Further to a statement made by the then Under-Secretary of State for Justice, my hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer) [Official Report, 26 November 2018; Vol.650, c.2WS], I wanted to update the House on the Ministry of Justice’s review of the implementation of the enforcement agent reforms contained in the Tribunals, Courts and Enforcement Act 2007. These reforms, which came into force in 2014, aimed to provide protection to debtors from the aggressive pursuit of their debt from enforcement agents, while balancing this against the need for effective enforcement.
Our review was launched with a call for evidence on 26 November 2018 that ran to 17 February 2019. This sought to provide further information on the operation of the reforms following the Government’s publication of the first post-implementation review on 2 April 2018. This review found that the reforms had led to many positive changes, including improved transparency and consistency, both in terms of the enforcement process and the fees charged by enforcement agents. The report noted, however, that some enforcement agents were still perceived to be acting aggressively and not complying with the new rules.
We received nearly 300 responses to the call for evidence from: individuals who have been visited by enforcement agents; enforcement agents, firms and trade associations; local authorities and other creditors; advice organisations and charities; MPs and members of the judiciary.
I am grateful to the Justice Committee for conducting an inquiry into this important issue. We are carefully considering its recommendations for further reform. We will provide a full response to the report and to our call for evidence, following further engagement with stakeholders over the summer.
Based on their data, civil enforcement agents now enforce around 3 million civil cases each year. Creditors need an effective, sustainable way to ensure that they receive the money owed to them. At the same time, the Government must ensure that those in debt, especially the vulnerable, including those with mental health issues, are treated fairly and given the protections they deserve.
Enforcement agents carry out an important job in often very challenging circumstances.
Many firms have made considerable efforts to make sure that they are treating those in debt fairly, but complaints continue. All enforcement agents must operate to the same high standards. So, 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.
One area of our focus will be how people can make complaints against enforcement agents. Data submitted to our call for evidence has shown that the volume of complaints made about enforcement agents is much lower than would be expected relative to the volume of debts enforced, and compared to similar industries. While this may in part be due to improvements in the sector, we believe that there are a number of barriers in the current complaints system that may deter people from making a complaint. We will look to address these with enforcement agents and others with a view to making the complaints system more effective, transparent and independent.
We are also considering what role independent regulation of enforcement agents could potentially play in ensuring that vulnerable debtors are treated fairly. We believe that regulation of this sector could be strengthened but we do not yet have a firm view on the form this should take. It is an issue that would benefit from further discussions with stakeholders. We are clear that any further regulation must be effective, proportionate and sustainable.
Alongside considering these reforms, we wish to bring quicker changes to the system to improve how enforcement agents operate. Our call for evidence and the Justice Committee’s inquiry found strong evidence that body-worn cameras are important in protecting both those in debt and enforcement agents, raising standards in the industry and enabling complaints to be properly investigated. We will be taking forward work to make use of body-worn cameras mandatory for all private enforcement agents and to produce best practice guidance.
Under the current system, all enforcement agents have to demonstrate knowledge of the law, customer care, dealing with conflict situations and identifying vulnerable situations. We believe that there is a good case, however, to look again at the guidance and requirements for how enforcement agents interact with those in debt, with a view to addressing any unfair treatment of vulnerable people, including those with mental health issues.
The Ministry of Justice proposes to engage with the enforcement industry, debt advice agencies, creditors and others on these and other issues over the summer before responding in full to its call for evidence and the Justice Committee report. The response will include a full analysis of the variety of evidence submitted to the review and set out proposals for reform to enhance the regulation of enforcement agents. We will consult on any proposals for legislative reform.
This work forms part of wider cross-Government efforts to improve the treatment of those in debt. This includes work by HM Treasury to implement a “breathing space” and statutory debt repayment plan for people in problem debt and the Ministry of Housing, Communities and Local Government review of how local authorities can improve the way they collect council tax debt.
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