Can bailiffs levy for their fees alone? Council Tax FOI

[brassnecked]

I think they're talking ball works! Their own union http://www.acea.org.uk/faq/ seem to contradict Manchester as well. They say bailiffs can pursue the debt in the same way as the original debt was pursued -ie- by getting their own liability order through the courts and then pursuing payment, which is pretty much what we've been saying all along. They cannot do it using the council's LO and the council cannot use a clause in a policy document as though it were law when it isn't. If they could I'd produce my own Policy Document stating that under Clause 45 my house is totally exempt of Council Tax!

 

That's how I would interpret it Tingy, they would need to initiate their own action and not rely on the councils LO. However if you wanted to try the Freeman approach send back their bill marked NO CONTRACT, or ACCEPTED FOR VALUE. That would really annoy and confuse them

[Tingy]

I know a few people who take Common Law all the way and their lives are "interesting." You're right though, it would definitely confuse them. Wonderful clip on You Tube of a man representing his Legal Fiction and the court trying to establish jurisdiction without success. Sadly you don't hear the end of the tale which is that the man did eventually pay his Council Tax.

[outlawla]

Ok, there's another response from MCC to a request for further clarification:

 

Additional questions

 

Thank you for your reply to my FOI request.

 

I believe your interpretation of "Regulation 45" would qualify your response under normal circumstances, i.e. where the debtor deals directly with the bailiff.

 

However, owing to the following item in regulation 45, it makes the task of answering this FOI more complicated:

 

45.—(3) If, before any goods are seized, the appropriate amount (including charges arising up to the time of the payment or tender) is paid or tendered to the authority, the authority shall accept the amount and the levy shall not be proceeded with.

 

Although the debtor may not have paid the bailiffs fees as in accordance with what is implied in item (3) above (including charges......); this is a completely different scenario, where the liability has been completely settled – no matter how it may have come about.

 

In light of the above, please could you provide an answer to my previous questions that goes beyond being satisfied by your interpretation of "Regulation 45"?

 

 

MCC's response

 

Further to your latest question I think I need to clarify a key point:

 

The legislation governing the administration and enforcement of Council Tax dictates that any costs and fees (including bailiff fees) are collected first prior to any Council Tax debt. So in cases where debtors attempt to pay debts outstanding, exclusive of any bailiff fees incurred up to that point, the effect of this is that the fees are paid in full and part of the original liability order debt remains outstanding. This is why bailiffs then proceed for an amount "equal to their fees", in fact they are proceeding to collect the remainder of the original debt as the fees have, by then, been paid in full.

 

So, unless payment in full is made of all Council Tax outstanding, plus all costs and fees incurred up to the point when the payment is made, the "liability" is never settled.

 

 

This latest response clearly describes a procedure that conforms to legislation outlined by tomtubby in a previous post.

 

In light of this then, the response to the original FOI request should have been something like the following:

 

A) Yes, Manchester City Council do pay the bailiff their fees for work carried by them when the debtor does not because of direct settlement of the account with the authority. This results in an amount outstanding on the liability order, equal to the bailiffs fees up until the payment was made, which remains collectable on that liability order. (Or Something)

 

My opinion is that the council is acquainting itself with legislation as further questions are put to them.

 

I suppose the next question should be something like what do MCC actually do in such circumstances, irrespective of their new found knowledge.

[Tingy]

Their answer is clearly now correct. However, I think it is wrong that someone in a senior position should give out incorrect information in the first place. They should either know their job, or, as many of us do, look up the relevant legislation before answering a question.

[jed52]

I have always believed that if an account with the council is settled, but bailiffs fees are outstanding, the bailiffs have every right to pursue the debtor for their legitimate fees, but cannot do so using the council's original LO. They must take independent action to recover their fees. I also believed that if you have paid the council everything you owe them, you have every right to demand that they mark the account as settled which it is. The fact that bailff fees are outstanding is nothing to do with it, hence it has to be pursued by the bailiffs which they obviously have every right to do. What they can't do anymore though, as stated already, is claim they are now representing the council as they are not.

