4. Emergency action

CPAG

4. Emergency action

The need for debt advice very often arises as a result of a priority creditor threatening to take immediate action against someone’s fuel supply, property or liberty. In such circumstances, you must always be prepared to take emergency action. In some cases, sufficient information and time are available to use one of the strategies outlined above. In other cases, neither time nor information is immediately available and, therefore, action by the creditor needs to be halted or delayed. This may be possible by making a telephone call to a creditor explaining that the client has approached the agency seeking advice and assistance, and indicating when an offer will be made.

Sections 7.3.11R and 7.3.12G of the Financial Conduct Authority’s Consumer Credit Sourcebook requires recovery action to be suspended for a ‘reasonable period’ (generally, 30 days) where the creditor has been informed that an adviser is helping a client to agree a repayment plan. However, this may not be the case when adjournments or delays have already been granted. In such situations, other emergency action must be taken.

Preventing fuel disconnection

With effect from 15 December 2020, new measures were announced by OFGEM to support clients with pre-payment meters and people with fuel debt. Suppliers are now expected to:

•offer emergency credit to clients struggling to top up pre-payment meters;

•offer clients ‘friendly hours credit’ provided overnight, at weekends and on public holidays and their meters have run out or are running low;

•offer extra pre-payment credit to clients in vulnerable circumstances to give them time to make alternative arrangements to pay; and

•ensure they put clients in debt on realistic and sustainable repayment plans, including making proactive contact with clients and setting repayment rates based on ability to pay.

The legislation governing the supply of gas and electricity states that supplies should not be disconnected while there is a genuine dispute about the amount due.1Sch 6 EA 1989; Sch 2B GA 1986 When there is any question about the amount claimed, such a dispute should immediately be registered with the relevant supplier and confirmed in writing. The supplier should be asked not to disconnect the supply until the dispute has been resolved.

Before being offered a pre-payment meter, the client should have been offered some form of repayment option to pay the arrears and cover the ongoing consumption. If this breaks down, some suppliers automatically offer a pre-payment meter as the only remaining option. You should consider explaining why the arrangement broke down (eg, it was unrealistic in the first place) and urge the supplier to enter into a new arrangement based on a financial statement.

Before disconnecting, the supplier must:

•comply with its code of practice (including providing information about reconnection);

•fit a pre-payment meter where it is safe and practical to do so;

•provide seven days’ notice of the date of disconnection;

•obtain a warrant of entry if the client refuses access;

•give a further seven days’ notice of its intention to use it.

A warrant of entry is granted by the magistrates’ court and allows the supplier to enter the client’s home (by force if necessary) in order to disconnect the supply. Although the supplier must give the client written notice that it intends to apply for a warrant, it does not have to give the client notice of the actual application. You can, however, phone the court in advance of an application, ask to speak to the magistrate who would deal with any application and make representations on behalf of the client – eg, that s/he is a vulnerable person and the supplier has unreasonably refused to agree to a repayment arrangement.

The client cannot be disconnected if:

•the bill is genuinely disputed;

•the debt is owed to a different supplier. A supplier who wants to retain the power to disconnect should object to the supply being switched;

•the debt is due from a previous occupier and the client has agreed to take over the supply;

•the debt is for something other than the supply of gas or electricity – ie, it does not relate to fuel consumption. Note: the supply can be disconnected for non-payment under a ‘green deal plan’ for energy efficiency improvements to the property made under the Energy Act 2011;

•a repayment plan has been agreed. Under its licence conditions, when arranging a repayment plan, the supplier must take into account the client’s ability to pay;

•the client has agreed to have a pre-payment meter fitted and it is safe and practicable to do so. The meter should be calibrated to recover the arrears at the rate the client can afford, taking into account her/his ability to repay;

•it is between 1 October and 31 March, and the supplier either knows or has reason to believe there is someone of pension age living either alone in the property or with others over pension age or under 18;

•it is between 1 October and 31 March and someone living in the property is either severely disabled or chronically sick, unless all other reasonable steps have been taken to recover the arrears.

Clients in the last two categories are likely to be on the Priority Services Register.

