Exercising discretion when applying to the court for a Council Tax Liability Order
Dear St Albans District Council,
The Council Tax (Administration and Enforcement) Regulations 1992 (the "Regulations") confer a duty on the billing authority to exercise discretion under regulation 34(1) when deciding whether to institute a complaint to the Magistrates' court to enforce payment.
Regulation 34(1) as amended by Regulation 15 of SI 1992/3008 states, with the relevant part emphasised, as follows:
"If an amount which has fallen due under paragraph (3) or (4) of regulation 23 (including those paragraphs as applied as mentioned in regulation 28A(2)) is wholly or partly unpaid, or (in a case where a final notice is required under regulation 33) the amount stated in the final notice is wholly or partly unpaid at the expiry of the period of 7 days beginning with the day on which the notice was issued, THE BILLING AUTHORITY MAY, in accordance with paragraph (2), apply to a magistrates' court for an order against the person by whom it is payable."
Regulation 34(2) states as follows:
"The application is to be instituted by making complaint to a justice of the peace, and requesting the issue of a summons directed to that person to appear before the court to show why he has not paid the sum which is outstanding."
The following are examples (but by no means exhaustive) of what are reasonable factors a recovery officer should take into account in exercising discretion to institute a complaint to the Magistrates court under paragraph (2) of regulation 34 of the Regulations:
1. the level of debt outstanding
2. any payments made subsequent to the full amount becoming due and time remaining of the financial year
3. are circumstances indicative of the debt being settled without resorting to enforcement
4. consider if enforcing the debt would unnecessarily subject the taxpayer to additional costs etc. and therefore amount to a penalty (see 3 above)
5. ensure monies have been prioritised to maintaining the in-year debt
6. allocate to the in-year any monies posted to arrears (or sufficient of it) that would if it had not been misallocated prevented the in-year liability also falling in arrears (see 5 above)
7. check for benefit claims or appeals already in the system and refrain from taking enforcement action where such genuine cases are unresolved
Q1. Does St Albans District Council exercise discretion before proceeding under regulation 34(2) of the Council Tax (Administration and Enforcement) Regulations 1992 to request a summons from a justice of the peace (it may be an automated process)
Q2. If yes to (1) what factors are taken into consideration
Yours faithfully,
Helen Barker
CORPORATE SERVICES
Head of Service - Simonne De Vall
Our Ref: 000004336
Please ask for: FOI Coordinator
Direct Dial: (01727) 819209
e-mail address: [St Albans District Council request email]
Date: 16th April 2020
Dear Ms Barker
Freedom of Information Request - acknowledgement
Reference:000004336
I write with regard to your request for information to St Albans City &
District Council. Your email was received by the Council on 10th April
2020.
Under Section 10(1) of the Freedom of Information Act 2000, we are
required to respond no later than 20 working days after the date we
receive your request.
This means that you should have a response by the 12th May 2020.
However, if we feel that we require further information to fulfill your
request we will write to inform you within the twenty day period [section
1(3)].
If we consider that complying with the request will exceed the cost limit
then we will write to tell you within 20 working days.
As a result of the Coronavirus (Covid-19) epidemic, some Council officers
will be providing support to our most vulnerable residents so this may
mean your response is later than we would wish. We will keep you informed
but please bear with us during this time.
Kind Regards
FOI Coordinator
Corporate Services
Privacy Notice for Freedom of Information (FOI)/Environmental Information
(EIR) Processes
This privacy notice explains how St Albans City & District Council (the
Data Controller) will use any personal information we collect about you
when you use our services.
What information do we collect about you?
The information that the Council will collect varies depending on how you
use the Council’s Services. We are using the information provided in this
case because we have a legal obligation (Art. 6(1)(c)). This means we
collect your personal information from you so that we can carry out a
function we are required by law to carry out i.e. responding to FOI and
EIR requests. You will usually provide the following information: your
contact information and details of your request [Art. 6(1)(a)]. We are
collecting this limited personal information so we can respond to your
request.
How will we use the information about you?
