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Government publishes proposals for legal regulation of bailiffs

The bailiff industry is to be legally regulated for the first time, the Government has announced.17 Feb 2012

A new consultation, published by the Ministry of Justice (MoJ), sets out a number of reforms which the Government says will "stamp out rogue practices" in the industry.

The proposals follow the publication of updated national standards for bailiffs last month.

"Too many people have experienced intrusive, expensive and stressful bailiff action and more often than not the public do not hold bailiffs in high regard, despite the fact most bailiffs carry out their work professionally. We want to restore balance to the system, improve clarity for both debtors and creditors, strengthen protection for vulnerable people and ensure that individuals, business and government are able to collect the debts they are owed – but in a way that is fair and regulated by law," said Justice Minister Jonathan Djangoly.

The consultation also provides for the implementation of the delayed Part 3 of the Tribunals, Courts and Enforcement Act, which will introduce a less draconian process for the collection of commercial rent arrears.

A bailiff is someone authorised to collect a debt on behalf of a creditor. Currently a certified bailiff can enter leased commercial premises occupied by a defaulting tenant and remove and sell goods owned by that tenant up to the value of the rent arrears. This remedy, known as 'distress for rent', effectively allows a landlord to recover rent arrears without initiating court proceedings.

Part 3 of the Tribunals, Courts and Enforcement Act, which received Royal Assent in 2007, abolishes distress in rent arrears cases. The Act creates a new process for collecting commercial rent arrears called Commercial Rent Arrears Recovery (CRAR), which is broadly similar to the current remedy but will only be available for 'pure' rent arrears.

The consultation sets out when and how a bailiff can enter a property, and proposes minimum entry standards and a certification process to ensure bailiffs are fit to operate. Under the new regulations bailiffs will be entitled to enter a property on any day, however will only be able to enter wholly residential properties between 6am and 9pm. There will be an exception for commercial premises that are open for "trade or business" at other times, and where a bailiff has already begun to take control of goods within the permitted time period.

The proposals also make it clear that a bailiff may not use "aggressive" practices in order to perform his duties effectively, such as threatening the use of force or imprisonment or charging excessive fees.

The Government also plans to remove regulation-making powers under which it could allow bailiffs to use force against individual debtors at a later date, stating that "there is no fairness or proportionality in using force against the person".

However, in order to underpin the right of creditors to recover debts it would "continue to allow the use of reasonable force to gain access to a property" when necessary.

The consultation will run until 14 May 2012, with the Government's response due in October.

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