Andrew Brookes, Partner
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The Housing Law Practitioners Association (HLPA) is an organisation of solicitors, barristers, advice workers, independent environmental health officers and others who work in the field of housing law.
Membership is open to all those who use housing law for the benefit of the homeless, tenants and other occupiers of housing. It has existed for over 10 years. Its main function is the holding of regular meetings for members on topics suggested by the membership and led by practitioners particularly experienced in that area, almost invariably members themselves. The Association is regularly consulted on proposed changes in housing law (by primary and subordinate legislation and also by other means such as relevant codes) by the relevant Departments, chiefly the DCLG.
The Chair, Vivien Gambling, is an experienced housing specialist and a partner in a leading firm of solicitors. Although the Association is London based, the membership is countrywide. The Association is also informally linked with similar Housing Law Practitioners Groups in the North-West, South Yorkshire and the West Midlands.
Membership of HLPA is on the basis of a commitment to HLPA’s objectives. HLPA’s objectives are:
- To promote, foster and develop equal access to the legal system.
- To promote, foster and develop the rights of homeless persons, tenants and others who receive housing services or are disadvantaged in the provision of housing.
- To foster the role of the legal process in the protection of tenants and other residential occupiers.
- To foster the role of the legal process in the promotion of higher standards of housing construction, improvement and repair, landlord services to tenants and local authority services to public and private sector tenants, homeless persons and others in need of advice and assistance in housing provision.
- To promote and develop expertise in the practice of housing law by education and the exchange of information and knowledge.
The HLPA Law Reform working group has prepared this response. This group meets regularly to discuss law reform issues as they affect housing law practitioners. The Chair of the group reports back to the Executive Committee and to members at the main meetings which take place every two months. The main meetings are regularly attended by over one hundred practitioners.
Introduction
The Housing Law Practitioners Association will limit itself to responding to Q2 and Q3 of the Consultation Paper, being the questions most relevant to the organisation and the client group we serve.
Q2: Do you agree that the small claims limit for housing disrepair should remain at £1,000 for disrepair and £1,000 for damages? If not, please set out your reasons why and state what you consider the appropriate level would be.
The Housing Law Practitioners Association agrees that the small claims limit for housing disrepair should remain at £1,000 for disrepair and £1,000 for damages.
We cannot stress enough how important housing conditions are for those we represent. Those living in poor housing conditions are disproportionately from disadvantaged and vulnerable groups in society, including BME communities, those who do not have English as their first language, and those subject to economic and educational deprivation. There have been numerous studies which have shown the link between poor health and bad housing. Housing disrepair is an issue which impacts both on the health of the nation and on wider issues of social exclusion. The Legal Services Commission has recognised this by making funding of housing cases, including housing disrepair cases, a priority.
The small claims limit for housing disrepair should remain at £1,000 because:
1. Housing disrepair claims are complex and require independent legal guidance. Such claims include a claim for an injunction as well as damages. If a claim for an injunction is not included, the small claims limit of £5,000 applies. It is rare for disrepair claims not to include an injunction which adds to the complexity. The substantive law is complicated. It draws on both contract law (the tenancy agreement), statute law, for example s11 of the Landlord & Tenant Act 1985 and s4 of the Defective Premises Act, and common law, for example on the assessment of damages. The issues thrown up in housing disrepair cases are not at all straightforward. One of the most common examples is the tenant who complains that their property is damp. This will not establish liability. The tenant must show that the damp is not the result of a design defect but that it results from a failure by the landlord to maintain the structure and exterior of the property. Frequently there is a lengthy factual history of various items of disrepair of varying severity depending on how long the tenancy has existed.
2. Housing disrepair claims require expert evidence. In almost all cases, the tenant will need evidence from, for example, a surveyor. This is to establish the cause of the defects and to prepare a schedule of works. Without a clear schedule of works, the tenant will not be able to ask the court for an injunction. Expert evidence is as important to housing disrepair cases as medical evidence is in personal injury cases.
3. An increase in the small claims limit would put people off making a claim. As housing practitioners, we have absolutely no doubt about this. Claimants in housing disrepair case are by definition from vulnerable and disadvantaged groups in society. They are far more likely to be educationally disadvantaged, from a BME community or where English is not the Claimant’s first language. The Constitutional Affairs Committee report was very clear that vulnerable tenants should not be disadvantaged by any change in the small claims limit. It is our submission that an increase in the small claims limit would put most people off. We have previously estimated that even a lower increase to the small claims limit to £2,500 would reduce the number of claims handled by our members by a fifth.
