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ENFORCEMENT OF CIVIL OBLIGATIONS IN SCOTLAND

3 (CONT.) STRUCTURE AND ORGANISATION OF THE ENFORCEMENT SYSTEM

Some Underlying Problems

3.55 Concerns raised about the current system for enforcement of civil obligations in Scotland relate almost exclusively to the role and conduct of the personnel involved in enforcing obligations for payment of money. Foregoing paragraphs summarised the way in which the enforcement system is currently structured and the organisation of the personnel who carry out the function.

3.56 The types of incidents related in research, official reports, anecdotal accounts in the public debate and elsewhere fall into a small number of categories. Whilst in some fora concerns were expressed in emotive and unspecific terms, upon examination there can nonetheless be identified certain root problems underlying them. Often this is attributable to a lack of knowledge or awareness but others fall into categories regarding accountability, creditors’ instruction of enforcement, enforcement officers’ attitude and informal debt collection.

Lack of Knowledge

3.57 A recurring and clear theme underlying a large proportion of the concerns raised is a lack of knowledge or understanding about the law and procedures involved in enforcement. This includes a lack of knowledge about the statutory arrangements for accountability of enforcement officers. There appears also to be a general lack of understanding about the sequence of events which may be followed when a creditor seeks to recover a debt and the difference between informal debt collection and formal enforcement. This has meant that debtors didn't know where exactly they stood or what strength of force could properly be used against them. Lack of awareness of debtor protection provided by existing law has resulted in safeguards not being taken up as widely as had been intended. Taken together, these different aspects of a knowledge deficit have unnecessarily generated worry and fear about what might happen to someone in debt.

3.58 Some concerns which, at first glance, appear to be about the conduct of enforcement officers, can be more accurately assessed as concerning a lack of knowledge about the way in which enforcement operates in law. This type of concern was raised only in the context of the poinding and warrant sale procedure, which is soon to be abolished and alternative arrangements brought forward, but it nonetheless raises an important issue about awareness of the law and procedures. The Scottish Law Commission explained the legal position about locksmiths opening locked doors ⁷⁷ and any officer who kicked a door down ought to have been the subject of a complaint under the statutory procedure. It is likely that descriptive licence has been adopted and that it is a feeling of being invaded which is conveyed by this type of description. It is perhaps not surprising, therefore, that no complaints about any such activity were made formally. Similarly, references have been made to household items being capable of attachment but which were exempted from enforcement by law.⁷⁸ Yet such statements were made as if portraying the correct legal position in the parliamentary and public arenas and may have added to public fear and alarm. It would be dangerous to make assumptions about how such misstatements came to have been made and it must be assumed that they were unwitting. Irrespectively, it is important to have regard to the underlying problem demonstrated by them, that is a lack of knowledge about law and procedures.

Accountability

3.59 Concerns were raised in the parliamentary area and elsewhere about accountability of enforcement officers. Earlier paragraphs in this Part detailed the current regulatory arrangements for those engaged in conducting enforcement, including the primary and secondary legislation, their judicial appointments, supervision and discipline in conjunction with the statutory complaints mechanism. Again, there appears to be a lack of knowledge that any regulatory framework exists and what the arrangements entail, rather than concerns being expressed about its nature and extent. This appears to be part of the wider lack of knowledge and understanding generally about the structure and legal framework of the enforcement system including the procedures, safeguards and controls.

3.60 The situation is exacerbated by the fact that informal debt collection activities appear often to be confused with formal enforcement. This is discussed separately along with other concerns about debt collection.

3.61 One suggestion for changing existing accountability arrangements was that the Society of Messengers-at-Arms and Sheriff Officers’ own complaint system should be made subject to the Legal Services Ombudsman, although it appears that the existence of the statutory judicial procedure may not have been appreciated, and that the Society's own code of conduct should be reviewed and taken in to statutory arrangements for misconduct.⁷⁹

Creditors’ Instruction of Enforcement

3.62 Some concerns, if taken at face value, would tend to suggest that there is a perception that enforcement officers pursue enforcement action of their own accord, rather than being instructed by creditors with legal authority to do so. Some might more accurately be assessed as a concern about the decisions which creditors take to pursue formal enforcement rather than seek agreement about the payment terms. Although the vessel of the instructing creditors, the focus of discontent has tended to be directed at the enforcement officer. The survey of local authorities and Report from the Money Advice Scotland conference tend to suggest that much of the grievance and distress arising from enforcement is more related to the fact the person's situation has reached the stage of enforcement action being taken rather than the way in which it is conducted.