 

This is a very interesting thread. I asked the same question in a thread I started a while ago.

I was not as eloquent in my questions as some of the posters in this thread though.

Now I have read through, I understand it a lot more.

My situation is as follows;

1st and 2nd visit fees paid. (£42.50)

Van visit, not paid (£110)

Levy, not paid (£46)

Total £156.

The bailiff has been chasing these fees for nearly 2 years now and I simply will not pay them.

They have sent letters and posted letters by hand when they have visited. On one occasion when

a different bailiff came he added £120 to the demand.

I queeried this £120 but so far they have failed to give me any explanation as to why it was added.

In all their letters they refer to council tax arrears even though I have a letter from the council saying that the

debt is paid.

I am of the firm belief that they will not go to court because they will have to confirm that their fees are correct and legal.

I do not believe that they are.

jed

[outlawla]

....In all their letters they refer to council tax arrears even though I have a letter from the council saying that the debt is paid.

 

I am of the firm belief that they will not go to court because they will have to confirm that their fees are correct and legal.

I do not believe that they are.

jed

 

I have been trying to get a definitive answer to these issues. Unfortunately it seems that responses from councils are contradictory which demonstrates that they haven't got a clue.

 

I can conclude so far that legislation states one thing (highlighted by tomtubby, and in #28 ), and councils, either through ignorance or choice, do another.

[Tingy]

Fees are quite clearly set down in law as follows:

 

Council Tax

 

Fees

 

For each liability order where no levy is made, £24.50 for the first or only visit and £18 for a second visit can be charged. Despite any further visits, the bailiff is only permitted to charge a maximum of 2 separate visits.

 

For levying distress, the following fees may be charged (or a lesser amount if that would be reasonable):

 

£24.50 for the first £100

For the next £400 - 4%

For the next £1,500 - 2.5%

For the next £8,000 - 1%

For any additional sums - 0.25 %

 

Charges

 

Walking possession------------------------------ £12.00

Attendance with vehicle/removal/storage ---------Reasonable costs and fees incurred.

Valuation --------------------------------------- Reasonable costs, but no charge can be made unless the debtor has been advised of the charge and the manner of its calculation, beforehand.

Sale --------------------------------------------Reasonable costs and fees incurred.

Where sale does not take place ------------------£20 or actual costs up to 5% of the amount of the liability order (whichever the larger sum).

It is therefore quite easy to work out whether or not what they are charging is accurate.

 

As regards the van fee I always argue on peoples' behalf that you can hire a van for a whole day for less than £110. I then state that I fail to believe that they were the only house visited that day, and if they supply me with a list of all the properties visited by that van on that day then they would willingly pay the approriate percentage of the van fee. They never like this argument!

 

In your case, working on the principle that they would charge the full amount and would not charge a lesser amount, reversing the mathematics it is almost impossible to get that levy fee.

[outlawla]

Latest from Man'cagey City Council

 

Additional requests:

 

It seems clear from the legislation you have explained that if this is adhered to, then Manchester City Council do in fact pay the bailiff their fees for work carried by them when the debtor does not because of direct settlement of the account with the authority.

 

In light of the various points which have been clarified throughout this process, could I ask for the original FOI request be amended or re-answered, now that a clearer understanding of the questions have been established?

 

And for the purpose of backing up your response, could I ask that some documented evidence is sent to me that relates to a case where these circumstances have occurred?

 

 

Council's response:

 

I'm afraid that I'm a little confused by your latest questions.

 

I can only reiterate that Manchester City Council only pays money to external bailiff companies, who act as our agents in the collection and enforcement of Council Tax, in the following circumstances.

 

1) We are required to pay VAT amounts on fees collected by them from debtors. These amounts are recliamed as part of the VAT administration process.

 

2) We, very occasionally, make recompense by way of compensation to them in cases where they collect our debt and any associated costs in full and subsequently the debtor proves not to have been liable to pay the Council Tax. In these cases we refund the Council Tax paid and they refund the associated recovery costs which we then reimburse.

