Select Committee on Work and Pensions Written Evidence

Memorandum submitted by Stephen Lawson


  1.  Historically the problem has not been the lack of enforcement powers available to the CSA but the failure to use them. The White Paper does not show how the change of culture will be achieved since it is not more powers that are required but proper and effective use of the existing measures.

  2.  Administrative enforcement is likely to result in substantial injustice especially in relation to recovery of historic arrears.

  3.  The White Paper should have made provision for compensation when dealing with the issue of "write offs" where financial loss is caused by Agency maladministration.

  4.  The CSA claims that it owes no legal duty of care to anyone. It claims the unique ability to make as many mistakes as it wants causing financial loss to individuals without any legal redress. The White Paper is silent with regard to legal duties owed by C-MEC and it is presumed that the Government's wish is to leave the position unchanged. This is not acceptable.

  5.  Collection of historic debt will saddle C-MEC with the impossible problems of the past and will deflect the new Commission from its role in collecting and enforcing current maintenance payments as they fall due.


  6.  I am a Solicitor of the Supreme Court. I qualified as such in October 1984. I am a Partner in Forshaws Solicitors LLP based in Warrington.

  7.  I represent both parents with care (PWC) and non-resident parents (NRP).

  8.  I am a member of Resolution. I have been involved in many Court actions against the CSA/Secretary of State for Work and Pensions.

  9.  Because my predominant area of expertise is in relation to "use of CSA powers" I intend to submit evidence only in relation to questions 6, 7, 8 and 9.

Q.6—Approaches to enforcement

  10.  The CSA White Paper complains that the problems facing the Agency are not the fault of the CSA—this is not accepted. Just by way of illustration the problems start right at the outset. If an NRP fails to return maintenance enquiry forms it seems not to be the practice of the CSA to institute any form of prosecution. An NRP who gives false or misleading information is most unlikely to be prosecuted—indeed most of the requests for information from the CSA are either made verbally or without the appropriate warning. This means that an NRP can give whatever untruthful response to questions without any fear of prosecution. (See Regulation 3A Child Support (Information Evidence and Disclosure) Regulations 1992).

  11.  The abject failure of the CSA to use the powers available to it to obtain bank statements or to send an inspector to discover information under section 15 of the Child Support Act 1991 continues this culture of apathy.

  12.  It is unclear if the Government intends to repeal in full the Child Support Act 1991 and ancillary regulations. If it does then information and inspection powers must be retained.

  13.  The CSA already has in place all of the necessary powers available to it to recover debts. The problem is the reluctance to use the powers available. There is a fear that the problems of the past will still be repeated in the future.

  14.  The Government says there is a culture of non-payment—the Government/CSA can easily send out a clear message that they will not tolerate failure to pay. Just as a small illustration, outside the police station in Liverpool are two sports cars that have been plastered with police stickers to indicate that the cars have been seized because the owners failed to pay tax and insurance. The CSA/C-MEC could send similar "messages" by seizing and displaying vehicles taken to pay child support arrears.

  15.  At present there is a reluctance to use the powers available to the CSA to consider recovering arrears from sources other than income. The CSA will not, as a matter of course, use the powers available to them to ascertain information about the resources of the NRP to enable a decision to be made about recovery—eg if a debtor in a civil case owes money a creditor will usually ask for evidence of the debtor's means and will want to see copies of bank statements, building society passbooks, life policy details, house equity details. The CSA is systematically incapable of obtaining or processing this information from capital. The drive to reduce administrative costs reduces the incentive for the CSA to conduct forensic investigation. The fear is that in the drive to reduce costs C-MEC will not make appropriate forensic enquiries and the PWC will not be engaged or consulted in the process.

Q.7—Shift to administrative enforcement

  16.  It is entirely appropriate to use a deduction of earnings order (DEO) in respect of "administrative enforcement" relating to recovery of maintenance payments as they fall due. There are great concerns about any use of administrative enforcement in relation to historic arrears. The justification given by the Government for the abolition of Court-based enforcement is not accepted.

  17.  The Government complains that the Liability Order process is too slow. As a matter of law the CSA only have to give an NRP seven days notice of an intention to apply for a Liability Order. Once a complaint is issued in a Magistrates Court a return date is issued very quickly—usually within a week or two. The Liability Order process should remain.

  18.  The Auditor General has qualified his opinion on CSA client funds accounts for each of the last 10 years due to errors.