3.63 It is, under present law, a matter for individual creditors to determine whether and when to pursue enforcement action if they have obtained the necessary legal authority to do so. A current trend towards encouraging the use of informal means of collecting monies owed rather than pursuing formal enforcement is discussed later.

3.64 An underlying concern about how creditors exercise their right to take enforcement action appears, in part, to be directed at local authorities. As large scale creditors they are inevitably heavy users of the formal enforcement system and also informal means of debt collection. In this context, the concern about the way creditors instruct action extends to co-ordination of multiple debts due to them. It is understood that it relates to increased costs and confusion for the debtor if separate agents are instructed to recover different years council tax debt or council tax plus rent arrears rather than co-ordinating these. However, it is particularly incumbent on local authorities to pursue recovery of debt without delay when payment is not forthcoming and services cannot be discontinued to prevent further debt accruing when arrears continue to mount. A cycle or layers of debt do then arise and again must be pursued. It seems that it may not be clear to which part of the total debt payments made are applied. Some sort of ongoing balance sheet covering all departments could show, at any given time, the total and component parts of the sum owing and which component parts may have been recovered by informal or formal means.

3.65 What might be at the root of the problem is perhaps less a question about enforcement and more a matter of management and liaison within local authorities. Remedies, where creditor use of the enforcement system has been inappropriate, are a matter considered in Part 4C of this paper.

Enforcement Officers’ Behaviour

3.66 Concerns expressed about the behaviour of enforcement officers when carrying out formal enforcement included instances of aggression or inappropriate language which caused distress. This might be regarded as conduct tending to bring the office of messengers-at-arms or sheriff officers into disrepute which could constitute misconduct. Yet the level of formal complaints channelled through the statutory judicial complaints procedure is extremely low. However, there is also as much evidence of good behaviour as there is of bad behaviour which suggests that it should not be regarded as an endemic problem. There may, nonetheless, be reasons why people do not use the complaints procedure. Some accounts appear to have related to recollections from pre-1987 reform days, people may be unwilling to involve themselves further with the courts over such matters, may simply not be sufficiently motivated to do so, or may not be aware of the complaints procedure.

3.67 Many of the concerns raised which appear to have been about the attitude of enforcement officers are in fact complaints about creditors' decisions to instruct enforcement action or were made on the basis of misunderstandings about the law as already discussed.

3.68 The recent groundswell of adverse opinion concerning enforcement officers has also been attributed to a backlash from the non-payment campaign in the 1980s against the community charge or poll tax and the bitter resentment felt towards the ‘messenger’ as a consequence of councils enforcing it by poinding and warrant sale.⁸⁰ Thus, the officer instructed to enforce unpopular taxes is associated with its unpopularity.

Informal Debt Collection

3.69 It would appear that more creditors are attempting to resolve matters informally without recourse to formal enforcement.⁸¹ Some may do so in-house but the trend appears to be towards greater use of debt collection services or referrals to advice agencies. Different techniques are adopted by debt collectors with some actively advocating a heavy handed approach. For example, a firm of English-based debt collectors licensed for consumer credit purposes offer services in Scotland "by sending one of my teams of obnoxious and arrogant collectors to your debtor's business or home".⁸²

3.70 A good proportion of the anecdotal complaints as well as those recorded by local authorities which are said to be about enforcement officers are, from examination of the circumstances, about the conduct of informal debt collection rather than official enforcement. The context in which objectionable behaviour has been committed may be blurred because this difference in personnel is not appreciated. There are a great many firms of debt collectors who engage solely in that activity. However, enforcement officers may seek judicial permission to also undertake debt collection as an extra-official activity. When they do so, they wear a different hat and do not act in the capacity as an officer of court. It might be supposed that this arrangement has given rise to greater levels of discontent about the conduct of enforcement officers being assumed than actually exists, although a proportion of such concerns could have involved the same people regardless of which hat they might have been wearing.

