The Ombudsman's final decision
Summary: Ms B complains the Council took enforcement action against her for non-payment of council tax. She says this was because of a mistake by the Council. Ms B says she was suffering financial hardship and had to pay additional costs to the bailiff. The Ombudsman does not find fault in how the Council managed the debt before enforcement action, or in how enforcement action took place.
The complaint
The complainant, who I refer to as Ms B, complains the Council took enforcement action over a £90 debt. She says she had already asked the Council to transfer the debt to her new account, but the Council did not do so. It then took enforcement action, which added costs to the debt. Ms B says she was in financial hardship and had to arrange a payment agreement of £15 a month. In total she had to pay back around £500, far in excess of the original debt.
The Ombudsman’s role and powers
We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended) We cannot question whether an organisation’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended) We cannot investigate a complaint about the start of court action or what happened in court. (Local Government Act 1974, Schedule 5/5A, paragraph 1/3, as amended) If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
How I considered this complaint
I considered the information Ms B provided and spoke to her about the complaint, then made enquiries of the Council. I sent a copy of my draft decision to Ms B and the Council for their comments, before making a final decision.
What I found
Law and Guidance A bailiff may not take control of goods if the debtor is a vulnerable person, and they are the only person present.
The Taking Control of Goods (Fees) Regulations 2014 say bailiffs may recover fees from the debtor. Where the debtor is a vulnerable person, the fee due for the enforcement stage is not recoverable unless the bailiff has given the debtor an adequate opportunity to get assistance and advice in relation to the exercise of the enforcement power.
The law does not define what a vulnerable person is. The Ministry of Justice has issued ‘Taking Control of Goods: National Standards’ (“the Standards”) which set out the responsibilities of creditors and bailiffs. The Standards say - ‘Creditors should remember that bailiffs act on their behalf and they are ultimately responsible, and accountable, for the bailiff’s actions.’
‘Bailiffs and creditors must recognise that they each have a role in ensuring that the vulnerable and socially excluded are protected and that the recovery process includes procedures agreed between the agent/agency about how such situations should be dealt with. The appropriate use of discretion is essential in every case and no amount of guidance could cover every situation. Therefore, the agent has a duty to contact the creditor and report the circumstances in situations where the is evidence of a potential cause for concern.’
The Standards provide a list of examples of where a person may be vulnerable. This list is not exhaustive, and care should be taken to assess each situation on a case-by-case basis. The list includes: The elderly People with a disability The seriously ill Unemployed people The government has published guidance entitled ‘Guidance to local councils on good practice in the collection of council tax arrears’ (“the Guidance”). The Guidance says councils should have robust contracts with bailiffs that includes common standards for assessing vulnerability.
In this case the Council instructed and bailiff agency (“the Bailiff”). The Bailiff has a policy available on its website about debtor vulnerability. It has a list of situations that could mean a debtor is vulnerable, which includes mental health and where the person is unemployed.
Background
In 2017 Ms B moved out of the home she owned and rented it to a tenant. In mid-2018 there was an outstanding amount of £90 for the council tax for that home. The Council notified Ms B of this.
In March 2019, Ms B moved back into the property after the tenant moved out. At around the same time, the Council issued a final notice for the £90.
Ms B telephoned the Council and notified it that she had moved back. Because of the change in situation, the Council opened a new council tax account for Ms B.
Ms B says that in this telephone call, she asked the advisor to transfer the £90 that she owed from the previous year to her new account. However, her council tax for March 2019 also amounted to around £90. Ms B says the advisor thought she was asking to transfer the £90 from March 2019 to the new tax year. She says this is because the £90 from the previous year was part of a different tax account.
In early April 2019 Ms B received a council tax bill that showed around £90 transferred to her new bill. She therefore assumed the Council had transferred the previous years amount, when in fact it had added the council tax liability for March 2019.
In late April 2019 the Council applied to the court for a liability order for the outstanding £90. Ms B emailed the Council to say she had received the court summons and asking for an explanation. Ms B said she had asked the Council to transfer it to her new bill. The Council said it had issued the court summons due to non-payment and that if full payment was made by end of May 2019 no further costs would be incurred. At that point in time, with added court costs, the amount owed was £200.
Ms B says she received the court summons but overlooked it. She says her mother is elderly and disabled and she was dealing with challenges around this, which meant she did not open her post for several weeks.
The court issued a liability order at the end of May 2019. The Council then instructed the Bailiff to recover the debt in mid-June 2019. Ms B received an enforcement notice from the Bailiff and contacted the Council in June 2019. The costs of enforcement action at this point brought the debt to around £500.
Ms B said that due to several recent periods of unemployment, she was already paying the £90 plus the current bill in affordable instalments. The Council reiterated that it had taken action due to non-payment. Ms B then said that she had spoken to one of the Council’s advisors who told her the following year’s tax bill would include the £90, which it did. The Council said Ms B would need to deal with the Bailiff directly. Ms B then provided the date of the telephone call and again said the advisor had told her it would be included in the following year. The Council said the case would remain with the Bailiff.
