Chair of the High Court Enforcement Officers Association, Alan J. Smith, looks at the pivotal role High Court enforcement plays in supporting the UK economy.
High Court enforcement is a critical component of the United Kingdom's legal and financial infrastructure. Its role extends far beyond settling disputes; it actively contributes to the stability, growth, and prosperity of the UK economy.
It is not just huge corporations recovering large debts. Small businesses, sole traders and individuals all rely on High Court enforcement to recover money owed to them and prevent them – as todays creditors – from becoming the debtors of tomorrow.
Preservation of small businesses
When businesses are not paid for goods or services provided, their cash flow suffers, limiting their ability to invest, expand, and create jobs, or even meet their day to day running costs. With the cost-of-living crisis the impact on small businesses is more noticeable than ever.
The backlog of cases in the County Courts Is making it difficult for the businesses and individuals who are relying on this income to recover the money owed to them. While judgments for debts over £600 can be transferred up to the High Court for efficient recovery, smaller debts that can make a real difference between a business staying open or facing insolvency are taking much longer to recover.
By successfully recovering debts, businesses can maintain liquidity, meet their financial obligations, and reinvest in their operations, which is why we’re committed to campaigning for freedom of choice for court users. A simple change to legislation would allow them to choose a High Court Enforcement Officer to help recover debts under £600, increasing their viability and preventing them from falling into debt of their own.
Reinforcement of Contractual Commitments
The UK economy thrives on a robust legal system that enforces contractual commitments. High Court enforcement plays a vital role in upholding these commitments, reinforcing the principle that agreements must be honoured.
This commitment to enforcing contracts promotes trust and confidence in business transactions, encouraging investors and businesses to engage in economic activities with the assurance that their rights and agreements will be protected.
Encouragement of Responsible Borrowing and Lending
When debtors know that unpaid debts can lead to legal consequences, they are incentivised to fulfil their financial obligations. It can also deter potential debtors from engaging in non-payment or defaulting on financial obligations, as they are aware of the potential legal consequences. This deterrence contributes to a more efficient and responsible economic ecosystem.
On the lender side, the knowledge that there is a mechanism for debt recovery reinforces responsible lending practices, discouraging the extension of credit to individuals or businesses with a history of non-payment. This fosters a healthier credit market and reduces the risk of financial instability.
As an Association we work closely with the newly-formed Enforcement Conduct Board to ensure High Court enforcement is carried out flexibly and responsibly, particularly in cases involving vulnerable debtors. High Court Enforcement Officers have a role in ensuring that the vulnerable and socially excluded are protected and that the recovery process includes procedures agreed between HCEOs and creditors about how such situations should be dealt with.
Support for Landlords
The property sector is a significant contributor to the UK economy. High Court enforcement plays a crucial role in supporting this by assisting in the enforcement of Orders of Possession and eviction proceedings. This is particularly important in cases where tenants fail to pay rent or breach tenancy agreements.
By helping landlords regain control of their properties, High Court enforcement ensures that rental income is protected, preventing financial losses and disruptions in property management. A stable property sector positively impacts property values, property tax revenue, and associated industries, such as construction and property management.
With the recent suspension of County Court bailiff appointments, it is High Court enforcement that has been able to continue to provide support for landlords looking to recover their property or rent arrears.
A vital role for UK plc
No system is perfect, but we’ve been working hard with government and other stakeholders to make High Court enforcement more accessible through digitisation and ensure that standards are maintained through appropriate funding.
Our members perform a vital role for UK plc – while they are doing the work that no one really thinks about, High Court enforcement preserves the financial health of businesses, encourages responsible financial behaviour, and reinforces contractual commitments. Its role in maintaining a fair and efficient economic environment underscores its significance as a cornerstone of the UK economy.