Policy Issues and Proposals for Reform

3.71 The main questions are whether the current arrangements are satisfactory in terms of the policy aims for the Scottish system of enforcement of civil obligations and whether the system operates to the optimum level to achieve its purpose. A number of conclusions can be drawn from the issues arising from concerns highlighted in foregoing paragraphs which have helped inform consideration of appropriate reform. In addition to considering any defects which should be corrected it is necessary to assess also the broader issue of whether there is a need for reform in order to develop the system towards greater effectiveness, efficiency, fairness, or transparency. Do existing arrangements, within the private sector but subject to judicial scrutiny and control, operate to best effect or is there a case for greater public sector involvement or control? Could improvements be made to modernise the system whilst retaining the policy aims?

Structure of the Enforcement System

3.72 As noted earlier, enforcement in Scotland is a privately arranged and funded concern. Individuals, businesses and government can enforce dishonoured obligations, most often for payment of money, arising from arrangements freely entered into, judicial ruling or statutory requirement. Enforcement is not a function which itself is undertaken by the state, except to regulate its operation.

3.73 It has occasionally been suggested that there should be a change in the structure of the system from private to public provision of this service. Proponents of a private regime seek choice and competition of service providers within a free market and have a perception of public sector services being run in an inefficient and dilatory manner. Proponents of a public regime seek state provision of services as a matter of principle due to the nature of the function and for greater levels of accountability.

3.74 A comparative academic study suggests that the Scottish arrangements compare favourably with regulation of enforcement in many other European jurisdictions.⁸³ The study was intended to contribute to debate on the creation of a European judicial area, the aim being to improve compatibility towards approximation between the legal systems of European Union members states. The study emphasises that there are, at present, dramatic differences between the systems of civil enforcement in member states and identifies strengths and weaknesses in each. So far as Scotland is concerned, it is noted that the regulatory framework for enforcement officers compares very favourably with that in England and Wales resulting in "greater opportunity to resist bad practice".⁸⁴

3.75 No significant difficulties have been identified with the system which might be resolved by a move from a private to public regime. Those issues raised in earlier paragraphs of this Part do not militate towards structural change as the solution for their improvement. For example, the mix of some poor and some good attitudes adopted by enforcement officers during the course of executing their duties could equally arise in a publicly run system. Structural change, by nationalising enforcement officers and bringing their role and employment wholly within the public sector, would be neither a logical nor measured response to the level and nature of such concerns. The associated setting up, running and compensation costs to the public purse would be disproportionate when desired improvements for this and other issues could be achieved by alternative, more directly focused, means. These are discussed below.

Access to Information

3.76 Both those who favour a privately run system and publicly run system seek enquiry into and use of information about individual and business circumstances and assets. Access to information held by third parties including government is an extremely important issue for an effective and fair enforcement regime, particularly for enforcement of obligations to pay money. If creditors had access to a range of information about debtors' financial circumstances and assets they would be able to target and use appropriate and effective enforcement mechanisms and avoid procedures likely to be fruitless or excessive. There would be a saving of time, expense and upset for all. Both debtor and creditor interests have expressed a need for this. It was of particular concern in It Pays to Pay which recommended measures for local authority access to information as part of its package of proposals for improving council tax collection in Scotland.⁸⁵

3.77 It has to be borne in mind, however, that obtaining a decree for payment of money does not guarantee that the amount held by the court to be due or any part of it will be recoverable. Indications from the research and from the advice sector are that this often comes as a surprise for creditors who assume that the state will force their debtors to pay up. Enforcement against a debtor’s assets may be unsuccessful or ultimately not possible. This is something which creditors should consider before proceeding to enforce or litigate to avoid throwing good money after bad. More information about a debtor’s circumstances and his assets, accessible by creditors, will assist them to make an informed judgement on such matters. It is equally in the interests of debtors with few or no assets who will not be subject to fruitless enforcement.

3.78 The key issue is the extent to which this should be permitted and by whom it should be accessed having regard to the competing privacy interest and compatibility with existing data protection laws. Much of the information about debtors’ assets and circumstances, which would be useful to enable appropriate enforcement means to be identified and fruitless blind attempts avoided, is held by government. Enforcement systems which are publicly run may naturally be able to access the information which other arms of government hold more readily. For example, in Sweden, the Enforcement Authority, in addition to receiving information supplied by the debtor, also has direct access to government registers and databases such as the Tax Register and National Car Register. The Authority may also access other existing registers such as private registers belonging to banks. Its own Enforcement Register, which contains details of all recovery and enforcement action taken and sums due, is open to the public. The significant factor in the Swedish model is, not so much that it’s state run but, rather that there are in place appropriate permissions authorising access to information and the use of appropriate technology to do so easily and cost-effectively. Concluding remarks in the comparative European study, mentioned in paragraph 3.74, note limitations in the effectiveness of the Scottish system arising from a lack of good access to information and the fact that enforcement officers lack a controlling role in the enforcement of civil debts.

