The monthly round-up of news, guidance, legislation, and case law from Shelter's Specialist Debt Advice Service.
News and legal updates
This month's legal round up includes updated DRO guidance on tobacco and alcohol, claimant data inclusion on credit files, FCA Consumer Duty reports, a new debt advice impact report of MaPS-funded debt advice services and Ofgem consultations.
Updated DRO tobacco and alcohol guidance
The Insolvency Service DRO team emailed Competent Authorities advising them to disregard the previous tobacco and alcohol guidance outlined in the DRO Newsletter dated 15 November 2024.
The DRO Team has updated its guidance:
Alcohol and Tobacco
Alcohol and tobacco items are allowable expenditure within the Standard Financial Statement guidelines.
The approved intermediary is expected to ensure that the expenses of the individual are within normal levels, using the Standard Financial Statement for consistency.
The form contains “trigger” points to show up areas where the individual’s expenses might exceed those considered normal. It is the responsibility of the intermediary to ensure that the individual’s expenses do not exceed the trigger points.
Alcohol and tobacco items are allowed so that a realistic picture of the spending is provided and are allowable expenditure, provided the trigger for the “Food and Housekeeping” category isn’t exceeded.
In exceptional circumstances (e.g. a medical condition requiring expensive food), the guidance may be breeched, but they should not normally be exceeded because of alcohol and/or tobacco products. If these items are included, costs need to be reduced within the overall category or across the communications and leisure and personal costs categories, to bring spending within reasonable limits.
If the triggers are exceeded and you believe there are exceptional circumstances as to why this should be allowable, you must email the DRO preorder inbox on submission with details. We will review these on a case-by-case basis.
The DRO team confirmed that the guidance is still subject to editing and final changes.
Government to legislate to include claimant data on the Register of Judgments
The Ministry of Justice (MoJ) published its consultation outcome on including claimant data on the Register of Judgments, Orders and Fines. The MoJ believes that the inclusion of claimant names on the Register would be beneficial to consumers and should be implemented.
The government intends to amend the Register of Judgments Orders and Fines Regulations 2005 via a Statutory Instrument to show claimant data. This will apply to money judgments in the County Court and High Court published on the Register.
Gov.uk claimant data consultation outcome
FCA Consumer Duty board report
The Financial Conduct Authority (FCA) published their report on Consumer Duty board reports with examples of good practice and areas for improvement. The FCA reviewed Consumer Duty board reports from 180 firms across various sectors and included small, medium and large firms.
The FCA recognised that the best reports were structured in a way that made them easy for boards to scrutinise key elements of FCA rules and guidance.
FCA Consumer Duty board reports
Money and Pensions Service debt advice impact report published
The Money and Pensions Service (MaPS) published its first debt advice impact report on the work of MaPS-funded debt advice. The report highlights that MaPS-funded services provide essential advice, support and have a positive impact on peoples’ financial resilience and wellbeing.
MaPS-funded debt advice impact report 2023/24
Ofgem consultations
Ofgem has launched two consultations.
The first invites views on whether to introduce a debt relief scheme for people who have got behind with their energy bills during the energy crisis and may struggle to repay.
The second is to gather evidence on potential future reforms to improve debt management in the energy sector.
The consultations close on 6 February 2025.
Ofgem consultation - Resetting the energy debt landscape: the case for a debt relief scheme
Ofgem consultation - Improving debt standards in the domestic retail market
Ofgem proposes new zero standing charge tariffs
Ofgem has also proposed that there should be new zero standing charge tariffs offered universally. Ofgem has proposed this alongside the proposal to introduce a clear debt guarantee as part of its drive to improve service standards by suppliers to those in debt.
Ofgem proposes introducing zero standing charge tariffs
Case law
Find debt case law summaries by topic on Shelter Legal.
Malik v Messalti
A valid trust deed to transfer property was deemed a transaction to defraud future creditors.
Malik v Messalti [2024] EWHC 2713 (Ch)
Manolete Partners v White
The court cannot make an order preventing the debtor from receiving the benefit of their occupational pension.
Manolete Partners v White [2024] EWCA Civ 1418
Re Nortel Companies and others
Bankruptcy includes liabilities that exist before the date of bankruptcy.