In the past year, local authorities in England and Wales obtained approx 3.5 million Liability Orders for council tax and non domestic rate arrears and with forthcoming changes to the benefits system, it is anticipated that this figure will increase significantly in the coming year.
The Summons and Summons Costs
Where an outstanding amount of council tax has not been paid after reminders have been sent, a local authority may apply to the magistrates’ court for authorisation to issue a summons. The summons will state the time and place of the hearing to establish liability (commonly referred to as a Liability Order hearing)
The regulations allow the local authority to also charge additional fees/costs for issuing a summons and for obtaining the Liability Order. These typically range from between £85 to £130 for Council Tax to as much as £250 for Business Rates (NNDR).
Do I need to attend the hearing at the Magistrates Court?
No. Unless the amount claimed on the summons is wrong or you are not the person named on the summons, the Magistrate must grant a liability order. However, if you do attend the hearing you will normally be able to speak with a representative from the local authority and in most cases, and agreement can be reached to settle the debt by way of affordable payments. The Liability Order will still be granted, but it should be possible avoid the debt being passed to bailiffs. If you do consider attending, it would be helpful to take any evidence of financial hardship.
What will happen at the hearing?
To obtain a Liability Order, a representative of the Local Authority will present a spreadsheet to the Magistrates Court consisting of the names, addresses and reference numbers of those debtors in arrears with Council Tax or Non Domestic Rates. This is officially called a Complaint List. Unless there are objections, (which are rare), the Court will rubberstamp the Complaint List with a court stamp. This has the effect of formally establishing that there is a liability (to the council) and enables the local authority to take a range of enforcement actions to recover the debt.
Will I be sent a copy of the Liability Order?
No, a ‘Liability Order’ is not a prescribed court document. The stamped ‘Compliant List’ gives the legal authority to the relevant council to use a range of enforcement methods (attachment of earnings, attachment against benefits, bailiff enforcement etc) to recover the liability.
Although there had previously been a requirement under Schedule 2 of the The Council Tax (Administration and Enforcement) Regulations 1992 for a form (Form A) of Liability Order to be provided to the debtor, this requirement was repealed in 2003 under the Council Tax (Administration and Enforcement) (Amendment) (No. 2) (England) Regulations 2003. For the avoidance of doubt, there is no such document as a Liability Order.
Is a Liability Order ‘statute barred’ after 6 years?
No, a Liability Order is not subject to the Statute of Limitations Act .
What will happen after a Liability Order has been granted?
The local authority are not under any obligation to write to you to advise that a Liability Order has been obtained and if they wish, they can simply pass the account to a firm of bailiffs.
If bailiff enforcement is to be avoided, it is vital for debtors to contact the local authority at the earliest possible stage to negotiate ways in which to settle the debt. Once the Liability Order has been passed by the council to their bailiffs, it is very rare indeed for the local authority to recall the debt.