Tuesday, 26 July 2016

Does the enforcement sector need a regulator?

Back in April 2011, I issued through Bailiff Studies Centre a discussion document (number three in the series) entitled "Do we need an enforcement services ombudsman?"  The query was met with enthusiasm from some and wariness by others.  Since then, of course, matters have moved on considerably.  At the time of writing it still appeared likely that the Security Industry Authority would have some regulatory role in the sector and that the introduction of the reformed regime of bailiff law would lead to a considerable strengthening of the procedures for licencing and monitoring individual agents.
None of that happened.  The SIA dropped out of the picture and the rejigged certification process brought in to the Civil Procedure Rules in 2014 is very far from comprehensive or robust.  We were promised thorough training for county court district judges; there is little evidence of this.  A recent issue of Bailiff Studies Bulletin highlighted some of the problems with the qualifications upon which certificates are issued and there is, of course, no regulation of agencies, only individual agents- a bizarre result in the early 21st century.  
We still lack any sector overview and any industry wide maintenance of standards or best practice.  It seems to me that there is still a very strong argument for some for of regulator (the commercial body Ombudsman Services were interested in the function five years ago).  I would propose, too, that this regulation is not limited to enforcement agents and agencies.  I suggest that there would be a useful function for all parties (not just debtors) for those offering advice on bailiff law also to be regulated.  With the proliferation of web based advice and consumer forums, I believe that there may be a role in setting and maintaining standards wherever consumers are asked to pay for advice on dealing with debt enforcement.
Another proposal for regulation that is currently in circulation is the idea of extending the remit of the Financial Conduct Authority (FCA) to bailiff services.  The main argument for this appears to be that it is anomalous for debt collection by taking control of goods to stand outside of FCA supervision when almost all other forms of debt collection are now regulated by them.  The largely unregulated status of the enforcement sector might be said, in itself, to be anomalous, but there is another more compelling argument which will possibly have to be confronted before too long.  That is, if county court judgment enforcement is opened up to the private sector (as has been suggested)- and especially if that liberalisation extends not just to HCEOs but also to certificated enforcement agents (bailiffs in the traditional sense) then compliance with FCA rules may become obligatory in any case.  Access to the work of executing county court warrants of control would almost inevitably include the recovery of Consumer Credit Act 1974 regulated agreements and that would necessitate FCA licencing.  The FCA regime is tough, but it might also go a long way to creating confidence in a professional enforcement sector and thereby eradicating the kinds of doubts and suspicions which then generate hostile and confrontational advice in some online fora.
Whether a new regulatory body is introduced or not, the current certification complaints process will still manifestly have a future: in cases of gross misconduct by an agent it enables the courts to exclude an individual from the profession and to forfeit all or part of the bond to provide compensation and pay costs.  However:
  • it is not apparent that the promised training for district judges has been provided by MoJ, given the reports of widely varying handling of certification matters;
  • Only individuals are certificated, not companies, and yet companies are the major factor in the sector in shaping practice and procedure; and,
  • the bond remains at £10,000, the same figure as when it was last fixed in 1988.  This drastically reduces the threshold to the sector without providing an equivalent level of sanction.

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