"The sooner the decision to litigate, or to continue litigation, is taken, the less financial impact these inevitable delays in the court process will have."
It remains the case that the courts will reopen for possession matters from 23rd August, while FCA guidance remains in place until 31st October. So, while the courts will be open, continuing or enforcing proceedings are unlikely to be considered in the best interests of the borrower until November.
However, last week, an announcement was made on amendments to the civil procedure rules. These amendments are temporary and will be in place until 28th March 2021. The main points are:
• A requirement for a Reactivation Notice when a lender wishes to resume stayed proceedings, both to court and borrower. There is no set timetable for when this is to be issued – and there is no prescriptive wording, so my view is that this can be done at the point of action and as part of the legal process. Indeed, the amendments suggest that this is the case. A lender may want to insert a further stage in the process it takes directly with the customer prior to legal proceedings, but this is optional.
• The Reactivation Notice must provide any relevant information about borrower circumstances, specifically information on the effect of the pandemic on borrower and their dependants, to enable the court to have regard to vulnerability, disability, social security position and those shielding. This means that lenders should now be collecting this information, if they haven’t done so already, and provide it with any instructions for issue.
• Listings will be spread out to avoid bunching and with regard to court capacity. The amendments refer to the courts being unlikely to meet an eight-week timescale between issue and hearing listings as a consequence. So, from a commercial perspective, the sooner the decision to litigate, or to continue litigation, is taken, the less financial impact these inevitable delays in the court process will have.
• A lender should provide full arrears history in advance of hearing. This is eminently sensible and already part of our process.
Simply put, nothing much has changed save for these additional process requirements and lenders will need to capture the additional details that are needed for Covid-19.
It is, however, a clear indication that listings will take longer than previously. There is a mismatch between the resumption of court proceedings and the FCA guidance, and this is something I am discussing with HM Treasury in my role as an executive committee member of the ASTL. Given this, and the inevitable delays in the courts, lenders will need to think carefully about how quickly they proceed with recovery activity to balance their regulatory responsibilities with the commercial pressures to which they are subject.
