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Virtual Enforcement - A new era for bailiff practices?

22 January 2021

Reproduced in full from the Stepchange Medium Blog . 22nd January 2021 

There’s a view of a bailiff visit in the popular consciousness. A stern-looking uniformed officer comes to the door of a property and demands payment. In shows like ‘Can’t Pay, We’ll Take it Away’, the image of a bailiff wandering around someone’s home itemising their belongings for potential sale in order to pay a debt has been fixed in popular culture. A court decision last week could see big changes to this long-standing stereotype.

The court declared that bailiff legislation doesn’t require bailiffs to enter someone’s property to make a Controlled Goods Agreement.

A Controlled Goods Agreement is the process of itemising belongings, against which repayment plans are secured if individuals fail to keep up payments.

While the ruling doesn’t endorse any method of how this would take place without entry, modes of virtual enforcement are being developed that will enable bailiffs to make a Controlled Goods Agreement over a video call without visiting someone’s home.

There are potential benefits from virtual enforcement visits. In-person visits can be traumatic, intimidating experiences for many. And in the context of the pandemic, avoiding doorstep contact will clearly reduce the risk of infection. Although the ruling makes it clear that making a Controlled Goods Agreement virtually would still count as the first stage of enforcement, methods of virtual enforcement have been proposed in which individuals would not be charged for a virtual visit.

Currently, High Court Enforcement Officers escalate from the compliance stage of enforcement, which is conducted remotely through letters or by phone, to stage one and two of enforcement, which involve the bailiff visiting someone’s property and taking control of goods. The escalation involves additional fees being charged at each stage.

The bailiff industry has welcomed the ruling, stating that it brings clarity on the matter of entry and Controlled Goods Agreements. However, the industry also accepts the need for the Ministry of Justice (MoJ) to respond by establishing regulations to govern this newly-authorised mode of collection.

In many ways, the ruling raises as many questions as it answers.

Although avoiding a bailiff visit may initially be ‘good news for debtors’, as the bailiff industry has commented, the ruling could open the door to shady practices that were supposedly consigned to history if the spirit of the ruling is not followed. The ruling, based on a series of well-intentioned policy documents and contradictory legislation, demonstrates a long-standing problem with policy-making around bailiff activity — the failure of government to deliver effective oversight, and the absence of an independent regulator to ensure good practice.

The bailiff trade associations have invited the MoJ to issue guidance or amend the regulations in the wake of the judgment. There are currently no rules or guidance to oversee how virtual enforcement will be conducted.

It’s not clear across the industry how vulnerabilities will be effectively identified virtually, or how bailiffs can be sure the visit is being conducted in the correct individual’s property.

Although current virtual enforcement proposals are clear that there would be no additional charge, we’re concerned about the existing ambiguity over how bailiffs move through the stages of enforcement and add fees to people’s debts. Without clear guidance from government, there’s a risk that less scrupulous bailiffs could exploit this ruling to add fees inappropriately.

The ruling also states that a virtual visit doesn’t constitute entry in the same way taking control of goods at a property does. The legislation allows bailiffs to make forced entry if they’ve already made peaceable entry on a previous occasion.

We’d welcome clarification of this point from the government, to ensure less scrupulous bailiffs don’t use virtual visits as a basis for subsequent forced entry.

Problems don’t just arise around the details of how virtual enforcement will be safely conducted. In the past, advice agencies were used to seeing less scrupulous bailiffs attempt to take control of goods without entering properties. They would itemise belongings by looking through windows or peering through the letterbox. These lists of possessions would then be used to extract payment from individuals who feared losing their belongings.

We know that less scrupulous bailiffs frequently exploit people’s lack of knowledge of their rights. When they’re presented with a list of their belongings and the suggestion that a bailiff has the power to force entry and take control of them, this can pressure some into taking on unaffordable payment arrangements and falling further into debt.

These points call for urgent clarification from the MoJ. However, the case itself highlighted a catalogue of government failures to deliver effective oversight of bailiff practices over the last 30 years. The judge was presented with a series of policy documents that led to the Tribunal Courts and Enforcement Act 2007 (TCE), which had lofty ambitions to clean up bailiff practices. The consultation document that guided the 2007 Act stated that its objectives were to:

· Provide more protection against aggressive bailiffs

· Establish a fair, transparent and sustainable costs regime

· Ensure effective protection for the vulnerable

It took the MoJ six years to finally pass the regulations that accompany this Act, while it then took them another four years to publish the ‘one-year review’ of its implementation. In this review, advice agencies reported that aggressive behaviour and treatment of vulnerable individuals had gotten worse since the regulations passed. Without an independent body to enforce the rules, practices remained unaffected, and even deteriorated.

Partly in response to this feedback and the campaigning of advice agencies on bailiff behaviour, the MoJ launched its call for evidence on bailiff regulation in 2019. Nearly two years on there’s still been no response, despite the Justice Select Committee recommending the creation of an independent regulator in the interim.

It’s because of these failings that we’re apprehensive about the court’s ruling last week.

While we acknowledge that virtual enforcement can be less intrusive, reduce fees and protect people during the pandemic, the history of developments in this sector suggests the need for caution.

Without an independent body that’s engaged on the issues, closely monitoring bailiff activity and able to make rules quickly in response to misconduct, we fear this ruling will open the door for less scrupulous bailiffs to revert to old stereotypes around bailiff activity, and leave those in debt unprotected.

Ed McDonagh, Senior Public Policy Advocate at Stepchange Debt Charity.

Stepchange is the UK's leading debt charity for expert debt advice and fee-free debt management.