Changes to Taking Control of Goods procedure and fees
Following the previous Government’s consultation in 2023 on the Taking Control of Goods (TCoG) regulations, the Minister of State for Justice, Sarah Sackman, has announced the changes that will be made as a result of the consultation and feedback from the enforcement sector.
The Minister of State says that an effective enforcement system in essential, to deliver court awards to claimants in a straightforward and timely manner, whilst treating debtors with dignity.
Let us go through the decisions that will be implemented in the coming months, via a statutory instrument. These are:
- Compliance stage
- Creditors receiving extra payments
- Time scale for fee reviews
- Enforcement fees
There are also proposed changes to Enforcement Stage 2 (ES2), which forms part of the High Court enforcement fee scale, but is not relevant to civil enforcement. The full report is available on the UK Government website if you wish to read more about ES2 changes.
Compliance stage
There is a strong desire to resolve more cases at compliance stage. As a result, creditors will be able to accept payment arrangements during compliance (instead of having to wait for the enforcement stage).
Whilst this has always been the case for civil enforcement debts, this will now also be applied to both High Court debts.
The duration of the compliance stage will also be extended from seven clear days to 14 clear days, to allow more time for payment and seeking of advice.
There had been consideration of either a 28-day duration or 14 days for businesses and 28 days for individuals. The former was rejected as causing delay for local authorities and other creditors who had already waited for payment.
Differentiating between businesses and individuals was rejected as being too complex to manage, with particular difficulties around the status of sole traders and could lead to questions around why would a sole trader business be given preferential terms over a limited company or partnership for business rates, for example.
However, if the debtor has sought advice from a debt advice provider and the debt advisor contacts the enforcement firm or agent to request an extension of the compliance period, this may go to a maximum of 28 days from the date of the notice of enforcement.
Creditors receiving extra payments
The National Standards will be amended to state that it is “inappropriate for creditors to require extra payments or profit-sharing from the use of EAs and the charging of fees.”
The Government said that the TCoG regulations are not suitable platforms for these provisions.
Time scale for fee reviews
The Government intends to review enforcement fees in three years’ time.
They will also be waiting for the outcome on the consultation on a statutory regulator for the enforcement sector, with one question being whether such a body should play a role in reviewing the fees.
Enforcement fees
Last, but by no means least, enforcement fees will increase by 5% across the board.
We do not know when this will come into effect and it will be the first increase since 2014, so does lag some way behind inflation over the last 11 eleven years, but it will help the enforcement sector, as costs have been increasing.
For the stage where a percentage fee can be recovered, the thresholds will be increased by 24%, so that the threshold for non-High Court will increase from £1,500 to £1,900. High Court writs thresholds will increase from £1,000 to £1,200.
The percentage fee remains unchanged at 7.5%.
Areas that the ECB will address
The Government has decided not to make changes to the tasks that a covered within the compliance stage or additional information that is sent with the notice of enforcement, as the Enforcement Conduct Board (ECB) is addressing these areas as part of their standards.
Implementation of these changes
These changes will be implemented by a statutory instrument. We are not sure when this will happen, but think it likely that the approval will be made early Autumn, with implementation some time thereafter.
