Why can’t HCEOs enforce Consumer Credit Act judgments?
Andrew Wilson, the new chairman of the High Court Enforcement Officers Association (HCEOA),¹ calls for a level playing field between the county courts and the High Court.
About the author
Andrew Wilson is a solicitor, and co-founder and a director of High Court enforcement company, Andrew Wilson & Co. The company is part of the Cerberus Group, of which he is chairman.
Article 8(1A) of the High Court and County Courts Jurisdiction Order (HC&CCtsJ) 1991 SI No 724, introduced by the High Court and County Courts Jurisdiction (Amendment) Order 1995 SI No 205, states that: ‘A judgment or order of a county court for the payment of a sum of money in proceedings arising out of an agreement regulated by the Consumer Credit Act 1974 shall be enforced only in a county court.’
So, currently High Court enforcement officers (HCEOs) do not have any powers to enforce Consumer Credit Act (CCA) judgments because of the obiter dicta of Lord Donaldson (the then Master of the Rolls) in the case of Forward Trust Ltd v Whymark [1990] 2 QB 670; [1989] 3 WLR 1229, CA: ‘A judgment for the full outstanding amount of the indebtedness under a consumer credit agreement should never be ordered to be enforced as a judgment of the High Court, since this would create problems of interest upon interest’ (para 681C).
Consumer credit legislation has its own interest provisions (as does income tax legislation), so this must refer to section 17 of the Judgments Act (JA) 1838, which provides for interest on judgment debts:
... Every judgment debt shall carry interest at the rate of x pounds per centum per annum from such time as shall be prescribed by rules of court … until the same shall be satisfied , and such interest may be levied under a writ of execution on such judgment [s17(1)] .
… Rules of court may provide for the court to disallow all or part of any interest otherwise payable under subsection (1) [s17(2)] .
CCA s141 (jurisdiction and parties) says:
(1) In England and Wales the county court shall have jurisdiction to hear and determine— (a) any action by the creditor or owner to enforce a regulated agreement or any security relating to it;
(2) Where an action or application is brought in the High Court which, by virtue of this Act, ought to have been brought in the county court it shall not be treated as improperly brought, but shall be transferred to the county court.
This section has been interpreted to mean that enforcement can only take place in the county court. However, this is not what the section says: it says that a CCA claim must be issued in the county court.
It should be remembered that it is not the county court claim which is transferred to the High Court, it is the county court judgment for enforcement purposes only (see Civil Procedure Rules Part 83.19 formerly Order CC25.13) and the note at Form N293A page 1).2 So, any issue relating to the original claim would, therefore, be decided in the county court and not in the High Court.
Time has moved on since the Forward Trust case was heard in July 1989, and there are a number of reasons why this restriction could and should be changed:
- • Lord Donaldson did not really appreciate how interest was applied in practice: JA s17(1) says ‘may’ not ‘must’ and, therefore, an exception could be made for consumer credit judgments.
- • Computerisation has made the process of applying interest in the course of enforcement very straightforward: it can be a contractual rate or a rate of 0% as on HM Revenue and Customs judgments or the default position of section 17 (currently 8% since 1993).
- • Section 17(2) was an amendment to the JA and was introduced in April 1999. It clearly anticipated some future changes.
- • The CCA 2006 removed the £25,000 upper limit on claims, so there are some substantial judgments against individuals being enforced in the
- county court. The usual limit in that court is £5,000 under HC&CCtsJ Order article 8(1)(a).
- • Customers want choice in this area. A survey by SurveyMonkey for HCEOA, between July and August 2015, involving 312 organisations found that 92% of respondents would consider using HCEOs to enforce CCA judgments if allowed to do so. Furthermore, 89% of respondents considered that there was no need to maintain the distinction in the HC&CCtsJ Order.
The answer is to let the market decide. County courts are under continuing pressure and the quality of their enforcement is suffering, as Lord Justice Briggs pointed out in his interim report.3 See page 22 of this issue.
High Court enforcement businesses have reduced substantially in number over the past 10 years; they are highly efficient and are capable of taking on more work. If they succeed in providing an effective service on consumer credit enforcement, then low-value court judgments and domestic possessions can be considered so that court users can have a level playing field between the two bodies entrusted by the government to enforce court judgments and orders: county court bailiffs and HCEOs.
1 Visit: www.hceoa.org.uk
2 The note reads as follows: ‘This judgment or order has been sent to the High Court for enforcement by (Writ of Control) (Writ of Possession against trespassers) only. The county court claim has not been transferred to the High Court. Applications for other methods of enforcement or ancillary applications must be made to the county court hearing centre in which the judgment or order was made, unless the case has since been transferred to a different court, in which case it must be made to that court.’ Form N293A is available here.
3 See Civil courts structure review: interim report, December 2015, paragraphs 5.97–5 .103, available here.