 

At all times the external bailiff companies that we use are acting on our behalf as our agents. Many local authorities use their own internal bailiffs where all fees and charges for bailiff activity simply are collected by the LA's themselves as part of the amounts due. The fees incurred in the enforcement process are our fees. Part of our contractual arrangements with the bailiff companies detail the fact that we allow the bailiffs to retain the enforcement fees themselves and to collect these first in cases where part payments are made by debtors.

 

EDIT:

 

Does anyone know where the legislation relating to the following is hidden please?

 

The legislation governing the administration and enforcement of Council Tax dictates that any costs and fees (including bailiff fees) are collected first prior to any Council Tax debt.

Edited May 20, 2011 by outlawla

[Tingy]

If anywhere it would be in this legislation, Council Tax (Administration and Enforcement) Regulations 1992. I believe it would be in this part, and as far as I can see it is not!

 

http://www.legislation.gov.uk/uksi/1992/613/regulation/45/made

Edited May 20, 2011 by Tingy

[outlawla]

Tingy,

 

You are right; it is in the Council Tax regulations – assuming this is the correct reference:

 

The Council Tax (Administration and Enforcement) Regulations

 

PART VI Enforcement

 

52. Relationship between remedies

 

52.–

(4) Where a step is taken for the recovery of an outstanding sum which is or forms part of an amount in respect of which a liability order has been made and under which additional costs or charges with respect to the step are also recoverable in accordance with this Part, any sum recovered thereby which is less than the aggregate of the amount outstanding and such additional costs and charges shall be treated as discharging first the costs and charges, the balance (if any) being applied towards the discharge of the outstanding sum.

 

Just need to know which councils adhere to this legislation in practice.

[Tingy]

Absolutely right - well found!

[outlawla]

Here's the latest from Manchester City Council regarding contractual arrangements with their external bailiffs:

 

Request for Additional clarification:

 

Thank you once again for your latest explanation to MCC's procedures regarding bailiff contracts. However, I feel I'm either taking part in the krypton factor or completing an entry exam for a position as chief decipherer of code with some intelligence service.

 

Can I begin by eliminating a couple of items from consideration, those being the VAT payments as I'm aware these can be claimed back; the other being the compensation as a result of MCC incorrectly sending cases for enforcement. Disregarding these two items it is clear that MCC do not make any payments to external bailiffs.

 

There are four aspects that are causing me most difficulty but which also may be the key in getting an understanding of your explanations.

 

i) The Council Tax Regulations, S.I. 613/1992 regulation 52(4) which states:

 

"Where a step is taken for the recovery of an outstanding sum which is or forms part of an amount in respect of which a liability order has been made and under which additional costs or charges with respect to the step are also recoverable in accordance with this Part, any sum recovered thereby which is less than the aggregate of the amount outstanding and such additional costs and charges shall be treated as discharging first the costs and charges, the balance (if any) being applied towards the discharge of the outstanding sum."

 

ii) The fees incurred in the enforcement process are the council's fees which may explain, in conjunction with iii), why the council do not pay fees to bailiffs despite S.I. 613/1992 regulation 52(4)

giving the impression that this should be the case.

 

iii) Part of your contractual arrangements with the bailiff companies detail the fact that you allow the bailiffs to retain the enforcement fees themselves and to collect these first in cases

where part payments are made by debtors.

 

iv) No sums are payable to bailiff companies in respect of uncollected fees in cases where debtors pay outstanding sums to MCC.

 

I will give my interpretation of the above information which I feel will be the best way of demonstrating whether or not I've grasped what you're saying:

 

1) There is no obligation for MCC, owing to Regulation 52(4) of S.I. 613/1992, to pay any fees to their external bailiffs when MCC receive payment directly from debtors. The is because the legislation does not refer to external bailiff fees; in fact external bailiff fees do not exist in the collection of council tax debt, they're always the council's enforcement fees.

 

2) The contractual arrangements outlined in iii) above, are only applicable when collection is actually made by the bailiff, i.e. the bailiff may retain the council's fees even when only part of the debt is collected. This does not extend to the council passing onto the bailiff the council's enforcement fees when debtors pay directly to them.

