The Ombudsman's final decision:
Summary: Ms X complained the Council instructed bailiffs to chase a debt in 2020 which she accrued before 2013. Ms X also complained the Council instructed bailiffs despite her continuing to pay this debt through her benefits. Ms X says this matter has caused her stress and anxiety. The Ombudsman does not find fault with the Council chasing the debt through deductions to Ms X’s benefits. The Ombudsman does find fault with the Council passing this matter to a bailiff for collection and for how the Council handling Ms X’s complaint. The Council agreed to the Ombudsman’s recommendations to apologise to Ms X and apply a further reduction to Ms X’s debt of £72 in addition to the £150 already applied.
- Ms X complained the Council instructed bailiffs to chase a debt in 2020 which she accrued before 2013. Ms X says this debt should be subject to the six-year limit outlined in the Limitation Act 1980.
- Ms X also complained the Council instructed bailiffs despite her continuing to pay this debt through her benefits. Ms X says the Council applied debt collection charges because of this.
- Ms X says this matter has caused her stress and anxiety.
What I have investigated
- I have investigated Ms X’s complaint about the Council chasing for a debt accrued in 2013 and for instructing a bailiff to collect this debt.
- I have not investigated the validity of the debt accrued in 2013. I have explained my reasons for this in the section titled “parts of the complaint that I did not investigate”.
The Ombudsman’s role and powers
- We cannot investigate late complaints unless we decide there are good reasons. Late complaints are when someone takes more than 12 months to complain to us about something a council has done. (Local Government Act 1974, sections 26B and 34D, as amended)
- We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
- If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
How I considered this complaint
- I have considered all the information Ms X provided. I have also asked the Council questions and requested information, and in turn have considered the Council’s response.
- Ms X and the Council had opportunity to comment on my draft decision. The Council accepted the recommendations and Ms X did provide comment. On this basis I have made my final decision.
What I found
- The time limit for recovery action is six years from the date on which the cause of the recovery action started. (The Limitation Act 1980, Section 9(2))
- The case of Regentford Ltd v Thanet District Council ( EWHC 246 (Admin)) clarified the six-year limitation period from the Limitation Act 1980. It advised this date starts from the date of service of the notice, or demand, to pay from a council and not the start date of the charges.
Council complaints procedure (November 2020)
- The Council has a two-stage complaints procedure.
- When a person complains to the Council it will consider the complaint at Stage 1 first. The Council will acknowledge receipt of a complaint within three working days and provide a response within 10 working days.
- If a person is unhappy with the Council’s Stage 1 response they can request escalation to Stage 2. Stage 2 is the Council’s final complaint stage.
- The Council will decide within three working days if it will accept the Stage 2 complaint. The Council will provide its Stage 2 complaint response in 20 working days.
- We expect bodies in jurisdiction to treat people fairly and with respect, and not to expose the public to unnecessary distress, harm or risk as a result of their actions or inactions. Such injustice cannot generally be remedied by a payment, so we usually seek a symbolic amount to acknowledge the impact of fault on the complainant. The amount depends on the circumstances of the case.
- When we assess distress, we consider the complainant’s individual circumstances (such as their state of health and age). In reaching a view on remedy we will consider all the circumstances including:
- the severity of the distress;
- the length of time involved;
- the number of people affected (for example, members of the complainant’s family as well as the complainant);
- whether the person affected is vulnerable and affected by distress more severely than most people; and
- any relevant professional opinion about the effects on any individual.
- when a Council refuses to consider a complaint.
- When a person needed to ask another body, such as a Councillor or MP, for help before the Council considers a complaint.
Events before 2020
- Ms X’s Council Tax benefit claim was terminated causing an overpayment in Council Tax benefits to Ms X in March 2013.
- The Council could not get repayment from Ms X so applied to the Magistrates Court for a liability order. The Magistrates Court granted this in December 2013.
- Ms X disputed the money owed to the Council and appealed to the tribunal. The tribunal disallowed Ms X’s appeal in May 2014. Ms X attended a court summons in October 2014 and appealed to the Upper tribunal. In February 2015 the Upper Tribunal refused to hear Ms X’s appeal.
