The Ministry of Justice is running an open consultation to gather views on proposed amendments to the Taking Control of Goods Regulations 2013 (the TCG Regulations) and the Taking Control of Goods (Fees) Regulations 2014 (the Fees Regulations). These Regulations, which came into force on 6 April 2014, regulate how enforcement agents (EAs) and High Court Enforcement Officers (HCEOs) in England and Wales take control of goods to enforce judgment debts and set out the fees they can recover from judgment debtors for that work.
The Regulations govern the recovery of fees that enforcement agents (EAs) and High Court Enforcement Officers (HCEOs) can recover when enforcing debts and seek to strike a balance between providing enough revenue for EAs and HCEOs to run a sustainable and profitable business, whilst seeking to protect debtors from disproportionate costs. Since the implementation of the TCG and Fees Regulations they have been subject to reviews in 2015, 2018 and 2019, to consider their consequences, flaws and to monitor data.
In 2019 the Justice Select Committee conducted an inquiry on the Regulations, recommending that the fees should be set as low as possible while ensuring the sustainability of the enforcement industry and recommended that the fees should be reviewed by an independent regulator.
A review was carried out in January 2023, during which time questionnaires were sent to key stakeholders, seeking to understand whether the fee structure and level of fees continue to strike an effective balance between providing EAs with adequate remuneration to run profitable businesses, and simultaneously ensuring debtors do not pay unnecessary and disproportionate fees. In addition, it sought to explore whether the fees continue to incentivise payment at the earliest and cheapest stage – the compliance stage.
Following this January review, the government published a review on 17 July 2023 of the fees that EAs and HCEOs can recover. The review considered both whether these fees should be uplifted and when they can be recovered. The government announced proposals to uplift the fixed fees that can be recovered from judgment debtors by 5%, the first uplift in 10 years arguing that it will ensure sustainability of the enforcement sector. Further to this, it was announced that there would be a 24% uplift to the thresholds above which an additional percentage fee can be recovered, meaning that the threshold for non-High Court cases will be £1,900 and the threshold for High Court cases will be £1,200.
The government hopes that these reforms would ensure the sustainability of the enforcement sector, whilst tightening up the rules that EAs and HCEOs must follow to ensure that people in debt are given more opportunities to settle the debt at the earliest and cheapest stage. It is believed that the uplift to the threshold will have the effect of reducing the proportion of debtors that will have to pay percentage fees and bring it back to the target levels when the thresholds were set.
The consultation opened on 10 October 2023 and closes on 4 December 2023. It is aimed at the enforcement industry, individual enforcement agents, creditors, users of the civil Courts, debt advice providers and any other interested parties.
The consultation sets out several proposals from A to H to be considered, each with their own questions in response. It seeks views on proposals to encourage people in debt to settle a judgment debt at the earliest stage, thereby keeping the fees that they pay to a minimum, and to prescribe when EAs and HCEOs can progress through the stages of enforcement.
This feedback should provide an interesting view from a wide spectrum of people affected by the proposed changes from those who stand to benefit them, to those who will likely be worse off as a result. Given the rising costs of living and business expenses, any uplift will surely be welcomed by EAs and HCEOs. However, increased costs affecting those who may already be struggling to pay judgment debts will only see them fall into greater debt.
More information can be found at https://www.gov.uk/government/consultations/taking-control-of-goods-regulations-consultation.
A copy of the original review can be found at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1170373/fee-review-response.pdf.