Sale Stage fee of £110. When should it be charged by bailiffs/enforcement agents?

[Bailiff Advice]

A month ago, a regular contributor to this forum (Dodgeball) started a thread on here about the ‘sale stage fee’ of £100 and when it should be charged by bailiffs.

 

The regulations were completely overhauled in April 2014 and there is (and will continue to be) a great deal of differing of opinion about the wording and application of the regulations and will no doubt not be properly resolved until a court makes a judgment.

 

Unfortunately, Dodgeball’s thread was once again the focus of unwarranted attention elsewhere and with this in mind, the thread ended up running to seven pages.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?453200-Removal-for-sale-fee-when-can-it-be-charged

 

I am reliably informed that because of the importance of this subject, Dodgeball approached the countries expert on bailiff law; John Kruse for his professional opinion. John considered that the question was important enough to be quoted is his regular Bulletin (that is available to the advice sector for free or available by subscription to the public).

 

Given the popularity of this forum, it is frequently viewed by members of the the enforcement industry. Those individuals are unlikely to read a copy of John Kruse's Bulletin. Hopefully by providing a copy of his opinion on the charging of this fee it may prove useful to them.

 

A copy of Dodgeball's question is below:

 

I am currently engaged in an interesting debate about sale fees and when they are applicable- in particular if a bailiff can charge the sale stage fee whilst on an enforcement visit. Many, particularly HCEOs, are under the impression they can. My position is that they cannot. My arguments are these:

 

Sch.12 para.13 TCE Act 2007- this section outlines the ways that goods can be taken under control; it says that one of the methods listed must be used. Since only controlled goods can be sold then presumably only one of these can be used and must be used prior to removal for sale. It must be noticed that none of the options relate to the sale of goods, in fact they all indicate that another attendance must be made, to removed the previously secured goods or to inquire about the failure of a controlled goods agreement. The mention of removing goods in para.13 is, as you say in Bulletin 27, for purpose of storage rather than sale, so a subsequent attendance must be made there also.

 

The Taking Control of Goods (Fees) Regulations state that “the sale or disposal stage ... comprises all activities relating to enforcement from the first attendance at the property for the purpose of transporting goods to the place of sale etc.” The attendance at enforcement cannot in my opinion be for the purpose of transporting goods to the place of sale, because no goods have been seized at this point. There is also the matter of arrangement for sale as you mentioned in Bulletin 29. I do not believe that merely ringing for a van can fill these criteria as I believe the MoJ has suggested.

 

Thirdly I think that the procedure was intended to be in three stages, so allowing the EA to circumvent the last stage by switching from enforcement to sale whilst in the enforcement stage is not what was intended.

 

I would appreciate your thoughts.

[Bailiff Advice]

The following is a copy of John Kruse's response (the underlining and bold text in mine).

 

 

As I have argued in previous issues of the Bulletin, I believe the circumstances in which the sale fee should be charged are deliberately closely defined and restricted by the new legislation.

 

Given the revised fee scales, it is predictable that some agencies may seek to supplement their income through use of the sale fee, especially where they are collecting road traffic debts and High Court judgments, where the cap on fees has perhaps been most noticeable. However, the sale fee should not be treated as a re-attendance fee and should probably only rarely be charged.

As cited above, the sale stage covers “all activities relating to enforcement from the first attendance at the property for the purpose of transporting goods to the place of sale.” Indisputably, a re-attendance with the intention to remove for sale would be covered by this fee, but not every attendance or re-attendance will be made for this purpose. It should be recalled that warrants and writs can last up to a year and that bailiffs may make repeat visits during this period (see particularly reg.24 of the 2013 Regulations and the earlier discussion of this issue).

 

A visit only qualifies as a visit falling within the sale stage if there are goods to remove for sale. Only goods that have been taken into control may be sold so that, unless there has been a taking, the sale fee can never arise. A visit with only an intention to take control (and/or to remove those goods) cannot therefore attract the fee. The sale stage must be preceded by an actual taking and in many cases it is likely that these will be separate events- an enforcement visit followed by a subsequent removal visit.

