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Unravelling a mental health moratorium


Kaye v Lees (2023) EWHC 152 (KB)

We’ve seen previous instalments in this matter here and here. The result of those was that Mr Kaye’s eviction of Ms Lees after a charging order and order for sale was unlawful as the eviction was after notification of a mental health crisis debt moratorium, but Mr Kaye was subrogated to Ms Lees’ mortgage lender’s rights as creditor in the amount of the mortgage that Mr Kaye had paid on selling the flat (which sale was undone in the previous judgment).  Yes it is complicated and messy. Details in the previous posts.

Mr Kaye was understandably keen to enforce the £500,000 or so debt. But on 8 November 2022, Ms Lees entered a further mental health crisis moratorium.

Mr Kaye applied “to cancel the Current Moratorium pursuant to Regulation 19 on the grounds that (1) Mr Kaye’s interests as a judgment creditor are unfairly prejudiced by the moratorium and (2) there has been a material irregularity in that Ms Lees did not meet the relevant eligibility criteria when the application for the Current Moratorium was made (Reg 17(2)) and that the application was not made bona fide.” He also sought an injunction to restrain Ms Lees from entering a further moratorium for a period of 60 days.

In the progress of the application, Ms Lees had agreed in a consent order to

file and serve evidence upon which she intends to rely, including evidence of her mental health crisis treatment upon which the debt advice provider submitted the application for the Moratorium (made on 8 November 2022), to include ongoing evidence as to duration, severity, prognosis and timescale for improvement, by 4pm on the day 14 days after Mr Justice Swift hands down judgment…

(That last was a permission to appeal judgment). This should have been done by 4 January 2023. It wasn’t. Ms Lees’ solicitors came off the record at this point.

Ms Lees subsequently twice sought to adjourn the present hearing, but did not turn up and told the Judge’s clerk she wasn’t going to attend by reason of the mental health moratorium. The applications were dismissed, but the evidence filed considered.

There had been four mental health moratoriums in succession, with a breathing space moratorium before them. The issue was the making of the fourth moratorium, and the evidence that was before the debt officer at Rethink was not available as not disclosed by Ms Lees as ordered. There was evidence that in the third mental health moratorium, “On 13 October 2022 Rethink wrote to Ms Lees saying that as a result of her mental health treatment having ceased on 7 October the related moratorium would come to an end 30 days afterwards, in other words on 6 November 2022.”.

With regard to the fourth moratorium, Rethink had said in response to a request for a review by Mr Kaye, that they were “not in a position to challenge the assertion by the AMHP (Approved Mental Health Professional) who had confirmed that Ms Lees was receiving treatment for a mental health crisis and therefore eligible for a mental health crisis moratorium”, but again, the evidence as to what was asserted was not before the court.

The most recent evidence was:

a) a report from a consultant psychiatrist dated 15 August 2022, which stated that Ms Lees had a diagnosis of adjustment disorder, and was receiving telephone 3 monthly out patient follow up following a crisis in October 2021.

b) A 3 November 2022 email from someone calling herself an ‘Approved Mental Health Professional – Social Worker’, which said:

“I am able to confirm that to the best of your knowledge (sic), I am 100% confident that the Ms Amanda Lees is receiving mental health crisis treatment as per section 2 of the referral form:-
receiving crisis, emergency or acute care or treatment in any setting from a specialist mental health service (i.e. crisis treatment from a crisis home treatment team, liaison mental health team, community mental health team or any other specialist mental health crisis service) for a mental disorder of a serious nature.”

Mr Kaye argued

(1) he is unfairly prejudiced by the Current Moratorium;

(2) Ms Lees is not eligible for the Current Moratorium;

(3) Ms Lees is deploying the Regulations to evade a judgment debt, which is now over 4 years old and stems from proceedings issued 7 years ago. That is not the purpose of the Regulations and is a consequence which the court should guard against;

(4) Ms Lees has had the benefit of four previous moratoria, all of which were obtained on the eve of enforcement, and then allowed to lapse. She has never devised a realistic repayment plan, or any repayment plan, which is the very purpose of the statutory scheme;

(5) There is no relevant evidence of Ms Lees’ mental health condition, in particular as to severity, prognosis and duration. Her condition appears to be not serious nor to require acute or emergency intervention and is directly and solely related to her eviction, which, on her construction, would render her forever immune from enforcement;

(6) There is contemporary evidence that Ms Lees, an author, is able to write, publish and publicise two new works of fiction, one of which is being published at the date of the hearing. That supports the obvious inference that her condition is not serious, or has significantly improved;

(7) It is just to grant an injunction to prevent further attempts by Ms Lees to frustrate the enforcement of a very stale judgment and to give finality to this matter and, in particular to Mr Kaye who is an innocent victim of Ms Lees’ conduct and to the innocent purchaser of Ms Lees’ property, Ms Chelsea Dixon.

