Will the new Enforcement Conduct Authority bring bailiff reform?

In 2020, the Centre for Social Justice (CSJ) brought together the debt advice sector and the bailiff industry to form the Enforcement
Oversight Working Group.  This group has co-authored a report called Taking Control for Good – introducing the Enforcement Conduct Authority, published on 25 July by the CSJ.

In place of the current system of bailiff self-regulation, the report recommends the establishment of a new independent body, the Enforcement Conduct Authority. This will have:

a clear mandate to ensure fair treatment and appropriate protection for people subject to enforcement.

So why is this needed? And is it likely to work – will it genuinely deliver protection?

Bailiff problems have got worse since 2014

The House of Commons briefing paper Enforcement officers (formerly known as bailiffs) published in June 2021 gives a good overview of developments since 2014 when regulations were changed.

The debt advice sector has been consistently saying bailiff self-regulation is not working. In 2017, the ‘Taking Control’ group was formed from 11 organisations – AdviceUK, Christians Against Poverty, Citizens Advice, Community Money Advice, Institute of Money Advisers, Money Advice Trust, PayPlan, StepChange Debt Charity, The Children’s Society, Toynbee Hall and Z2K.

Citizens Advice, Money Advice Trust and StepChange have all reported increases in the number of clients with bailiff problems including aggressive behaviour, failure to recognise vulnerability, and disregard of rules. As Citizens Advice said in 2019:

The fact that so many different organisations are reporting widespread problems suggests that this is a systemic issue across the bailiff industry. We would suggest this is the result of the current self-regulatory approach that is not protecting people in vulnerable circumstances.

But too often the bailiff industry and the Ministry of Justice has appeared to be in denial about the scale of the problems:

• Citizens Advice claims to have recorded a 24% rise in “bailiff problems” since new regulations were introduced in 2014. These
  regulations include a duty on enforcement agents to signpost to debt advice organisations and every piece of official correspondence gives details, so the rise in people seeking advice – not necessarily with “bailiff problems” – is a sign that the measures are working. (CIVEA, 2018, my bold)
• Data provided by the advice sector show that some debtors and debt advisors perceive that aggressive behaviour is still happening in practice (MoJ, 2018, my bold).

In July 2019 the David Gaulke, the Secretary of State for Justice, said:

we will be pushing forward with a reform package to make sure that people do not face aggressive action from enforcement agents and to improve trust in the industry as a whole.

However, beyond making body-worn cameras compulsory, two years later, the government has not brought forward any proposals for reform.

The ECA – what is being proposed?

The ECA will start with a remit to regulate certificated enforcement agents and the firms that employ them. It will later consult on how to bring High Court Enforcement Officers, County Court bailiffs and Civilian enforcement officers into the ECA.

It will be independent of the bailiff industry, although funded by it. It will not be a statutory body. CIVEA, the Civil Enforcement Association that is the trade body for these bailiffs, has said it expects CIVEA members to become regulated by the ECA.

The ECA has as its first aim to raise standards:

• it will set out effective standards, audit performance and have sanctions for non-compliance;
• it will publish an annual review and make recommendations to the MoJ on standards.

It says:

the ECA will commit to ensuring the fair treatment of people subject to enforcement in vulnerable circumstances… This will be primarily delivered through provision of new affordable repayment and vulnerability protocols drawing on best practice from other organisations.

It will have a two-stage complaints procedure – complaints first have to be decided by firms and only after that escalated to the second ECA stage.  The current bailiff complaints procedures are highly fragmented as Citizens Advice’s page on complaining about bailiffs shows. The report says the ECA will work closely with all bodies which currently have oversight on complaints to determine an effective transitional framework.

Three key issues for the ECA

I think there are three key areas.

1. Vulnerability

Many people who come into contact with bailiffs will be vulnerable because their inability to pay bills and debts results, directly or indirectly, from their vulnerability. As the report says, the current bailiff National Standards for vulnerability, which are non-binding anyway, are:

limited in scope and ambition in comparison to the high standards required of other sectors.

The report notes there is no single definition of vulnerability. But in other sectors a consensus is emerging. As the Insolvency Service said in the new 2021 IVA Protocol:

The FCA guidance is a benchmark for those providing debt advice to consumers who may have vulnerabilities.

I can’t think of a good reason why the ECA should not adopt the same approach.

2. Affordability

Vulnerability issues are made worse when bailiffs are demanding unaffordable monthly repayments.  But you don’t have to be a pensioner or have health problems to be unable to afford hundreds of pounds a month.

To some extent this issue is not under the bailiff firms’ control, with some creditors, including Local Authorities, demanding bailiffs use aggressive repayment models in order to be awarded contracts. But ultimately the firms can simply refuse to tender for these contracts.

We already have a “best practice” for affordability – the Standard Financial Statement, used by debt advisers, FCA-regulated debt collectors, the courts, even the Insolvency Service… It is time for central and local government debt collection to start using it too. If the CEA can help to push this along, it will be a major improvement. If it can’t, improvements on vulnerability and complaints will only help around the edges of “the bailiff problem”.

3. Complaints handling

At the moment not many people make complaints because they don’t understand their rights and they don’t understand the fragmented complaints procedure. The ECA should be able to produce an improvement here.

But another reason for the low number of complaints is because people sometimes have no faith that making a complaint will actually achieve anything. For this to change, effective sanctions need to be applied to firms and bailiffs who have broken the rules and adequate redress needs to be provided to people winning complaints. Time will tell.

Conclusion – it’s well worth a try

The Taking Control group of debt advice agencies says:

Though it falls short of the full statutory regulation we’ve called for, these proposals are an important opportunity to raise standards and protect people in financial difficulty from unfair practices. 

We don’t know how well the ECA will work, nor if its remit will be extended to cover the other types of bailiffs. But with a government that seems to have no interest in introducing statutory regulation, other ways have to be tried. And it is good that with the ECA, the bailiff industry has now recognised that raising standards is essential.

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