- Ms X raised a complaint with the Local Government and Social Care Ombudsman (the Ombudsman) who reached its decision in September 2015. Following this, the Council confirmed it would recover Ms X’s debt through deductions from her benefits by the Department of Work and Pensions (DWP).
- In January 2016, the DWP started taking weekly deductions from Ms X’s Employment Support Allowance benefit.
- In June 2018, the Council arranged for a bailiff to collect the outstanding debt from Ms X. Ms X complained to the Council. The Council confirmed the DWP was still collecting the debt through deductions from Ms X’s benefits and stopped the collection activity on 18 July 2018.
Events from 2020
- The Council sent Ms X a letter on 23 July 2020. It advised it was going to start taking deductions from Ms X’s Income Support related to her Job Seekers Allowance to repay the historic Council Tax liability.
- Ms X contacted the Council on 1 August 2020 and 9 August 2020 to dispute the deductions from her Income Support. Ms X asked the Council to review the matter. The Council did not respond to Ms X’s contacts.
- The Council instructed a bailiff to collect the debt from Ms X on 19 October 2020.
- The bailiff wrote to Ms X on 27 October 2020 advising of the debt passed over by the Council and inviting Ms X to discuss repayment of the debt with it.
- Ms X contacted the bailiff and Council on 30 October 2020 to dispute the collections activity. Ms X told the Council she was repaying the debt through deductions by the DWP. Ms X told the bailiffs about her vulnerability.
- The bailiff wrote to Ms X to advise it had placed a 30-day hold on her enforcement case to allow Ms X time to provide evidence of her vulnerability.
- Ms X also contacted the DWP on 2 November 2020 who confirmed it was still applying deductions to her Employment Support Allowance and had been doing so since 12 January 2016.
- Ms X contacted the Ombudsman on 3 November 2020 to complain about the Council. Ms X also wrote to the Council again on 4 November 2020 to complain about the collections activity. The Council did not respond to Ms X’s contact.
- The Ombudsman contacted the Council on 21 November 2020 to ask if it had completed its complaints process. The Council confirmed with the Ombudsman it had opened a Stage 1 complaint on 23 November 2020 and it would provide this to Ms X by 8 December 2020. The Council also promised a hold to collections activity while it investigated the complaint and contacted the bailiff accordingly.
- The Council sent Ms X a Stage 1 complaint response on 7 December 2020. The Council said:
- It had confirmed the DWP was already recovering the debt through deductions.
- It had made a clerical error causing it to refer the debt to a bailiff.
- It had now asked the bailiff to stop collections activity with immediate effect.
- It had applied a reduction of £150 to Ms X’s debt as a gesture of goodwill and apologised for the distress and inconvenience caused.
- The Council Tax liability it was chasing was because of the Council Tax overpayment in 2013.
- The Tribunal and Upper Tribunal had previously rejected Ms X’s appeals about this debt.
- It passed the debt onto the DWP since Ms X did not pay the Council directly.
- It could hold Ms X liable for this debt because it starting chasing this debt within six years of its accrual.
- It made an administration error causing it to pass the debt on to a bailiff despite the DWP taking deductions.
- It considered the circumstances of Ms X’s complaint did not warrant more than the £150 goodwill award it had already applied.
- Ms X could approach the Ombudsman with her complaint.
Liability for debt
- Ms X disputed liability for the debt because the Council only started debt collection action in 2020.
- Ms X accrued the debt before 2013. The Limitation Act 1980 applies a six-year time limit on a council starting recovery action against a debt. However, this six-year date starts from the Council’s demand to pay.
- The Council issued its first notice of overpayment on 26 March 2013. This means the Council would have six years from this date to start recovery action. If the Council had taken no recovery action before 2020, it would be outside the six year time limit set out in the Limitation Act 1980.
- However, the Council had already started collection activity before 2020. Notably, the DWP started taking deductions from Ms X’s benefits to repay the debt in January 2016. This means the Council started recovery action well within the time limit set by the Limitation Act 1980.
- Since the Council began recovery action within the six-year time limit and this recovery is continuing, Ms X is still liable for the remaining debt owed. I do not find fault with the Council finding that Ms X is liable for the debt.