Energy UK (the trade association for the UK gas and electricity industries) members have signed up to a ’safety net for vulnerable customers’, under which they are committed never knowingly to disconnect a vulnerable customer at any time of year ’where for reasons of age, health, disability or severe financial insecurity that customer is unable to safeguard their personal welfare or the personal welfare of other members of the household’. For more details, see energy-uk.org.uk.

No one who is prepared to have a pre-payment meter or who is eligible for direct payments from her/his benefits or who can afford to pay for current consumption plus a payment towards the arrears should ever be disconnected. Energy trust funds or other charities may be able to help with payment of bills or to prevent self-disconnection – ie, if clients do not use gas or electricity because they cannot afford to pay for it. In the case of pre-payment meters, self-disconnection can be as a result of arrears being recovered at too high a rate. Suppliers can always be asked to confirm how arrears are being recovered, and asked to recalibrate the meter where appropriate.

If negotiations with the fuel supplier are proving unsuccessful, contact Citizens Advice or the Ombudsman Services: Energy (see Appendix 1), which have the power to intervene when disconnection is threatened. See also CPAG’s Fuel Rights Handbook for more information.

1 Sch 6 EA 1989; Sch 2B GA 1986 »

Preventing the home being lost

When a possession order has already been granted and is followed by a warrant of possession (see here), you may need to make an immediate application to the court on Form N244 to suspend the warrant. If the eviction is not due to take place for several days, attempt to negotiate directly with the lender (or the lender’s solicitor) or the landlord, to obtain a binding agreement that the property will not be repossessed. If this is not possible or appears unlikely, or the eviction is due to take place that day or the following day, Form N244 should be submitted to the court.

Form N244 must state the grounds of the application and, if possible, include an offer of payment. The fee is court fee 2.7 – ie, £14 (and not £275 as some courts argue (court fee 2.4(a))). See here for how to apply for a remission. For further information about a warrant of possession, see here, and for how to complete Form N244, see here.

In the case of local authority or registered social landlord tenants, there is usually an internal procedure that must be followed before a warrant is applied for, which may involve considering representations from the tenant. Check that procedure has been complied with and challenge the landlord if it has not.1See B Fisher, ‘Eviction Appeal Panels’ and D Durden, ‘A Landlord’s Perspective’, Adviser 114

An application to suspend the possession warrant always stops county court bailiffs executing it (ie, carrying out its instructions) until the court has heard the application, although the court is usually very quick in arranging a hearing. The success of an application depends largely on:

•whether several arrangements have already been made but not kept to;

•your ability and the client’s ability to present the case;

•how many previous warrants have been suspended;

•how long the client has been getting help from an advice agency;

•the client’s ability to pay.

If it is too late to make the application to the court because the bailiffs are already on their way to carry out the eviction, phone the creditor immediately and negotiate with the bailiff, on the doorstep if necessary, for more time. Bailiffs normally have a mobile phone with them and so can be contacted right up to the point of eviction.

1 See B Fisher, ‘Eviction Appeal Panels’ and D Durden, ‘A Landlord’s Perspective’, Adviser 114 »

Preventing goods being taken control of by magistrates’ court bailiffs

**Alert: Government advice to bailiffs not to enter residential properties in England and Wales was withdrawn with effect from 1 June 2021. However, the guidance issued by the Ministry of Justice entitled Working safely during COVID-19: enforcement agents (bailiffs) continues to apply.1Available at: gov.uk/government/publications/working-safely-during-covid-19-enforcement-agents-bailiffs/working-safely-during-covid-19-enforcement-agents-bailiffs This guidance does not supersede any legal obligations arising from legislation and should be considered alongside the guidance in Taking Control of Goods: national standards2See .**

Bailiffs working for the magistrates’ court cannot act without a warrant of control. This is a document issued by the court allowing them to take control of goods belonging to the client, which can then be sold and the money used to pay the unpaid debt.

If a warrant of control has been issued by a magistrates’ court because of arrears in the payment of fines, and bailiffs are about to take control of the client’s goods, it is not clear whether magistrates can hear an application to give further time to pay (see here).