If you contact us for information, we will use your personal information
to allow us to send you the response. We may share your personal
information with other departments in order to provide you with the
response.
We will not share the personal information we hold with any external
organisations. We may be required to share your personal information with
the Police, Internal Audit, or similar agency, or another Council for the
purposes of preventing and detecting fraud.
We will ensure that all personal information is kept securely.
How long will you keep this information?
We will destroy this personal information 7 years after we have closed the
case.
Individuals’ Rights
You have a right to request a copy of the personal information that we
hold about you. If you would like a copy of some or all of your
information, please contact [1][St Albans District Council request email] and ask for a subject
access request.
If you consider we hold inaccurate personal information about you, you can
contact us to ask for this information to be corrected. We will consider
your request and respond within one month. Please contact
[2][email address].
You can find out more about your rights on our website:
[3]http://www.stalbans.gov.uk/council-and-d...
Changes to our Data Protection Policy
We have a Data Protection Policy in place and this can be found here:
[4]http://www.stalbans.gov.uk/Images/SADC%2...
We review this policy annually. An updated General Data Protection
Regulation version will appear here before 25^th May 2018.
Data Protection Officer
Our Data Protection Officer for the purposes of Articles 37 to 39 of the
General Data Protection Regulation is Charles Turner, Solicitor to the
Council. He can be contacted by emailing [5][email address] or
calling 01727 819209 for our Complaints Team.
How to contact us
Please contact us if you have any questions about our Data Protection
Policy, or concerns about how we handle your information: by emailing
[6][St Albans District Council request email] or write to us at: FOI Team, St Albans City &
District Council, St Peter’s Street, St Albans, AL1 3JE.
Complaints
You have a right to complain to the Information Commissioner if you are
unhappy with how we process your personal information. You can do so
through their website: [7]https://ico.org.uk/concerns/ or by emailing:
[8][email address] or calling their helpline on 0303 123 1113.
GDPR Privacy Notice – FOI and EIR Art 6(1)(c) Legal Obligation 02.5.18
****Disclaimer****
The information in this message should be regarded as Private and is
intended for the addressee only unless explicitly stated.
If you have received this message in error it must be deleted and the
sender
notified.
The views expressed in this message are personal and not necessarily
those of St Albans City and District Council unless explicitly stated.
Please be aware that emails sent to or received from St Albans City and
District Council may be intercepted and read by the council.
Interception will only occur to ensure compliance with council policies or
procedures or regulatory obligations, to prevent or deter crime, or for
the
purposes of essential maintenance or support of the email system.
Please note that the Council does not accept service by e-mail
The personal information you provide will be held in accordance with the
General Data Protection Regulation (GDPR) and the Council’s Data
Protection Policy. You can find more information about how we will handle
your personal information in our privacy notice: [9]Privacy Notice
References
Visible links
1. mailto:[St Albans District Council request email]
2. mailto:[email address]
3. http://www.stalbans.gov.uk/council-and-d...
4. http://www.stalbans.gov.uk/Images/SADC%2...
5. mailto:[email address]
6. mailto:[St Albans District Council request email]
7. https://ico.org.uk/concerns/
8. mailto:[email address]
9. http://www.stalbans.gov.uk/Images/Privac...
CORPORATE SERVICES
Head of Service - Simonne De Vall
Our Ref: 000004336
Please ask for: FOI Coordinator
Direct Dial: (01727) 819209
e-mail address: [St Albans District Council request email]
Date: 15th May 2020
Dear Ms Barker
Freedom of Information Request Ref. No. 000004336
I write with regard to your request for information sent by email to St
Albans City & District Council. Your email was received by the Council on
14th April 2020.
Under the Freedom of Information Act 2000, we are required to confirm what
information we hold, and if we do hold the information, disclose the
information, subject to exemptions or other provisions applying.
You requested:
Q1. Does St Albans District Council exercise discretion before proceeding
under regulation 34(2) of the Council Tax (Administration and Enforcement)
Regulations 1992 to request a summons from a justice of the peace (it may
be an automated process)
Q2. If yes to (1) what factors are taken into consideration
Our response:
We can confirm that we do hold this information.
