Trevor Bone v Simon Williamson [2024] EWCA Civ 4 (HCEOs are personally liable for bailiffs and fee irregularities)

[zeke]

In 2019, my client, Trevor Bone approached me with a writ for just under 24K and Gary Brown attended and overcharged with his fees in breach of a stay order.

On 19 December 2019, I applied for a stay on enforcement and a fee assessment. Master Davison granted the stay and listed a fee assessment hearing.

On 10 January 2020, Gary Brown turned up in breach of Master Davison's stay order (and the judgment later found that Gary Brown knew of Master Davison’s stay order on that date he attended).

On 18 September 2020, after I prepared the detailed assessment of Mr Brown's fees and damages for taking an enforcement step in breach of a stay order.

My fee assessment skeleton argument relied on the operation of regulation 17 of the 2014 fees regulations, which says Fees and disbursements not recoverable where enforcement process ceases.

On 10 February 2020, Master Lisa Sullivan, who was then new and inexperienced to the KBD, presided over the hearing.

Simon Williamson as HCEO argued he is not liable for his agents. Simon then applied for an order that Gary Brown be added as a co-defendant.

Master Sullivan dismissed my client's claim and awarded costs in favour of Simon Williamson and Gary Brown against my client because she felt that Simon Williamson was not the right party to bring a fee assessment application.

I referred my client to a specialist solicitor to appeal Master Sullivan's order.

The appeal was posted on 11 Jan 2024.

https://caselaw.nationalarchives.gov.uk/ewca/civ/2024/4

The case was presided over by Phillips LJ, Andrews LJ (of Nicolson v Haringey Liability Order costs fame), and Laing LJ.

My client's appeal was allowed and all costs orders against him were revoked. The HCEO, Simon John Williams (sic) ordered to pay my client's costs.

Master Lisa Sullivan presiding found it difficult to see how Gary Brown acted as Simon Williamson’s agent. My client's argument is the HCEO is liable for enforcement agents acting under his authority because paragraph 66 of Schedule 12 states a "related party" is the person to whom the enforcement power is conferred. The language used on the writ named Simon Williamson is "commanded" to execute the writ, and only an HCEA, an "individual", (section 63 of the TCEA) is authorised to take control of goods under the authority of an HCEO (paragraph 2(2) of Schedule 12 to the TCEA).

Interestingly, the High Court Enforcement Association intervened. Their position is that the HCEO is personally responsible for his enforcement agents for enforcement breaches and fee irregularities.

The noteworthy points are.

An HCEO is personally liable, (and vicariously liable) for his enforcement agents. He cannot shelter himself behind a Limited company (in this case DCBL). The liability is for both fee irregularities and for enforcement breaches.

Debtors do not need to sue an enforcement agent, they can sue the HCEO alone.

Bailiff companies, in this case, DCBL, are not authorised to hold client money taken from debtors. Only the HCEO is authorised to hold client money in a separate nominee bank account.

Limited companies cannot be authorised to act as HCEO (regulation 6 of the HCEA Regs 2004) or as HCEA (section 63 of the TCEA) in the execution of writs of control. Regulations reserve that authority to the HCEO (an "individual") who assigns an Enforcement Agent (also an "individual").

Enforcement fees and charges are not recoverable from the debtor when the enforcement power ceases to be exercisable, paragraph 6(3) of Schedule 12 and Regulation 17 of the Fees Regulations.

HCEO's (an individual) holds client money including fees and charges taken. The HCEO cannot delegate that responsibility to a limited company, e.g. DCBL or their bank account. The court stated: the proceeds, from which any fees must come, are held in the HCEO’s nominee bank account. and I also agree that the statutory scheme requires that all money recovered from the debtor in the course of the enforcement process, whether directly or in consequence of the sale of seized assets, must be paid into the designated bank account held by the HCEO. The practice adopted in the present case, whereby it appears that DCBL held the moneys[sic] in an account to the order of Mr Brown, appears to me to have been quite irregular..

HCEO's are not appointed by the Lord Chancellor, rather they are authorised by the Lord Chancellor.

Bailiff companies, such as DCBL are not authorised to hold client money, nor authorised to act as HCEO or HCEA. The court said The term ‘individual’ is used throughout the legislative scheme, both in relation to HCEOs and to HCEAs.. The court further stated DCBL could not, therefore, hold or exercise an enforcement power.

Simon Williamson applied to the court to add the bailiff, Gary Brown as a co-defendant without my client's foreknowledge, the court decided my client is not liable for Gary's costs because the debtor may sue the HCEO alone. (*take note PFG when adding himself and a limited company as a co-defendant behind my client’s back. Big bill for your client)..

The rest of the judgment recycles the Schedule 12 provisions, its underlying regulations, and parts of the HCEO Regulations 2004.




Potential consequences.

Bailiff companies trading in the enforcement of High Court Writs do not have a statutory right to take or hold client money. Nor can they avail themselves to the 2014 fees regulations. That remains the privilege of the individual HCEO enforcing a High Court writ, or the individual HCEA (bailiff) enforcing non-high court debts.