 

3) Because no sums are payable to bailiff companies in respect of uncollected fees in cases where debtors pay outstanding sums to MCC; the council do not pay the bailiff those fees equivalent to the council's, even in situations where the debtor pays to the council an amount equal to the debt and the council's enforcement fees. Though in such circumstances, the debtors liability would be completely settled and the bailiff would not be allowed (lawfully) to pursue the debtor for the council's enforcement fees he would normally be entitled to if he had collected himself.

 

4) Owing to regulation 52(4), any payment, regardless to whom it is paid, if it does not completely cover the combined total of the outstanding debt plus the council's fees, the liability will not be settled and therefore the bailiff will be allowed to pursue the debt under the liability order.

 

If I have understood your explanation fully and item 4 above is correct, could you for the purpose of clarifying this point, provide some documented examples which relate to cases where the original debt has been paid to the council (less council's enforcement fees) and the liability order has remained active for the bailiff firm to levy goods/enforce payment?

 

MC Council's response:

 

Please see my comments (in bold, just for clarity, I'm not shouting!) added in between the text of your latest comments.

 

I hope these comments serve to further clarify the position which you have clearly now fully understood.

 

Thank you once again for your latest explanation to MCC's procedures regarding bailiff contracts. However, I feel I'm either taking part in the krypton factor or completing an entry exam for a position as chief decipherer of code with some intelligence service.

 

Can I begin by eliminating a couple of items from consideration, those being the VAT payments as I'm aware these can be claimed back; the other being the compensation as a result of MCC incorrectly sending cases for enforcement. Disregarding these two items it is clear that MCC do not make any payments to external bailiffs.

 

Yes absolutely correct except in one rare instance which I should have mentioned in my previous reply...please see my comments linked to your point 1) below. Apologies that I simply forgot to mention this in my previous e-mail.

 

 

There are four aspects that are causing me most difficulty but which also may be the key in getting an understanding of your explanations.

 

i) The Council Tax Regulations, S.I. 613/1992 regulation 52(4) which states:

 

"Where a step is taken for the recovery of an outstanding sum which is or forms part of an amount in respect of which a liability order has been made and under which additional costs or charges with respect to the step are also recoverable in accordance with this Part, any sum recovered thereby which is less than the aggregate of the amount outstanding and such additional costs and charges shall be treated as discharging first the costs and charges, the balance (if any) being applied towards the discharge of the outstanding sum."

 

Yes if any amount is paid, less than the total amount outstanding (inclusive of all fees) then fees and charges are paid off first before the original Council Tax debt.

 

ii) The fees incurred in the enforcement process are the council's fees which may explain, in conjunction with iii), why the council do not pay fees to bailiffs despite S.I. 613/1992 regulation 52(4)

giving the impression that this should be the case.

 

iii) Part of your contractual arrangements with the bailiff companies detail the fact that you allow the bailiffs to retain the enforcement fees themselves and to collect these first in cases

where part payments are made by debtors.

 

Yes agreed...all fees and charges are our fees in law both those that are prescribed and those that are simply stated as being "reasonable" in the legislation. All fees and charges added by our external bailiff companies must be agreed by MCC and we operate a "fixed fee schedule" that all bailiff companies who work for us must adhere to.

 

iv) No sums are payable to bailiff companies in respect of uncollected fees in cases where debtors pay outstanding sums to MCC.

 

Again yes perfectly correct.

 

I will give my interpretation of the above information which I feel will be the best way of demonstrating whether or not I've grasped what you're saying:

 

1) There is no obligation for MCC, owing to Regulation 52(4) of S.I. 613/1992, to pay any fees to their external bailiffs when MCC receive payment directly from debtors. The is because the legislation does not refer to external bailiff fees; in fact external bailiff fees do not exist in the collection of council tax debt, they're always the council's enforcement fees.

