Taking limited control

Changes to the bailiff laws have been in the making for the past 20 years. The Law Commission has examined the matter and recommended reforms, and more recently the experience of the poll tax focussed attention upon the activities of private bailiffs and set in motion a series of working parties which culminated in the new statute.

This process was accelerated by the Human Rights Act. The government was keenly aware that enforcement law was vulnerable to a challenge under the European Convention on Human Rights. A key principle of interpretation in Convention case law is that interferences with rights should be founded upon law that is 'clear and accessible'. Rights to seize goods for 15 to 20 different liabilities which rest upon many pieces of statute and thousands of cases are obviously highly susceptible to such a claim.

Create harmonised code

For all these reasons it was decided to sweep away the confusing and complex existing rules and to create a harmonised and simplified code of modernised enforcement law. In future, it will only be necessary to look in the one place to find the rights and responsibilities of enforcement agents. All stakeholders, creditors, bailiffs' trade bodies and debtors' representatives supported this move. But how well has the government achieved its primary aim.

The Tribunals, Courts and Enforcement Act 2007 (TCEA) received royal assent on 19 July. It succeeds in consolidating and clarifying the law '“ and yet it also fails. Schedule 12 of the Act offers a reasonably comprehensive statement of the procedure to be employed by bailiffs in the recovery of the most significant debts '“ council tax, fines, road traffic penalties and judgments. In future seizure of goods will be termed 'taking control'. However, as these statements suggest, some debts are still excluded from the operation of the new Act.

Extended debts

The excluded debts are primarily liabilities enforceable against shipping and include a range of fines due from merchant shipping and fishing vessels. Distress for market tolls and stallages are also outside the remit of the new Act. However in practical, day-to-day terms, these exclusions make little difference as they are debts which are seldom or ever encountered by the majority of practitioners.

The real problem is the consequence of making the decision not to bring certain liabilities within the TCEA procedure of taking control. I would not like to speculate as to why these liabilities were not incorporated, though it does not seem to me that there would have been any particular difficulty adapting the new procedure of taking control to accommodate levies upon vessels.

However, by not reforming these forms of distress it has been necessary for the government to leave all the old law in force. The Act abolishes many old procedures such as replevin and poundbreach for the purposes of (say) council tax, but has to retain them for distress for the costs of wreck removal. Plainly this failure to make a clean sweep of the old provisions seriously undermines the aspiration to create a single coherent body of enforcement law.

This complaint is not merely one of legal aesthetics. The dual system of rules that result may give rise to real confusion, as I shall demonstrate.

Firstly, let us consider distress for fines on fishing boats under the Sea Fisheries Act 1968. It has been necessary to retain in force Magistrates Court Act 1980 s78 '“ although this provision will no longer apply to the recovery of the majority of fines on individual offenders. Section 78 creates an offence of interference with seized goods, imposes a penalty upon bailiffs for making improper charges and creates an offence of 'irregular distress' '“ minor errors in procedure will not render an entire levy trespass.

Now, s62(4) of TCEA renames all warrants and writs: warrants of distress become 'warrants of control' under the new rules. We are required to interpolate these new terms into existing legislation; for example the Insolvency Act 1986 is wholly unamended and it is necessary for practitioners to understand that references to distress and execution should in future be understood to refer to writs and warrants of control.

That being the case, what prevents the same interpolation being made in respect of s78 of the 1980 Act? In other words '“ is it not possible to read this section as still being in force for all forms of seizure of goods, under both the old and the new law?

Statute of Marlborough

The same problem may apply in the second instance I wish to bring to readers' attention '“ that of the Statute of Marlborough 1267. It seems remarkable that this ancient statute still remains in force '“ even more so that it has survived the repeals made by the new Act. That, nonetheless, is the case. The reason for the Statute's survival is the survival of the unreformed types of distraint already mentioned. However its continued existence gives rise to similar problems of interpretation as were just alluded to. If all references to warrants of distress are now to be understood to be warrants of control, does that mean that the reference to the offence of levying an excessive distress in chapter 4 of the Statute should similarly be reinterpreted?

