo also says that creditors must make over that money to the bailiff, who then takes out his fees ratio and returns the balance to the creditor.

The FOI's confirm that does not happen. In fact, there is no evidence at all that says a creditor makes over money to a bailiff to be divided up under regulation 13(4).

Let's remind ourselves. The word "enforcement" is specifically defined by law. Section 62 of the Tribunals, Courts and Enforcement Act 2007, states:

taking control of goods and selling them to recover a sum of money

[Amethyst]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Okay try this...

Say, Debt of £500.

Passed to enforcement - incurs enforcement fees of £75+£235 - brings total owed to £810

Debtor goes and pays creditor £250 direct.


The argument is whether ....

The creditor keeps that £250 and bailiffs carry on enforcement for the £250 left and fees of £310.

Or

The creditor gives Bailiffs the £250, Bailiffs take 50% of it to pay their fees ( as the debtor paid 50% of the debt aka pro-rata) and give £125 back to the council and continue enforcement for the other £250 of the debt and £185 remainder of their fees ( and add more fees if applicable etc) ( or is the pro rata worked out inclusive of the fees already applied? )


Everyone agrees if the £500 was paid to the creditor direct none of it would be passed to the bailiff and the bailiff would just carry on for his fees.

( Not arguing just making sure I've got what the discussion is about )

[Jim Bowen]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Okay try this...

Say, Debt of £500.

Passed to enforcement - incurs enforcement fees of £75+£235 - brings total owed to £810

Debtor goes and pays creditor £250 direct.


The argument is whether ....

The creditor keeps that £250 and bailiffs carry on enforcement for the £250 left and fees of £310.

That is correct. The creditor should keep the whole amount to pay the council tax bill. The EA continues to enforce for the other £250.

Everyone agrees if the £500 was paid to the creditor direct none of it would be passed to the bailiff and the bailiff would just carry on for his fees.

( Not arguing just making sure I've got what the discussion is about )

[Amethyst]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Okay cool Thanks.

And what actually happens in practice ? ( ie. without any intervention being made )

[Fred Astaire]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

If no goods have been taken into control, there there are no proceeds.

I didn't want to post the Oxford dictionary of "proceeds" but I think we can all agree on what proceeds are.

The example given by Amethyst is a scenario where a creditor receives payment of money that is less than the amount outstanding.

That does not stop the enforcement power - unless - the money paid is equal or greater than the sum specified on the warrant or liability order.

The law does, however, enable the bailiff to recover his costs of executing the warrant - Paragraph 50(3) and Paragraph 62 of Schedule 12. Nothing says the bailiff can recover "fees" from money paid to a creditor. Otherwise the law would say he can.

[Milo]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Let's remind ourselves. The word "enforcement" is specifically defined by law. Section 62 of the Tribunals, Courts and Enforcement Act 2007, states:

taking control of goods and selling them to recover a sum of money

I do apologise for taking a while to respond. Unfortunately, I have only been able to view this forum on a mobile as the past three days have been taken up with tackling severe floods where I live. That must take priority over internet queries.

Can I ask a quick question:

It would seem to me that the emphasis of your posts is that, unless goods have been taken into control and actually sold....that enforcement agent fees cannot be charged.

[Fred Astaire]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Okay cool Thanks.

And what actually happens in practice ? ( ie. without any intervention being made )

With council tax, it is as per the FOI's posted on this thread. No public money is given to a bailiff.

Court fines. The money is retained by the treasury and a letter sent to the debtor confirming receipt, and that bailiff are instructed. It is careful not to say any public money has been given to them.

High Court. When the creditor has paid the sum on the wrist and makes a copy of the cheque and record of posting, the enforcement power ceases. If the bailiff takes an enforcement step, the creditor is liable for everything. That is what a court decided the law says in the judgment of Wilkinson vs Murgatroyd in Feb 2015.

[Jim Bowen]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Can I ask a quick question:

It would seem to me that the emphasis of your posts is that, unless goods have been taken into control and actually sold....that enforcement agent fees cannot be charged.

The central point is that a bailiff can only collect his fees from the proceeds of using the schedule 12 procedure.

[Amethyst]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Okay good stuff. Thank you.

