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09 June 2020
One debtor with three debts could be chased by three separate enforcement companies and charged three sets of enforcement fees. Is that the right thing to do?
In March 2020 in the case of 365 Business Finance Limited v Bellagio Hospitality WB Ltd that involved enforcement companies Marston and Court Enforcement Services (CES), Lord Justice Lewison upheld the Judgment made by Mr Justice Turner in July 2019 that ordered that CES send Marston the money they had collected from a debtor because priority existed. Marston were entitled to the money as they received their Writ first, from a different creditor.
Lord Justice Lewison said “(to) not allow for priority would permit a disorderly race between enforcement agents, favouring the most aggressive and least forbearing.” That in turn, Mr Ryan (who was representing Marston in Court) pointed out, would be contrary to one of the policy objectives of the reforms of the TCE Act, which was to encourage a proportionate and staged approach to the enforcement of judgment debts and discourage aggressive actions by enforcement agents.
Why is this order from the Court important?
The order clarifies, for the first time in modern history, a number of key areas of the law relating to enforcement; here we focus on priority: Priority does exist and is determined by the date and time the Writ is received by the enforcement officer
Let’s look at an example of what currently happens with enforcement and the issues that are created. Two debts could be owed by the same person and as such are being pursued by two different creditors.
So, what issues are created by this?
1. Regardless of when or which enforcement agent visits the debtor, Creditor X is entitled to their money first?
2. This lack of regard of Priority results in:
When enforced together, the enforcement of the Writs becomes cheaper for the debtor to pay, cheaper for the enforcement company to enforce, and returns more of the money collected to the creditor to repay the principle amounts.
What can be done to ensure priority is recognised, fees are minimised and creditors get their money in a timely manner and without delay?
It makes perfect sense to treat debtors fairly and in line with the law but as demonstrated above, it also benefits the enforcement company and the creditor too.
Find out more about the enforcement market integration approach we take and read testimonials from some of our customers who are the largest creditors in the UK.
About the Author: Jamie Waller
Jamie Waller is an entrepreneur, investor, author, and philanthropist. In 2018 he was awarded the prestigious Cranfield Business School, Entrepreneur of the Year and has been responsible for the formation, development, and sale of two previous businesses in the financial services industry.
Jamie is the Chairman of the Arum Group of companies.