Any money transfer can only be a commercial agreement, or a commission, between individual bailiffs and limited companies seeking enforcement business.

It is the practice of a certain solicitor to insert a limited company trading in enforcement business, and therefore himself as fee earner as co-defendant when a debtor sues a creditor alone for breach of the enforcement regulations or a fee dispute. This judgment states the debtor is not responsible for the solicitor’s fees of the inserted party. The inserted party must pay their legal costs when the debtor does not choose to make them party. In any case, limited companies trading in enforcement business cannot insert themselves into a claim because they are not a prescribed "related party" defined at paragraph 66 of Schedule 12.

Bailiff companies cannot act as legal representatives for their bailiffs.

When a bailiff company conceals the name and address of a related party such as a bailiff, creditor, or the HCEO, or says "data protection act", the debtor can apply for an order to get the name and address of the related party or instruct an investigator to search financial, vehicle and land registry records to get their home address.

[Justanotherperson]

Hi,

I read this judgment not too long ago, very interesting but I have a some curious questions if you wouldn't mind answering when you have the time.

1. If a company such as DCBL cannot hold any enforcement power or act as a HCEO or HCEA given the way 'individual' is referenced throughout the legislation:

a. presumably that means that any notices of enforcement issued in the name of an enforcement company like DBCL are deemed invalid for the purposes of giving the required notice prior to enforcement?

b. Would it be your opinion that (a) applies if the HCEA is an employee of the enforcement company? For example, letterhead and all in the name of DBCL but signed off in the HCEA's name? My reading of the judgment is that the HCEO employs the HCEA under a separate contractual relationship of principal and agent notwithstanding the HCEA's employment with the enforcement company, which for the purposes of enforcement action, is irrelevant. Is that your understanding too?

2. You say bailiff companies cannot act as legal representatives for their bailiffs. I don't think I read that in the judgment unless it was hidden somewhere. Can you elaborate?

3. You also mentioned that a certain solicitor likes to add themselves as an individual and a company as a co-defendant if there is claim or application made by the debtor. Not sure I understand the purpose of why the solicitor does this if they are not necessary to the dispute or have any active or real engagement in the matters disputed - surely that is a classic case of champerty and maintenance. Can you elaborate how or why they would be added?

4. At various paragraphs of the judgment in relation to fees, LJ Lain alludes to the fact that the HCEA takes instructions from the HCEO but when it comes to charging fees, it sort of feels to me that before the HCEA can start any fee stage, he or she must seek instructions from the HCEO. Perhaps the HCEO could argue that the HCEA was given general authorisation to engage the fee stages if, for example payment was not made in full but wouldn't that be a risky option especially since the government's guidance on enforcement?

5. How is one to know or come to information as to whether the HCEO is using a bank account that is not held by the HCEO. The judgment states that the moneys were held in a DCBL account which I would take to be a breach of the HCEO's authorisation conditions. The only consequences I can see is that the HCEO may lose their authorisation, but not so much recourse for the debtor i guess?

[zeke]

1a. Regulations permit a bailiff company to send the Notice of Enforcement (NOE) as the enforcement agent's office.

1b. All enforcement conducted by a High Court Enforcement Agent (HCEA) falls under the authority of the HCEO specified on the Writ of Control. Responsibility cannot be transferred to a Limited company as both entities are required by their respective legal frameworks to be individuals. Whether the HCEA has a contractual arrangement with a third-party limited company is inconsequential.


2. The judgment does not expressly state that bailiff companies act as legal representatives. However, it does raise doubts regarding the compliance of the suggested relationship.


3. There was a specific solicitor, Peter Felton Gerber, who had a practice of attempting to include his client, a limited company, in a claim involving breaches of Schedule 12 enforcement provisions. The solicitor aimed to join himself and his client to the claim in order to act as a fee-charging solicitor. This practice ceased when the Claimant switched the claim to an application under Civil Procedure Rule 84.13, which does not allow for third parties to join.


4. The fee structure can only be applied by "enforcement agents" and not by HCEOs or their limited companies. This argument was presented when I drafted the Skeleton for the Bone case, and the court upheld it. This stems from a time before Schedule 12 when I successfully contested claims for "officers' fees" during their recovery due to the absence of a contract or legislation permitting such fees to be recovered from the debtor under what was then part 12 of Schedule 3 of the High Court Enforcement Officers Regulations 2004. Post-Schedule 12, there are no longer any grounds for argument by an HCEO concerning his fees and charges.


5. The bank account can be identified either through the payment link sent to the debtor or through documentation provided by the bailiff company. There are numerous options available to the debtor because, during the fee assessment hearing, this evidence is presented to the master, as the regulations do not permit a limited company to hold funds obtained in the execution of a Writ of Control. Additionally, this facilitates chargebacks as the limited company cannot demonstrate authority to take funds in the exercise of enforcement powers.