Led Up The Garden Path - And Abandoned To Their Fate

Following on from his trip out with one of Shergroup's enforcement teams and a BBC camera crew, Chris Bell, Shergroup's recently appointed policy adviser and head of public affairs, recently went along to watch one of Shergroup's authorised HCEOs deal with assessment fee hearings before a Queen's Bench Master at the RCJ. As Chris reports below, it was a day that was interesting yet at the same time in some ways quite concerning.

The Royal Courts of Justice building on the Strand remains one of the architectural gems of central London, and one cannot fail to be awed by the majesty of the Great Hall as one goes in through the main entrance. It is sometimes easy to forget that it is, in fact, a working court building, and that the business of upholding the law goes on there on a daily basis.

So it was that I found myself there accompanying Shergroup HCEO Chris Badger as he dealt with two hearings before a Queen's Bench Master one chilly Tuesday morning in early February. Both hearings had come about as the result of complaints made by debtors about the levels of fees being charged by Shergroup in the process of enforcing a High Court writ of fi-fa. I was about to enter the world of the assessment hearing. I had an interest in this on many levels. Not only did I want to see whether the outcome would see the fees charged by Shergroup justified and upheld or not, but as someone who was involved all those years ago in setting up the reformed High Court enforcement structure that came into effect in 2004, I wanted to see whether the procedures we had put in place at that time for adjudicating on disputes as to the level of fees charged actually worked as we envisaged it would back then.

As you probably all know, assessment hearings are the way in which complaints against the level of fees charged by HCEOs should properly be dealt with. They shouldn't be resolved by back room deals that involve a little bit being shaved off the bill here and there in an effort to placate a disgruntled debtor or debt advisor. Shergroup's message in this respect is clear - charge only what you should from the outset and then be prepared to back up your position or admit your faults if you got it wrong in the courts - don't charge what you think you can get away with and then take a bit off when you've been found out.

The world of enforcement is nothing if not fluid, however, and it soon became apparent that our expected two hearings were, in fact, about to become just the one hearing.

In one of the cases due to be heard today, the day before the hearing the claimant had been in contact. It would appear that whilst he hadn't been exactly happy about the fees he had been charged, he certainly hadn't wanted to challenge them through the courts. As is often the case, it would appear that he had been ill-advised by his debt advisor, who having told him to challenge the fees through the courts, then left the poor debtor to his own devices when it came to preparing for and conducting the hearing. The problem had been compounded by the letter informing the debtor of the hearing date having been misdirected in the post and only arriving with him the day before the hearing. In the circumstances, it had been agreed with the debtor to adjourn the hearing generally with liberty to restore at a later date should that be necessary, whilst official written confirmation from the debtor that he was withdrawing his legal challenge to the fees was to be provided as son as possible.

I must comment at this point that the extra costs Shergroup had incurred as a result of this episode will no doubt have to be revisited at a later date too. Drawing up the details of the costs incurred in enforcing a High Court writ of fi-fa - especially if it has involved, for example, seizing or removing goods, dealing with dishonoured cheques or setting up and overseeing a long term instalment arrangement - is a time consuming and complex business. This clearly appears to be something that debt advisors don't take into account when telling their clients to go down the path of appealing against the fees charged, and that seems to me to be a pretty shabby way to treat their clients, who after all may well end up having to pick up the tab for this at the end of the day.

So, it was a case of one down, one to go, with another fee assessment hearing that would be going ahead next on the agenda.

Once again, however, it was the familiar story of a debtor having been pushed down the path of appealing against the fees by their debt advisor (in this case from the CAB) without really understanding the potential consequences. The debtor had been told to appeal against the fees charged as 'unfair', and yet the advisors did not appear to actually have done anything to help the debtor prepare her case and were not there on the day to help her. In fact, all they had provided was 2 witness statements produced on behalf of the debtor but which the debtor admitted she hadn't seen or been consulted upon. So the debtor was there with just her husband for company, totally unprepared, and by her own admission she was 'petrified'.

After the judge had taken some time to read through the witness statements and other paperwork, he called us in for the hearing to begin. It followed a predictable pattern.