Q1. The process at St Albans City & District Council is automated.
Q2. N/A
If you are dissatisfied with this response the Commissioner’s Office
recommends that you first refer the matter to the Council. You can do this
by writing to [1][St Albans District Council request email] asking for an internal review of my
decision. If you wish the Council to undertake an internal review, then
you must write to the Council within 40 working days of the date of this
letter. The Council will not consider any requests received after this
date unless there are exceptional circumstances for the delay.
You have a right to appeal to the Information Commissioner's Office at the
following address: Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF.
You must do this no later than two months after the Local Authority’s last
response to you.
Kind Regards
FOI Coordinator
Corporate Services
****Disclaimer****
The information in this message should be regarded as Private and is
intended for the addressee only unless explicitly stated.
If you have received this message in error it must be deleted and the
sender
notified.
The views expressed in this message are personal and not necessarily
those of St Albans City and District Council unless explicitly stated.
Please be aware that emails sent to or received from St Albans City and
District Council may be intercepted and read by the council.
Interception will only occur to ensure compliance with council policies or
procedures or regulatory obligations, to prevent or deter crime, or for
the
purposes of essential maintenance or support of the email system.
Please note for the time being during the Covid-19 pandemic, the
Council will accept service by email.
The personal information you provide will be held in accordance with the
General Data Protection Regulation (GDPR) and the Council’s Data
Protection Policy. You can find more information about how we will handle
your personal information in our privacy notice: [2]Privacy Notice
References
Visible links
1. mailto:[St Albans District Council request email]
2. https://www.stalbans.gov.uk/privacy-notice
Dear Debra Wardena,
Thank you for your response. On a related matter I would like it clarifying what the council's procedure is regarding recovery. For example, I would like it confirming the level of costs and at what stage of recovery they are applied. Also whether an arrangement is possible at final notice or after the summons stage and whether this avoids costs/proceeding to liability order. I have been unable to find this information on the council's website nor have I been able to find a publicly available debt recovery policy.
Yours sincerely,
Helen Barker
CORPORATE SERVICES
Head of Service - Simonne De Vall
Our Ref: 000004789
Please ask for: FOI Coordinator
Direct Dial: (01727) 819209
e-mail address: [St Albans District Council request email]
Date: 16th October 2020
Dear Ms Barker
Freedom of Information Request - acknowledgement
Reference:000004789
I write with regard to your request for information to St Albans City &
District Council. Your email was received by the Council on 16th October
2020.
Under Section 10(1) of the Freedom of Information Act 2000, we are
required to respond no later than 20 working days after the date we
receive your request.
This means that you should have a response by the 12th November 2020.
However, if we feel that we require further information to fulfill your
request we will write to inform you within the twenty day period [section
1(3)].
If we consider that complying with the request will exceed the cost limit
then we will write to tell you within 20 working days.
As a result of the Coronavirus (Covid-19) pandemic, some Council officers
will be providing support to our most vulnerable residents so this may
mean your response is later than we would wish. We will keep you informed
but please bear with us during this time.
Kind Regards
FOI Coordinator
Corporate Services
Privacy Notice for Freedom of Information (FOI)/Environmental Information
(EIR) Processes
This privacy notice explains how St Albans City & District Council (the
Data Controller) will use any personal information we collect about you
when you use our services.
What information do we collect about you?
The information that the Council will collect varies depending on how you
use the Council’s Services. We are using the information provided in this
case because we have a legal obligation (Art. 6(1)(c)). This means we
collect your personal information from you so that we can carry out a
function we are required by law to carry out i.e. responding to FOI and
EIR requests. You will usually provide the following information: your
contact information and details of your request [Art. 6(1)(a)]. We are
collecting this limited personal information so we can respond to your
request.
How will we use the information about you?
If you contact us for information, we will use your personal information
to allow us to send you the response. We may share your personal
information with other departments in order to provide you with the
response.
We will not share the personal information we hold with any external
organisations. We may be required to share your personal information with
the Police, Internal Audit, or similar agency, or another Council for the
purposes of preventing and detecting fraud.
