Best practice to recover court costs?
11/09/2012 7:48 am
I work for a local authority (mostly secure tenancies). We often have the situation where we have obtained a possession order at court and have been awarded court costs which are then posted to a sub account. The tenant then clears the arrears but not the costs. It is my understanding that whilst the court order remains live because of the outstanding costs, we cannot take the matter back to court to recover costs alone. We write to the tenant requesting payment of the costs but if they fail to do so, what other options are available and what do others find best practice in dealing with this situation? I'd be grateful for your comments.
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11/09/2012 10:23 am
The most important consideration to reduce these instances is clear training for recovery officers to ensure that the costs are recovered post the rent arrears being cleared. This really orientates around training staff reviewing such accounts to consider sundry debts and ensure when reviewing accounts that are or have been under a possession order to ensure they ensure payments are maintained to clear the court costs.
As you have stated they are in truth a sundry debt the collection of which can be challenging.
11/09/2012 10:42 am
What is important is that the sums are recovered, otherwise non-offending tenants end up footing the bill.
The costs are the subject of a court order, therefore non payment is a contempt issue - but that would not present well if used.
As the sum is a sundry debt then debt collection, goods seizure, attatchment of earnings style options can be used. The debt could also be 'sold' for agency collection.
Why not schedule payments to be part arrear and part cost, at an equivalent rate so that both sums clear at the same date - that way any default can still be represented against the rent account in court.
11/09/2012 6:13 pm
Thank you both for your replies.
Staff will have more training once we have a set a more robust procedure for recovering court costs. At the moment we send a couple of letters but if there is no response it is difficult to know how to proceed in view of the costs involved, the unknown prospect of success and the lack of any real consequence e.g. eviction. I would be interested to hear what other local authorities do in this situation.
Chris, I thank you for reminding me about attachment of earnings, goods seizure etc. because it has given me an idea. The problem with such methods is, as I mentioned above, it is difficult to know which path to go down but having just downloaded and re-read the court leaflet about how to get money after judgement, it mentioned applying for an Order for Information and maybe we would have more success with a letter along the lines of......
'....If you fail to make payments to your court costs account in accordance with the court order dated xxxxxx, we will apply for a Court Order requiring you to go to the court to be questioned, on oath, by a court officer. You will be asked questions about your financial situation including:
• employment status;
• if appropriate, details of employer and wages or salary;
• details of dependants and outgoings paid from income;
• details of any additional income;
• details of any property owned (house, car, caravan, etc.), which may have a saleable value;
• details of any bank or building society accounts and the balances in them.
We will then decide what further action to take. This action may include obtaining a warrant of execution which gives court bailiffs the authority to take goods from your home. Alternatively, we may apply for a charging order, an attachment of earnings or a third party debt order.
This will incur further court costs which will be added to the amount you already owe.......'
This would be a stronger letter than the ones we currently send and whether we decide to proceed or not, the prospect of having to attend court to answer questions and the additional prospect of possible bailiff action etc. may be enough in itself to prompt a response. It certainly feels like there will be consequences if court costs are not paid!
Your suggestion of scheduling payments to be part arrear and part cost would, I fear, have a negative effect on achieving targets because it would take longer to clear the arrears whereas court costs are on a sub account and are not included in the arrears figures for target purposes.
Thanks again for your comments, you have given me food for thought.
I'd still like to hear from any other local authorities who have had any success with this or even just good ideas.
13/09/2012 8:45 am
Same anon here, of course you collect it as part of the arrears and it would have no negative effect on targets as it would show as CR until transferred to the SD account, in fact it falsely improves your stats with small CR offestting your overall arrears target.
In regard to attachement of earning and CCJ, the problem is they often are not economically viable as a rationale route to collection, the only efficeint way is collect it is in conjuction with the arrears (i.e, at the end) - NB I have managed FT/SD and CT arrears for many years.
13/09/2012 3:26 pm
So can I ask how you collect the court costs at the end? Assuming the arrears are cleared, you write requesting payment of court costs and get no response - then what? That's what I'm after - what action people find effective next.
13/09/2012 3:33 pm
I think not getting into that position in the first place would be more beneficial as you have lost your leverage.
That said, all you have open to you are standard debt recovery measures such as bailiffs etc, which it appears you want to avoid the extra cost of.
Perhaps, from point of view of clearing it from your books, selling the debt is your best option. Swallowing a percentage loss is better than collecting nothing. But I'd go back to not getting into that hopeless position in the first instance.
13/09/2012 3:39 pm
I take your point Chris and will raise the suggestion regarding selling the debt with the powers that be. Thank you.