4. Defendant landlords in housing disrepair claims are almost always legally represented. This is true whether the landlord is a private landlord, housing association or local authority. Potential claimants with strong claims would be unable to afford legal representation and legal aid is not available for small claims. Some of the most vulnerable groups in our society would be denied access to justice or be forced to face represented opponents.
5. The current small claims limit of £1000 represents a considerable sum for most people, and particularly claimant tenants in housing disrepair cases, who will generally be from low income groups. It is also true that the current disrepair limit of £1,000 for works of repair represents a substantial sum. There is no need to raise the small claims limit, which is already set at a reasonably high level.
6. Claimants in person almost always undervalue their claims. Without the benefit of legal advice, claimants in housing disrepair claims will not know what the true value of their claim is. On the other hand, defendant landlords will often initially make very low offers of compensation. When acting in person, unrepresented Claimants will often accept a first offer without realising the landlord would negotiate and that the claim is worth far more.
7. We do not accept that intervention from District Judges would resolve the issues of inequality of arms if the small claims limit was increased. The first point is that many claims do not get as far as court and the disrepair pre-action protocol is of course designed to prevent, as far as possible, cases getting to court. Claimants would still have to assemble evidence and in particular obtain their own appropriate expert evidence. Claimants would still have to deal with correspondence from a represented Defendant landlord. They would have to deal with tactical ploys from the landlord such as a low offer.
8. The advice sector and the courts could not cope with a substantial increase in litigants in person. In particular, housing disrepair claims are often conducted by private practice solicitors firms. The already over-stretched advice sector would be faced with a substantial number of litigants in person. Leaflets are no substitute for proper legal advice. Leaflets can explain procedure but they cannot explain how the substantive law affects an individual claimant’s case.
9. Damages in housing disrepair cases have not increased substantially since the current small claims limit was increased. Indeed, the leading case on housing disrepair damages pre-dates the introduction of the Civil Procedure Rules and the current small claims limit. Therefore there is no need to increase the small claims limit at this time to reflect an increase in damages awards. The Constitutional Affairs Committee accepted that damages in housing disrepair cases were modest. That means that even relatively severe cases may only just exceed the small claims now. If the small claims limit is increased, tenants may delay taking disrepair claims until the damages will be sufficient to exceed the new small claims limit. That would have the undesirable effect of forcing tenants, their families and children to live in poor conditions for longer until the damages were sufficient for them to be able to take action.
10. If costs are perceived to be a problem (and we do not believe they are) then the Housing Law Practitioners’ Association considers this would be better dealt with by streamlining the procedure rather than raising the small claims limit. We deal with further in our response to Question 3.
We would also like to comment briefly on some of the arguments put for raising the small claims limit for housing disrepair cases. One submission is that disrepair is not a widespread problem and most issues raised relate to improvements. The evidence of the government’s English House Condition survey suggests that poor housing conditions are still widespread. Second, if disrepair is not widespread it does not follow that the small claims limit should be raised, rather it shows that for such cases as do exist Claimants should have access to proper legal advice to be able to deal with the disrepair.
Another argument is that landlords are spending large amounts of resources on meritless claims. Again, even if this were true, it does not therefore follow that the small claims limit should be raised. The proper response is to properly defend the claims. In fact the total number of Legal Help (initial advice and assistance) cases for housing disrepair in 2005-2006 was only 6,856 cases. Also in 2005/6 there were only 1,832 legal aid certificates issued for proceedings in the whole of England & Wales. This tiny number is hardly indicative of large amounts of resources being spent by landlords.
Finally, it is said, without any statistical evidence being provided, that the costs incurred are disproportionate to the amount of damages awarded. In HLPA’s experience, this is not the case. It is important to remember that damages are only one aspect of a housing disrepair claim. The other part of the claim is the value of the works of repair. When you add that to the damages, the costs rarely seem disproportionate. Where costs do mount up, this is often due to the Defendant landlord’s failure to engage properly with the housing disrepair pre-action protocol, leading to the unnecessary issuing of proceedings and increased costs. Costs are in any event controlled by the detailed assessment procedure.
It is also worthy of note that the so called claims farmers have almost entirely left the arena of disrepair. This is as a result of changes brought about by the Compensation Act 2006 and also by decisions of costs judges who have effectively curtailed the use of conditional fee agreements where legal aid is available.
We wholeheartedly agree that the small claims limit for housing should remain the same as the small claims limit for personal injury cases. Almost all of the arguments applicable to personal injury cases also apply to housing cases. There would be no logic to increasing one and not the other. Indeed, we consider that the arguments for retaining the small claims limit at £1,000 in housing disrepair cases are even stronger than they are for personal injury cases.
