WARRANTS OF ENTRY BY UTILITY COMPANIES....AN UPDATE

I began this blog almost six years ago initially at  http://thejusticeofthepeace.blog.co.uk/ and laterally here.  In all that time the most widely read posts with literally tens of thousands of views have been on the subject of utility warrants of entry.  From various analytics I have deduced that these have been read not by regular viewers to this or the previous site (which is still viewable) but by one off visitors finding it directly or by references from sites dedicated to assisting those summonsed to court on the pain of applications from mainly electricity and/or gas companies for non payment of accounts.  This is not surprising nor is the headline and story in this news medium and many others.

When I was sitting in applications courts I would regularly be handed a third of the bundle of applications and told by the chairman where to sign them.  There was virtually no discussion.  I repeat.......this was the normal recognised way of processing these matters with the only consideration that of the legal advisor that we must not delay forthcoming business. Even prior to being appointed an approved chairman I made my objections where and when I could that this was a disgraceful way to approve a possible forced entry to premises whether private or business.  And then came the currently hotly debated Human Rights Act incoporated into our legal system in 1998 and a couple of additional clauses were inserted by the utility companies into the information laid before us insofar as consideration had been given as to the make up of said households eg invalids, children etc and they thought their obligation was complete. Around this time I discovered The Good Practice Guide* which is reproduced after this post.  Whilst I was still a winger I attempted with little success to persuade chairmen of the benefits of applying the "Guide". Generally it was waste of time.  On taking the chair I began to impose the document on my wingers prior to 10.00am usually without any objection.  There was a sitting where the clock showed 10.30am and I was still questioning an application when the L/A told me quite bluntly there was no more time and we had to get on.  There was a heated post court discussion.  Over the next few years I gradually persuaded powers that be that it was an utter disgrace and an injustice not to investigate these applications.  In those early days more often that not my questions were answered by the reply, "Not to my knowledge, sir."  Indeed at one sitting an applicant awaiting his turn in the open court shouted out, "This is rubbish; never had to go through this before." He walked out.  My persistence eventually paid off.  In my court on every bench there is now an abridged version of the original document** (also reproduced below) which is available for every chairman for reference.  I am pleased and perhaps if I am honest a little bit proud  that before being kicked out my colleagues and legal advisors would refer to my efforts on this topic as making me the "expert" on the subject.

In the light of the news story I would ask fellow J.P.s to consider these guides if they have have not done so and perhaps consider how seriously they apply themselves when next they sit in applications courts.

                          *  ENERGY DISCONNECTION WARRANTS

BEST PRACTICE GUIDANCE

Under the Rights of Entry (Gas and Electricity Boards) Act 1954 a representative of a gas or electricity supply company can apply for a warrant of entry to premises to inspect or read the meter, to install a prepayment meter, or to disconnect the supply.

Applications for a warrant of entry must be made on oath under s2(1) of the 1954 Act.  In order for a warrant to be granted, the relevant company must satisfy the magistrate that admission is reasonably required, that consent has not been given by or on behalf of the occupier, and that relevant period of notice has been given.

When considering whether to grant a disconnection warrant, you should consider asking some or all of the following questions.  An explanation for the thinking behind some of them follows in italics.

Potential questions for company representatives

1)             How many attempts were made to contact the customer and were any successful?

There is no legal requirement on energy companies regarding the number of attempts to contact the customer in advance of a disconnection to assess vulnerability or discuss debt.  However, the Energy Retail Association, the dedicated trade association for energy suppliers, provided a typical example of the attempts made by energy suppliers to contact customers during the process in its report ‘Protecting Vulnerable Consumers from Disconnection’ (September 2004) as follows:

·                 Collections path duration – 5 months

·                 8 attempts to contact through correspondence

·                 2 attempts to contact by telephone

·                 2 attempts to contact by personal visit to the property

·                 1 attempt to contact by visit to court

·                 Final attempt to contact at warrant execution

http://www.energy-retail.org.uk/pdfs/Disconnections_Report_Sep_04.pdf (Page 10)

2)             If the customer has been successfully contacted, are you satisfied that they are not, for reasons of their age, health, disability or severe financial insecurity, unable to safeguard their personal welfare or the personal welfare of other members of the household, and what evidence do you have for this?

