You can't get blood out of a stone - or money out of a legally unenforceable writ

Shergroup - A Company with History and Heritage at its Heart Shergroup CEO Claire Sandbrook writes on recent ongoing debates on the enforcement of unpaid employment tribunal awards and ACAS settlements - and asks just what more critics of those who currently enforce such awards believe they could do to get legally unenforceable writs paid?

The recent second reading in the House of Commons of the Enterprise & Regulatory Reform Bill has provided Citizens Advice with another opportunity to raise the thorny subject of enforcement of unpaid Employment Tribunal awards and ACAS settlements.

This has been done mainly through a briefing note issued by the CAB, although this note itself follows on from a number of recent letters and articles about the subject, which has been a matter of ongoing debate between the enforcement industry, the advice sector and the MoJ for some period of time now.

I have to say that in general terms I do not disagree with what is written in their briefing paper with regard to the need to make it easier for those granted such awards to be able to ensure they get the money they are owed - but I do disagree very strongly with some of the conclusions that are being drawn by Citizens Advice as to the effectiveness of HCEOs when it comes to enforcing those awards and settlements that they are legally able to enforce and indeed our powers in supposedly being able to declare an award as 'irrecoverable'.

It is certainly the case that all too often we find ourselves frustrated in our attempts to enforce these awards and settlements due to one of those annoying but unfortunate technicalities that make our writ legally unenforceable - and believe me, we are just as frustrated as the claimant when that happens. But if the employer company owing the money has gone into liquidation, or has otherwise ceased to trade, I am sorry but there is nothing we can do that can change that situation and make the money suddenly appear. Similarly, if we are sent to the wrong address or if the person owing the money has disappeared and left no forwarding address when we arrive at the premises we have been sent to, or if the address we are sent to is the personal address of a former director of the company and no company assets are there, the reality is that there is not much we can do in terms of magicking payment out of thin air.

There have been a number of suggestions as to law changes that could be made to help address this situation. It has been suggested that payment of such amounts should be made out of the National Insurance Fund (in the same way as unpaid statutory redundancy pay) if successful enforcement action has not been possible. It has also been suggested that such unpaid awards should be given priority status when it comes to distributing any funds or assets available from a liquidated company. It has been further suggested that it should be made much more difficult for directors of companies who owe such amount to put their companies into liquidation whilst such amounts are outstanding and unpaid. There have even been suggestions that directors should be made personally liable for any such awards and that enforcement action should be allowed against the directors for awards and settlements due from but not paid by their company - whether that company is still trading or not. These are all worthy of consideration. Indeed, anything that gives those in receipt of such awards a greater chance of actually getting their hands on the money they are owed should be approached with an open mind.

But what I do have to say at this point is that any decision as to whether a case is legally unenforceable is not one that the HCEO has any real influence over - nor, indeed, does the HCEO have any real discretion or flexibility of interpretation in how that decision is exercised.

The example that CAB quote in their evidence is a case in point. If the former employer has wound up their previous business and then started trading again from the same site under a slightly different name that is something that we as HCEOs have no control over. And we certainly don't have any scope or flexibility under the law to say that we will attempt to enforce against the new business. The debt is owed by the previous company and can only be collected from or enforced against that legal entity - we have no legal powers to force the new entity to pay that debt or to seize, remove and sell any assets of the new company. Many people may wish we did - but that is not the point. It is a matter of law that we cannot do so - and the way the example is phrased and presented makes it look as though we do and that we are somehow backsliding in our duties towards the person owed the money by not going ahead and enforcing.

Believe me, we take no pleasure from walking away from such cases - not only because we have failed to get the creditor the money that was owed to him but, if you want to be mercenary about it, we don't make any money on such cases - in fact, we will lose out quite considerably in terms of what it has cost for us to get an officer onto the doorstep merely to have to walk away empty-handed due to an insurmountable legal technicality.

I feel I must also query the CABs comment that if they'd known the true nature of HCEO performance figures back in 2009 they would not have suggested that HCEOs should have been given the task of enforcing unpaid awards.

All performance statistics collated and quoted officially by both the MoJ and the HCEOA regarding the performance not only of HCEOs but also of, for example, the County Court bailiffs, are based on the percentage of money collected when balanced against the percentage of money owed on legally enforceable writs and warrants only. Many people may feel this is an imperfect way of calculating the effectiveness of enforcement and I wouldn't necessarily disagree - but that is the measurement that is used.

I don't think that the MoJ, the HCEOA or any individual enforcement company would ever have claimed that they achieved payment in full on 70 to 80 per cent of all the cases they receive. I would certainly have never claimed such a thing and personally I think this is just another example of the CAB looking for a stick to beat the enforcement industry and the MoJ with rather than an accurate representation of what may have been said or implied in discussions three or four years ago.

Yes, I would agree that a situation where only somewhere between 40 and 50 per cent of those employment tribunal award and ACAS settlement cases referred to HCEOs for enforcement result in payment in full being obtained for the claimant is one that could and should be improved upon.

But as I've commented before, these figures are not down to any failings on the part of HCEOs when it comes to trying to enforce those writs. My officers certainly try their hardest and use all their powers within the law to try and successfully obtain full settlement on behalf of the claimant, and I don't see why the officers employed by any other High Court enforcement company would be any different. If our attempts are thwarted because a writ is legally unenforceable, then we just have to suck it up, advise the claimant of the situation with as much information and advice as to the next step they could take as we possibly can, accept our own financial losses and move on to the next case.

And if Citizens Advice really does feel that they should not have suggested using HCEOs to enforce these awards, I would love to know who they feel should be enforcing them or how these amounts should be collected if not by way of execution against goods. Do they really think that they should be enforced through the County Courts using court-based enforcement methods such as third party debt orders, charging orders and the like? They can feel free to suggest that if they like - I'd be very interested to know what sort of success rate they would anticipate those owed such awards taking that course of action would result in.

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