 

Yes that is exactly what happens. On the rare occasions where we are asked for a "full and final settlement" figure to clear a debt by a debtor whose account is with a firm of bailiffs, we will contact the bailiff company, add on the fees outstanding, collect them and then reimburse them back to the bailiff. Normally we instruct the debtor to contact, and pay, the bailiff direct but there are rare occasions when we deem it to be in everyone's best interests to collect the money ourselves (such as when the debtor has come into our customer contact centre in person to clear the account).

 

2) The contractual arrangements outlined in iii) above, are only applicable when collection is actually made by the bailiff, i.e. the bailiff may retain the council's fees even when only part of the debt is collected. This does not extend to the council passing onto the bailiff the council's enforcement fees when debtors pay directly to them.

 

Yes although see my comments to your point 1 above...in this (rare!)event we collect the fees and pass them back to the bailiff company by way of a cheque. This probably happens on less than a dozen occasions per year despite the fact that we issue in the region of 30,000 cases to bailiffs.

 

3) Because no sums are payable to bailiff companies in respect of uncollected fees in cases where debtors pay outstanding sums to MCC; the council do not pay the bailiff those fees equivalent to the council's, even in situations where the debtor pays to the council an amount equal to the debt and the council's enforcement fees. Though in such circumstances, the debtors liability would be completely settled and the bailiff would not be allowed (lawfully) to pursue the debtor for the council's enforcement fees he would normally be entitled to if he had collected himself.

 

Yes if all sums due are paid to MCC (inclusive of any bailiff fees incurred to date)then enforcement action must cease immediately.

 

4) Owing to regulation 52(4), any payment, regardless to whom it is paid, if it does not completely cover the combined total of the outstanding debt plus the council's fees, the liability will not be settled and therefore the bailiff will be allowed to pursue the debt under the liability order.

 

Exactly correct.

 

If I have understood your explanation fully and item 4 above is correct, could you for the purpose of clarifying this point, provide some documented examples which relate to cases where the original debt has been paid to the council (less council's enforcement fees) and the liability order has remained active for the bailiff firm to levy goods/enforce payment?

 

Example:

 

Council Tax debt £1,000.00

Liability order court fees £74.00

Total debt passed to bailiff for collection £1,074.00

Fees incurred for first and second bailiff visits £42.50

Total to pay £1,116.50

 

Debtor pays £1,074.00 in an attempt to stop bailiff action, direct to MCC

 

MCC notifies bailiff company of a "direct payment" of £1,074.00.

 

Bailiff company will continue to enforce payment of £42.50...plus any subsequent further bailiff costs (for example a levy fee where walking possession of goods is taken) if payment of the outstanding balance is not made.

 

 

To anyone who has had the patience to wade through all this, would you agree that perhaps the only missing piece of the jigsaw is whether or not the council would give a toss about the bailiff continuing to enforce payment in the above outlined example, especially as the council are in receipt of the original debt.

Edited May 23, 2011 by outlawla

[Tingy]

I am still having problems understanding how the bailiffs can continue to collect when the debt has been discharged.

 

As I read the above bailiffs fees and additional costs are discharged first from any monies recovered.

 

If you then discharge your debt to the council and they give you a receipt saying the full balance has been paid then there remains no debt for the bailiffs to collect on.

 

If you have piad the council direct and they have accepted this sum, then they should surely pay the bailiffs from what you have paid them.

 

I still do no believe given the CT Enforcement Regulations that bailiffs can continue to collect for any fees they consider outstanding under the original LO.

 

I know I'm not fully with it today, but that's the way it seems to me.

[brassnecked]

I am still having problems understanding how the bailiffs can continue to collect when the debt has been discharged.

 

As I read the above bailiffs fees and additional costs are discharged first from any monies recovered.

 

If you then discharge your debt to the council and they give you a receipt saying the full balance has been paid then there remains no debt for the bailiffs to collect on.

 

If you have piad the council direct and they have accepted this sum, then they should surely pay the bailiffs from what you have paid them.

 

I still do no believe given the CT Enforcement Regulations that bailiffs can continue to collect for any fees they consider outstanding under the original LO.

