If a notice of enforcement is delivered to your business premises warning you that a High Court Writ has been issued against your limited company, you have a problem that is not simply going to go away.
The notice will inform you that you have seven days to settle a business debt or you will be visited by a High Court enforcement officer. They will be tasked with collecting the debt on behalf of the creditor. They have a range of powers to enforce the debt and at every stage of the process, additional charges will be applied.
In this guide, we’ll explain what a High Court Writ is, discuss the powers it gives to High Court enforcement officers and explore your options for dealing with it.
What is a High Court Writ?
A High Court Writ, formally known as a High Court Writ of Control, is a formal written order that gives enforcement officers the power to visit your business premises to seize and remove business assets that can be sold to ensure the debt is repaid.
The priority for the High Court enforcement officers (HCEOs) is to get a payment upfront or to arrange a payment plan to repay the debt over a period of time. However, if that is not possible, they will remove goods to recover the debt.
In many cases, the value of the assets removed will far exceed the value of the debt. That’s because the price the assets are sold for at auction will often be considerably less than their true market value. That’s why it’s never a good idea to let it go this far.
High Court Writs tend to have a specified timeframe that the enforcement officers must act within, which is usually one year. However, once a High Court Writ has been issued against your business, it will be held on the registry trust for six years, which could make it difficult to obtain credit in the future.
What is the Process for Issuing a High Court Writ?
High Court Writs are used by creditors to enforce unpaid County Court Judgements (CCJs).
They usually take between 7 and 28 days to obtain.
If you have received a CCJ that you have not paid and that has not been set aside, the next step the creditor can take is to apply to the High Court for a Writ of Execution. That can take various forms, including a Writ of Possession or Writ of Delivery, but is most commonly a Writ of Control. That empowers the High Court enforcement officers to make contact with you, visit your business premises and take control of goods if necessary to recover the debt on the creditor’s behalf.
Before attending a business’s premises, a notice of enforcement must be served on the company’s registered address seven clear days (excluding Sundays and Bank Holidays) before the HCEOs can visit. That gives the recipient a final opportunity to make the payment, and although additional charges will already have been applied, if payment is made before an HCEO visits in person, those charges will be minimal (£75 plus VAT).
Once the seven days period has expired, the HCEOs can visit your premises to take control of goods under the Writ of Control. If you can’t make the payment upfront, they may try to negotiate a payment plan with you before making an inventory and pressuring you into signing a controlled goods agreement.
If you do not stick to the payment plan, they can return to seize the goods listed in the controlled goods agreement to recover the debt. They must provide seven days’ notice before the sale is due to take place to give you a final opportunity to pay the debt before the goods are sold.
What Powers do High Court Baliffs have?
A High Court Writ of Control allows a High Court enforcement officer to take control of goods to cover the value of the debt and the additional charges that have been incurred to sell at auction. If the debtor business is a limited company, HCEOs can only visit the business’s premises and seize goods that belong to the limited company.
That means any assets that are owned by the company directors personally or assets that are rented, on hire purchase or finance agreements cannot be seized. Under the terms of the Writ of Control, HCEOs are also not permitted to take assets that are essential to the business, known as ‘tools of the trade’, that are worth up to £1,350.
Business assets that can be seized include:
- Business vehicles
- Moveable plant and machinery
- Office furniture
What is the Difference Between a Writ of Control and a Warrant of Control?
A Writ of Control is issued by the High Court for debts over £5,000 or debts below that amount but over £600 that have been transferred from the County Court to the High Court by the creditor for collection. It is common for debts to be transferred to the High Court for collection as High Court enforcement agents work for private firms and are paid on commission, while County Court bailiffs are employed by the Court. In many people’s minds, that makes HCEOs more effective.
A Warrant of Control is issued by a County Court and will be enforced by a County Court bailiff. County Court bailiffs do not have the same powers of entry as HCEOs, who can force entry to business premises. That can make a Warrant of Control more difficult to enforce.
What Powers Does a High Court Writ of Control Give HCEOs?
High Court enforcement officers can visit your business premises seven days a week between 6am and 9pm. They can also visit you outside of those hours if you run a business that operates at other times, such as a nightclub. The HCEO can force entry to your business if necessary; however, they must provide you with seven days’ notice of their intention to visit.
If you cannot pay the debt, then under the Taking of Goods Regulations 2013, the HCEOs are entitled to seize and remove goods from your business immediately for sale at auction or demand that you sign a controlled goods agreement if you agree to a payment plan. If you don’t stick to the payment plan, they will return to seize the goods for sale at auction. You must receive seven days’ notice before the goods can be sold.
Although the right to force entry and seize goods sounds intimidating, in the majority of cases, goods are not seized and payment is made or payment plans are agreed. This is usually in the debtor’s and the creditor’s best interests.
How do I Stop a Writ of Control?
If you have received a Writ of Control, you have seven days to act to prevent a visit from the High Court enforcement officers and the increased fees and additional stress that brings. There are several options open to you:
- Try to stop the Writ of Control – You could download and complete form N244 from the HM Court Service website, make a witness statement and send it off the High Court in London along with a £100 fee to apply for a stay of execution. While that might sound like an attractive option, the court process has already taken place so you must have a very good reason for your stay of execution application to be successful. You will need evidence to show that you didn’t know about the judgement and have a reasonable prospect of defending the original claim.
- Pay off the debt – To prevent the High Court Writ from progressing further, you could pay off the debt in full or contact the creditor and the enforcement officers to arrange a payment plan. Doing this before the seven day notice period is up will reduce the charges you pay.
- Explore your finance options – If you cannot afford to repay the debt in full or negotiate an acceptable payment plan, you may need to seek alternative ways to free up the cash to pay off the debt. Finance options such as asset-based lending and invoice finance could allow you to release some of the value from business assets to enable you to make the payment.
- Propose a Company Voluntary Arrangement (CVA) – If you cannot repay the debt all at once or agree to an affordable payment plan and are unable to access external finance, you could propose a Company Voluntary Arrangement. A CVA is a legally binding agreement to repay all of the company’s debts via a single monthly payment for up to five years. This will have to be agreed with the company’s creditors as a whole and not just the creditor who has issued the High Court Writ.
If none of these options are feasible then the High Court enforcement officers have the right to visit and enter your commercial premises to take possession of and remove assets for sale at auction. This approach is not recommended as you will pay the highest level of HCEO fees and the assets seized will typically be worth far more than the value of the debt.
How Long Does a High Court Writ Last?
High Court Writs have a specified time frame, which is usually 12 months from the date the notice of enforcement was served. However, if you receive a notice of enforcement, you should expect a visit from a High Court enforcement officer sooner rather than later. If you enter into a payment arrangement that you do not stick to, the writ will be valid for a further 12 months from that point.
High Court Writs will show up in your credit record as they are considered public knowledge.
If you have received a notice of enforcement about a High Court Writ, you should act quickly before enforcement action is taken. We can provide a cost and obligation-free consultation to help you understand your position and the available options. Give us a call on 0808 239 3402, email [email protected] or submit an enquiry form and we’ll get back to you on the same or next day.