Ms Lees’ written submissions asserted variously

1) there is plenty of material before the court from which it can conclude that she is receiving mental health crisis treatment which satisfies the statutory criteria;

2) as a person who is suffering from a mental health crisis she is under a disability and the conduct of Mr Kaye towards her has been discriminatory;

3) there has been a breach of her rights under the European Convention on Human Rights in the way in which she was evicted from her Flat and subjected to repeated applications to bring the moratoria to an end;

4) the Application is an abuse of the process;

5) Mr Kaye has failed to provide evidence that the Application is urgent or that his health has suffered in the way alleged in the witness statements filed by his solicitor on his behalf.

Regulation 28(2) of the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 provides that the condition for a moratorium is:

“(a) has been detained in hospital for assessment under sections 2 or 4 of the Mental Health Act 1983,
(b) has been detained in hospital for treatment under section 3 of that Act,
(c) has been removed to a place of safety by a police constable under sections 135 or 136 of that Act,
(d) has been detained in hospital for assessment or treatment under sections 35, 36, 37, 38 , 45A, 47 or 48 of that Act, or
(e) is receiving any other crisis, emergency or acute care or treatment in hospital or in the community from a specialist mental health service in relation to a mental disorder of a serious nature.”

Reg 28(2)(e) appeared to be the only possible relevant one here. The court found that the conditions of making a mental health moratorium under Regulation 28(2)(e) were that:

(1) the debtor is suffering from a “mental disorder of a serious nature” and

(2) in respect of that disorder the debtor is receiving “crisis, emergency or acute” care or treatment in hospital or in the community.

Reg 28(2)(e) had to be read in the context of (a) to (d), such that the crisis must be of a severity that would otherwise justify overriding the free will of the person in detaining them or removing them.

Further, the care or treatment must be such as to be designed to meet a crisis or emergency of an acute nature, well beyond general or routine treatment.

A mental health crisis moratorium differed from a breathing space moratorium in that it ended 30 days after the debtor had ceased to receive crisis treatment.

Regulation 19 provided for the county court on application to cancel the moratorium, or to cancel it for a specified debt.

The court was not satisfied that the conditions for the current moratorium were met.

I readily accept that I do not have the assistance of an expert to explain what an Adjustment Disorder is but there is no indication in the letter from Dr Sacks (of August 2022) that it is a mental health disorder of a serious nature equivalent to the disorders for which a debtor might be forcibly removed or detained as provided for in sub-paragraphs 28(2)(a) to (d) of the Regulations. The letter does not begin to satisfy me that Ms Lees was at the material time suffering from a disorder of the severity required by the Regulations. Dr Sacks does not appear to describe Ms Lees’ condition as serious, although her view appears to be that Ms Lees was suffering from a mental health crisis, albeit without further explanation. The symptoms described by Dr Sacks in section 3 of the letter relate not to the alleged disorder itself but to the eviction which took place in the Spring of 2022 leading unsurprisingly to Ms Lees suffering from stress, but in any event they would not lead me to conclude, if attributable to the diagnosed disorder, that it was of a serious nature within the proper meaning of that phrase as used in Regulation 28. Secondly the treatment described in the letter cannot be categorised as “crisis, emergency or acute”. According to Dr Sacks the treatment consisted of three-monthly patient follow-up appointments without any other medical or clinical interventions whether involving medication, therapy or otherwise. In my judgment, therefore, this evidence is not capable of satisfying either of the conditions required by Regulation 28(2)(e) let alone both.

The email from Ms Hooper of 3 November 2022 adds nothing of value to assessment of the issue of whether the relevant criteria were met at the date of initiation of the Current Moratorium. The email is no more than an assertion (albeit from a potentially relevant professional) that Ms Lees was receiving mental health crisis treatment but provided nothing of substance which the court could evaluate.

The criteria of reg 28(2) were not met when the 8 November 2022 moratorium was made, and there was no evidence that the material before the debt advisors, Rethink, that would support a moratorium. There was therefore a material irregularity in accordance with Regulation 17(1)(b) and the moratorium was cancelled under reg 19(3).