 

That said, it is not impossible that an enforcement visit could, because of circumstances at the premises, turn into a sale stage visit, but such events must surely be the exception. Indeed, even if, on an enforcement visit, goods are taken into control and immediately removed, it is arguable that the removal would, in any case, be for the purposes of taking control under Sch.12 para.13 rather than for the purposes of an early sale. The test of this, of course, is whether the mandatory valuation is carried out by the agent within the next seven days. If it is, sale is planned; if not, either the agent is breaching the regulations or the removal was for securer storage.

 

Another test of intent may be the goods in question. Sales of household effects have always been a last resort and are likely to become even less popular under the new law. Unless the debtor possessed valuable (possibly commercial) assets, it is probably highly unlikely that a sale was ever really intended.

[Peterbard]

Hi BA

 

Yes i received this some weeks ago but was reluctant to post it, but since he has posted it on his bulletin it is OK.

 

Good to see the whole thing, as some already have started to take individual words and phrases and put there own interpretation on them, hopefully seeing the whole response all remarks in the context the are made will settle a lot of the loony brigades nonsense.

 

John continues to maintain that sale fees can only be added at sale stage, which is after goods have been taken under control and on attendance for the specific purpose of sale.

He points out that strictly speaking this may not be the second visit, because the regulations permit repeated visits at enforcement, and theses would not represent sale. The correct term would be the second enforcement stage visit.

 

He also says there may be an argument to charge a enforcment under certain rare occasions, but even these can be argued against. On further investigation it seems he was referring to the second enforcment stage in high court enforcment, where goods have been seized and put under control at the first visit.

[bazm]

I think its sad reflection that (allegedly) some EAs are treating the Sale/Removal fee the same as the disreputable Van fee of old. MoJ are quite clear on this. You have to first take control of the goods and then take an action that moves it into the sale/removal stage. Common scenario is to immoblise a vehicle, debtor refuses to enter a CGA. EA then requests a removal vehicle to attend. At that point the sale/removal fee kicks in.

[Peterbard]

I think its sad reflection that (allegedly) some EAs are treating the Sale/Removal fee the same as the disreputable Van fee of old. MoJ are quite clear on this. You have to first take control of the goods and then take an action that moves it into the sale/removal stage. Common scenario is to immoblise a vehicle, debtor refuses to enter a CGA. EA then requests a removal vehicle to attend. At that point the sale/removal fee kicks in.

 

Yes, I think that it must be time to forget about the old systems and practices and focus on what is said in the TCE and relavant regulations. Not only those who seek to advise but by the enforcement agencies themselves.

There are many agents who are sticking to their old ways and basically refusing to acknowledge the new regime. We always knew it would take some time for the new practices to reach every nook and cranny of the enforcment world, but you do get the feeling that some are deliberately choosing to turn a blind eye.

[brassnecked]

I think its sad reflection that (allegedly) some EAs are treating the Sale/Removal fee the same as the disreputable Van fee of old. MoJ are quite clear on this. You have to first take control of the goods and then take an action that moves it into the sale/removal stage. Common scenario is to immoblise a vehicle, debtor refuses to enter a CGA. EA then requests a removal vehicle to attend. At that point the sale/removal fee kicks in.

It would appear that this is so, they seem to want to add the sales fee as soon as they have taken Control, or even with No CGA, if and when they decide to call again.

[Coughdrop]

Common scenario is to immoblise a vehicle, debtor refuses to enter a CGA. EA then requests a removal vehicle to attend. At that point the sale/removal fee kicks in.

 

Very nearly, but not quite.

 

It is not a sale/removal fee, it is a sale or disposal stage fee and is for removal to the place of sale. thus, if the vehicle or other goods are being removed to secure storage somewhere, the sale fee would not be chargeable.

[Bailiff Advice]

Very nearly, but not quite.

 

It is not a sale/removal fee, it is a sale or disposal stage fee and is for removal to the place of sale. thus, if the vehicle or other goods are being removed to secure storage somewhere, the sale fee would not be chargeable.

 

Whilst you are indeed correct, the fact remains that the ordinary debtor faced with the removal of their vehicle, would not know the difference. They would not go to the extreme lengths of 'The Guru' (JasonDWB) of attending the bailiff companies vehicle pound with a debtor to pick up her car and at the same time, to coax the debtor into asking the staff whether cars are sold at the premises or only stored and secretly filming the conversation and uploading the video online.

 

The ordinary debtor would also not go to the additional extreme lengths of the same individual of searching planning applications to establish whether the property had been granted permission for sale use or storage.