We will ensure that all personal information is kept securely.
How long will you keep this information?
We will destroy this personal information 7 years after we have closed the
case.
Individuals’ Rights
You have a right to request a copy of the personal information that we
hold about you. If you would like a copy of some or all of your
information, please contact [1][St Albans District Council request email] and ask for a subject
access request.
If you consider we hold inaccurate personal information about you, you can
contact us to ask for this information to be corrected. We will consider
your request and respond within one month. Please contact
[2][email address].
You can find out more about your rights on our website:
[3]http://www.stalbans.gov.uk/council-and-d...
Changes to our Data Protection Policy
We have a Data Protection Policy in place and this can be found here:
[4]http://www.stalbans.gov.uk/Images/SADC%2...
We review this policy annually. An updated General Data Protection
Regulation version will appear here before 25^th May 2018.
Data Protection Officer
Our Data Protection Officer for the purposes of Articles 37 to 39 of the
General Data Protection Regulation is Charles Turner, Solicitor to the
Council. He can be contacted by emailing [5][email address] or
calling 01727 819209 for our Complaints Team.
How to contact us
Please contact us if you have any questions about our Data Protection
Policy, or concerns about how we handle your information: by emailing
[6][St Albans District Council request email] or write to us at: FOI Team, St Albans City &
District Council, St Peter’s Street, St Albans, AL1 3JE.
Complaints
You have a right to complain to the Information Commissioner if you are
unhappy with how we process your personal information. You can do so
through their website: [7]https://ico.org.uk/concerns/ or by emailing:
[8][email address] or calling their helpline on 0303 123 1113.
GDPR Privacy Notice – FOI and EIR Art 6(1)(c) Legal Obligation 02.5.18
Your vote matters; don’t lose it
The annual household registration canvass commences in July and every
property within the district will receive an email or letter. If you’re
asked to respond, please do so as soon as possible. Details of how to do
this will be provided.
Anyone who is not yet registered to vote will also need to register
individually. Visit [9]www.gov.uk/register-to-vote. Paper application
forms will be sent upon request.
For further information visit [10]www.stalbans.gov.uk/voting-and-elections
or call 01727 819294
Do you have a ‘MyStAlbans’ District Account?
To register, just go to [11]www.stalbans.gov.uk/mystalbansdistrictaccount
to access a personalised online account that gives you instant access to
lots of useful council services, wherever you live in the District.
[12][IMG]
****Disclaimer****
The information in this message should be regarded as Private and is
intended for the addressee only unless explicitly stated.
If you have received this message in error it must be deleted and the
sender
notified.
The views expressed in this message are personal and not necessarily
those of St Albans City and District Council unless explicitly stated.
Please be aware that emails sent to or received from St Albans City and
District Council may be intercepted and read by the council.
Interception will only occur to ensure compliance with council policies or
procedures or regulatory obligations, to prevent or deter crime, or for
the
purposes of essential maintenance or support of the email system.
Please note for the time being during the Covid-19 pandemic, the
Council will accept service by email.
The personal information you provide will be held in accordance with the
General Data Protection Regulation (GDPR) and the Council’s Data
Protection Policy. You can find more information about how we will handle
your personal information in our privacy notice: [13]Privacy Notice
References
Visible links
1. mailto:[St Albans District Council request email]
2. mailto:[email address]
3. http://www.stalbans.gov.uk/council-and-d...
4. http://www.stalbans.gov.uk/Images/SADC%2...
5. mailto:[email address]
6. mailto:[St Albans District Council request email]
7. https://ico.org.uk/concerns/
8. mailto:[email address]
9. http://www.gov.uk/register-to-vote
10. http://www.stalbans.gov.uk/voting-and-el...
11. http://www.stalbans.gov.uk/mystalbansdis...