On unfair prejudice, though not necessary to find, the court referred to the ‘balancing act’ set out by HHJ Matthews in Axnoller Events Limited v Brakes (2021) EWHC 2308 (Ch) (our note)

“I accept that unfairness is to be assessed objectively, and that this will require the court to embark upon a balancing exercise. I further accept that, where the moratorium discriminates unfairly between creditors, so that the impact on one is significantly more severe than on another, that may well be a proper basis on which the court can say that the moratorium “unfairly prejudices” the applicant creditor. But I also accept that the phrase “unfairly prejudices” should not be confined to that. These are ordinary English words, undefined in the legislation, and not obviously terms of art. They can properly be understood to go wider.”

On the facts here, the court found the balance did fall for Mr Kaye, as:

i) The Judgment Debt is substantial, it is longstanding and no attempts have been made by Ms Lees to discharge it notwithstanding that one of the express purposes of the breathing space legislation is, as the name suggests, to provide the debtor with the opportunity of making a “realistic plan for the repayment of some or all of the debts” (section 6(2) of the Financial Guidance and Claims Act 2018);
ii) Either the debt is no longer fully secured or will cease to be fully secured in the near future as the sums owed by Ms Lees to Mr Kaye continue to grow;
iii) The evidence suggests that Mr Kaye, whose claims have been vindicated by a court which awarded appropriate compensation, has exhausted his financial means in seeking to enforce that award;
iv) Ms Lees did not participate in the trials before HHJ Roberts and has not directly engaged with the merits of the Application;
v) Ms Lees has subsequently been protected by a sequence of moratoria the basis for which must now be in doubt, which must be to the detriment of Mr Kaye;
vi) There is no evidence to suggest that Ms Lees requires any further protection from her debts whereas there is evidence that she has been able to continue to work and be economically productive.

The court proceeded to grant injunctive relief preventing Ms Lees from seeking a further breathing space or mental health moratorium for a period not specified in the judgment, with permission to Ms Lees to apply within 7 days of the order to set aside or vary it.

I am satisfied that there is a real risk, given the history of this case, that were she not to be restrained Ms Lees might seek to obtain a further moratorium the effect of which would be to frustrate the terms of this judgment and prevent Mr Kaye from enforcing the Judgment Debt. A chronological analysis of the steps Ms Lees has, and has not, taken in the litigation from its inception in 2015 demonstrates clearly to me that there is such a risk. She failed to observe orders made in the county court and failed to engage with the trial process. She did not appeal the decisions made by HHJ Roberts. She has made repeated applications for moratoria at points in time when Mr Kaye was getting closer to enforcement, including on the eve of scheduled evictions. She has failed to engage properly with the Application leaving me with the paucity of material as to her alleged disorder and treatment which I have set out in detail above.


Well, there is a lot in there to digest, for creditors, for debtors and most certainly for debt advisors as to the necessary conditions for a mental health crisis moratorium.

All should be aware of the two stage criteria set out here:

(1) the debtor is suffering from a “mental disorder of a serious nature” and

(2) in respect of that disorder the debtor is receiving “crisis, emergency or acute” care or treatment in hospital or in the community.


Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.


  1. Luke Oliver

    His Honour Judge Dight CBE cited the comments of Swift J at para 25 of Kaye v Lees [2022] EWHC 3326 (KB) (21 December 2022), acknowledging them to be ‘strictly obiter.’ Nonetheless, Judge Dight appears to have rested his decision at para 38 to cancel the MHCM on them (at least in part).

    I would respectfully disagree with the view expressed by Swift J and confirmed by Judge Dight CBE on this point.

    In my view it is strongly arguable that the regulations don’t provide for the DAP to ‘assess the information available and seek clarification or further information as necessary’ in the context of requiring whether the evidence of mental health treatment threshold for a MHCM has been met.

    Reg 30 (2) (b) requires: the DAP must initiate a MHCM if (amongst other things) they consider that the conditions under reg 30 (4) are met. Reg 30 (4) requires that an AMHP has provided ‘evidence’ (in accordance with reg 29 (2) and (4)) that the debtor is receiving mental health crisis treatment.

    Regulation 29 (3) (a) – (e) provides all the information which the evidence from approved mental health professional must include for the purposes of paragraph 29 (2) (b). All this information is provided through completion of the standard Evidence of mental health crisis treatment (EMHCT) form issued by HM Treasury Rethink has confirmed that this form is the only evidence relied on in all MHCM determinations. This approach adheres to the Government guidance in the Debt Respite Scheme (Breathing Space) guidance for money advisers at para 4.6. See also HM Treasury’s Debt respite scheme (breathing space): Guidance on mental health crisis breathing space. At paras 3.15 and 3.36 which illustrate the decision on whether a person is in mental health crisis treatment is, in the Treasury’s view, within the role of the AMHP not the DAP.

