Covid 19 has impacted every area of life including the administration of justice and the courts. There has been a deluge of emergency legislation not seen since the Second World War. That does not mean that the law and its machinery have stopped working rather that things will be done differently for the time being at least.
For creditors who are trying to collect debts for which they already have judgements, and for debtors who are facing enforcement of judgement debts, they are going to have to approach both sides of this situation from new angles.
On 23 March the power of Bailiffs and High Court Enforcement Agents to visit residential premises to take control of a debtor’s goods or to take goods, such as a debtor’s car parked on a public highway, was suspended.
For creditors, the use of High Court Enforcement Officers has been attractive because of the ability to ‘transfer up’ County Court judgments for more than £600.00 and speed of response.
The suspension applies during the Emergency Period until the lockdown is eased or ended by the government so as to lift the suspension of enforcement officers’ powers. The initial Emergency Period ran until 16 April and the current period will end on 7 May when it is due to be reviewed again.
However, other methods of enforcing a judgement without using enforcement officers remain available such as:
- Charging Order to secure an unsatisfied judgement debt against a debtor’s property or share in a property.
- Attachment of Earnings Order
- Third Party Debt Order
Enforcing a judgement using methods that do not require the use of enforcement officers falls within the Priority 1 work of the County Courts that must be done during the Emergency Period.
For creditors, the use of High Court Enforcement Officers is attractive because of the ability to ‘transfer up’ County Court judgments for more than £600.00 and speed of response
Where any documents have to be delivered to the debtor there may be a practical problem in physically bringing them to the attention of the debtor.
Creditors should keep in mind that a debtor may not have the means to pay their debt if they have been furloughed or made redundant, or if the value of their home has fallen so as to push them in to negative equity. In these circumstances it may be in a creditor’s interest to agree a Consent Order for a programme of relatively modest payments by the debtor, and then applying to increase the payments when circumstances improve. For the creditor, this has the advantage that the debtor’s failure to keep to the instalment plan can trigger the whole balance of the debt becoming due.
The enforcement methods that don’t involve the taking control of goods usually require a Court hearing where the debtor has the opportunity to object to the making of the Order, or make an offer of instalments to the Court.
Hearings can take place by video link or by conference call.
Debtors sit on the other side of the enforcement process. They need to remember that the debt is not going to go away even in these extraordinary times.
However, while the powers of enforcement officers are suspended, the present situation could give them the opportunity to negotiate a better method of settling their debt than might otherwise have been possible.
If negotiation fails, they will still have the opportunity to explain their circumstances and make an offer in settlement.
If they fail to deal with debt and the enforcement processes that can still go ahead, they may face redoubled efforts by enforcement officers to collect debts when the Emergency Period comes to an end, not to mention accumulated interest and legal and enforcement costs.
Article written and contributed by Michael Olmer of Clapham & Collinge LLP
DISCLAIMER: This article should not be regarded as constituting legal advice in relation to particular circumstances. It is merely a general comment on the relevant topic. If specific advice is required in connection with any of the matters covered above, please speak to Clapham & Collinge LLP directly