3.79 This was recognised in Striking the Balance by the independent Working Group who recommended that " the Executive continue to investigate, with the UK Government and other interested parties, the scope for progress towards sharing information about debtors' financial circumstances." ⁸⁶ Much work on data sharing has been undertaken within government although until recently it has been piecemeal. The Cabinet Office Performance and Innovation Unit has recently been considering this issue in the Privacy and Data Sharing project.⁸⁷ This has considered the issues surrounding data sharing within government and public bodies only. The Executive inputted to the project for the Executive's enforcement interest and it is anticipated that a report will be published imminently.

3.80 As part of its review of enforcement, the Lord Chancellor's Department has put forward a proposal for the introduction of court based Data Disclosure Orders. In the first instance, before contacting a debtor, a regulated enforcement officer would have limited ability to confirm that debtor information, as provided by the creditor, is current. Secondly, the creditor would, after wilful non-compliance by a debtor, be able to ask the court for an order requiring information to be disclosed by third parties. The Executive considers such a model may prove costly for users, particularly debtors who bear the costs of enforcement. Given current statistics on the use of enforcement, it would weigh heavily on the courts’ time and resources in a matter which in few cases would require judicial determination.

3.81 This is an area of concern in other European jurisdictions. For example, a private members bill submitted to the Chamber of Representatives of Belgium proposes statutory arrangements for access to information about debtors' assets.⁸⁸ This would be undertaken, on behalf of a creditor holding a judgement for debt, by members of a controlled and regulated profession of bailiffs. The aim is to strengthen the creditors position whilst doing so in compliance with human dignity and privacy and halt agencies already resorting to unorthodox methods.

3.82 Legislative rules for access to information will have to be formulated with regard to privacy, data protection and human rights issues and ensure that suitable safeguards and monitoring arrangements are built in. The Executive will continue to work with the UK government on this since a solution which sets uniform arrangements and criteria throughout the UK is desirable, not least for ease and compatibility in cross-border enforcement. This is something for which the Scottish Civil Enforcement Commission, which is discussed in the following paragraphs, should have responsibility once workable arrangements have been identified and taken forward.

Organisation of the Enforcement System

3.83 Among both those who use and provide the current enforcement system there is a will for change. Modernising unnecessary or outdated features and developing the system in line with present-day expectations is desirable to maintain confidence in the system and those who carry out its functions.

3.84 Despite the division in territorial competence and functions of enforcement officers, the distinction between sheriff officers and messengers-at-arms is not so great as might be imagined. Most significantly, the personnel involved are by and large the same: as a result of reforms implemented by the 1987 Act an individual must hold a commission as a sheriff officer before he can obtain a commission as a messenger-at-arms,⁸⁹ although not every sheriff officer seeks this additional commission.⁹⁰ There are also a number of circumstances in which the boundary between the functions of sheriff officers and messengers-at-arms becomes blurred. There are, for example, statutory exceptions to the rule that a sheriff officer may only act within the area for which his commission was granted ⁹¹ and a sheriff officer may exercise the duties and functions of a messenger-at-arms in situations where there is no resident, or reasonably available, practising messenger-at-arms.⁹²

3.85 Whether the two classes of officer of court should be merged into one was considered by the Scottish Law Commission. The Commission, in its 1985 Report, noted that fusion into just one class of officer, "would not necessarily mean that all officers would execute the decrees of all courts in Scotland…since it would be possible to have one service of court officers and yet impose limits on the territorial competence of individual officers".⁹³ It took the view that: "The arguments for and against fusion turn largely on what new arrangements would be made on such matters as the appointment, training, discipline, control and territorial competence of officers in a fused service, and the level and mode of regulation of fees".⁹⁴

3.86 At that time, of most importance to the Commission was the retention of separate jurisdictions for officers because "the Court of Session and the sheriffs principal should control the officers who execute the decrees of their respective courts, and it seems to us that the distinction between messengers-at-arms and sheriff officers provides a convenient method of achieving this".⁹⁵ It also considered it necessary to retain the nation-wide territorial competence of messengers-at-arms and the more limited territorial jurisdiction of sheriff officers. It considered the fact that there was already a high level of fusion in practice to be supportive of retaining the existing system and that, in the absence of compelling arguments in favour of change, the history and tradition of the separate commissions should be respected.

