I beg to move that this House do agree with Commons Amendments 5. I shall speak also to Amendments 6 and 31. As the debates in this House and the other place have shown, there is broad agreement that more needs to be done to protect debtors from the unscrupulous practices of a minority of bailiffs, while
at the same time ensuring that legitimate creditors can collect the money that they are owed. The Government are committed to achieving this. On 25 January, the Ministry of Justice published the Government’s response to the Transforming Bailiff Action consultation, which sets out the key reforms that we are undertaking to deliver on this commitment.
It may assist the House if I give a brief overview of the Government’s reforms, which centre on the implementation of Part 3 of the Tribunals, Courts and Enforcement Act 2007. Among other things, they will remove antiquated and confusing laws, provide clarity about the power of bailiffs, allow for the introduction of regulations setting out what goods a bailiff can or cannot seize and introduce a clear and fair charging regime. Furthermore, new mandatory training and an enhanced certification system will ensure that the individuals carrying out this difficult job are the right people, and will build on the existing remedies available if things go wrong.
The Government believe that the framework for the regulation of bailiffs in Part 3 of the Tribunals, Courts and Enforcement Act 2007 generally strikes the right balance between ensuring that all bailiffs operate to appropriate minimum standards and not subjecting the industry to overburdensome regulation. As such, I hope that the House can readily agree Commons Amendment 5, which will enable us to correct a number of inadequacies in the legislation. Having done so, we will be able to move quickly to bring Part 3 of the 2007 Act into force.
The key changes made to the 2007 Act are threefold. First, it removes the ability to make regulations that would confer a power on enforcement agents to use reasonable force against debtors. It is one thing to countenance the use of reasonable force to enter premises; it is quite another to authorise such force against a person. Here the 2007 Act plainly got the balance wrong and it is right that we should provide this additional safeguard.
5.45 pm
Secondly, the amendment will allow enforcement agents who are executing a High Court or county court debt to use reasonable force to enter commercial premises. As I have said, using reasonable force to secure entry into premises is quite different from using force against an individual. Enforcement agents already have such powers under common law and we believe that the failure to confer an equivalent statutory power was an omission from the 2007 Act. The third key change to the 2007 Act is to allow enforcement agents to re-enter any premises, domestic or commercial, where the debtor is in breach of a controlled goods agreement to which they have consented. Here again, we are seeking to provide in statute what is already the position under common law.
The balance of our reforms is to encourage compliance by debtors, including by encouraging the use of controlled goods agreements, which allow debtors to keep their possessions but enter into an agreed payment plan with the enforcement agent. There is a danger that without these changes we may remove the possibility of negotiation and in fact encourage bailiffs to use
aggressive action. Without the assurance that they will be able to re-enter premises quickly and remove goods should the agreement be broken, it is likely that they will remove goods straight away. Safeguards for this process will be included in regulations, stipulating that a bailiff will be required to give notice to the debtor of their intention to use reasonable force to re-enter premises. As I have indicated, these amendments to the 2007 Act will not increase the existing powers of entry available to bailiffs. Rather, they codify in statute existing common law powers.
Commons Amendment 6 removes Clause 26, which was inserted at Third Reading when this House agreed an amendment in the name of the noble Baroness, Lady Meacher, who I see in her place. As I stated then, we believe that the provisions expanding the remit of the Legal Services Ombudsman to include complaints against bailiffs is unnecessary. Existing forms of redress are already available to debtors, including in-house complaints processes run by creditors, bailiff companies and trade associations. Furthermore, under the Government’s reforms, all individuals undertaking enforcement action will be required to have a certificate from the county court to practise. Should a debtor wish to complain about the conduct of an individual, they will be able to complain directly to a judge who may decide whether the certificate should be withdrawn or whether any retraining could be appropriate. Carrying out enforcement work without a certificate will be a criminal offence.
It is also worth remembering that 80% of debt enforced by bailiffs is local government debt, and in these circumstances bailiffs are either directly employed by or contracted to act as agents on behalf of local authorities. In these cases, the debtor can also seek redress from the Local Government Ombudsman if they feel that the local authority has not satisfactorily considered their complaint. The Local Government Ombudsman has taken a particular interest in local authorities’ use and monitoring of private contracted bailiffs. In November last year, they published a focus report, Taking Possession: Councils’ Use of Bailiffs for Local Debt Collection. This is a very helpful report that highlights the need to reform bailiff law, and its recommendations were taken into consideration in the Government’s response to the Transforming Bailiff Action consultation published in January this year.
Of the other 20%, the majority of the debt is enforced on behalf of central government, which includes Her Majesty’s Revenue and Customs, Her Majesty’s Courts and Tribunals Service and the Department for Work and Pensions. Again, bailiffs are either directly employed by, or contracted to act as agents on behalf of, these departments. If the department does not deal with any complaint satisfactorily, then ultimately the individual, through their MP, could complain to the Parliamentary and Health Service Ombudsman.
The only other areas of debt enforcement that private bailiffs enforce are High Court writs and commercial rent arrears recovery. High Court enforcement officers are authorised by the Lord Chancellor through his delegate, therefore any complaints not dealt with satisfactorily by the High Court Enforcement Officers Association can be sent to the Lord Chancellor’s delegate. For commercial rent arrears recovery, there
is no ombudsman. However, we estimate that this is only 1% of debt collected by bailiffs and only affects business. I should add that we have received very few complaints in this area.
For all these reasons, the Government consider that the introduction of another ombudsman complaints system is unnecessary at best and at worst confusing. As I have previously said, we believe that the underlying causes of most, if not all, complaints will be dealt with by our reforms. Officials are working with the advice sector to consider once more the types of complaints received and will work with them to ensure they are adequately addressed by the regulations. It is our intention to make these regulations available by the summer to take effect by April 2014.
We are also working with external bodies that are involved in developing training programmes for the enforcement industry and know that it is important that the training includes how to deal with situations which involve vulnerable individuals; for example, those with mental capacity issues. The Money Advice Trust and the Royal College of Psychiatrists have already developed and are running mental health training for collection staff, which we will consider for inclusion in the wider bailiffs training framework.
We are looking at existing programmes which include online training, face-to-face modules with preparatory work to be undertaken in advance and possible examinations as well as continuous professional development. The full extent of the training is still being developed. We know that the Institute of Revenues Rating and Valuation has developed a level 2 vocational qualification aimed at the enforcement industry which is achieved through a mix of academic studies and work-based learning delivered over a period of three months. Again, this is something we are exploring further.
Our reforms are a significant step forward, and they must be given time to take effect. We have given a commitment to undertake a review of the reforms one, three and, if necessary, five years after their introduction. We are working with stakeholders to ensure that there is a robust framework in place by which to assess their success and to ensure that we deliver our commitment.
The Government are committed to protecting debtors from aggressive bailiff action. We are clear that intimidating behaviour and the oppressive and underhand tactics practised by some bailiffs are completely unacceptable. Implementing the provisions in the Tribunals, Courts and Enforcement Act 2007 will ensure that we focus on the root causes of bailiff complaints. In the light of this explanation, I ask the House to accept Commons Amendments 5, 6 and 31, and I hope that the noble Baroness, Lady Meacher, will consider not moving her amendment.