Occasionally, bailiffs agree to give a debt adviser a few days in which to produce an offer of repayment. If the client is vulnerable, try to persuade the bailiff to return the warrant to the court, citing paragraphs 70–78 of the Taking Control of Goods: national standards (April 2014) – see gov.uk/government/publications/bailiffs-and-enforcement-agents-national-standards. However, success to date has been limited.

See Chapter 14 for further details of bailiffs’ powers.

1 Available at: gov.uk/government/publications/working-safely-during-covid-19-enforcement-agents-bailiffs/working-safely-during-covid-19-enforcement-agents-bailiffs »

2 See »

Preventing goods being taken control of for council tax arrears

**Alert: Please see here. The Civil Enforcement Association (CIVEA) has issued updated COVID-19 Guidance confirming that bailiffs are entitled to enter residential property provided they follow the MoJ guidance on working safely (noted here). The guidance is available at: **

If a court grants a local authority a liability order, it can use private bailiffs (since 1 April 2014 these have also been known as ‘enforcement agents’) to take control of goods belonging to the client, which can then be sold and the money used to pay the council tax arrears.

Different local authorities give different instructions to their bailiffs. In some areas, a clear code of conduct exists, preventing a client’s goods being taken control of if s/he is on benefit or in certain other circumstances. The June 2013 Council Tax: guidance to local councils on good practice in the collection of council tax arrears issued by the Department for Housing, Communities and Local Government, has been updated as Council tax collection: best practice guidelines for local authorities (August 2021). This shares the experience of innovative authorities and the methods they use when collecting council tax. These include investing in clear communication, supportive recovery techniques and proactive engagement with the debt advice sector. The section entitled ‘Making effective use of enforcement action’ is of particular relevance and makes reference not only to identification of vulnerable situations but also how people in these circumstances should be dealt with. The guidelines also reference the Ministry of Justice’s Taking Control of Goods: national standards, which are relevant both to a local authority’s own responsibilities as creditors and the standards expected of their bailiffs, particularly if the client is a ‘vulnerable person’ (see here).

Citizens Advice and the Local Government Association have produced the Council Tax Protocol (reissued in June 2017), which they recommend advisers and local authorities should adopt. The protocol contains practical steps to prevent clients getting into arrears but, if they do, suggests procedures to ensure bailiffs act appropriately, including a requirement that local authorities should have a process for dealing with cases where the client is indentified as vulnerable. The protocol is available at citizensadvice.org.uk/about-us/our-campaigns/all-our-current-campaigns/council-tax-protocol/.

Local authorities should actively manage their contracts with bailiffs, including having arrangements to safeguard against them entering into ‘punitive’ arrangements with clients, and should be prepared to deal directly with individuals at any point. The guidance reminds local authorities that: ‘It is perfectly within their gift to call action back from the bailiffs at any time and where there is a case to do so they should consider such action.’

Complaints against bailiffs should be investigated properly and not just referred back to the bailiff. The guidance reminds local authorities that bailiffs are working on their behalf and they remain responsible for the bailiffs’ actions.1See M van Rooyen, ‘Complaints about Bailiffs and Local Authority Debts’, Quarterly Account 54, IMA

You should know what rules (if any) the local authority uses. If an action by bailiffs breaches these, contact the local authority immediately so that its order to the bailiffs can be withdrawn. The guidance recommends the use of dedicated contacts accessible on direct lines and by electronic means so that issues can be taken up quickly.

Even if there is no clear policy, contact the local authority and ask it to consider withdrawing the warrant from the bailiffs or, if that is not possible, instructing the bailiffs to accept a lower payment offer. Bailiffs themselves may occasionally agree to delay action, but this is unlikely. There may be no need for the client to let the bailiffs into her/his home. See here for the rules about bailiffs’ powers to enter property.

In the absence of the warrant being withdrawn, arguably, paying the debt direct to the local authority but not including payment of the bailiff’s fees does not prevent the bailiff attempting to recover their fees (although if the warrant is withdrawn, it appears the bailiffs would have to look to the local authority for payment).2This seems to be the effect of reg 17(1) and (2) TCG(F) Regs

As noted above, in appropriate cases, the local authority could be asked to write off council tax arrears.