[Milo]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Just so I'm clear exactly what you are arguing about ( to help with tidying up) the question is ( very basically)

' Do bailiffs have the right to continue enforcement for just their fees after the full debt has been been paid direct to the council' and so far the answer is ' Yes they have the right but tend not to ' ??? (or in any case there's been no case law to date as to whether they can continue enforcement for just their fees )

The bailiff regulations were completely overhauled in 2014 and the purpose of the regulations was to stop aggressive bailiff enforcement.

The 'pro rata' distribution of payments is a vitally important part of the regulations and this is better explained by the government.

The link below is to the Explanatory Memorandum supporting the Taking Control of Goods (Fees) Regulations 2014. Of particular importance, is item 8.3 which states as follows:

The consultation response stated that in cases where the proceeds of enforcement are less than the amount outstanding, they should be distributed on a pro-rata basis between creditor and enforcement agent (regarding the outstanding debt and the enforcement fees and disbursements respectively).

However, it has since been demonstrated that this would cause enforcement agents to operate at a loss for some time before they recovered their fees, undermining the fee structure model by significantly delaying remuneration and preventing the necessary investment in enforcement businesses required to provide a sustainable service.

Without this, successful enforcement could potentially decline significantly and enforcement agents may be encouraged to act in an aggressive manner in order to try and recoup the entire debt.

It was therefore decided that enforcement agents should be paid the compliance stage in full first, followed by a pro-rata division of proceeds between enforcement agent and creditor.

http://www.legislation.gov.uk/uksi/2014/1/pdfs/uksiem_20140001_en.pdf

[Fred Astaire]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

That is not in dispute. Parliament clarified how proceeds are distributed.

You say that money paid to the creditor is also distributed in this way.

We don't agree. Money paid to a creditor is not "proceeds where less than the amount outstanding".

[Amethyst]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Ok.

Sec 17 says that Fees and disbursements are still recoverable even if the amount outstanding has been paid.

Which section does para 8.3 of the Memo relate to in the TCGFR2014 ?

[Milo]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

The central point is that a bailiff can only collect his fees from the proceeds of using the schedule 12 procedure.

Could you please answer the direct question that I raised which was this. It is a vitally important one.

It would seem that the emphasis of your posts is that, unless goods have been taken into control and actually sold....that enforcement agent fees cannot be charged.

[Milo]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

Ok.

Sec 17 says that Fees and disbursements are still recoverable even if the amount outstanding has been paid.

Which section does para 8.3 of the Memo relate to in the TCGFR2014 ?

What is happening Amethyst is this:

Some are advising debtors that in order to avoid paying bailiff fees, they should circumnavigate the enforcement agent and instead, pay the council direct (always of course minus bailiff fees).

In cases of court fines, if a direct payment is made (after a warrant has been issued) then in EVERY case, the payment is simply forwarded to the enforcement company so that they (the bailiff firm) can deduct their compliance fee (of £75) and allocate the balance of the payment in accordance with the 'pro rata' distribution as outlined in legislation.

With local authorities the position is slightly different:

With HMCTS, you are only having to deal with one computer system so referring the payment back to the enforcement company is quite simple. With the 300 odd local authorities, the position is not the same at all as each council have their own computer system.

Approx one month ago, I was at an industry awards and approx 70 local authorities were present. This was the 2nd industry conference that I had attended in the past 3 months. Overwhelmingly, the message coming across was that the number of 'direct' payments has significantly reduced and that local authorities are managing to now account (either monthly or quarterly) to the enforcement companies for these payments. The message from the councils was clear in that unless the enforcement agents were compensated for the Compliance fee of £75 (as outlined in the Explanatory Memorandum) and any other fees due, we will quickly have a return to aggressive behaviour. That must be avoided at all costs.

[Amethyst]

Re: Discussion on Payment direct to Council vs paying the bailiff fees

With local authorities the position is slightly different:

With HMCTS, you are only having to deal with one computer system so referring the payment back to the enforcement company is quite simple. With the 300 odd local authorities, the position is not the same at all as each council have their own computer system.

Sorry, not sure I understand that. The FOI responses do seem to say that Councils don't pass on the money paid direct to them to EAs for pro-rata extraction of fees or anything - they don't mention this is due to having a pants computer system. lol.

So people who pay council direct could be chased aggressively by the EA's for the £75 as the council don't pass it on?