In early July 2019, Ms B engaged support from the Citizens Advice Bureau (“CAB”). An advisor from CAB telephoned the Council with Ms B present. A Council officer explained that it was the £90 from March 2019 that was brought forward to the new bill, not the £90 for which the Bailiff was instructed. Ms B told him about the previous call she had in March. She said she was currently caring for a disabled mother and was unemployed. She asked the Council to recall the debt. The officer said the Council would not recall the debt as it was issued correctly, and she would need to deal directly with the Bailiff.
In August 2019 Ms B emailed the Council again to say she could not afford to pay the £500 as she already had significant mortgage arrears due to long periods of unemployment. She said it was an honest mistake as she thought the £90 was transferred to her current year’s bill. Ms B also raised that she had self-harmed in previous years. She asked for the enforcement action to be postponed.
Based on the information Ms B provided the Council asked the Bailiff to accept a payment plan of £15 per week. It also made a referral to its safeguarding team.
Ms B continued to make payments in line with the plan, except for a period of time in which this stopped due to her becoming unemployed. Ms B has now repaid the full amount owed.
Ms B says the debt should not have been sent for enforcement action as the misunderstanding was based on a mistake by the Council, and she should not have had to pay the significantly increased amount in fees.
Findings
As outlined at Paragraph 4, we cannot investigate complaints about court action. I cannot make any decision about whether the Council should have taken court action, or the process of that court action. However, I can consider what happened before and after this. I have therefore investigated the following issues: The confusion around the request for transfer of £90 to the new bill The way enforcement action took place Request for transfer of £90 I have listened a voice recording of the telephone conversation between Ms B and the advisor in March 2019. The focus of the conversation appeared to be on confirming that Ms B was now the sole occupant of the property and setting up a new account. The advisor read Ms B a declaration and updated the details.
At one point I heard Ms B mention that she had a residual amount from a previous year. However, she did not specify how much, when exactly it was from, or ask for it to be transferred to the new bill. I could not hear anything in the call that supports Ms B’s account that she requested the transfer of the £90 to her new bill, or that the advisor suggested she would do this.
It is an unfortunate coincidence that the council tax from March 2019 was a similar value to the amount previously owed. This clearly caused a misunderstanding. However, based on the call recording, I cannot find fault in the Council not having transferred this to the new bill, or representing that it had.
The Council was entitled to issue court proceedings based on non-payment, following its final reminder notice. As already outlined, I cannot investigate the court proceedings from that point on, including issuing of the summons or liability order.
Enforcement action I also cannot find fault in the Council instructing the Bailiff in the first instance. Ms B had received all relevant court documents. While I understand she was under other pressures that made it difficult to respond, the Council was within its rights to start enforcement action following the issue of the notice of liability.
I have considered whether the Council and Bailiff properly dealt with any concerns about Ms B as a potentially vulnerable debtor. I listened to a recoding of the call in July 2019, with the CAB. It sounded as though Ms B suggested she was currently unemployed. However, other correspondence from her suggests that in fact she was not unemployed at that time but was on a low income and had been unemployed for long periods before this.
The Council says unemployment, in of itself, would not be a reason to classify a person as vulnerable. This raises some concerns as the Standards clearly state that unemployment is a factor that might indicate a person is vulnerable. The Standards are also clear that the Council, as creditor, retains overall responsibility for how enforcement action takes place. The Bailiff should notify the Council of any concerns about vulnerability and agree a way forward. Therefore, if Ms B made comments to the Council that suggested she may be treated as vulnerable debtor, the Council should not simply tell her to raise this with the enforcement agent. It is aware of those concerns and one way or another needs to liaise with the Bailiff about how enforcement action goes forward.
In this case, the written information to the Council in June and July 2019 suggests Ms B was not unemployed at that moment in time but had been previously. Based on this I do not find the Council at fault for failing to consider whether Ms B was a vulnerable debtor based on unemployment. However, it should consider this point going forward, as its assertion that unemployment would not be an indicator of vulnerability in of itself, does not appear to be in line with the Standards.
Ms B made further comments in August 2019, which suggested she had experienced difficulties with her mental health. I can see an email in which the Council says Ms B should raise any issues of vulnerability with the Bailiff directly.
For the same reasons as at Paragraph 34, the Council should not rely only on Ms B raising these issues with the Bailiff separately, if it is aware of them. However, I can see that it did act on Ms B’s email and instructed the Bailiff to enter into a payment agreement. I can also see that if the Bailiff had not agreed to this, the Council intended to recall the debt. This suggests the Council did recognise that there were concerns around potentially vulnerability and gave clear instructions to the Bailiff on how to go forward with that in mind. I therefore do not find fault in how the enforcement action took place.
Investigator's decision on behalf of the Ombudsman