Are high court enforcement officers powerful?
There are two courts that primarily deal with debt recovery for business, and that is the County Court (smaller value claims) and the High Court, dealing with much higher value claims for non-payments. Debt concerns over £50,000 will be issued to the High Court. However, judgements made at the County Court can then be transferred to the High Court.
A high court enforcement officer (HCEO) has been specially authorised by the high court and, as such have additional high court enforcement powers, over and above that of a bailiff/enforcement officer. However, they must comply with a code of practice and professional conduct by the High Court Enforcement Officers Association. There are also high court enforcement fees involved within the operation that your business will face.
Difference between high court enforcement officer and ‘enforcement officer’?
Enforcement officers or bailiffs are legally authorised to take goods and collect debts on behalf of the county court, but do not carry the same powers as that of HCEO. They can work with the courts directly, or be employed by civil enforcement agencies.
The primary role of a bailiff is to obtain payment from the debtor or seek to enter into a payment plan under a controlled goods agreement. If they do not come to an agreement, they will visit your business with a view to seizing goods. The bailiffs must notify your business, seven days before they intend to visit as bailiffs do not immediately enjoy right of entry. When they do arrive, you should always ask for proper identification and check they are certificated.
For a comprehensive guide to bailiffs and enforcement officers, you can read more here.
What can a high court enforcement officer take?
Once the HCEO has the debtor’s address, they will visit to see if goods can be seized from the premises. Before the taking of goods, the high court enforcement officer will visit your business, and they can do so without asking the court for permission to attend and giving notice.
They will make a list of goods that can be seized, but will primarily provide an opportunity to pay the debt. If you do not do so, they have the power to uplift goods immediately. Alternatively, they can request for you to sign a controlled goods agreement. A controlled goods agreement will see the high court enforcement officers return after seven days to remove company goods, should you not pay the debts.
High court enforcement powers include but are not limited too:
- Stock and machinery
- Business furniture
- Vehicles belonging to the company
- Bonds, shares and deeds
- Goods on finance (the finance company must agree to the sale)
The main areas in which items high court enforcement powers do not extend to taking goods are:
- Perishable goods
- Tools of the trade – items needed by the debtor to conduct their jobs or run business, up to the value of £1,350. Anything above that may be taken by the high court enforcement officer.
- Goods leased or hired
- Assets subject to third party ownership
The high court enforcement officer cannot force entry if the premises is secured, and they are not permitted to take goods from a third-party premises, unless there is good reason to believe the company has stored goods there.
Generally, the goods will then be sold at a public auction. However, it’s worth noting that some high court enforcement officers host their own auctions. If some company goods are not appropriate for a public auction, the HCEO can apply to the court to sell the asset to a private buyer. There are also high court enforcement fees to consider when your business faces this stage.
Negotiating a payment plan is the best course of action for your company, should you face visits from the bailiffs or high court enforcement officers. However, the payment plan must be realistic and within reach. Seeking advice as soon as your company faces issues with paying debts is strongly advised. The earlier you catch the problem, the more options open to your company and the higher the chance of business recovery.
Our business rescue experts provide free, knowledgeable advice on how to immediately deal with the issue.