1 See M van Rooyen, ‘Complaints about Bailiffs and Local Authority Debts’, Quarterly Account 54, IMA »

2 This seems to be the effect of reg 17(1) and (2) TCG(F) Regs »

Preventing the local authority taking bankruptcy proceedings

Many local authorities now use bankruptcy proceedings to recover council tax arrears from homeowners where the total outstanding balance due under the liability order or orders is £5,000 or more. There is no government guidance on this. However, local authorities should bear in mind the principles of proportionality and reasonableness in deciding whether to use bankruptcy proceedings, particularly the client’s potential liability for substantial costs.1See Lock v Aylesbury Vale DC [2018] EWHC 2015 (Ch) (Adviser 187 abstracts) in which the High Court held that, where a petition was based on unpaid council tax, there was burden on the council to show that making a bankruptcy order would achieve some useful purpose (Ms L did not work, did not own her home and did not receive any benefits). A charging order is likely to be a more proportionate recovery method, given the sums involved, and should not be rejected purely on the basis that the court might not order a sale in the event of payment not being forthcoming.

Consider making a complaint to the Local Government and Social Care Ombudsman in order to challenge a local authority’s decision to resort to bankruptcy proceedings. The Local Government and Social Care Ombudsman has made the following points.2Complaint against Wolverhampton City Council, 06/B/16600 (Adviser 128 money advice abstracts). See also Complaint against Camden London Borough Council, 07/A/12661 (Adviser 129 money advice abstracts), where the revenue department’s failure to make internal enquiries resulted in bankruptcy proceedings against a vulnerable person. The Ombudsman said: ‘The dire and punitive consequences of bankruptcy, involving a multiplication of the original debt many times over and frequently incurring the loss of the debtor’s home, must be a factor to be taken into account in deciding that the ”last resort” is indeed appropriate.’

•Bankruptcy should only be used as a last resort and local authorities should have a policy to this effect.

•Local authorities should record their reasons for not pursuing alternative collection methods.

•Local authorities should send letters containing clear and detailed warnings of the potential consequences of bankruptcy for the client in terms of not only the costs of the petition itself and possible loss of the home but also the far greater costs that would be incurred if a bankruptcy order were made.

•The policy should also deal with charging orders and require them to be considered as an alternative to bankruptcy. Charging orders should not be rejected on the grounds that they do not provide a practical recovery method.

•Local authorities must act proportionately and take into account the client’s personal circumstances.

•Local authorities must proactively make enquiries about vulnerability.

The Ombudsman is likely to find maladministration if a local authority:3Local Government and Social Care Ombudsman, Can’t Pay? Won’t Pay? Using bankruptcy for council tax debts, October 2011, available at lgo.org.uk/make-a-complaint/fact-sheets/benefits-and-tax/bankruptcy

•does not have a formal published debt recovery policy;

•has not gathered and considered information about the client’s circumstances;

•does not include in its debt recovery policy the steps it must take before deciding on bankruptcy, committal or charging orders;

•pursues bankruptcy without clearly recording that each of these steps has been taken.

Local authorities must also take account of their duties under the Equality Act 2010, particularly if the client may have mental health issues.

You should therefore obtain the local authority’s collection policy to ensure it complies with the Ombudsman’s recommendations and point out any shortcomings. Use the recommendations to challenge any inappropriate use of bankruptcy proceedings by local authorities.4The Local Government and Social Care Ombudsman has also issued a factsheet, available at lgo.org.uk/make-a-complaint/fact-sheets/benefits-and-tax/bankruptcy. See also A Hobley, ‘Using Bankruptcy for Council Tax Debts’, Adviser 150

