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Administration and Enforcement Restriction Orders

Volume 713: debated on Tuesday 27 October 2009

Statement

My honourable friend the Parliamentary Under-Secretary of State for Justice (Bridget Prentice) has made the following Written Ministerial Statement.

On 18 September the Ministry of Justice published the consultation paper entitled Administration and Enforcement Restriction Orders: Setting the Parameters. I have today deposited copies of the consultation paper in the Libraries of both Houses, in the Vote Office, the Printed Paper Office and on the internet at www.justice.gov.uk.

This was a formal consultation exercise undertaken by the Ministry of Justice to discuss the areas where secondary legislation will be used to establish the constraints and limits required for the effective operation of the revised administration order (AO) and the enforcement restriction order (ERO) schemes. These are contained in chapters 1 and 2 of Part 5 of the Tribunals, Courts and Enforcement Act (TCEA) 2007.

Responses were received from various sectors of the community including the creditor, debt advice, legal and government sectors as well as individuals, and were generally supportive of the proposals.

However, due to the need for supporting IT changes in the county courts it will not be possible to introduce the reformed AO scheme and the ERO until April 2011, at the earliest. This would result in delay in providing help and support to debtors.

The ERO would only be available to those who have experienced a sudden, unforeseen change in circumstances from which they are likely to recover within six months, but it has become clear that this is not fully understood and there is a significant risk that large numbers of debtors might apply for an ERO, without considering the requirement for evidence of recovery in the short term, in the mistaken belief that it will be available to them.

If debtors apply for an ERO in inappropriate circumstances, this could worsen their position as:

if awarded, interest will continue to be added to the debt;

if not awarded, they will have wasted time in identifying an appropriate workable solution; and

it would place a significant strain on HMCS as these would be priority hearings, which need to be heard on the same day as the application is received.