It is generally accepted that defining vulnerability is not an exact science.  Energy companies currently apply the following definition, and have stated that no person who meets this definition has been disconnected since December 2003 or will be disconnected in future  – “A customer is vulnerable if for reasons of their age, health, disability or severe financial insecurity they are unable to safeguard their personal welfare or the personal welfare of other members of the household”.

http://www.energy-retail.org.uk/pdfs/Disconnections_Report_Sep_04.pdf (Page 6)

3)             Has any indication been received from third party representatives (such as a carer, social worker, health visitor or physician) that the customer may be vulnerable?

4)             Are you satisfied that no member of the household is dependent on medical equipment that is operated by electricity such as a stair lift, electric wheelchair, defibrillator or dialysis machine?

In order to avoid being overly prescriptive in drawing up its definition of vulnerability the Energy Retail Association provided additional guidance to its members to ensure that genuinely vulnerable consumers were not excluded.  This additional guidance acts as a framework within which energy suppliers should operate their debt recovery systems, and where suppliers identify households in the following circumstances they are advised to consider whether the customer is vulnerable in accordance with the definition:

·                 A customer is caring for an elderly person in the household;

·                 A permanent member of the household is disabled and unable to support themselves or has a long-term medical condition;

·                 A carer, social worker, health visitor or physician has indicated that a member of the household may be vulnerable;

·                 Households on a low income/state benefit with young children; or

·                 A customer dependent on medical equipment that is operated by electricity e.g. a stair lift, electric wheelchair, defibrillator or dialysis machine

http://www.energy-retail.org.uk/pdfs/Disconnections_Report_Sep_04.pdf (Page 7)

5)             Does the application for a warrant follow a broken payment arrangement between the customer and his or her supplier?  If so, what was the arrangement made?

Energy companies are expected to offer a range of help to customers experiencing difficulties as an alternative to disconnection, and Standard Licence Condition 35(d) for both gas and electricity supply requires companies to take into account the customer’s ability to repay debt.

http://www.dti.gov.uk/energy/gas_and_electricity/regulation_policy/licences/sc1_elecsupply.pdf (Electricity - Page 104)

http://www.dti.gov.uk/energy/gas_and_electricity/regulation_policy/licences/sc1_gassupply.pdf (Gas - Page 111)

6)             What is the total amount owed by the customer?

There is no legal requirement on energy companies for debt to reach a certain level prior to disconnection.  However, Ofgem’s annual report into supplier performance in line with the regulator’s Social Action Plan showed that the average amount owed to suppliers by consumers on a debt payment arrangement as of September 2005 was as follows:

	<£100	£100-£300	£300-£600	>£600
Gas	59%	27%	9%	5%
Electricity	62%	23%	6%	7%

http://www.ofgem.gov.uk/temp/ofgem/cache/cmsattach/10978_10505.pdf (Page 18)

7)             Has there been any dispute about the amount owed by the customer?

Ofgem, the regulator, and energywatch, the energy consumer representative, produced guidelines for energy companies in January 2003 entitled ‘Preventing Debt and Disconnection’.  These guidelines were intended to provide guidance on best practice for the industry.  In this guidance, it was suggested that, in situations where a supplier has clearly been in error and the consumer is not culpable, good practice is to provide means of redress, which may be financial or otherwise, and may include reducing debts or writing off debts over a certain age (mention Super Complaint); not blocking consumers if they wish to change suppliers; or accepting repayment over an extended period at least as long as the period over which the bill has accrued (notwithstanding the obligation under gas and electricity Supply Licence Condition 35d to take into account the ability to pay).

http://www.ofgem.gov.uk/temp/ofgem/cache/cmsattach/1248_jan2403debtprev.pdf (Page 3)

8)             Under what circumstances, when the engineer arrives at the property, would the disconnection not be carried out?

The Energy Retail Association has indicated that the final attempt by energy companies to contact the consumer to assess vulnerability and discuss debt is at the time of warrant execution and that, therefore, all field staff should be trained to recognise signs of vulnerability and be empowered to halt the disconnection procedure pending further investigation by suppliers’ priority service teams.  If it is assessed that the consumer is vulnerable according to the accepted industry definition or the additional guidance provided by the Energy Retail Association, the consumer should have their record flagged and be offered the help most appropriate to their needs.

http://www.energy-retail.org.uk/pdfs/Disconnections_Report_Sep_04.pdf (Page 9-10)

9)             Under what circumstances will a prepayment meter be fitted at the premises?