12. https://stalbans.force.com/mysadc/s/
13. https://www.stalbans.gov.uk/privacy-notice
CORPORATE SERVICES
Head of Service - Simonne De Vall
Our Ref: 000004789
Please ask for: FOI Coordinator
Direct Dial: (01727) 819209
e-mail address: [St Albans District Council request email]
Date: 13th November 2020
Dear Ms Barker
Freedom of Information Request Ref. No. 000004789
I write with regard to your request for information sent by email to St
Albans City & District Council. Your email was received by the Council on
16th October 2020
Under the Freedom of Information Act 2000, we are required to confirm what
information we hold, and if we do hold the information, disclose the
information, subject to exemptions or other provisions applying.
You requested:
On a related matter I would like it clarifying what the council's
procedure is regarding recovery. For example, I would like it confirming
the level of costs and at what stage of recovery they are applied. Also
whether an arrangement is possible at final notice or after the summons
stage and whether this avoids costs/proceeding to liability order. I have
been unable to find this information on the council's website nor have I
been able to find a publicly available debt recovery policy.
Our response:
Recovery costs are £82.00 summons costs and £12.00 liability order costs.
£82.00 is applied when a summons is issued, if the arrears including the
costs are paid in full prior to the court date then the liability order
costs do not become payable and the council tax payer just pays the costs
of £82.00 and the balance owing.
When the summons is issued an arrangement is included on the notice but it
will include the liability costs because if you pay as per the arrangement
it will go down the recovery route and a liability order will be granted
which means all costs are payable.
If a final notice is issued technically the full balance becomes payable
because a council tax payer has lost the right to pay by instalments and
if paid in full within the specified time on the notice no costs are
applied.
If you are dissatisfied with this response the Commissioner’s Office
recommends that you first refer the matter to the Council. You can do this
by writing to [1][St Albans District Council request email] asking for an internal review of my
decision. If you wish the Council to undertake an internal review, then
you must write to the Council within 40 working days of the date of this
letter. The Council will not consider any requests received after this
date unless there are exceptional circumstances for the delay.
You have a right to appeal to the Information Commissioner's Office at the
following address: Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF.
You must do this no later than two months after the Local Authority’s last
response to you.
Kind Regards
FOI Coordinator
Corporate Services
Your vote matters; don’t lose it
The annual household registration canvass commences in July and every
property within the district will receive an email or letter. If you’re
asked to respond, please do so as soon as possible. Details of how to do
this will be provided.
Anyone who is not yet registered to vote will also need to register
individually. Visit [2]www.gov.uk/register-to-vote. Paper application
forms will be sent upon request.
For further information visit [3]www.stalbans.gov.uk/voting-and-elections
or call 01727 819294
Do you have a ‘MyStAlbans’ District Account?
To register, just go to [4]www.stalbans.gov.uk/mystalbansdistrictaccount
to access a personalised online account that gives you instant access to
lots of useful council services, wherever you live in the District.
[5][IMG]
****Disclaimer****
The information in this message should be regarded as Private and is
intended for the addressee only unless explicitly stated.
If you have received this message in error it must be deleted and the
sender
notified.
The views expressed in this message are personal and not necessarily
those of St Albans City and District Council unless explicitly stated.
Please be aware that emails sent to or received from St Albans City and
District Council may be intercepted and read by the council.
Interception will only occur to ensure compliance with council policies or
procedures or regulatory obligations, to prevent or deter crime, or for
the
purposes of essential maintenance or support of the email system.
Please note for the time being during the Covid-19 pandemic, the
Council will accept service by email.
The personal information you provide will be held in accordance with the
General Data Protection Regulation (GDPR) and the Council’s Data
Protection Policy. You can find more information about how we will handle
your personal information in our privacy notice: [6]Privacy Notice
References
Visible links
1. mailto:[St Albans District Council request email]
2. http://www.gov.uk/register-to-vote
3. http://www.stalbans.gov.uk/voting-and-el...
4. http://www.stalbans.gov.uk/mystalbansdis...
5. https://stalbans.force.com/mysadc/s/
6. https://www.stalbans.gov.uk/privacy-notice
Dear Nancy Dagniaux,
"If a final notice is issued technically the full balance becomes payable because a council tax payer has lost the right to pay by instalments and if paid in full within the specified time on the notice no costs are applied. "
Does the above serve as confirmation that an arrangement is not possible at final notice?