Note: while complaining to the Local Government and Social Care Ombudsman (or the Public Services Ombudsman for Wales) is a cheap remedy, it is an after-the-event remedy and is not quick. Because of restrictions on its jurisdiction, the Ombudsman can only investigate a local authority’s actions up to the issue of proceedings, although the Ombudsman retains the right to investigate in cases in which the client has unsuccessfully applied to annul a bankruptcy order.5Complaint against Newham London Borough Council, 08019113 (Adviser 137 abstracts) Outcomes of complaints about local authority council tax collection can be viewed at lgo.org.uk/decisions. If the client is eligible for public funding and the bankruptcy petition has not yet been issued, an application for judicial review could be considered.6See R Barnwell, ‘Local Government Ombudsman and Complaints About Bankruptcy’, Adviser 131; R Low-Beer, ‘Council Tax Arrears and Bankruptcy’, Quarterly Account 12, IMA See cpag.org.uk/welfare-rights/judicial-review for help with the judicial review process.

Bear in mind that, before the local authority can take bankruptcy proceedings, it must have a liability order for the amount in question and be able to prove the existence of that liability order to the satisfaction of the court. The local authority’s own computer records are not sufficient for this purpose; it must either be able to produce a sealed copy of the liability order or a statement from the magistrates’ court that an order was made.7Smolen v Tower Hamlets London Borough Council [2006] All ER(D) 48 (Adviser 126 money advice abstracts) However, unless there was evidence that the local authority’s records were incorrect, the Ombudsman would probably accept (on the balance of probability) a local authority’s computer evidence that a liability order was made.

Get specialist advice if a client has received either a statutory demand or a petition from the local authority, or if a bankruptcy order has been made on the local authority’s petition.

1 See Lock v Aylesbury Vale DC [2018] EWHC 2015 (Ch) (Adviser 187 abstracts) in which the High Court held that, where a petition was based on unpaid council tax, there was burden on the council to show that making a bankruptcy order would achieve some useful purpose (Ms L did not work, did not own her home and did not receive any benefits). »

2 Complaint against Wolverhampton City Council, 06/B/16600 (Adviser 128 money advice abstracts). See also Complaint against Camden London Borough Council, 07/A/12661 (Adviser 129 money advice abstracts), where the revenue department’s failure to make internal enquiries resulted in bankruptcy proceedings against a vulnerable person. The Ombudsman said: ‘The dire and punitive consequences of bankruptcy, involving a multiplication of the original debt many times over and frequently incurring the loss of the debtor’s home, must be a factor to be taken into account in deciding that the ”last resort” is indeed appropriate.’ »

3 Local Government and Social Care Ombudsman, Can’t Pay? Won’t Pay? Using bankruptcy for council tax debts, October 2011, available at lgo.org.uk/make-a-complaint/fact-sheets/benefits-and-tax/bankruptcy »

4 The Local Government and Social Care Ombudsman has also issued a factsheet, available at lgo.org.uk/make-a-complaint/fact-sheets/benefits-and-tax/bankruptcy. See also A Hobley, ‘Using Bankruptcy for Council Tax Debts’, Adviser 150 »

5 Complaint against Newham London Borough Council, 08019113 (Adviser 137 abstracts) »

6 See R Barnwell, ‘Local Government Ombudsman and Complaints About Bankruptcy’, Adviser 131; R Low-Beer, ‘Council Tax Arrears and Bankruptcy’, Quarterly Account 12, IMA »

7 Smolen v Tower Hamlets London Borough Council [2006] All ER(D) 48 (Adviser 126 money advice abstracts) »

Preventing goods being taken control of by county court bailiffs

**Alert: Government advice to bailiffs not to enter residential properties in England and Wales was withdrawn with effect from 1 June 2021. However, guidance issued by the Ministry of Justice entitled Working safely during COVID-19: enforcement agents (bailiffs) continues to apply.1Available at: . See here**

If a creditor has instructed the court to issue a warrant of control for an unpaid county court judgment, the client can make a combined application to the county court to suspend the bailiff action and to vary the judgment. This is done on Form N245. See here for details of how to do this and Chapter 14 for details of county court bailiffs’ powers.

If the bailiff is threatening to take control of goods subject to a hire purchase or conditional sale agreement or bill of sale, specialist advice should be obtained.

