Seizure of Digital Information

Seizure of Digital Information, computers, laptops, iPads, smartphones and games consoles

Bailiffs have a long established right to take control of goods belonging to the debtor, but seizing electronic equipment holding digital information can present a danger to the person making distress and for the creditor authority the bailiff is acting for.

If a laptop is used for business, trade or study and its value is under £1350 then it is exempt goods. Make an Claim to exempt goods.

The original law of distress was created long before the digital age in 1604 with the landmark case of Semayne v Gresham [1604] Yelverton 29 or Seyman v Gresham [1604] Croke, Elizabeth 809 or P.18 Ed.IV fo.4 pl.19. It has been followed by Halsbury's Laws of England loose leaf edition vol.1 paragraph 9.128 which makes the official rules of the law of seizure.

The law of distress was largely replaced by the procedures in Schedule 12 of the Tribunals, Courts and Enforcement Act 2007 and much of the case law was repealed by Section 65 of the Act.

Seizing digital equipment holding electronic data presents a number of problems for bailiffs and those they represent.

1. Personal data cannot be sold, so taking control of it does not produce a tangible item.

2. Intellectual property, only a trustee in bankruptcy can apply to the Patents Court under Section 37 of the Patents Act 1977 for a transfer of ownership of intellectual property

3. Stored banking and credit card details cannot be seized.

4. Electronic gadgets such as smartphones and iPads now have anti-theft GPS tracking and kill switch rendering them useless to anyone buying them at auction following seizure.

There is no provision that enables a bailiff to force a debtor to delete or destroy digital information stored on an electronic device. This amounts to the destruction of the debtor's property and the creditor would liable for damages in respect of replacing it, and there could be a criminal liability under Section 1 of the Criminal Damage Act 1971.

There currently is no maximum limit on how much such a damages award can be, it can only be determined case by case. The case of Huntress Search Limited (Claimant) v Canapeum Limited (Defendant) and DSI Foods Limited (Interpleader Claimant) [2010] EWHC 1270 demonstrated how liability for damage to property can place a creditor at risk even when the damage was caused by a simple accident and after ignoring a warning from an employee.

If the device is used for your work and its loss causes you to be unable to carry on your work, then you can claim damages to your business reputation and loss of income Skidmore v Booth [1834] 6 C&P 777. If you work for a company and the device contains data needed for your employment then your employer is the party that requests the return of the device from the creditor, but if the creditor does not cooperate with due reasonable speed, then the employer can sue for damages.

If bank or credit details stored on a device that has been seized and they are subsequently breached then the creditor would be liable for the whole lot because the case of Singer Manufacturing Co v Butterfield [1902] 114 LT 39; [1905] 13 PMR 963; [1910] 129 LT 578 showed the bailiff ought to invite the debtor to select items to be treated as exempt so as to protect the creditor from a claim.

Games consoles, in particular current generation machine that do not have removable media (a DVD drive) and where purchased games are downloaded to an internal hard drive can also place a creditor at risk because these devices store the user's bank details to enable downloading of games and other apps using their bank card details, and they also contain non-tangible personal data which the cost of replacement can be recovered from the creditor. In case such as games consoles the bailiff should apply diligence to protect themselves from claims brought following Taylor v Ashworth [1910] 129 LT 578 or Harrison v Mearing [1843] The Times May 10 8b Exch or Doe d Haverson v Franks [1847] 2 C&K 678 or Mullett v Challis [1851] 16 QBD 239

Newer devices such as digital televisions are becoming connected devices that hold personal data, however wall-mounted TVs may will be exempt because they are fixtures (Re: Richards ex p. Astbury [1869] 4 Ch app 630) and are worthless without its stand or base and this can result in a claim for irregular distress due to goods of insignificant value and a claim can follow the case of Smith v Enright [1894] 69 LT 724 which is a significant judgment for a vexatious levy.

Expensive mobile phones are popular with low-income households, but seizing them is a recipe for disaster, because not only because of their data content but a mobile phone on a contract is not the property of the debtor and replacing old with new will be expensive. The cases of Potts v Hickman [1941] AC 212 or Hutchins v Chambers [1758] 1 Burr 579 or Steel Linings Ltd v Bibby & London Borough of Hammersmith and Fulham [1993] EWCA WL 964281 have all ruled that goods that are owned under a conditional sale agreement or contract are exempt. It is not compatible with Paragraph 10 of Schedule 12 of the Tribunals, Courts and Enforcement Act 2007

The only prudent advice for bailiffs thinking about levying a device containing digital information stored is, stay well away from it.