 

In any event, I would assume that the application of this fee will be addressed under the One Year Review which is nearing it's completion.

 

I appreciate that this fee (of £110) is important but my personal view is that far more serious is the simply astonishing amount of 'storage fees' that are being charged. A discussion for another day.

[Bailiff Advice]

I notice that this thread has been picked up by SCOOP. Accordingly, it may be useful for viewers to read the recent Guidance Note from CIVEA on the subject of the 'sale fee'.

 

http://www.scoop.it/t/lacef-news

 

 

CIVEA Guidance Note

 

The transition from the enforcement to the sale stage and when a sale stage fee becomes applicable

 

How and why the issue arises

 

 

1.1 Historically, attendance to remove (ATR) fees under the old regime have been contentious, particularly where issues arose as to whether there was an actual ability to remove goods, and whether that was a prerequisite for an ATR fee. The clear aim of the new legislative regime is to remove such uncertainties. 


 

1.2 The "trigger" for the application of a sale stage fee attracted considerable debate during the consultation process. It was even suggested by the MoJ - but countered by CIVEA - that actual removal would have to take place in order to 
justify a sale stage fee. That would lead to an absurd result because, as is known, the catalyst for payment is often the realisation that actual removal of goods is imminent; either when the removal vehicle has been summoned, or when it arrives. Where a removal vehicle has been called, or has arrived, and where payment is then made, it would be inflammatory to have to complete the exercise of removal so as to justify a fee. 


 

 

Legal framework

 


Regulation 5 of the Taking Control of Goods (Fees) Regulations 2014 provides, so far as material:

 

Stages of enforcement for which fees may be recovered - enforcement other than under High Court writs

 

5.-(l) The relevant stages of enforcement under an enforcement power which is not conferred by a High Court writ are as follows -

 

(a) the compliance stage, which comprises all activities relating to enforcement from the receipt by the enforcement agent of instructions to use that procedure in relation to a sum to be recovered up to but not including the commencement of the enforcement stage;

 

(b) the enforcement stage, which comprises all activities relating to enforcement from the first attendant at the premises in relation to the instructions up to but not including the commencement of the sale or disposal stage;

 

© the sale or disposal stage, which comprises all activities relating to enforcement from the first attendance at theproperty for the purpose of transporting goods to the place of sale, or from commencing preparation for sale if the sale is to be held on the premises, until the completion of sale or disposal..

.

 

Guidance

 

3.1 Regulation 5 draws a sharp distinction between the various stages.




 

3.2 A sale stage fee becomes applicable when there is a step-change between the enforcement and sale stages. A "step-change" requires a positive action, the best example of which will be the calling of a removal vehicle (and therefore incurring a liability to a third party contractor). 


 

 

3.3 What will amount to a step-change will be fact-specific, and it is impossible to cover every factual scenario. The following, however, will not amount to a step-change: 


 

a mere intention, or mindset, to remove goods 


 

that a number of enforcement visits have been made so as to meet some sort of 
arbitrary "threshold" for a sale stage fee somehow to become applicable 


 

that an enforcement agent has been at the scene for a length oftime - in other 
words, by the sheer lapse of time 


 

where a vehicle has been immobilised, but before a removal contractor is 
contacted 


 

where a controlled goods agreement has been completed




 

3.4 The above examples are set out to demonstrate that:

 

(i) a sale stage fee does not become automatically applicable,

 

(ii) a passive or default approach is not what the Regulations intend and:

 

(iii) it will require a positive step-change.

[Coughdrop]

Whilst you are indeed correct, the fact remains that the ordinary debtor faced with the removal of their vehicle, would not know the difference.

 

No, that is probably the case. However, the title of the thread which you started is, "Sale Stage fee of £110. When should it be charged by bailiffs/enforcement agents?" Accordingly, the information here needs to be correct. (apologies if this comes out large, I've tried to get it the same size, but it posts differently).

 

 

I notice that this thread has been picked up by SCOOP.

 

Yes, they usually are. Given the poster "bazm" runs Scoop, I think, or certainly has a page on it, and given his senior role in enforcement at Brighton and Hove Council, I was surprised to see incorrect information being posted by him. This is the second time I have picked him up on issues recently - the last was when, not long ago, he took delight in stating how he thought CCJ's for anyone with a bailiff debt were a great idea.