The fitting of a prepayment meter (PPM) to recover debt varies between gas and electricity, which has led to the discrepancy in the number of disconnections between the two fuels.  It is not necessary for the consumer to be present when PPMs are fitted in most cases.  However, some suppliers are reluctant to fit gas PPMs without the consumer present on safety grounds.  The Energy Retail Association has indicated that fitting a PPM is now the preferred option to disconnection where it is possible to do so.

http://www.energy-retail.org.uk/pdfs/Disconnections_Report_Sep_04.pdf (Page 11)

10)         Has information been provided to the customer about how they could reduce their bills in future by more efficient use of energy?

Good practice as recommended by Ofgem and energywatch is for energy suppliers, when staff identify a consumer who would benefit from energy efficiency advice, to be proactive in providing that advice by passing the consumer’s details to energy efficiency specialists within the company.

http://www.ofgem.gov.uk/temp/ofgem/cache/cmsattach/1248_jan2403debtprev.pdf (Page 4)

11)         What steps have been taken to ensure that the address is correct in relation to the supply point?

12)         What steps have been taken to ensure that the address is currently occupied by the person responsible for the debt?

Good practice as recommended by Ofgem and energywatch is for suppliers to make every effort to minimize the extent to which billing errors lead to debt or exacerbate payment problems.  Although rare, the above are potential examples of such an error.

http://www.ofgem.gov.uk/temp/ofgem/cache/cmsattach/1248_jan2403debtprev.pdf (Page 3)

13)         If in receipt of benefits, has any attempt been made to enable the customer to pay off the arrears using Fuel Direct?

Fuel Direct is part of the Third Party Deductions Scheme operated by the Department of Work and Pensions.  It allows for a deduction to be made from benefits at source to repay debt accrued to energy suppliers.  It is limited to consumers on income support, jobseeker’s allowance and pension credit.  Suppliers are not able to control who qualifies for Fuel Direct – this decision is taken by the local benefits office.  However, good practice as recommended by Ofgem and energywatch would be for suppliers to offer Fuel Direct to such consumers who are in debt and eligible and to approach the relevant benefits office.  Third Party Deductions will only be used when all other avenues of debt recovery have been exhausted and can be used to pay any outstanding debts and maintain the supply or to prevent any further debt accruing.

http://www.ofgem.gov.uk/temp/ofgem/cache/cmsattach/1248_jan2403debtprev.pdf (Page 6)

Background Information for magistrates

Actions before applying for a warrant.

Whilst there is no legal requirement to do so, energy suppliers wishing to disconnect energy supply should make several attempts to contact the customer – by letter, by phone and in person - before moving to apply for a warrant in accordance with voluntary guidance published in 2004 by the Energy Retail Association, the trade association for domestic energy suppliers.  They can also deal with a third party agent, though they may not always succeed in establishing contact.  If, during contact with the customer, it becomes apparent that the customer is unable to pay the bill, suppliers’ staff will attempt to obtain further information about the customer or their dependents, including such details as their age, whether they are currently receiving benefits, the number of young children in the household or any special circumstances such as whether any members of the household are disabled or have special needs.

The typical number of attempts to contact the customer is detailed earlier in this document. 

  

Regulation on disconnections

Companies wishing to supply gas or electricity in Great Britain must hold a licence from the regulator, the Office of Gas and Electricity Markets (Ofgem), and must comply with a list of Standard Licence Conditions.  Of relevance to the issue of the disconnection of supply are Standard Licence Conditions 35 and 37A for gas suppliers and Standard Licence Condition 35 for electricity suppliers.

Limitations on possible disconnection

 The effect of these Licence Conditions is that gas and electricity suppliers should, as far as practicable, avoid disconnecting the supply where the customer (the bill payer) is either of pensionable age or disabled or chronically sick in the period between 1 October and 31 March (commonly referred to as the Winter Moratorium) and, in the case of gas supply, should not disconnect households where, to the knowledge or reasonable belief of the company, the customer is of pensionable age and lives alone or with other persons all of whom are also of pensionable age or under eighteen years of age between the same dates.