  19.  The National Audit Office 2006 report (paragraph 4.24) reflected that 65% of the cases where a Liability Order was sought were inaccurate. Why should C-MEC be given administrative enforcement powers in respect of historic arrears when there is such little confidence in the accuracy of existing calculations?

  20.  The CSA can already take up to 40% of the net wages of an NRP by way of a DEO despite the incredible hardship that may arise to an NRP and any new family. There is great concern about the lack of policy and lack of right of appeal in cases of hardship.

    "Just as an example there is a case of an NRP refuse collector who the CSA say should pay arrears of £3,000 at the rate of £74.63 a week by way of DEO. In another case a barrister NRP, who owes £14,000 arrears, has been ordered to pay at the rate of £12.75 a week. The refuse collector is assessed under the "old" CSA scheme and the CSA assessment is NIL—his income is so low that he is deemed too poor to be required to pay maintenance yet the CSA administratively take £74.63 a week in respect of arrears. There is no right of appeal."

  Administrative enforcement is arbitrary, made without reference to ability to pay and is subject to no judicial scrutiny.

  21.  It is recognised that the new Commission will be a new organisation—but many of the staff will remain the same. The additional pressure to recover money alleged to be due may have the effect of making the new Commission staff even less willing to listen to the concerns of NRPs than the CSA.

  22.  The attached Schedule (Schedule 1) provides examples of some recent cases concerning the CSA, which illustrates the inability of administrative officers to deal with cases sensitively or professionally. Until C-MEC has a track record of trust and accuracy administrative enforcement powers should not be given.

Q.8—Collectable debt

  23.  There are grave concerns that the issue of debt has not been seriously addressed. The accumulated debt is simply too big for most individuals to repay. NRPs with CSA arrears of £30,000, £40,000, £50,000 or even more are not uncommon. It is beyond the ability of most NRPs ever to be able to pay—even by instalments. In any event most of this debt is legally and practically unrecoverable. Prior to the Summer of 2006 the CSA had no powers to obtain a Liability Order in respect of debts that were more than six years old—see Regulation 28 of the Child Support (Collection and Enforcement) Regulations 1992. There are no proposals in the White Paper for a change to this Regulation in respect of debt that arose before the Summer of 2006.

Q.9—Write off powers

  24.  Paragraph 4.17 of the 2006 National Audit Office report reflected that debt greater than six years old was currently estimated at around £760 million and could not be subject to a Liability Court Order. In many cases it seems there has been Agency maladministration, which has caused financial loss. The CSA should be taking proactive steps to make compensation payments to PWCs who have lost money as a result of CSA maladministration. Incidentally the Committee is probably aware of the fact that the legal stance taken by the CSA is that it owes no "duty of care" to anyone. The CSA claims to have the unique ability to make as many mistakes as it wants, causing individuals financial loss without having to pay any legal redress.

  25.  What is of more concern for the future is how C-MEC intends to deal with this issue of historic debt. The proposals to make some alterations to the figures (5.41 and 5.42 White Paper) are seen but no information is given about how C-MEC intends to recover debt that it has no legal power to collect (other than by DEO). Someone somewhere needs to make a brave and realistic decision to resolve the historic debt issue otherwise this debt will continue to overshadow the creation of the new Commission. This decision needs to reflect:

    —    The impossible position in which some NRPs find themselves. The maintenance arrears figure is realistically too high to pay—in one case the CSA agreed a repayment schedule over 200 years. Many agreements entered into now by the CSA will take over 40 or 50 years to repay.

    —    The fact that the CSA has no power to recover much of the historic debt more than six years old.

    —    PWCs have been deprived of maintenance that could and should have been collected. The issue of Compensation for Maladministration should be addressed.

  26.  In principle there is no problem with the CSA seeking to revalue historic debts—eg by converting interim maintenance assessments (IMA) to full maintenance assessments (FMA). But the logic that has been given is flawed. The Government says (paragraph 5.41 White Paper) that IMAs acted as a penalty for any NRP who failed to provide information about their circumstances. There is no "penalty" for non-compliance if historic punitive debts are simply converted to FMAs. The CSA has gone through an enormous bureaucratic exercise for no benefit to anyone, at an enormous cost to the taxpayer. Whatever was the point of imposing an IMA if it is simply going to be converted to an FMA retrospectively?