3.87 Other than tradition, there do not appear to be any strong reasons for retaining the separate classes of enforcement officer. As the Commission noted, many officers already hold commissions in both capacities and it is debatable whether users of the enforcement system are, or should be, concerned about whether it is carried out by a messenger-at-arms or a sheriff officer. The system could be greatly simplified and avoid possible confusion amongst users if there was fusion of these offices resulting in only one type of enforcement officer.

3.88 This leads to the separate question of whether it is desirable or necessary to maintain separate territorial competencies for enforcement officers. This goes to the heart of the question of the organisation and control of enforcement officers. It is, firstly, necessary to consider whether it remains necessary and appropriate for the Court of Session and sheriffs principal to retain control over the award of commissions and regulation of the conduct of officers within their own jurisdiction. If it is, then some distinction in respect of territorial competence should be retained.

3.89 Enforcement is an essential arm of the civil justice system and this function, which is necessary for implementing the decisions of the civil courts, must by some means be responsible to the courts for conducting the function in a manner compatible with the courts’ authority. There is also a significant public interest. Under current arrangements the independence of the judiciary ensures that the process is fair and impartial. The Executive’s policy for developing greater openness and transparency within judicial appointments in the civil justice system is in part relevant to the subsidiary arm of enforcement. The Executive is creating an independent Judicial Appointments Board to advise the First Minister on the appointment of Judges and Sheriffs. In keeping with this policy, the appointment and control of enforcement officers should be extended to involve lay input.

3.90 The purpose of the existing Advisory Council introduced by the 1987 Act was to advise the Court of Session on the rules for enforcement and for keeping all matters relating to enforcement officers under review. In practice, the Advisory Council has taken on a low key, rather than pro-active, approach towards assessing matters relating to enforcement officers and recommending alterations for improvement to the Court of Session. A body empowered to take a more active role in relation to all aspects of the enforcement system may be more appropriate. The functions and constitution of that body could be reorganised and responsibility for appointment and control of enforcement officers including complaints and discipline transferred to it. It could operate as the sole body where all matters relating to enforcement are determined and overseen. It could be made up of the judicial and professional interests already represented together with lay representation. Matters such as approving standards of practice, training and continuing professional development programmes currently set by the profession, including the arrangements set by the present committee of examiners, and setting fees would also come within its remit. So too the collection of information and statistics, monitoring trends of enforcement usage and publication of an annual report.

3.91 It would no longer be appropriate, given the range of functions involved, to consider this as an advisory body and these functions could be exercised by a new Scottish Civil Enforcement Commission. Such an arrangement would be in the public interest. It would improve and build upon current arrangements and have clear benefits of increasing public awareness and confidence about these matters. The Commission would require a greater commitment in terms of members time, administrative support and facilities than former arrangements and so would give rise to an additional cost to the public purse.

3.92 Since it is important that enforcement officers will be obliged to adhere to arrangements considered necessary for maintaining or enhancing standards of professionalism, consideration should also be given to whether membership of their professional organisation should be compulsory. It may be, however, that this would become the practical effect. Costs to the public purse would be minimised in a regime in which standards were approved by an accountable governing body and applied by the profession at its own cost. Compulsory membership of the professional organisation would enable training, education and ongoing improvement of the professional status to be financed by the profession itself.

3.93 The Scottish Law Commission considered whether membership of the Society should be compulsory for all officers of court and, although it initially suggested compulsory membership in its 1980 Consultative Memorandum,⁹⁶ it concluded in its 1985 Report that:

"On reconsideration we recommend that membership of the Society should not be compulsory. It is, we think, a fundamental principle that officers of court should be controlled by the courts. If membership of the Society were compulsory there would be inevitable conflicts between the Society and the disciplinary authorities over control of officers; compulsory membership of the Society is only compatible with a self-regulating service of officers of court."⁹⁷

3.94 The main objection to compulsory membership at that time concerned the ability of the Society to expel its own members, and thereby deprive them of their commission, which should be a matter for the courts to control rather than the Society. At present the Society’s own disciplinary framework already duplicates the statutory arrangements for judicial discipline. This issue could be dealt with under the Society’s constitution by associating expulsion with determinations for deprivation of a commission by the Scottish Civil Enforcement Commission and doing away with its own disciplinary procedure.