The debtor admitted she could add nothing to the witness statements, and although it appeared that the story of how the case ended up as a County Court judgment and then a High Court writ in the first place was a bit of a sad muddle, the judge politely had to inform the debtor that that wasn't really a point at issue or for discussion today.

Mr Badger outlined the position from Shergroup's point of view, even going so far as to point out where Shergroup's officers had attempted to help the debtor achieve a solution to her problems (something the debtor had herself mentioned as being grateful for and that the judge himself commended) and where Shergroup had already agreed that certain fees should in this instance not be charged given the particular circumstances of the case (for example, for two visits where it had not been possible to ascertain whether the correct documentation had been left at the time of the visit or not). Indeed, as a further gesture of goodwill Shergroup would not be asking for their costs for drawing up their bill of fees or for attending at the court to present their case.

The judge seemed concerned about the help (or lack of it) that the debtor had been given by the CAB. Why had a stay of execution not been applied for? Why had they not given the debtor more advice as to how to sort out issues as and when they arose rather than waiting until now when quite frankly it was too late in the day to address the core problems at the heart of the case? He accepted that Shergroup's officers had been as helpful as they could be in the circumstances, but, at the end of the day, a debtor couldn't expect the enforcement officer to apply for the stay of execution on her behalf, for example.

When it came to the key legal points raised in the CAB's submission, the judge was dismissive. He agreed with the approach to charging fees as laid out by Justice Irvin in the case of Beswick v Loynes, and agreed that charging fees under paragraph 12 of the fee regulations was permissible and did not require the approval of the judges before they could be charged, and further made clear that in his view the CAB's interpretation of the ruling in that particular case was wholly wrong. Indeed, if the ruling had been in line with CAB's interpretation then the decision in the case quoted would clearly have gone the other way from that which actually resulted. On the points they raised about the need for proportionality of the fees to the debt in question, the judge disagreed with their position and said that fees should be in line with the work done to enforce the writ rather than the value of the writ itself. Certain fees will be the same whatever the size of the debt - he gave the example of the cost of calling for a tow truck to take away a seized car being the same whether the car being removed was a Renault Megane worth a couple of thousand pounds to satisfy a small debt or a top of the range BMW worth sixty thousand pounds being removed to satisfy a debt that was considerably larger.

After due consideration of the witness statements and the evidence given in the hearing, the judge reached a decision.

He said that the fees that had been charged had been charged legally, and that the enforcement officer was entitled to those fees. The points put forward by the CAB in their witness statements were not valid and should not detract from the fact that the fees charged were correctly raised. However, the law gave him discretion over the amount to be charged, and taking into account the individual circumstances of the case and the debtor, he reduced the amount to be paid by the debtor by approx 40%. He made absolutely clear, however, that in doing this he was doing so because of the debtor's personal circumstances and not because the fees originally charged and how they had been arrived at were wrong. It would now be for the debtor to agree with Shergroup how those fees were to be paid.

With that, we left the courtroom and Mr Badger went off to discuss matters of payment with the debtor.

So how did I feel about what I had just witnessed? I have to say my feelings were mixed. Clearly I was glad to see that Shergroup's position was vindicated - they had the right to charge those fees in the way they did, they had done so correctly, and the way they had come to the final sum owed and claimed was beyond reproach.

I was also glad to see that the system for adjudicating such disputes over the fees charged by HCEOs clearly works. Despite having been part of the team that drew up the High Court Enforcement Officers Regulations 2004, which set up the fee regime and the appeals structure for HCEO fees, I had never actually attended one of these hearings before. I have to say, it probably went just as I would have envisaged it would when we were putting the system together a few years back, and I for one was pleased to see that what we put in place clearly works as we intended it to all those years ago.

But I also felt certain sadness for the debtor. Clearly badly advised, she had been left abandoned to her fate by debt advisors who saw this as an opportunity to try and make some academic or political points about the fee structure for High Court enforcement and how to appeal against any fees charged that you don't agree with. At no time did the realities of her position or the circumstances of her case or her family seem to have been taken into consideration. At the end of the day she will only feel badly let down by those who purported to be acting in her best interests, and if that doesn't sadden everyone concerned with this particular episode, then it should.

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