  27.  It is important to consider the practical realities of "revaluing" historic debts. Firstly, is it fair and just to a PWC to reduce the debt that is owed? For many years the CSA will have regularly sent statements to the PWC confirming the amount of arrears—as they grow year-by-year. The PWC may have relied on this information without any indication ever having been given that this debt was subject to a revaluation/reduction. At no time has it been the policy of the CSA to advise a PWC that an IMA could be revalued and/or reduced. Secondly, there have been cases where IMAs, going back to 1993 have, in 2006 been converted to FMAs. In many cases it is difficult to ascertain the financial income of the NRP as it was in, say, 1993. It is virtually impossible to obtain information such as housing costs as they were in 1993. The CSA ends up having to accept a "guess" since inevitably no one retains documents relating to their financial circumstances, as they would have been in 1993. Any assessment backdated to 1993 can be nothing more than a "guess". Is this fair and equitable to a PWC?

  28.  The CSA have, in December 2006, written to say "The White Paper proposes reducing outstanding IMA debt to 27% of current liability where data are not available to allow an FMA". Once again this proposal indicates the arbitrary and capricious intention in relation to historic debt. There is concern that this proposal has not, in fact, been mentioned in the White Paper and seems to be a recognition that the task of accurately converting an IMA to an FMA is, in reality, impossible.


Case studies

    —    The CSA wrote to a happily married man and said "we have sent you an enquiry form for child maintenance with this letter ... this is because we have an application for child maintenance from XXX who says that you are the parent of YYY".

    The man denied that he knew the mother of the child concerned but his wife was most sceptical. He called for an explanation but his enquiries were unresolved. Three letters were sent to the branch office of the CSA dealing with the application (Stockport). Each letter was ignored. It was only when a formal claim for compensation was intimated that the CSA (the taxpayer!!!) agreed to pay him £1,000 compensation and his legal costs. No explanation was ever forthcoming about why the letter was sent but it appears that the PWC made a general allegation that someone with a similar name was the father of the child. The CSA then recklessly wrote to him and identified him (without any evidence at all) as the father.

    —    An NRP complained that he had not received any notice of a Liability Order in respect of outstanding maintenance that had been made against him. The CSA said that there was nothing that could be done so he instructed me. A formal application to Court was sent to set aside the Liability Order. At the Court hearing the Presenting Officer admitted that the Liability Order Application Notice had been returned by the Post Office marked "gone away" but she declined to give this information to the Court and proceeded to obtain the Liability Order in any event. The application to set aside the Order was successful. The CSA (the taxpayer!!!) was ordered to pay the NRPs legal costs.

    —    On two separate occasions NRPs have claimed that they did not receive notice of Liability Order applications and only found out about the hearing after the order had been made. Both NRPs complained to the CSA who said that there was nothing that could be done—and in one instance insisted that the bailiffs would seize his possessions. The correspondence from the CSA said, "Although there is an application to set aside the Liability Order granted, the order at this present time is valid. As such the CSA are acting in accordance with the CSA legislation in the process of recovering the outstanding debt. Bailiff action has been authorised and will continue".

    The NRP was also threatened with arrest by the bailiff. An application was made to Court to set aside the Liability Orders and both were set aside (the CSA again having to pay costs—and agreed to make a payment to reflect the distress sustained by the NRP).

    —    In 2005 the CSA wrote to an alleged NRP and said "Following an application for child maintenance from Miss X and our phone call to you, you told us that you are the parent of YYY".

    The NRP protested that he had never in fact received a telephone call from the CSA as alleged and denied that he had ever admitted that he was the parent of the relevant child. A complaint was made to the CSA who admitted that this was a standard letter that was sent out in these circumstances. Because of the very serious nature of the allegations that were made in extraordinary circumstances a letter was sent to a senior official within the CSA to complain about the use of this standard letter.

    —    A year later, on the 19 October 2006, the CSA wrote to an entirely different NRP and used the same standard letter stating, "Following an application for child maintenance from Miss K and our phone call to you on the 5 October 2006 you told us that you are the parent of CS".

    This letter was opened by the man's wife who was extremely distressed that her husband had received correspondence from the CSA and admitted to being the father of a child without any reference being made to her. In reliance on this alleged admission the CSA proceeded to make an assessment of maintenance after obtaining information about wages from his employer and then proceeded to intimate that it would make a deduction from earnings order. My client tells me that no such telephone conversation ever took place.

    —    The CSA made an application to the Court for a Liability Order when it should not have done so as maintenance was being recovered by a DEO (see section 33 Child Support Act 1991). When I asked the Presenting Officer why the application was made (wrongly) she said, "I thought that but the CSA told me to do it".


  I have written to the CSA to ask where payment of Solicitors' legal costs appears in the CSA annual accounts. I have been told that this is information I am not entitled to know.

8 January 2007

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