3.95 Returning to the question of whether territorial competence of enforcement officers should be retained, this would initially appear to be unnecessary for organisational or operational purposes. It is, however, a matter of public interest that there should be nation-wide access to sufficient enforcement services for courts’ and users’ requirements as well as choice.

3.96 At present it would appear that these factors are taken into account by the judiciary when deciding whether or not to recommend or grant the award of a commission. In its 1985 Report, the Commission stated that:

"In considering an application for appointment as a sheriff officer, the sheriff principal has regard to the interest of the applicant, to the interest of any objectors opposing the application and to the public interest, which is paramount. Important factors in determining the public interest are that there should be an adequate but not excessive number of sheriff officers for the relevant district; that a single officer or firm of officers should not have a monopoly of business so that a choice is available to creditors; that the officer should be a person of good character; and that the officer should preferably have knowledge of the local community. Where contested applications occur, it is usually because other sheriff officers holding appointments in the relevant district claim that there is already an adequate provision of officers in that district. The total volume of warrants for citation and diligence emanating from a particular sheriff court is finite, so that a surplus of officers could well result in existing officers’ businesses ceasing to be viable."⁹⁸

3.97 This indirect regulation of the business of officers of court is a matter which has been discussed in only a few reported cases. In Lewis, Petr.⁹⁹ the sheriff considered objections made by existing sheriff officers in Ayr to the grant of a commission to two applicants. He gave some explanation of the factors which he considered relevant:

"It is improper in my opinion to have regard to what was described as, "healthy" competition, and to make fresh appointments without regard to the amount of work available, on the view that the most efficient sheriff officer will get the work and the others must just suffer. It is, in my view, clear that the total amount of work available at any time is a fixed quantity not to be increased by any efforts of the sheriff officers as a whole. In these circumstances an increase in the number of sheriff officers must obviously result in a reduction in the size of the "slice" available to each…I do not consider that it has been established that there is a present need for more sheriff officers in Ayr. In these circumstances, I do not consider it proper to appoint additional sheriff officers, who would be bound to take away business from those at present holding office."¹⁰⁰

3.98 Almost thirty years later similar views were expressed in Macpherson, Petr:¹⁰¹

"A sheriff principal is not directly concerned with the way in which sheriff officers organise themselves to carry out their duties, or with their right to compete for business. His primary concern is to ensure that those to whom he grants commissions carry out the paramount duty which they owe to him as officers of court. He could not close his eyes to developments which could lead to any impairment of that duty. A concentration of all sheriff officer work in a few hands…could seriously damage the traditional loyalty owed by a sheriff officer to the sheriff principal who granted his commission…a general free for all should not be allowed to develop."¹⁰²

3.99 More recently in Moore, Petr ¹⁰³ an application for a commission was opposed by other officers on grounds including that there was insufficient work in the particular sheriffdom for another officer and the applicant already held commissions in two other sheriffdoms so would not be able to properly discharge duties in all. The applicant's employers had won a major contract for work in the sheriffdom. Determining factors in the decision were that a reasonable service could not be provided under the contract without the services of a commissioned sheriff officer and there was a real possibility of existing local firms amalgamating resulting in a monopoly in the area, which would be undesirable. In granting the application the sheriff principal took the view that: "An important component of a satisfactory service from Sheriff Officers is that those who wish to instruct them should have a measure of choice as to whom they instruct."¹⁰⁴

3.100 It is considered appropriate that these matters should continue to be taken into account. In order to do so it may be necessary for the Scottish Civil Enforcement Commission to determine the territorial competence of enforcement officers. Equally, where supply was not such to meet demand in remote or outlying areas, the Commission could have regard to arrangements which applicants proposed to accommodate this and could impose suitable conditions. This is, to some extent, already provided for by the arrangements mentioned in paragraph 3.11.

Extra-Official Activities and Debt Collection

3.101 The rather circular argument in paragraph 3.70, about the impact of inadvertent attribution of inappropriate conduct during debt collection to enforcement, simply underlines the fact that informal debt collection and formal enforcement activities are in practice closely related. They seek to achieve the same end, albeit by different means and with different legal legitimacy. The important distinction between them is that formal enforcement is authorised only after due process of law. This may be regarded as why they are subject to different standards of conduct required. Yet the question is whether there should be different standards of care between these activities. Arguably a greater standard of care should apply to informal debt recovery since techniques or procedures adopted are not governed by law.

