For anyone that is owed money, being awarded judgment may feel like the end of a long journey. And, sometimes, it will be the end of the process if the debtor makes a payment covering the total amount owed.
If no payment is received, then the claimant must decide whether to take further enforcement action to recover the money owed.
In terms of commercial or business debt, High Court enforcement can be a successful way to recover money you are owed.
High Court enforcement
High Court enforcement can be an effective method of recovery. This is because of the direct nature of the process. There are several stages to the process, but it begins with the transfer of the county court judgment using form N293A.
The enforcement of a judgment by a High Court enforcement officer (HCEO) is governed by the Taking Control of Goods Regulations 2013, which set out the stages of enforcement. The Taking Control of Goods (Fees) Regulations 2014 determine the fees associated with each stage.
The claimant or their solicitor can choose an HCEO themselves or also ask Registry Trust to allocate the case to an HCEO. Once instructed, the HCEO manages the transfer up on behalf of the claimant or their instructing solicitor. Most do not charge a fee for this.
Once the writ is sealed, enforcement can begin.
The enforcement process begins with the compliance stage, This requires a notice of enforcement to be sent to the debtor. This notice gives the debtor seven clear days to make payment. If they make a payment covering the full amount owed, which includes the original debt, judgment interest, court fees and the compliance fee of £75 plus VAT, then this concludes the matter.
If there is no response or the debtor wants to set up a payment arrangement, then we proceed to enforcement stage one. An enforcement agent attends the debtor’s premises. Enforcement agents are certificated by a judge and work under the authority of the authorised HCEO.
There is a fixed fee for enforcement stage one: £190 plus 7.5% of the value of the sum to be recovered above £1,000. VAT at the standard rate is applied to all fees.
If the debtor pays in full at this stage (including judgment interest, court fees and enforcement fees), enforcement is complete, and the matter is concluded.
If the debtor wishes to enter into a payment arrangement, the enforcement agent will take an inventory of items and complete the controlled goods agreement paperwork. This paperwork is then signed by the debtor to confirm that the goods are now under the control of the HCEO. The debtor is not permitted to remove or sell the goods—to do so is a criminal offence.
Where there is a controlled goods agreement, the enforcement agent can go back to the premises at any time to inspect or remove the goods. If payment is not made or the debtor refuses to enter into an arrangement, the case moves onto enforcement stage two. If a payment arrangement is broken, the enforcement agent will re-attend under enforcement stage two.
There is a flat fee of £495 plus VAT for enforcement stage two.
The final stage of the enforcement journey is the sale or disposal stage, when the enforcement agent must sell controlled goods to satisfy the debt, because the debtor is refusing to make payment. The regulations state that goods should be sold at public auction, although other means of sale, such as private treaty, can be permitted by the court, provided there is a strong argument that the alternative method of sale will achieve a better price.
The goods may be removed from site for sale although the auction can take place on the debtor’s premises if it is impractical to move them. Boats and heavy plant equipment are good examples.
The fee for the sale or disposal stage is £525 plus 7.5% of the sums to be recovered above £1,000, all plus VAT. There are additional fees that can be charged but these will be carefully scrutinised and they include storage fees and advertising and auctioneers fees.
It is rare that a case proceeds through to the sale or disposal stage. It is not in the debtor’s best interests financially for the case to reach the point where goods need to be sold, however, occasionally it can be the only way for a creditor to receive the money they are owed.