Council collection activity
- Ms X complained the Council passed the debt to a bailiff despite her repaying the debt through deductions by the DWP.
- The Council tried to take deductions from Ms X’s Income Support in August 2020. Since the DWP was already taking deductions from Ms X’s Employment Support Allowance, the Council should not have tried to duplicate deductions. This was fault.
- The Council instructed a bailiff to recover the debt from Ms X on 19 October 2020. This debt remained with the bailiff until 8 December 2020.
- The Council has already accepted it should not have passed this debt to the bailiff. This was fault.
- During the time the bailiff held this debt it sent one letter to Ms X to chase for payment. The bailiff also applied £72 in collection charges to the debt. The Council was at fault for any distress caused by this letter and for applying invalid collection charges.
- The other letters the bailiff sent related to Ms X providing evidence of her vulnerability. The bailiff also engaged with Ms X in discussions over her vulnerability and applied a hold to collection activity while Ms X provided evidence of this. I do not find fault with how the bailiff handled these contacts with Ms X.
- The Council has removed the £72 collection charges when it applied the £150 goodwill award. The Council recalled the debt in just over seven weeks and has removed any collection charges applied. The Council does not need to take any further remedial action to put Ms X back in the same position she would have been in had its fault not occurred.
- I have addressed the suitability of the Council’s remaining £78 goodwill award in paragraphs 58 to 61.
- Ms X complained to the Council on 1 August 2020, 9 August 2020, 30 October 2020 and 4 November 2020. The Council failed to respond to any of Ms X’s contacts, investigate her concerns or log a complaint.
- The Council only logged a complaint for Ms X following contact from the Ombudsman on 21 November 2020. This is fault. This fault from the Council caused Ms X added time and trouble in raising a complaint with the Council.
- While the Council sent its Stage 1 complaint response to Ms X within the timescales set out in its complaints procedure, it failed to do so in response to Ms X’s Stage 2 request.
- The Council took 58 working days to provide a Stage 2 complaint response to Ms X following her request on 18 December 2020. This means the Council provided the response 38 days after the timescale set in its corporate complaints procedure. This is fault causing Ms X extra time and trouble in raising a complaint with the Council.
- As detailed in paragraphs 52 and 53, the Council reduced Ms X’s debt by £150. £72 of this award removed the incorrectly applied collection charges. This means the Council provided a £78 goodwill award to reflect any time, trouble and distress Ms X experienced through its collection activity and complaint handling.
- Ms X has been handling her complaint with the Council from August 2020 to March 2021, seven months. The Council failed to correspondence with Ms X for the first four months until the Ombudsman asked it to raise a complaint.
- The Council’s action caused Ms X distress through fear of collection activity whether through duplicated deductions or by bailiffs for four months from August 2020 until December 2020. The Council’s actions would also likely have caused Ms X heightened distress because of her vulnerability.
- I do not consider the distress, time and inconvenience in this case is severe or prolonged. However, I also do not consider the Council’s award of £78 goodwill is enough in the circumstances of Ms X’s complaint. The extra £72 the Council applied to remove the collection charges should be considered as goodwill and not removal of incorrect fees. This would allow for a goodwill award of £150 as well as ensuring Ms X is back in the same position she would have been in had the Council’s fault not occurred.
- Within one month of the Ombudsman’s final decision the Council should:
- Apply a further reduction to Ms X’s debt of £72 to reflect the distress, time and inconvenience the Council’s fault caused Ms X.
- Provide Ms X with confirmation of this further reduction and an apology for the distress, time and inconvenience.
- There was fault by the Council. As the Council has agreed to my recommendations I have completed my investigation.
Parts of the complaint that I did not investigate
- I have not investigated the validity of the debt Ms X accrued before 2013.
- This is because a tribunal has already decided Ms X was liable for this debt and the Ombudsman has already considered this complaint in a previous decision.
- Ms X’s complaint also relates to a debt accrued more than 12 months ago. I see no good reason to investigate the accrual of this debt or Ms X’s liability for this debt in the circumstances.
Investigator's decision on behalf of the Ombudsman