From 6th April 2014, the current Abortive Fee is to be replaced by a new fee which was originally penned as the ‘Creditor Guaranteed Fee’ and was a recommendation by the MoJ’s consultant economist Alex Dehayen during his Enforcement Fee Structure Review in 2009. The fee is an amendment to the current High Court Enforcement Officers Regulations 2004.
This new fee is payable by the creditor to the High Court Enforcement Officer (HCEO) in the event that it was not possible to enforce the writ. This could be for a variety of reasons including debtors in insolvency or those that have moved address.
The fee will go some way to covering the costs the HCEO has incurred.
How the fee is triggered
It is triggered by the HCEO sending the Notice of Enforcement to the debtor, the first stage of the new enforcement process, called the Compliance Stage.
The fee has been set at £75 and this is the first time the abortive fee has increased in over 10 years.
We are still awaiting guidance from the MoJ & HMRC as to whether High Court enforcement fees will attract VAT.
How the notice is delivered
Under the new regulations, the Notice of Enforcement must be sent to the debtor personally, giving them 7 clear days to pay the sums due in full, at the place, or one of the places, where the debtor usually lives or carries on a trade or business.
If the debtor is a company or partnership the notice must be sent to the place, or one of the places, where the debtor carries on a trade or business or the registered office.
Delivery can be by post, fax or other electronic means such as email for example.
It is quite likely that creditors will be more diligent in their attempts to provide accurate information on debtors, either before instructing their HCEO, or instructing the HCEO to run a debtor trace before sending the Notice of Enforcement.
I think it is a positive step. In recent years HCEOs have had to swallow some of the costs of enforcement by visiting several addresses for the one £66 abortive fee. In my opinion the fee will provide more accurate information on enforcement addresses and a fairer recompense for the HCEO for the work undertaken.