Safeguards and duties

In addition, energy companies are also expected to offer a range of help to customers experiencing difficulties as an alternative to disconnection, and Standard Licence Condition 35(d) for both gas and electricity supply requires companies to take into account the customer’s ability to repay debt.  Suppliers have a duty to accept payment by Fuel Direct, a system whereby customers on three qualifying benefits (Income Support, Pension Credit and Jobseekers Allowance) facing disconnection can pay a defined minimum which is deducted from benefits weekly.  Suppliers are also required to offer customers a Pre Payment Meter before they move to disconnect supply.     

Industry Vulnerable Customer Safety Net

In September 2004 the Energy Retail Association (ERA), the dedicated trade association for the six major UK energy suppliers, published a report on the issues of debt and disconnection in the energy sector following a challenge from Ofgem to industry to develop measures to protect vulnerable customers from being disconnected.  This report presented the definition of a vulnerable customer which member companies will seek to abide by, that “a customer is vulnerable if for reasons of age, health, disability or severe financial insecurity they are unable to safeguard their personal welfare or the personal welfare of other members of the household.”

References to ‘customer’ in the Standard Licence Conditions refer to the bill payer.  The ERA has stated that industry’s intention is to protect all those who are vulnerable and at risk from disconnection, which has prompted the inclusion in its definition of vulnerability that the bill payer must also be able to safeguard the welfare of other members of the household.

In order to ensure that genuinely vulnerable customers are not excluded from the definition the ERA has also produced guidance to suppliers on identifying vulnerability, noting five separate circumstances which, if applicable, could lead to energy suppliers determining that the customer is vulnerable.  These are:

1. A customer is caring for an elderly person in the household;
2. A permanent member of the household is disabled and unable to support themselves or has a long-term medical condition;
3. A carer, social worker, health visitor or physician has indicated that a member of the household may be vulnerable;
4. Households on a low income/state benefit with young children; or
5. A customer dependent on medical equipment that is operated by electricity e.g. a stair lift, electric wheelchair, defibrillator or dialysis machine.

Ofgem/energywatch guidance

In January 2003 the regulator, Ofgem, and the consumer watchdog, energywatch, produced a set of guidelines aimed at improving suppliers’ performance in debt management and recovery and in reducing disconnection, identifying six key areas for action – minimising billing errors; using incoming calls to identify customers in difficulty; using customer records to target energy efficiency improvements (these reduce energy use and therefore cost, thus reducing the potential for debt); demonstrating flexibility in debt recovery; offering sustainable solutions to customers in extreme hardship; and helping customers who are unable to manage their own affairs.  Since January 2003 all suppliers have developed strategies for improvements in these areas.

Disconnection figures

Statistics published by Ofgem show that the number of disconnections for gas and electricity in the last five calendar years was as follows:

Year	Gas	Electricity	Total
2000	16500	300	19500
2001	26088	375	26463
2002	21780	995	22775
2003	15973	1361	17334
2004	2553	727	3280

It is accepted that the discrepancy between the figures for gas and electricity are due to the fact that it is easier to install a prepayment meter (PPM) for electricity supply than it is for gas, as in the latter case it is necessary for the customer to be present for safe installation to take place.

 **

Utilities Warrants – Questions for Applicants

1)                            How many attempts were made to contact the customer before the application today and were any successful?

2)                            Could the customer be vulnerable?

3)                            Are you satisfied that no member of the household is dependent on medical equipment that is operated by electricity such as a stair lift, electric wheelchair, defibrillator or dialysis machine?

4)                            What is the total amount owed by the customer and what period do the arrears cover?

5)                            Has there been any dispute about the amount owed by the customer?  How are you sure that you are right and they are wrong?

6)                            Could the arrears be met by an arrangement between the customer and his or her supplier? 

7)                            If in receipt of benefits, has any attempt been made to enable the customer to pay off the arrears using Fuel Direct?

8)                            Under what circumstances, when the engineer arrives at the property, would the disconnection not be carried out?

9)                            Has information been provided to the customer about how they could reduce their bills in future by more efficient use of energy?

10)                      Are you sure that the address is currently occupied by the person responsible for the debt?