This is for two reasons:
1.Personal Injury cases are damages only cases. Housing Disrepair cases involve both a claim for damages and a claim for an injunction to have repairs carried out. They are by their very nature more complex procedurally. This makes the argument that there should not be inequality of arms where the landlord is represented and the tenant is not more forceful. Vulnerable tenants are even more likely to be put off pursuing a claim.
2. Although claimants in personal injury cases include vulnerable groups, it is of course the case that anyone can suffer personal injury. On the other hand, by definition claimants in housing disrepair cases are almost certainly going to be from vulnerable groups in society, and be disadvantaged for that reason.
To summarise, the Housing Law Practitioners Association believes that the only option is for the small claims limit for housing disrepair cases to remain at £1,000.
Q3: Your views are sought on whether the process for dealing with housing disrepair cases can be improved and simplified, and if so, how this could be achieved.
Many of the past inefficiencies of the system have been resolved by the housing disrepair pre-action protocol. In common with other pre-action protocols, the housing disrepair pre-action protocol is designed to avoid litigation by early exchange of information, and by attempting to agree a jointly instructed expert before litigation commences.
In general, the housing disrepair pre-action protocol has worked extremely well. Problems have tended to arise where the Defendant landlord has not wished to engage with the protocol or have tried to ignore it.
However, the Housing Law Practitioners Association does consider that it may be time to review the working of the pre-action protocol, to ensure that the protocol can be updated where necessary.
In particular, the following could be considered:
1. Promoting early admissions of liability. It is the experience of HLPA members that, unlike in personal injury cases, liability is rarely admitted by the Defendant at an early stage when it really ought to be. This of course makes the issuing of a claim more likely and means that costs are increased in having to prove liability. There may be scope for more stringent penalties on defendants who fail to admit liability early in a claim. This is probably best done by imposing an additional costs liability. Admissions should be binding. Unless there is a need for urgent work, for example an interim injunction, Claimants representatives should not carry out any further investigation on the case until the time limit for notifying a decision on liability has passed.
2. In Conditional Fee cases, if liability is admitted, the matter would proceed to the next stage but there will be no ATE cover because it is would not be necessary. This would help to reduce premiums.
3. Introducing a template for surveyor’s reports. The protocol already suggests a letter of instruction to an expert in housing disrepair cases. However, the reports which are produced by surveyors and others of course vary in their presentation and scope. A template for experts reports would ensure that the questions which each party needs to be answered are properly answered, and will facilitate early admissions of liability and settlement where appropriate.
4. In straightforward cases, following receipt of the expert’s report, the Claimant’s solicitor could also send a settlement pack, including a Claimant’s offer to settle, with the Letter of Claim. Within say two weeks of the settlement pack, the Defendant must either accept or reject the offer. If a counter offer is made, then an additional period should be allowed for negotiation.
5. Reviewing the system for assessing general damages. In housing disrepair cases, there is no equivalent of the Judicial Studies Board guidelines for personal injury cases. Although case law has established that damages should be related to the contractual rent, it can be very difficult to assess the appropriate percentage reduction in rent in an individual case. This does not facilitate settlement and can mean that Claimant and Defendant have a very different view of likely quantum of damages. If some guidelines were prepared, this would assist the parties to reach settlement at an early stage.
It is appropriate at this stage to say that the Housing Law Practitioners Association does not consider that there is scope at present to introduce fixed costs to fast track housing disrepair cases. There are a number of reasons for this. First, there is no real equivalent to the straightforward RTA cases which now attract fixed costs. Housing disrepair cases are different from personal injury cases because very often there is ongoing disrepair, whereas in RTA cases you are dealing with a one off event which took place in the past. It would be unfair to impose fixed costs where the Claimant’s representative was forced to do more work because the disrepair worsened as the case progressed. There are simply not enough disrepair cases to model the appropriate level of fixed costs. Housing disrepair cases take a variety of forms which make them difficult to apply fixed costs to. For example, some cases may relate to disrepair which has existed over a prolonged period and has had an adverse impact on the health of the Claimant and his/her family. Other cases may relate to a short term but extreme event, for example a severe roof leak.
To conclude, the Housing Law Practitioners’ Association considers that it is now time to review the housing disrepair pre-action protocol, with a view to further simplifying and streamlining housing disrepair cases.
Andrew Brookes
For further information email Andrew or call 020 7940 4000.