Yours sincerely,
Helen Barker
Good Afternoon,
I am informed as follow: Officially when a final notice is issued a
charge-payer has lost the right to pay by instalments, however it is not
impossible to make an arrangement because we treat all enquiries on a case
by case basis.
Regards,
Nancy
Nancy Dagniaux
PA to Colm O’Callaghan, Deputy Chief Executive (Finance & Legal)
Finance & Legal Department
St Albans District Council
Tel: 01727819217
Ext: 9217
www.stalbans.gov.uk/contact-us
Dear Nancy Dagniaux,
Thank you for clarifying your response.
Since I submitted my request a number of anomalies have come to light regarding the enforcement procedure in the area concerned. However, I do not wish to pursue this, though the council might want to reconsider its actions regarding the recovery of Council Tax in light of the issues. Note later on under the heading 'NO LEGAL BASIS TO PURSUE LIABILITY ORDER ONCE AN AMOUNT AGREED' the point discussed is not a discretionary matter. I suggest this and the other points raised are considered by the Monitoring Officer, but that is of course a matter for the council.
As the council has stated, discretion is not exercised at the point where a decision is needed to be made about whether to request a summons (it is automated). However, it is evident that discretion is applied earlier than this, after a summons has been issued but before a liability order is obtained and after a liability order has been obtained, primarily to make payment arrangements which need to be monitored after the debt is secured by a liability order. The actual process of running the complaint list and the summonses is automated for which the defendant incurs disproportionate costs.
It is apparent that the defendant incurs a £82.00 sum in respect of the council requesting the issue of a summons (an automated procedure). However, that sum actually covers the council's additional expenditure in respect of sending out reminders and officer time engaging with customers who query their accounts at this point. Also the same for final notices (see below) and after a summons has been issued in respect of customers who query their accounts to arrange payment plans which are conditioned, in the case of the latter, upon the council obtaining a Liability Order (to secure the debt). A total £94.00 court costs are added comprising summons costs of £82.00 plus a further £12.00 for the Liability Order. The £12.00 sum is added to the £82.00 costs already incurred for the request of the summons in respect of the accounts of all customers who have not paid the total amount outstanding of their liability before the court hearing, whether or not they take advantage of the pre-arranged payment plan. This is to compensate the council for the officer time attributed to making the application for a Liability Order (on day of the hearing).
Before the summons stage (final notice), it is possible, in some cases, for a customer to avoid summons costs, for example, a taxpayer who has lost her right to pay by instalments may have them effectively re-instated if the council agrees to a payment arrangement. Discretion whether to enter into a payment agreement with a taxpayer is applied again once the council has obtained a liability order (as an alternative to taking recovery action) but by that time she would have had the total £94.00 court costs added to the debt and included in the payment plan.
So the costs in reality cover the council's expenditure (additional to the issue of the summons) attributable to before the summons is requested, both after the summons is requested but before the liability order application and after the order has been obtained in respect of officer time engaging with customers who agree to enter into payment agreements. The costs must therefore with absolute certainty cover the general administration of the council tax and enforcement departments.
RELEVANT LEGISLATION AND CASE LAW
I understand that the council must adhere to the Council Tax (Administration and Enforcement) Regulations 1992 and also be mindful of all established case law regarding the area concerned.
I am aware of a number of cases but particularly two which I would like to refer to regarding your response namely R (Nicolson) v Tottenham Magistrates [2015] EWHC 1252 (Admin) and Williams v East Northamptonshire [2016] EWHC 470 (Admin).
Williams v East Northamptonshire [2016] EWHC 470 (Admin)
The council confirms that £82.00 of the costs are applied when a summons is issued (presumably added to the customer's account).