 

I know I'm not fully with it today, but that's the way it seems to me.

 

I would tend to agree with you on that one Tingy, as if the council sign it off as paid in full, then the liability order must be discharged as Satisfied, leaving the bailiff with nowhere to go, especially if the bailiff has already had some fees imho, and the council has taken the rest of the money.

 

If the council are lax in calling off the bailiff once the debt is paid, and the bailiff calls again and adds further fees, and carries on trying to collect, then the council must be at fault, and the bailiff should sue their employer, the council for their now spurious fees which they would have to assure the council that they were correct give or take a van fee and attend to remove fee or two imho.

[Leakie]

Well guy/girls

I hope to be in a position to pay off my Liability order on the 31st May,

I have had numerous letters from Equita with 2 different amounts owed,

1 £1055

2 £955.

They had not attend at my property at this time,

I have had 1 Hand delivered letter but with no amount on it

I belive that I owe the remainder of the LO and 1 Baliff fee of £24.50

Lets see what my council does.

 

 

Leakie

[outlawla]

I am still having problems understanding how the bailiffs can continue to collect when the debt has been discharged.

It seems that the debt is not discharged unless the debt, including all the "enforcement fees", are paid to the council. The likelihood is that the council will not care much either way whether you pay the bailiff. Though it seems that the bailiff can continue to enforce for the remaining debt outstanding on the liability order. Remember there is no such thing as bailiff fees in connection with council tax enforcement. They are the council's enforcement fees that they allow bailiffs to keep, under some contractual agreement, if they collect successfully.

 

As I read the above bailiffs fees and additional costs are discharged first from any monies recovered.

You are referring to Regulation 52(4) of the council tax regs, and this is what causes much of the confusion I think. These don't have anything to do with the bailiff fees because they don't exist; they are only entitled to the fees when they collect, and this is because of their contract with the council, not Regulation 52(4).

 

If you then discharge your debt to the council and they give you a receipt saying the full balance has been paid then there remains no debt for the bailiffs to collect on.

I'd guess here that the council are taking the "I'm alright Jack" attitude, in that they have got their share of the money. I should think the liability order would not be settled though in these circumstances according to Manchester City Council's response.

 

If you have piad the council direct and they have accepted this sum, then they should surely pay the bailiffs from what you have paid them.

You have to remember it's the crafty councils we are talking about here. They have no obligation to pay them. Regulation 52(4) does not refer to bailiff fees. If they don't collect, they don't get.

 

I still do no believe given the CT Enforcement Regulations that bailiffs can continue to collect for any fees they consider outstanding under the original LO.

 

I know I'm not fully with it today, but that's the way it seems to me.

 

 

Despite the FOI response apparently being more in favour with the councils and bailiffs than I'd expected, this is just one council. Maybe this is typical of most councils, if so, it seems extra caution is necessary if paying them direct, especially regarding goods the bailiff may have access to levy.

[brassnecked]

Yes outlawa, I think it is watch and beware, and each case will have to be on it's own merits, depending on what correspondence is forthcoming from the council after a "full" payment is made, as a disgruntled bailiff is a loose cannon that will levy on anything even if it is nailed down.

[outlawla]

Yes outlawa, I think it is watch and beware, and each case will have to be on it's own merits, depending on what correspondence is forthcoming from the council after a "full" payment is made, as a disgruntled bailiff is a loose cannon that will levy on anything even if it is nailed down.

 

 

Yes I agree, after winkling out all this information from the council it just about boils down to what you're saying. What surprises me though from this long drawn out FOI is how things are never quite what they seem, even when it's written down in B&W in some S.I. legislation.

[brassnecked]

Yes I agree, after winkling out all this information from the council it just about boils down to what you're saying. What surprises me though from this long drawn out FOI is how things are never quite what they seem, even when it's written down in B&W in some S.I. legislation.

 

I really don't think many councils have actually read and digested exactly what are their rights and duties under the legislation, and do not realise how the bailiffs actions can rebound on them when it all goes pear shaped, and the bailiffs breach the guidelines, especially where there is a vulnerability issue