It might be objected to the above suggestion that the Act has generally reformed the remedies available to the parties to a seizure for goods. Section 65 states that a number of common law rules are replaced '“ these include the rules distinguishing between an illegal, an irregular and an excessive exercise of a power, rules of replevin and rules about rescuing goods. All these remedies are replaced by the new court procedures in Sch.12 para.66.

In respect of the Statute of Marlborough it can be objected that only the common law rules on excessive seizures are repealed; the statutory remedy plainly survives. In passing it may be noted that the Act also purports to abolish the common law offence of irregular distress. This is a considerable achievement as such an offence never existed at common law; it is solely a creation of statute.

Common law problems

The whole reason for the first example of irregular distress '“ s19 Distress for Rent Act 1737 '“ was to overcome the problem at common law that an error in procedure, however minor, could render a whole levy an illegal distraint and a trespass ab initio. This error in the Act is relatively insignificant, as all the relevant statutory provisions (other than s78 Magistrates Court Act) are abolished.

Far more of an issue for practitioners may be the fact that the offence of illegal distraint is also abolished. It has proved of considerable value in the past to be able to point to an error in the manner of entry or in the goods seized, whereby it could be argued that the whole levy had been rendered wrongful.

The bailiff's only option then was to abandon the defective levy and to start again. This significant bargaining tool will not be available in the future and debtors may find themselves generally in a poorer position as a result.

The plethora of often obscure and inaccessible remedies against bailiffs has been abolished. Replevin, interpleader, appeals to a magistrates court and the like are all replaced by a right to claim damages and recovery of goods under Sch.12 para.66(5).

Equally from the point of view of creditors, the largely useless remedies of rescue and poundbreach are scrapped; instead creditors will be able to issue a claim for any damages caused by interference with goods taken into control, while offences of obstructing bailiffs and interfering with controlled goods have been created (Sch.12 para.68). Such rationalisations are long overdue, as most creditors had no tangible benefit at all from the common law offences of rescue and poundbreach.

It is however to be noted that the government has kept any eye on its own interests. In distraint for indirect taxes, such as VAT and landfill tax and the like, a specific civil penalty already exists for interference with seized goods.

These remedies are preserved into the new regime '“ in future interference with goods subject to a 'controlled goods agreement' will continue to attract an automatic penalty of 50 per cent of the tax already due.

Commercial rent arrears recovery

Responding to a longstanding recommendation of the Law Commission, the Act abolishes distress for rent. That said, commercial landlords are not deprived of a remedy for their rent arrears against a tenants' goods.

Distress is replaced with a new means of taking control called commercial rent arrears recovery (CRAR). This is a right for landlords of commercial premises only to issue warrants to instruct bailiffs to levy against goods for outstanding rent arrears.

The Act reproduces many of the established common law rules on the landlord and tenant relationship and on the manner in which the rent debt falls due and may be enforced, while the actual procedure of seizure is harmonised with that for other debts. All the unique and complex rules applicable to levies of distress for rent are abolished, as is the right to levy distress against domestic tenants.

The other major issue to mention at this stage is regulation. One of the main elements of the promised programme of reform was a new system of regulation for enforcement agents.

The Act as passed does not deliver on this point. What we are guaranteed is a revamped process of certification in the county court ((2006) SJ 150 1318, 13.10.06).

Extension to persons acting as bailiffs

The reformed certification procedure is now extended to all persons acting as bailiffs except constables,officers employed by government departments such as HM Revenue and Customs, court staff and civilian enforcement officers employed in magistrates' courts.

The detail of how the revised process for granting certification, dealing with complaints and cancelling bailiffs' certificates will work in practice will be key to deciding whether these changes offer any substantial improvement over the present regime.

However for this, along with much of the other procedural information, we must wait for subsequent regulations. That said, certification is not a substitute for a comprehensive regulatory regime.

All parties had campaigned for a dedicated body to authorise, monitor and discipline bailiffs, overseeing their training and continual professional development, developing good practice guidelines and handling complaints. What it seems we will be offered at some future date is licencing by the Security Industry Authority.

Although this may be helpful, it will fall far short of what was initially envisaged and that lack may weaken the whole Act.