I am aware that in the East Northamptonshire case, the judgment went to some lengths to clarify the position with regard to when, i.e. at what stage it was permissible for a billing authority to add summons costs to a customer's account. In essence, what the judgment determined was that it was entirely lawful for the billing authority to inform the customer by stating on the summons the amount of costs it would ask for in the event it proceeded to make the application at court for a Liability Order. Implicit in this is that it is impermissible to add to the customers account at this point the costs claimed by the billing authority because there is only any legal basis to do so once the court has granted the Liability Order. The following in paragraph 28 of the judgment bears this out:
"...I have come to the clear conclusion that the summons is not an abuse of the process or otherwise invalid by reason of the fact that it includes reference to a claim for costs. The heading of the summons makes clear it seeks recovery of the Council Tax only. The complaint is therefore only as to the non payment of the Council Tax. The tax due is the Council Tax which is separately identified both on the first page and on the subsequent page. It is abundantly clear that the subject matter of the summons is therefore the recipient’s liability for the Council Tax...."
NO LEGAL BASIS TO PURSUE LIABILITY ORDER ONCE AN AMOUNT AGREED
From the information provided it is evident that when a summons is issued, but before the Court hearing, it is possible to agree a payment arrangement but on the basis that the court will still be asked to grant a Liability Order and the payment plan will include the costs incurred in obtaining the Liability Order (£82.00 summons and £12.00 liability order).
These costs are incurred at a point after the customer has tendered payment. Therefore, the cost attributable to this activity could not lawfully be included in the costs claimed because expenditure may only be recharged that has been incurred by the authority up to the time of the payment or tender and clearly resources called upon by engaging staff in the matter would occur after payment was tendered. Expenditure incurred by the authority after that point falls on the wrong side of line to be referable to the summons and would only be lawfully recharged (if eligible) in respect of those who had not paid or tendered to the authority the aggregate of the outstanding amount and costs before the court hearing because only those customers may be proceeded against further and incur additional costs.
To be clear, it is not just the costs in these circumstances which are artificially inflated by either front loading or being charged where there is no legal basis at all which is a point of contention. The consequences are that for all those cases against whom the council proceeds in order to secure the debt once an amount has been agreed (the payment arrangement), the action is unlawful because regulation 34 of SI 1992/613 provides that the authority shall accept the amount and the application shall not be proceeded with in these circumstances.
Paragraph 34(5) of the regulations, are as follows (with emphasis):
“(5) If, after a summons has been issued in accordance with paragraph (2) but before the application is heard, there is paid or TENDERED to the authority an amount equal to the aggregate of—
(a) the sum specified in the summons as the sum outstanding or so much of it as remains outstanding (as the case may be); and
(b) a sum of an amount equal to the costs reasonably incurred by the authority in connection with the application UP TO THE TIME OF THE payment or TENDER,
the authority shall accept the amount and the application shall not be proceeded with.”
The authority could not defend its actions on the grounds that an arrangement does not constitute payment therefore it is entitled to obtain a liability order to secure the debt because the law does not say that the amount must be paid for the application not to be proceeded with, only that the amount tendered is accepted (the aggregate of the outstanding amount and costs). By agreeing a payment plan which encompasses the outstanding amount and costs (costs which are properly referable to the enforcement process) the authority has accepted the amount and so there is no legal basis to proceed to obtain a liability order from the Magistrates' court.
Notwithstanding the lack of provision to proceed once the aggregate of the outstanding amount and costs has been agreed by the council, even if it were permissible, these costs and any other incurred would have further criteria to meet for the court to be satisfied that they were reasonably incurred.
R (Nicolson) v Tottenham Magistrates [2015] EWHC 1252 (Admin)
The Tottenham case provides in the judgment some general guidance regarding Council Tax Liability Order court costs and give clues (paragraphs 35 and 46) as to what should not be included in the costs and an approach that might be legitimate in respect of averaging the costs.
