Debt Collection: Fees and Charges

Ministry of Justice written question – answered on 25th April 2016.

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Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

To ask the Secretary of State for Justice, what estimate he has made of the number of instances in which enforcement agent fees paid by a defendant were transferred directly by HM Courts and Tribunal Services to enforcement agents in each of the last five years; and what estimate he has made of the amounts transferred in that period.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

To ask the Secretary of State for Justice, how many full-time equivalent officials of his Department work facilitating co-operation with enforcement agents; and if he will make a statement.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

To ask the Secretary of State for Justice, what estimate his Department has made of the proportion of court fines referred to enforcement agents in the last year and if he will make a statement.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

To ask the Secretary of State for Justice, what estimate he has made of the total number of court fines issued in each of the last five years; and what estimate he has made of the value of such fines.

Photo of Jim Cunningham Jim Cunningham Labour, Coventry South

To ask the Secretary of State for Justice, what estimate he has made of the total payment made to enforcement agents for the collection of outstanding court fines in each of the last five years; and if he will make a statement.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

The table below sets out the total number of financial imposition accounts that were opened in the last five years and the total value imposed on those accounts.

Year

Number of financial imposition accounts opened

Total value of financial impositions ordered.

2011/12

1,189,323

£385,743,300

2012/13

1,122,871

£404,584,213

2013/14

1,141,776

£420,255,840

2014/15

1,166,238

£457,415,183

2015/16 to December (latest published period)

893,999

£449,748,768

The figures above include impositions for fines, compensation, victim surcharge, prosecution costs and in 2015/16, criminal courts charge. One financial imposition account can include one or any combination of the different imposition types.

The table below shows the amount HM Courts and Tribunals Service (HMCTS) has paid to approved enforcement agents (AEAs) for the enforcement of arrest warrants in the last five years. Arrest warrants can include some that are not related to the collection of outstanding fines such as community penalty breach warrants but it is not possible to split these out. HMCTS does not pay AEAs for the execution of warrants of control.

Year

Amount paid to AEAs

2011/12

£1,304,403

2012/13

£1,179,465

2013/14

£1,317,794

2014/15

£588,900

2015/16

£1,171,594

The number of warrants of control issued to AEAs for the enforcement of outstanding financial impositions in the last year was 602,695 and there were also 32,446 arrest warrants issued to AEAs. These warrants can relate to amounts imposed in the year or any previous year.

If an offender makes a payment on a financial imposition after a warrant of control has been issued and referred to the AEA, HMCTS transfers the full payment to the AEA to enable them to reconcile their accounts and take the fee owed to them and they then return any balance owed to HMCTS. The Tribunals Courts and Enforcement Act states that the AEA is entitled to retain the first £75 of any amount paid on a warrant and then their fees are retained on a pro rata basis with the balance paid to HMCTS. It is not possible to identify how many times offenders make a payment direct to HMCTS once a warrant has been issued.

The management of work to and from the AEAs is a function carried out by a number of staff within the Compliance and Enforcement Service of HMCTS alongside a number of other tasks and it is not possible to segregate this to identify how many full time equivalent officials facilitate work with the AEAs. There is one full time individual whose main role is to manage the contract relationship with the AEAs and monitor performance against the agreed KPIs.

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Annotations

S B
Posted on 29 Apr 2016 11:52 am (Report this annotation)

Mr Vara, the TCEA makes no mention of £75 fees or pro-rata payments. Please can you explain where you have received this information?

S B
Posted on 29 Apr 2016 12:06 pm (Report this annotation)

Mr Vara, enforcement of fines must use the procedure under schedule 12 of the TCEA. An enforcement agent can only collect his fees from the proceeds of using the power under this procedure. The procedure is taking control of and selling a debtor's goods. An enforcement agent can therefore only collect his fees from the proceeds of taking control of and selling goods. There are no other provisions.

An enforcement agent is still entitled to recover his fees, however he cannot recover fees from money paid direct to HMCTS as this money has not been recovered under the schedule 12 procedure as no goods have been taken control of and sold.

S B
Posted on 29 Apr 2016 12:14 pm (Report this annotation)

Mr Vara, it seems that HMCTS have in place their own contract with their enforcement agencies. Once clause states that any payments HMCTS receive after the issue of a warrant will be diverted to the enforcement agent so he can deduct his fees. This means that money that has not been recovered under the schedule 12 procedure has been unlawfully diverted.

HMCTS contracts cannot over-ride legislation. The debtor is not bound by third party contracts.

S B
Posted on 29 Apr 2016 7:10 pm (Report this annotation)

Mr Vara, for those who are struggling to understand, the TCEA schedule 12 procedure is concerning the taking control of and selling goods to recover a sum. Part 1 of the schedule states;

"1) Using the procedure in this Schedule to recover a sum means taking control of goods and selling them to recover that sum in accordance with this Schedule and regulations under it.

(2) In this Schedule a power to use the procedure to recover a particular sum is called an “enforcement power”."

Therefore whenever the term 'enforcement power' is mentioned it means taking control of goods and selling them. So to take part 50 which is concerned with proceeds, the part states;

"(1) Proceeds from the exercise of an enforcement power must be used to pay the amount outstanding."

So we can substitute the words 'an enforcement power' to show what this means under part 1;

"(1) Proceeds from the exercise of taking control of goods and selling them must be used to pay the amount outstanding."

Money paid direct to HMCTS have not been collected under the power of schedule 12 so are not proceeds of enforcement.

S B
Posted on 30 Apr 2016 12:25 pm (Report this annotation)

Mr Vara, to clarify further, the Taking Control of Goods (Fees) Regulations 2014 (TCG14) states in part 4, (Recovery of fees for enforcement-related services from the debtor):

"(1) — The enforcement agent may recover from the debtor the fees indicated in the Schedule in accordance with this regulation and regulations 11, 12, 13, 16 and 17, by reference to the stage, or stages, of enforcement for which enforcement-related services have been supplied.

(2) The fees referred to in paragraph (1) may be recovered out of proceeds. "

TCG14 states in part 2:

"“proceeds” has the meaning given by paragraph 50(2) of Schedule 12; "

50 (2) of Schedule 12 states:

"(2) Proceeds are any of these—

(a) proceeds of sale or disposal of controlled goods;

(b) money taken in exercise of the power, if paragraph 37(1) does not apply to it."

So proceeds means either money raised from the selling of the debtor's goods, or money taken under schedule 12. For clarity, 'money' does not always mean pounds sterling. Part 3(1) of schedule 12 states:

"“money” means money in sterling or another currency; "

Money must be treated as goods for which the best price must be sought. Schedule 12 part 37 states:

"(1) An enforcement agent must sell or dispose of controlled goods for the best price that can reasonably be obtained in accordance with this Schedule.

(2) That does not apply to money that can be used for paying any of the outstanding amount, unless the best price is more than its value if used in that way."

That means if the sale of "money" would exceed it's face value, the agent must dispose of the money by way of sale. By way of example, a dateless 20p piece has a face value of 20p, yet one was sold on Ebay on 18th of April for £60.