    It seems clear from the guidance that reg 29 (3) was drafted to deliberately ensure that the task of assessing the cogency of the evidence of mental health crisis treatment solely within the AMHP’s remit, for obvious reasons. This is done by standardizing the evidence required in the form of the EMHCT form.

    The courts might legitimately consider that the evidence of mental health crisis treatment needs to expressly show one of the conditions in reg 28 (2). In most cases this will be reg 28 (2) (e) which is far more nuanced than the other more observable conditions. This is arguably a logical, purposive, reading of the regulations, and Judge Dight appears to have taken exactly this approach. But, where does this leave the DAP, given that the regs and guidance have been structured to require only a properly completed EMHCT form for MHCM eligibility? DAPs are not qualified to assess the strength of evidence of mental health crisis treatment.

    The Insolvency Service and the Treasury need to urgently consider how MHCMs should operate procedurally considering this judgment to ensure that DAPs can be reassured that they are determining eligibility for MHCMs in accordance with the law.

    • Giles Peaker

      Luke – reg 29(3) doesn’t provide ‘all the information’ required, it simply provides for information that must be included. Reg 29(2)(b) provides that there must be “evidence from an approved mental health professional that the debtor is receiving mental health crisis treatment.”

      Guidance and Treasury forms are not the law, of course.

      The assessment of crisis is the AMHP role, certainly, but they arguably have to provide sufficient evidence so that the advisor can be satisfied of the AMHP assessment rather than just a certification.

  2. Chris

    I rather wonder if, in an appropriate case, the debt adviser might find themselves targeted with an application that they should pay, via a non-party costs order under CPR 46.2/s51 Senior Courts Act 1981, the costs occasioned by their actions. In this case the debt adviser Rethink would seem to be the charity formerly known as the National Schizophrenia Fellowship but despite them being a charity they may not be short of a bob or two. The Charity Commission website says that their income for the year 2022 was £37,479,000 and their total income includes £22,205,435 from 157 government contract(s) and £1,049,506 from 97 government grant(s).

    • Giles Peaker

      No, not unless they had done something really bad such as authorise a mental health moratorium without any statement from a mental health practitioner. Would have to be completely outside powers under the regs for anything like that to arise.

      • Chris @ Possession Friend

        Perhaps CPR may be an uphill battle, but its surely right that an inappropraite and unjustified moratorium by a DAP could have Professional &/ or financial consequences for them.

        • Giles Peaker

          No, They have been given a statutory role to do, and as long as they do it within the powers, limits and requirements of statute, there is no liability. There is no liability to the creditor in negligence as no duty owed to the creditor. At worst, for a wholly irrational decision to grant a moratorium, there may be a third party costs order on the costs of applying to set aside the moratorium.

      • Giles Peaker

        Yes, pretty much what I surmised (in ignorance of the guidance). Non party costs orders are rare and need something out of the ordinary.

      • Chris Daniel

        Thank you Luke, very interesting. My concerns are that the DAP is financially remunerated for engaging a debtor and that may ‘influence’ DRS decisions.
        Further, that the time constrict for a creditor requesting a Review, and the response if to decline cancellation of the moratorium, means effectively that an application to court is unlikely to produce a hearing much before the end of the moratorium itself.

        • Chris Daniel

          Thanks for your reply Luke, strangely, there isn’t an option to reply to your comment. But whilst there may not be a fee, directly attributable to the obtaining of a moratorium which is only a step in the process towards an IVA. DAP charge 15% of the amount repaid to creditors, who only receive a percentage of the amount that was owed anyway.

        • Giles Peaker

          A moratorium isn’t a ‘step towards an IVA’ necessarily, and there is no financial incentive on a DAP to authorise a moratorium. Most DAPs doing moratorium work don’t make any charge for debt advice work anyway. I’m sorry, but your theory of ulterior motives in authorising moratoriums doesn’t have any basis at all.

  3. Tim

    Reading made me wonder what sorts of things Ms. Lees tends to write. Sadly it turned out to be nothing of any directly apparent further interest. (Mystery fiction novels set in France.) Though wouldn’t mind an intro to her psych and/or DAP!



  1. Debt news - 5 February 2023 · Debt Camel - […] Unravelling a mental health moratorium Nearly Legal: a complicated and messy case (as NL says) but this ending of…

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