“It is clear that there must be a sufficient link between the costs in question and the process of obtaining the liability order. It would obviously be impermissible (for example) to include in the costs claimed any element referable to the costs of executing the order after it was obtained, or to the overall administration of council tax in the area concerned.” (Paragraph 35)
"In principle, therefore, provided that the right types of costs and expenses are taken into account, and provided that due consideration is given to the dangers of double-counting, or of artificial inflation of costs, it may be a legitimate approach for a local authority to calculate and aggregate the relevant costs it has incurred in the previous year, and divide that up by the previous (or anticipated) number of summonses over twelve months so as to provide an average figure which could be levied across the board in "standard" cases.." (Paragraph 46)
However, the above does not go so far as to specify what the right types of costs and expenses are, plus the 1992 Council Tax Regulations (and associated guidance) also apply so any provisions in those capable of establishing what are "relevant costs" need taking into account. Crucially, the possibility that the approach of averaging the costs is conditional upon the right types of costs and expenses being taken into account and being mindful of the dangers of artificially inflating the costs.
Government guidance from 1993 and 2013 both provide within them that "the Court may wish to be satisfied that the amount claimed by way of costs in any individual case is no more than that reasonably incurred by the authority". They do so because the court is obliged to hear individually anyone wishing to raise a defence and regulation 35(1) of the Regulations provides that a single liability order may deal with one person and one amount.
The streamlining of the process, i.e. by hearing cases of all the defendants in a bulk application who decline the invitation to defend themselves would if the law was properly applied be met with a forfeiture of costs income because only expenditure which is common to every defendant may lawfully be included in a standard sum. For example, even if expenditure attributable to engaging with customers agreeing payment arrangements was not impermissible for the reasons discussed, they would not otherwise be deemed "relevant costs" to be included in the calculation because the expenditure is not common to every defendant but also because it would be impermissible to include in the costs any element referable to the overall administration of council tax in the area concerned (para 35, Tottenham judgment).
There is also the anomaly that the customers who to the greatest degree drive the level of activity are ironically avoiding the recovery process and not incurring any costs. These are generally those customers who have negotiated their instalments being re-instated, whilst customers who settle their debt without causing additional work are left subsidising this expenditure when bizarrely none is incurred in connection with their summonses.
Expanding further on the concept of "reasonably incurred". If the costs are to be recharged lawfully to the customer it must have been reasonable for the council to have incurred them. Any expenditure recharged to the customer in respect of costs has not been reasonably incurred which is attributable to activity carried out by the council above what is necessary to secure the court order. Obtaining the order is merely a formality and it functions simply as the vehicle empowering the council to make use of a range of enforcement measures to pursue monies owed should it be necessary once it is in place, so with that in mind and that applications are made en masse, then the vast majority of costs typically claimed by local authorities are not necessary in a process which amounts to no more than seeking permission from the court.
Expenditure attributable to work carried out, which is clearly by its nature referable to the overall administration (in the area of council tax concerned) would not by virtue of it coinciding with when the complaint is in progress be sufficient to link it to the actual process of obtaining the liability order. This is separable from any that is permissible to be included in the costs claimed and would need omitting from the calculation because it would not be reasonable to expect those paying them to subsidise general administration or to be exploited as a means of funding revenues/recovery staff - and - because it is not common to every defendant.
It is generally accepted by billing authorities that defences against the issue of a Liability Order at the court hearing which are considered to be valid are restricted to no more than a handful. However, there are seven obvious additional defences that would be valid if no discretion is exercised prior to requesting the issue of a summons and expenditure incurred by the council outside the process of applying for and obtaining a liability order is included in those costs. They would be that;
1. the billing authority has not (does not) comply with regulation 34(1) of the Council Tax (Administration and Enforcement) Regulations 1992;
2. expenditure amounting to £82.00 was not incurred by the council in respect of instituting the complaint;
3. the costs have been inflated to subsidise customers who opt to make payment in line with the pre-arranged payment plans;
4. the costs in respect of instituting the summons include expenditure which is incurred by the council after that action;
5. the costs have been inflated to subsidise expenditure incurred by the council in respect of potential applications to the court but which are not made by virtue of negotiations that have taken place to reinstate instalments;
6. the costs in general have been inflated to subsidise expenditure incurred by the council in respect of officer time monitoring arrangements and/or engaging with customers after the process of applying for and obtaining the liability order has ended; and
7. the costs in general have been inflated to fund the running of the council tax and enforcement departments and/or the overall administration of council tax in the area concerned.
Yours sincerely,
Helen Barker
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