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Enforcement reform: Review published

Business meeting 12 Print publication

04/05/2018

The Ministry of Justice (MOJ) has published the findings of its one-year review of reforms designed to both simplify and improve transparency around enforcement practice in England and Wales. Conducted predominantly in 2015, the review has identified improved awareness around debtors’ rights, the complaints process, and how enforcement fees are calculated. Lenders will be pleased to note that the review shows that the regulatory changes have also exceeded expectation with regards to promoting earlier recovery of debt via the compliance stage.

Yearlong review of enforcement agent reform published

In 2014, a new regulatory structure was introduced [1], as well as the introduction of requirements for enforcement agents to become certified and undertake a minimum level of mandatory training. The MOJ conducted a review of this regulatory reform to assess its impact on the transparency and consistency of the enforcement process, as well as the impact it has had tackling aggressive and unacceptable behaviour by a small number of enforcement agents.

The changes were also intended to incentivise debtors to repay earlier via the 7 day compliance stage [2] during which, if debt is repaid in full, no further enforcement action will be taken.

The review has established that the regulations have succeeded in introducing greater transparency, with the standardised forms and letters providing more information about where to seek debt advice. The review has also concluded that the impact on earlier debt recovery has been more successful than anticipated with 10% of writs issued being recovered at the compliance stage. That exceeding the initial MOJ estimates of 1%. This results in lenders being paid more quickly and debtors avoiding further fees.

Government open to submissions

The full impact of the tighter training and standards for enforcement agents has been difficult to establish as a number of the regulations and their requirements were still be implemented at the time of the initial review. The UK Government is to open a forum for submissions regarding the actions of bailiffs and enforcement agents, with members of the public able to submit evidence of any inappropriate actions for further investigation. The Government has acknowledged that any such inappropriate or aggressive behaviour only takes place in a small number of cases.

Lenders are likely to welcome the Government’s proactive approach to ensuring enforcement agents are acting in a way that maintains public trust in lenders and enforcement agents, whilst still efficiently recovering unpaid debts.

Implications for legal advice

The review has acknowledged a growing number of online sources purporting to provide legal advice, where the advice given is often misleading or incorrect. That, unfortunately leads to additional enforcement action being necessitated in some cases. It therefore remains paramount that any advice given to debtors should be legally accurate, and provided by specialists with appropriate qualification and experience.

Overall, whilst enforcement may not always be considered the most dynamic of legal processes, for the creditors it can, of course, be absolutely essential. There is often no point incurring the time and expense of obtaining a court judgment if, at the end of the day, it cannot be enforced and the debt recovered.  Lenders and other creditors alike will no doubt be pleased to see that regulatory changes are having effect, and that this important area clearly remains on the Government’s agenda.

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[1] via Part 3, Schedule 12 of the Tribunals, Courts and Enforcement Act 2007 and supported by the new Taking Control of Goods Regulations 2013, and the Taking Control of Goods Regulations (Fees) 2014
[2] excluding Sundays and bank holidays

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