1 Available at: . »

Preventing goods being taken control of by High Court enforcement officers

**Alert: Please see here. The High Court Enforcement Officers’ Association (HCEOA) has issued updated guidance to its members entitled COVID-19 Plan - A Flexible and Sympathetic Approach to Enforcement. High Court enforcement officers are encouraged to enter controlled goods agreements and/or make arrangements to pay at Enforcement Stage 1 to reduce the burden of increased fees (see here). The guidance is available at 2021-07-12_HCEOA_COVID-19_PLAN.pdf**

High Court enforcement officers now enforce High Court judgments (including county court judgments transferred to the High Court for enforcement). They are private bailiffs authorised by the court to enforce debts in the High Court. See Chapter 14 for details of the powers of High Court enforcement officers.

If an enforcement officer is threatening to take control of goods, specialist advice should be obtained.

Preventing goods being taken control of by tax bailiffs

**Alert: Please see the coronavirus alert on Preventing goods being taken control of by county court bailiffs.**

Officials from HM Revenue and Customs have the powers of bailiffs to take and sell goods to pay unpaid tax debts.1s127 Finance Act 2008 If they are unable to gain access to a property, they can apply for an order to force entry. Normally, a private bailiff accompanies the collector on such visits.

It is possible to negotiate with the collector directly and either suggest a repayment arrangement or submit a late return if the client does not agree with the amount of the debt and it is outside the normal time limit for appealing (see Chapter 16). If the client has no goods, the collector is likely to seek an alternative means of enforcement, such as court action or bankruptcy.

1 s127 Finance Act 2008 »

Preventing imprisonment

Magistrates’ courts have the power to imprison people who refuse to pay financial penalties, maintenance, council tax or non-domestic rates. Note: debtors can no longer be imprisoned in Wales for arrears of council tax and non-domestic rates. See Chapter 13 for the circumstances in which they can use this power and the arguments to use against them.

Warrant with bail

When a client has failed to attend a court hearing, or sometimes just failed to keep up the payments, a warrant can be issued for her/his arrest by magistrates. In most cases, this is a warrant with bail which requires the client to surrender her/himself and be given a time and date for a court hearing.

Warrant without bail

Occasionally (usually where previous warrants have been ignored), a warrant without bail is issued. This requests the police or specially licensed bailiffs to arrest the client and hold her/him in custody until a court hearing can be arranged (within 24 hours).

If a warrant without bail has been issued, the client should report to the court at a time, depending on local circumstances, when it is likely not to be busy so that s/he will not be held in the cells for too long. This may be after lunch, if the court sits then, or first thing in the morning before other prisoners have been brought from police stations. Some courts demand that people surrender themselves to the police station rather than the courts, but there is no legal foundation for this and you should ensure that police and other court staff accept a client’s surrender in court buildings.

Committal hearing

Most magistrates’ courts do not imprison people until they have been given a number of opportunities to pay by instalments. Whenever someone is brought before court after the issue of an arrest warrant, s/he should be represented, if possible. S/he cannot lawfully be imprisoned if legal representation has not been made available to her/him. If a solicitor (perhaps from the duty solicitor scheme) is to provide representation, an advice agency should brief her/him first and provide a full financial statement, as it is common for unrealistic offers to be made by solicitors, which then cause the client to be brought back before the court and treated with even less sympathy because s/he has broken a previous undertaking to pay. In some courts, probation officers can obtain adjournments so that they can produce a statement of the client’s means for the court. For further information about committal hearings, see here.

After imprisonment

If magistrates have imprisoned someone for debt, it is possible that they have done so improperly, in which case an application for judicial review should be made immediately. An application for bail pending a hearing can also be made (to a High Court judge in London). The application must be made by a solicitor or barrister specialising in this field. The most likely improprieties are procedural irregularities (eg, if the court failed to consider the question of wilfulness, culpability or alternatives to imprisonment) or unreasonableness (eg, if the court expected someone on income support to pay £20 a week towards a fine), natural justice (eg, if legal representation was denied to the client) or acting ultra vires – eg, if the resolution setting council tax was not signed by the appropriately authorised officer of the council.

Base text size -

Chapter illustrations ()