Adam WonnacottSales Director, Burlington Group

ICM Chilterns Branch: 27th March 2014

www.burlingtongroup.co.uk

Effective Enforcement, Responsibly Delivered

“Working with High Court Enforcement Officers”

Scope of this seminar

(Brief) introduction to High Court Enforcement

What do HCEO’s do? Where do they sit in the Credit Control process?

Benefits of using HCEO’s

Working with HCEO’s effectively

Taking Control of Goods Regulations 2013

What is High Court Enforcement?

High Court Enforcement Officers enforce County Court Judgments (CCJ’s) and High Court judgments

High Court Enforcement Officers (HCEO’s) are empowered under a High Court writ to seize goods of the defendant/debtor

If payment isn’t made, goods can be removed and sold to pay the amount owing under the writ and HCEO costs

Litigation and Enforcement in the High Court

When can High Court Enforcement be used?

- Where the creditor has a judgment debt over £600.00; and- the judgment debt does not arise from a Consumer Credit Act regulated

agreement

Note: Changes to legislation that would permit enforcement of CCA regulated judgments are currently being considered by government

Litigation and Enforcement in the High Court

How long does the High Court Enforcement process take?

The process of obtaining a High Court writ may take 2-3 weeks, after which time the Enforcement Officer will make an attendance to enforce the judgment

Dependent on the circumstances, the Enforcement Officer may be able to collect payment in full or may agree terms of repayment with the debtor

Litigation and Enforcement in the High Court

What happens of the defendant cannot pay?

If the defendant cannot make payment in full, the Enforcement Officer will usually attempt to set up a payment arrangement.

If the defendant refuses to make a payment arrangement we may look to remove assets for sale by public auction

If the defendant has insufficient assets to cover the cost of removal and sale then we may return the file for alternative enforcement action/insolvency

Litigation and Enforcement in the High Court

What is the cost?

Initial cost of obtaining a writ is £60 (recoverable cost)

Where the writ can be enforced, the defendant is responsible for paying costs (under the statutory scale in Taking Control of Goods (Fees) Regulations 2014)

If the defendant does not pay and has insufficient assets to cover the cost of removal and sale, costs will be capped to an ‘abortive fee’ of £60+VAT

NB: Creditor will also incur (recoverable) costs of obtaining judgment

Litigation and Enforcement in the High Court

When does High Court Enforcement work well?

- Where the debtor is known to have or is likely to have assets- Particularly where debtor is a trading business

Can be used in conjunction with (and at the same time as) alternative methods of enforcement – CPR Part 70

There may be situations in which HCE may not be appropriate and where another enforcement method might be better employed

Litigation and Enforcement in the High Court

Where does High Court Enforcement fit into the Credit Control process?

High Court Enforcement is a post-litigation debt recovery method as, as such, should not be used where the debt is substantially disputed

However, where the debtor is refusing to make payment the litigation and enforcement process can be very effective is recovering from debtors who fail to respond to in-house collections or external DCA’s

Many HCEO’s will offer outsourced DCA services with litigation and enforcement as a complete service offering

Working effectively with High Court Enforcement Officers

Ways in which you can assist your HCEO

Provide as much information as you can – is there further information you can collect during sales process?

Explain your ‘attitude’ towards enforcement – Is the focus on payment arrangements or removal?

Payment arrangements – What are your acceptable terms/parameters for payment arrangements?

Working effectively with High Court Enforcement Officers

What to expect

Decide upon KPI’s and expect to receive management information based on these

Method of case reporting – how would you like to receive reports, how often would you like to receive reports and how comprehensive should they be?

Establish a key contact or Account Manager

Effect of the Taking Control of Goods Regulations 2013

Background to the Taking Control of Goods Regulations 2013

• Reform of the enforcement industry has been ‘in progress’ for almost 30 years

• Enforcement law was a mixture of piecemeal statute and archaic case law; the new regulations are designed to codify the law

• Importantly, the new regulations set out a more prescriptive fee scale and give the defendant the opportunity to avoid more punitive fees by engaging earlier in the judgment enforcement process

Effect of the Taking Control of Goods Regulations 2013

Taking Control of Goods Regulations 2013: Key Reforms

• Introduction of requirement to provide notice before ‘taking control of goods’ and subsequent notices

• Definitions of goods exempt from seizure; ‘tools of the trade’

• Days and times of entry; modes of entry

• New ‘interpleader’ procedure

• New fee structure

Conclusions

• Litigation and using High Court Enforcement Officers can be an effective method of recovering from more ‘determined’ debtors

• Can be an effective alternative to using DCA’s: More leverage and can be cost neutral to the creditor

• HCE is a post-litigation method, but litigating need not be an expensive process

• Effect of the new TCOG Regulations is to provide greater certainty for all stakeholders

Email: adam.wonnacott@burlingtongroup.comCall: 07788 871250 / 0845 520 2000

@BurlGroup

www.burlingtongroup.co.uk

Winners of Credit Today Enforcement Team of the Year Award 2013