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 new DRO guidance for creditors, new rules for vulnerable customers with prepayment meters, HM Treasury’s response to Shelter’s ‘open letter’, and findings from MaPS ‘call for evidence’ on deficit budgets.
Newly published Insolvency Service guidance for creditors listed in a DRO
The Insolvency Service has published new guidance for creditors listed in a DRO. The guidance includes details of how creditors are informed about a DRO, their responsibilities and restrictions during a DRO, and how to object to a DRO.
New prepayment meter rules extend protections for vulnerable people
Ofgem has published new guidance for vulnerable customers with prepayment meters (PPMs). The guidance confirms that:
PPM installations are to be banned for people over 75 with no support in their house and homes with children aged under 2 (this previously only applied to customers aged 85 and over)
the voluntary Code of Practice for the involuntary installation of PPMs is to be made mandatory
breach of the Code of Practice can result in enforcement action and fines
currently, no suppliers are carrying out involuntary installations and will face severe penalties if they do unless they meet strict criteria set by Ofgem.
When suppliers do so, the new rules – which come into effect on 8 November after a mandatory 56-day notice period – will ensure they are acting in a fair and responsible way with involuntary installations used only as a last resort.
New prepayment meter rules extend protections for vulnerable people
Citizens Advice responds to Ofgem's final decision on the PPM code of practice
HM Treasury’s response to the Shelter open letter
In June 2023, Shelter and other signatories wrote to HM Treasury to clarify the role of the debt advice provider in delivering mental health crisis moratoriums. The letter highlighted concerns regarding the implications of recent High Court decisions regarding mental health crisis moratoriums.
Andrew Griffith MP from HM Treasury has now replied confirming that:
the case of Kaye v Lees has clarified what constitutes eligible mental health crisis treatment
the breathing space guidance for money advisers has been updated reflecting recent High Court judgments
the government does not expect debt advisers to ‘second guess’ any medical evidence provided by an approved mental health professional (AMHP)
However, the letter goes on to state that if debt advisers have ‘cause to doubt’ an individual’s eligibility for their mental health crisis moratorium, they should consider seeking further clarification from the AMHP or nominated point of contact.
Shelter's letter to HM Treasury - download PDF
Response from HM Treasury - download PDF
Insolvency regulation to be 'overhauled'
The government has announced an overhaul of insolvency regulation to modernise the framework, increase transparency, and encourage confidence in regulation. This announcement follows the government’s response to its consultation on the future of insolvency regulation.
Reforms include:
regulating firms offering insolvency services (alongside current IP regulation)
the creation of a public register - listing all authorised individuals and firms and whether they are subject to sanctions by their regulator
the four recognised professional bodies (RPBs) that currently regulate individual IPs will continue to have oversight of the profession, but with additional tools
There will be a further consultation to devise a new compensation and redress scheme for people affected by insolvency professionals’ mistakes or misconduct.
The government states that the need and options for introducing a single regulator will remain under review.
Insolvency Practitioner regulation reform - UK Parliament written statement
The future of insolvency regulation
Findings from call for evidence published
The Money and Pensions Service (MaPS) has published findings from its call for evidence on clients with deficit budgets. Amongst other things, the responses identified that:
advisers need to spend time helping with pressing needs before effectively engaging with clients
tackling wider issues makes it possible to effectively resolve issues and move advice forward
creating a sustainable budget is challenging for deficit budget clients
complex cases can remain open for long periods
Findings from call for evidence on debt advice clients with deficit budgets
Enforcement Conduct Board launches accreditation scheme
The Enforcement Conduct Board (ECB) has launched its accreditation scheme for enforcement firms to sign up to. According to the ECB, enforcement firms that sign up to its scheme will demonstrate public commitment to accountability, high standards and good practice.
In particular, accredited firms will be committed to:
complying with the Ministry of Justice National Standards (April 2014)
providing the ECB with quarterly data
providing information on request
payment of the levy in a timely fashion
applying annually for accreditation
The ECB intends to publish a register of all ECB accredited firms on its website from late October 2023.
Attachment of earnings order guidance published
HMCTS has updated its attachment of earnings order guidance for creditors. Contents include checking whether an attachment of earnings is the best option, who the order can be made against, and what happens after an attachment of earnings order is made.
Attachment of earnings order guidance
Case law
Find debt case law summaries by topic on Shelter Legal.
Enforcement agent fees and disbursements
Fees and disbursements of an enforcement agent disallowed as the debtor was vulnerable and should have been given more time to seek advice.
Progressive Property Ventures LLP v Mrozinski
Equitable interest in property
Equitable interest in land is the money that a legal owner, joint owner, or non-legal owner is entitled to from a sale of the property.
Read more about equitable interest in property on Shelter Legal.