Regulation of Bailiffs

Oral Answers to Questions — Attorney-General – in the House of Commons at 1:24 pm on 8th January 2013.

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Motion for leave to bring in a Bill (Standing Order No. 23 )

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South 1:54 pm, 8th January 2013

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to introduce a regulatory regime for bailiffs which would preclude the making of multiple fee charges without explanation;
to introduce guidelines for dealing with potentially vulnerable debtors;
and for connected purposes.

Concerns about the practices of bailiffs are not new, nor has the issue simply gone ignored. Governments have been aware of the concerns for decades. Action on the matter, however, has proved slow at best. I do not wish to make a party political issue of it, and I am aware of cross-party concerns about bailiff practices. Before I continue, I wish to thank the Coventry Evening Telegraph for the investigative work that it has undertaken into the matter. Many of my examples have been drawn from the paper’s investigation.

Those of us wanting reform of the bailiff system were given hope when, in February last year, the Government announced a consultation on bailiff reform. The consultation duly went ahead and closed in May 2012. I am aware of the disappointment felt by many in the industry regarding the scope of the consultation, but many have been optimistic that it could lead to real change. However, the report on the consultation was due to be published in October. As might be expected, every month that passes with no word from the Government diminishes hope about their commitment to the issue. I understand that the report is due to be published this month, and I very much hope that that will be the case. I therefore want the House to signal to the Ministry of Justice that we place great importance on bailiff reform.

Another reason for the lack of faith in the forthcoming report is that the Department in charge consulted 16 organisations and introduced the national standards for enforcement agents in 2002. Those standards remained unchanged for nine years and were clearly in need of updating. Many people were therefore delighted when the then Justice Minister, Mr Djanogly, announced last January that the national standards had been updated. He said that the voluntary code had been tightened to protect people from rogue bailiffs, and stated:

“Councils and other authorities will adopt the standards”.

I do not know on what basis he could make those claims, given that the standards remain voluntary.

What is most concerning, however, is that on close inspection of the updated standards, it appears that only six sentences were added to the original standards. Only one sentence was changed in the section on information and confidentiality, adding the words

“avoiding unnecessary and unhelpful use of legal and technical language”.

No changes were made under the headings “Complaints/Discipline”, “Vulnerable situations” or “Goods”. I was also shocked to discover that most of the new material had been taken almost word for word from the new Office of Fair Trading debt collection guidance.

In updating the standards, the Ministry of Justice consulted only two organisations, compared with the original 16. Anyone looking for a meaningful change in standards for bailiffs must be extremely disappointed. Based on the Ministry’s last announcement regarding its efforts to address bailiff reform, in my eyes there is reason to be pessimistic about the Government’s forthcoming proposals. Nevertheless, I wish to take this opportunity to raise a number of recommendations that have been made, in the hope that the Ministry will take them into consideration.

The first recommendation is to eliminate the practice of making multiple fee charges for a single visit without explanation. I believe that in calling for that, I am asking for something modest. The local government ombudsman has recognised that the practice is legal and not uncommon, but she has also ruled that in many cases it is disproportionate. She has urged councils to enter into new contracts with bailiffs preventing multiple fee charging.

An example from Coventry might be helpful. Coventry council’s hired bailiffs recently sent 10 threatening letters in two days demanding that a disabled woman pay her debts in full immediately or face the loss of her possessions. That was despite her already having begun a payment plan. The bailiffs charged her five lots of £95 for a single visit to her house, which cannot be right, reasonable or fair.

There are many reports of bailiffs charging multiple fees for a single visit or bill, and the debt escalates rapidly. Such practice is too prevalent for us to continue relying on individual contracts with private bailiff firms. Let me reiterate that such cases are not unique to Coventry council and it has not behaved illegally. I hope, however, that all hon. Members will agree that such things should not be allowed to happen.

We are failing vulnerable people facing bailiff action. A cancer patient in Coventry missed just two council tax payments before receiving a court summons and a demand for the full up-front payment, together with the threat that her home possessions might be taken away. The bailiffs added another £200 costs and appear to have wrongly threatened her with prison. In that case, the bailiff firm seems to have accepted that it failed in the guideline “duty” on bailiffs to hand cases back to councils as soon as any potential for vulnerable circumstances is identified, so that councils may handle such cases more sensitively. There are many other examples from my constituency of vulnerable people trying desperately to persuade private bailiffs of their situation but simply being ignored. Such cases include a women who was suffering from severe depression and deemed at risk of suicide.

National standards for enforcement agents make clear that bailiffs should exercise discretion when dealing with debtors who may be vulnerable. The standards state that potentially vulnerable people include those with a disability, but do not mention debtors who have mental health difficulties or who may be vulnerable by virtue of other difficulties—for example, those facing homelessness.

A bailiff might be the first person in the process to realise that a debtor is vulnerable, and we need much closer regulation of how to handle vulnerable debtors than currently exists. Private bailiff firms must be forced to inform councils of vulnerable cases. At the moment, administrative oversights, mistakes and unclear protocol can result in vulnerable people becoming the victims of aggressive or inept practice by bailiffs. I therefore hope to see a drastic change to the guidelines on how vulnerable people are treated in our private bailiff system, and I hope that all hon. Members will agree on the need for change.

This issue was discussed before Christmas in another place during a debate on an amendment to the Crime and Courts Bill, and I urge the Government to take on board the many sensible and important points made then, particularly regarding a full regulatory system for bailiffs. I call on the Government to consider the recommendations in the recent local government ombudsman report, “Taking possession: councils’ use of bailiffs for local debt collection”. The report covers a number of issues and provides recommendations based on the ombudsman’s considerable experience of complaints.

In conclusion, I appreciate the importance of debt collection to councils’ revenues, particularly in these times of austerity. Faced with cuts to council budgets, Coventry council has set a target under the bailiffs’ contract to reduce council tax debts from previous years by about 40%, and many other councils are in similar situations. We can therefore expect private bailiff firms to continue to be necessary to a certain extent, but we should make whatever arrangements are necessary to prevent the worst practices—whether due to incompetence or greed—such as multiple fee-charging, and protect the most vulnerable in society at an extremely distressing time. I hope that the Government will take my comments on board in the upcoming report, and that we will finally see radical change to our mediaeval bailiff system. I hope we will achieve a system that is reasonable, legal and proportionate, and I commend my Bill to the House.

Question put and agreed to.

Ordered,

That Mr Jim Cunningham, Thomas Docherty, Mr Geoffrey Robinson, Grahame M. Morris, Mr Tom Clarke, Sir Bob Russell and Mr David Winnick present the Bill.

Mr Jim Cunningham accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 25 January, and to be printed (Bill 117 ).