3.102 It is notable that current opinion, of debtors, the advice sector and Working Groups which considered issues in this field, generally favours deploying mechanisms to assist or encourage resolution of debt obligations before decree is obtained and post-decree enforcement action undertaken with the aim of reducing costs and distress. At the same time, there are concerns about some techniques adopted by those engaged in informal debt collection, although there is no clear consensus about acceptable behaviour. This general approach towards greater informal means is implemented in the thrust of the recommendations made in the Report Striking the Balance – a new approach to debt management. Should these proposals be adopted, it is all the more important that those engaged by creditors for pre-decree collection should be required to do so to appropriate standards of care and conduct.

3.103 It has been suggested that the good office of enforcement officers could be better maintained if their role was to be restricted to official enforcement activities but not extra-official debt collection. There are two strands to this proposition. Firstly, that it would prevent any undesirable practices which would not then be rightly or wrongly attributed to enforcement officers. Curiously, the same argument has not been applied to solicitors who also engage in provision of pre-litigation debt collection services for clients. The proposition appears to further underline the need for appropriate standards to be applied to debt collection as the appropriate solution to get at the heart of the problem concerned.

3.104 Secondly, that enforcement officers should not gain commercial advantage when engaged in informal debt collection by virtue of their status otherwise from their role in enforcing court orders. Steps had been taken to legislate for this and there are restrictions presently in place to prevent any conflict of interest arising when enforcement officers engage in the extra-official activity of debt collection. The comparative European study referred to in paragraph 3.74 identifies the matter of debt collection as being particularly controversial in Scotland. It is noted that "There is a fear that sheriff officers may abuse their position if they also offer debt collection services - by misrepresenting the authority that they have in relation to the amicable collection of the debt, or by making use of information obtained in one context to put pressure on a debtor in another context".¹⁰⁵ This is contrasted with the situation in France, the Netherlands and Belgium where the worry about abuse of power does not predominate and which is considered to be an "interesting example of the different cultural responses to or traditional attitudes towards the enforcement agent".¹⁰⁶

3.105 It is not the nature of the two activities which it is said makes them incompatible, the opposite probably pertains. It is the opportunity presented to actively or impliedly make out that a debt collector acts in a different capacity with the authority of official enforcement behind him when he does not have authority to do so. This could be done equally by those who are or are not otherwise entitled to undertake official enforcement on other occasions. To get at the heart of the problem everyone must be prevented from doing so.

3.106 It would be possible to make the act of passing oneself off as an enforcement officer an offence. However, other measures such as practice regulation and codes of conduct, may be more appropriate and practically effective. For example, in the context of advertising by enforcement officers, the 1991 Rules provide that, "an officer of court who performs an extra-official activity…shall not state or imply that he is acting in his capacity as an officer of court".¹⁰⁷ This seeks to prohibit any advertisements which might blur the distinction between official and extra-official activities and which might imply that an officer of court is acting in his official capacity when collecting debts informally. Similarly, any such activity on the part of other informal debt collectors should be curbed by parallel means. Monitoring this, in relation to advertising as well as other forms of conduct, and issuing guidance would be another appropriate task for the Scottish Civil Enforcement Commission.

3.107 As detailed in paragraphs 3.31-3.32, debt collectors are only licensed for recovery of monies owing under consumer credit and hire arrangements and no code of conduct has yet been imposed. Unlicensed debt collectors are not subject to any statutory standards. The logical approach would be to ensure that the same mandatory code of conduct applied to relevant aspects of both informal debt collection and formal enforcement. This would be with a view to ensuring that standards of conduct in both activities came up equally to the highest common denominator. It would cover all currently unlicensed debt collection not arising from a consumer credit/hire arrangement. This is a matter for which the Scottish Civil Enforcement Commission should have responsibility.

Awareness about the Enforcement System

3.108 A very clear and recurring theme has emerged of a general and widespread lack of knowledge about all aspects of the enforcement system. This general lack of knowledge about this area of law, exacerbated by inaccurate statements made about it, has given rise to a culture of fear and distrust. This cannot be allowed to persist. The Commission could be charged with responsibility for determining and implementing an education and information strategy and programme.

