Bailiff regulation: back to the future

22The famous judge Lord Denning once described bailiffs seizing the goods of people as an ‘archaic remedy’, dating back to medieval times.  In 1986 the Law Commission recommended the abolition of distress for goods, and bailiffs seemed a thing of the past – the remote past.

All this changed in April 1990 with the introduction of the poll tax, which imposed liability for local tax debt upon millions of people, a feature which remained with the council tax. The poll tax collapsed in the face of non-payment but the principle of liability for millions of people continued. Coupled with a growing underclass in poverty in Britain and a working population that had gone on a credit binge encouraged by banks, suddenly, it was boom-time for bailiffs when public authorities and credit card companies set out to recover their money.

With the credit crunch of 2008 – still showing no signs of stopping – more people fell into debt with the result that more debts were there to be collected. As a result, the good times for bailiffs didn’t stop, and got better as the number of council tax liability orders crept up into the millions. One in seven homes can now expect a visit from the bailiffs for council tax alone. Britain’s top bailiffs now earn far more than Britain’s top judges, thanks to lucrative contracts handed out by the state and lack of control and supervision over fees and the inability of the most vulnerable sectors of the public to know when they are being fleeced, bailiffs themselves being carried away in the orgy of greed between 2000-2008. However, the major mistake that bailiffs made in this period was not only going after debts owed by the poor but taking draconian actions as wheel clampers for even bigger fees – many of them unlawful. When bailiffs started hitting the motor vehicles owned by the better off and more vocal sections of society calls for reform of bailiffs soon gathered apace.

The light touch of regulation resulted in numerous complaints and legal actions against bailiffs, to such an extent that the Lord Chancellor commenced a reform process in 1998, to modernise the law of distress. It was long overdue. English bailiff law is the worst in the world, a confusing mass of antique regulation, statutes and case law – with over 2000 judicial pronouncements over the centuries. It was ripe for reform, but the eventual remedy the Tribunals Courts and Enforcement Act 2007 showed the cure was worse than the disease, threatening to give bailiffs a power to break down the doors of private homes  and once inside to use force against the person and even seize domestic pets.

To be fair, even many bailiffs were opposed to these ideas, dreamed up by civil servants who had never been near an eviction or a levy of distress. The Zacchaeus 2000 Trust led a successful campaign which forced the government to drop these plans in 2009. Measures in the Act were not implemented and the reform process was postponed.

In 2010 the Coalition Government looked at the matter again and began a consultation. By this time a considerable number of middle class people had woken up to the activities of bailiffs – or those posing as bailiffs –  who had wheel clamped yet more vehicles and extorted even more money  from motorists. On account of this trespass to vehicles, laws restricting clampers were introduced and the process of reform and consultation re-commenced for the wider sector. We now have the results.

On January 25th 2013 he Ministry of Justice announced that it will be introducing new Bailiff regulations next year. The changes will be made by enacting parts of the Tribunals, Courts and Enforcement Act 2007 and creating new laws through the Crime and Courts Bill. The Bill is currently progressing through Parliament. The reforms will include:

(1)   Banning landlords from using bailiffs to seize property for residential rent arrears without going to court.

(2)   Banning the use of force against debtors.

(3)   Stopping bailiffs entering homes when only children are present.

(4)   Banning bailiffs from visiting debtors at night. They will only be allowed to enter a property between 6am and 9pm.

(5)   Legislate on a simple set of rules and fees detailing when a bailiff can enter a property, what goods they can take and a fee structure which will end excessive and multiple fees.

(6)   Introducing mandatory training and a new certification process for bailiffs, and ensuring that vulnerable people get assistance and advice.

It may be noted that a number of these measures are simply re-stating what has been law for centuries and in some cases as a result of the Tribunals Courts and Enforcement Act 2007 abolished distress for rent without a warrant in 2007.

At common law, bailiffs could not force entry to a domestic dwelling,  nor use force against someone inside.  Similarly, they could not call between sunset and sunrise.

A rationalised fee structure is very welcome, since existing schedules on fees for local taxes and parking fines are exceedingly obscure – perhaps deliberately so.

It will also be interesting to see how vulnerable people get advice and assistance given that legal aid is being cut and currently does not exist for rights to challenge levies of distress for bailiffs under the Council Tax (Administration and Enforcement) Regulations 1992 SI 613. Effectively we are returning to safeguards recognised a long time ago in many cases.

Aside from these reforms, in our consumer society it should ultimately be noted that the whole remedy of distress against  a debtor’s goods by a bailiff to sell the goods at public auction and pay the debt is a bluff. Whilst it made sense in a simple medieval subsistence economy based on agriculture, it is a nonsense today.  Bailiffs don’t want to actually seize goods but simply scare the debtor into handing over money  – in essence the threat to take away a debtor’s goods is a massive con-trick. Leaving aside the aggravation – and health and safety implications – of lugging a large TV down 13 flights of stairs in a scaberous tower block where the lift doesn’t work, the last thing that a bailiff actually wants to do is take away a debtor’s goods and have to sell them at auction. In 2010, out of 1 million liability orders and warrants, Equita bailiffs one of the largest firms seized and sold goods on only 928 occasions.

The reason is that goods when sold at bailiff auctions raise pathetic sums of money that scarcely pay the auctioneer’s fee let alone the bailiff’s own fees. The goods that the poor own are often rubbish anyway or on HP and can’t be sold. Indeed, the only regular attendees at bailiff auctions appear to be bailiffs and off-duty police officers. However, ignorant debtors don’t realise this and fall victim to all kinds of ridiculous and unlawful proceedings – for example the case of the seizure of a kettle in Waltham Forest (see earlier posts) and the £230 pounds charged for seizing a doormat in Slough condemned by the Local Government Ombudsman in 2011 in one of his long overdue forays into this area (Report on an investigation into complaint no 10 007 469 against Slough Borough Council) . In twenty years not a single case of a bailiff auction sale of a debtor’s goods once satisfying an outstanding council tax debt has been recorded.

If bailiffs actually relied upon seizing goods and actually selling them, the whole industry would go bust overnight. If a non-payment campaign similar to that which occurred with poll tax between 1990-93 begins over council tax, sections of the industry will also collapse very quickly as, like so much of the troubled financial sector, the whole remedy of debt collection by seizing goods is based on a legal fiction rather than reality.