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Guide to debt recovery using High Court Enforcement

Contractors can recover unpaid fees when their client or agency won’t pay but have business assets by using High Court Enforcement, and High Court Enforcement Officers to recover the debt.

According to Ross Crawford of enforcement solutions company the Burlington Group, High Court Enforcement can be particularly effective when a contractor’s client or agency won’t pay, rather than can’t pay, and has significant business assets such as equipment, plant or stock.

“If a contractor has a debt in excess of £600 and has obtained a County Court Judgment (CCJ), but the client or agency still refuses to pay,” says Crawford, “then transferring the case to the High Court and using litigation as a form of debt collection by appointing a High Court Enforcement Officer to recover the debt can be highly effective.”

Crawford highlights that High Court Enforcement Officers have powers to seize and auction a debtor’s assets to clear their debts. Just the threat of having their assets seized motivates many clients and agencies to pay without any further action being required.

Getting judgment in your favour

As High Court Enforcement is a ‘post-judgment’ method of debt recovery, contractors will need to obtain judgment first. Using Money Claim Online, a contractor can obtain judgment directly by issuing their own claim. The alternative is to ask a solicitor to secure a County Court Judgment (CCJ) against the business.

Crawford explains: “It is important for the contractor to apply debt recovery best practice by sending letters informing the debtor that the payment is overdue and send a letter before action (LBA) before issuing a legal claim.”

“Once the judgment is obtained, using High Court Enforcement officers can be very effective. The alternative would be to use the County Court bailiff service. However, County Court bailiffs have limited resources which can sometimes lead to delays. They will also charge a set fee to the creditor, regardless of the outcome of the visit.”

High Court Enforcement Officers are paid by results

“High Court Enforcement Officers, formerly known as ‘Sheriffs’, are Enforcement Agents who are authorised to enforce orders of the High Court such as a Writ of Control, which is the High Court method of enforcing money judgments.”

“High Court Enforcement Officers are employed by private companies and are heavily incentivised to collect, since the majority of the fee is payable by the debtor,” continues Crawford.

That means the contractor only pays court fees (£60) and, typically, a modest administration fee (£75+VAT) to the company employing the High Court Enforcement Officer. These fees are fully recoverable from the defendant upon successful enforcement of the judgment.

Obtaining a High Court Enforcement - process and procedures

“Before High Court Enforcement can be used, a contractor must first obtain a CCJ, or a High Court Judgment of £600 or more,” explains Crawford. “Once the CCJ has been awarded, the contractor can get the judgment transferred to the High Court, which is a relatively straightforward administrative exercise for an enforcement solutions company that employs High Court Enforcement Officers, and only costs the contractor £60 in court fees.

“The next stage is to issue a Writ of Control, which is a ‘paper exercise’ and does not require a court hearing, and takes about 14-16 days.”

In accordance with the Taking Control of Goods Regulations that came into force in April 2014, once the writ is received, the enforcement agent will send a Notice of Enforcement to the client or agency that gives seven days notice to pay. That letter will also describe the consequences of not paying, such as having assets seized and auctioned, and that prompt payment will reduce the cost of collection that will be charged to the debtor.

“Since the new process came into force in April 2014, we have seen cases where defendants pay on the Notice of Enforcement because they realise that the costs escalate from that point and they are generally keen to avoid this.”

Seizing and auctioning assets

“The Notice of Enforcement can prompt payment”, notes Crawford, “But if the debtor doesn’t pay, a High Court Enforcement Officer can visit the debtor’s premises and remove any assets of value.”

In practice, this could involve taking computers or any equipment, stock or plant that amounts to the value of the debt, the enforcement costs and the cost of removal. The court officers will evaluate the assets on site and make provision for their removal, which will almost certainly require transport of some description that adds further costs to the debtor.

Since the new process came into force in April 2014, we have seen cases where defendants pay on the Notice of Enforcement because they realise that the costs escalate from that point and they are generally keen to avoid this

Ross Crawford, Burlington Group

Once seized, the assets will be sold at public auction and the contractor will receive their judgment debt from the proceeds of sale.

High Court Enforcement is less effective when the client has no assets

Crawford warns that this approach is only effective when the client or agency has assets of value: “Quite often the contractor is close to the client and in a good position to tell the enforcement agent whether there are any assets of value.

“If the debtor is trading from serviced offices, then there are unlikely to be any assets of value to seize.

But if the contractor knows that the client has assets of value that the client would not want to be removed, then High Court Enforcement can be highly effective: “The contractor’s risk is the court fee of £60 and the enforcement agent’s admin fee, which is only £75 + VAT.”

Crawford concludes: “When a contractor has clients that won’t pay, and they know that the client has valuable assets that could be seized as part of a debt collection process, then using High Court Enforcement Officers can be a highly effective debt recovery strategy.”

Published: 28 August 2014

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