3.109 There may be many means of delivering an education and information package to users generally and specifically targeting those in greatest need. Particularly sensitive areas, such as eviction and orders in relation to children, may need specialised coverage. Enforcement for payment of money may require more general means for reaching individual creditors and debtors plus their interest and advice groups. Coverage both prior to and during litigation would be desirable through wide-reaching channels and sources.

Summary of Proposals for Organisational Restructure and Related Reform

3.110 A Scottish Civil Enforcement Commission should operate as the sole body where all matters relating to enforcement are determined and overseen. Existing judicial responsibility including granting commission, investigation of complaints and discipline of enforcement officers together with existing functions of the Advisory Council of Messengers-at-Arms and Sheriff Officers should transfer to the Commission. Its membership should comprise the judicial and professional interests represented in the former Advisory Council together with lay representation. The Commission should also approve standards of practice, training and continuing professional development programmes, set the level of regulated fees and issue guidance on matters such as advertising practices. It should collect information and statistics, publish an annual report and have responsibility for education and information in this field.

3.111 The existing offices of messenger-at-arms and sheriff officers should be amalgamated into a single office of civil enforcement officers. The Commission should determine the territorial competence of enforcement officers having regard to sheriff court jurisdiction and may impose conditions with regard to remote or outlying areas. All commissioned enforcement officers should have competence to execute Court of Session enforcement within their territory.

Q. 3.1 Should there be a Scottish Civil Enforcement Commission to carry out the enforcement functions specified?

Q. 3.2 Should the Commission have responsibility for determining an education and information programme and what form should this take?

Q. 3.3 Should the Commission carry out any other functions?

Q. 3.4 Should the Commission comprise the membership specified?

Q. 3.5 Should there be a single class of enforcement officers?

3.112 It is considered that informal debt collection activities should be regulated including mandatory codes for appropriate standards of care and conduct.

Q. 3.6 Should informal debt collection activities be regulated in Scotland including mandatory codes for appropriate standards of care and conduct?

3.113 The Executive will take the issue of access to information held by third parties forward in partnership with the reserved interests concerned in order to achieve a solution in co-operation with those who hold such information, including reserved interests in the UK government and the finance institutions. Views from respondents to this consultation exercise about the extent to which this is required are sought.

Q. 3.7 Would access to information held by third parties assist towards achieving more effective enforcement?

Q. 3.8 If so, what type of information held by which third parties should be permitted?

Q. 3.9 Should the same types and sources of information be uniformly accessible in the different UK jurisdictions?

77 See excerpt in Annex A.
78 Ibid .
79 See para 3.49.
80 See Annex A, Part 3, Statements and Quotes, Historical Context.
81 The Report It Pays to Pay recommended that local authorities should review their practices to exploit fully the complete range of debt collection and recovery processes and facilities, both statutory and non-statutory, that are available. (Para 104 and Annex F, para10).
82 Crucial Input Ltd., advertising flyer, November 2000.
83 The Regulation of Civil Enforcement Agents in Europe . See excerpt in Annex A.
84 Ibid , p 182.
85 Paras 60-64.
86 Striking the Balance , para 97.
87 www.piu.gov.uk
88 Proposition de Loi prévoyant un droit d'enquêet d'information de l'huissier de justice dans le Code judiciaire , Doc 50, 1388/001.
89 1987 Act, s77(1).
90 See para 3.11 and fn 28.]
91 1987 Act, s91(2).
92 Execution of Diligence (Scotland) Act 1926, c16, ss 1-3.
93 Scot Law Com No 95, para 8.14.
94 Ibid .
95 Ibid , para 8.15.
96 Scot Law Com CM No 51 , para 6.18.
97 Scot Law Com No 95, para 8.149.
98 Ibid , para 8.50.
99 Lewis , Petitioner, 1963 SLT (Sh Ct) 6.
100 Ibid , pp 6-7.
101 Macpherson , Petitioner 1989 SLT (Sh Ct) 53.
102 Ibid , pp 54-55.
103 Moore, Petitioner, 2001 SLT (Sh Ct) 111.
104 Ibid , p 114.
105 The Regulation of Civil Enforcement Agents in Europe , p 86.
106 Ibid, p 87.
107 A.S. 1991/1397, rule 15(2).

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