 

 

Accordingly, it may be useful for viewers to read the recent Guidance Note from CIVEA on the subject of the 'sale fee'.

 

As with all things bailiff, some will be quick to point out it is 'just guidance' however. It is helpful though, so:

 

 

http://www.scoop.it/t/lacef-news

 

 

CIVEA Guidance Note

 

A sale stage fee becomes applicable when there is a step-change between the enforcement and sale stages. A "step-change" requires a positive action, the best example of which will be the calling of a removal vehicle (and therefore incurring a liability to a third party contractor). 


 

This is wrong as far as I understand things. If the removal vehicle is removing to a place of storage (for a vehicle or other goods), then the sale stage does not begin and the fee is not chargeable - An unfortunate error by CIVEA.

 

It is so easy to correct this common error, that I fail to see why it is not being sung loud and clear on every consumer and advice site going. It was posted incorrectly on here by bazm, the Senior Bailiff with Brighton and Hove Council; it was posted incorrectly in the CIVEA guidance explaining the Sale Fee. One has to question whether the enforcement industry itself does not understand it, or whether they are simply promoting incorrect charging. Perhaps I am wrong?

 

I agree entirely with you that the one year review hopefully will clarify things. Actually I posted it was best to wait until then over a month ago, when Dodgeball started a thread on this, but another thread was started, so I've said it again. My understanding has not changed during that time.

[Peterbard]

Very nearly, but not quite.

 

It is not a sale/removal fee, it is a sale or disposal stage fee and is for removal to the place of sale. thus, if the vehicle or other goods are being removed to secure storage somewhere, the sale fee would not be chargeable.

 

Yes indeed, as said earlier it is time to stop talking about van fees head H etc, because all of that is irrelevant under the new regime.

All that matters is what is said under the legislation. I also acknowledge what BA says, she has a great advantage of knowing what is actually happening out there after all.

But this is not a reason to ignore the fact that the law in this area is being abused and ignored, hopefully the MOJ will bring out guidence in the next couple of months which will clear this up for everyone including civea who have yet again issued guidence, which is to say the least misleading in its interpretation of the act.

[Peterbard]

No, that is probably the case. However, the title of the thread which you started is, "Sale Stage fee of £110. When should it be charged by bailiffs/enforcement agents?" Accordingly, the information here needs to be correct. (apologies if this comes out large, I've tried to get it the same size, but it posts differently).

 

 

 

 

Yes, they usually are. Given the poster "bazm" runs Scoop, I think, or certainly has a page on it, and given his senior role in enforcement at Brighton and Hove Council, I was surprised to see incorrect information being posted by him. This is the second time I have picked him up on issues recently - the last was when, not long ago, he took delight in stating how he thought CCJ's for anyone with a bailiff debt were a great idea.

 

 

 

 

As with all things bailiff, some will be quick to point out it is 'just guidance' however. It is helpful though, so:

 

 

 

 

This is wrong as far as I understand things. If the removal vehicle is removing to a place of storage (for a vehicle or other goods), then the sale stage does not begin and the fee is not chargeable - An unfortunate error by CIVEA.

 

I agree entirely with you that the one year review hopefully will clarify things. Actually I posted it was best to wait until then over a month ago, when Dodgeball started a thread on this, but another thread was started, so I've said it again. My understanding has not changed during that time.

 

Yes in fact section 5 © of the Taking control regs says that the fee can be applied from the first attendance with the intention of taking goods for sale or disposal. Since any attendance prior to that would be enforcement it really is not that difficult to understand I would have thought.

 

The cynical thing is that civea seek to put the commencement of the enforcment stage squarely back in the bailiffs hands, in that they are quite free to just say, ok we will have it here, add the fee to the bill.

The act was designed to prevent this, this is why the stages are set quite clearly within the regulations.

[Peterbard]

It should also be added that the fees stage relating to sale includes "preparing goods for sale" and also that there must be a statutory limit of at least 7 days between taken for storage and sale ( TCoG section 37-38), so the property would have to be stored even if taken for sale.

[brassnecked]

It should also be added that the fees stage relating to sale includes "preparing goods for sale" and also that there must be a statutory limit of at least 7 days between taken for storage and sale ( TCoG section 37-38), so the property would have to be stored even if taken for sale.

 

For which they will add a Storage Fee especially if the goods are a Motor Vehicle.