Housing disrepair: Unexpected call for evidence
A ban on referral fees and an increase in the small claims limit are among ideas floated yesterday by the government to curb “unscrupulous” behaviour in housing disrepair cases.
There “may be issues” with some solicitors and claims management companies (CMCs) “not acting in tenants’ best interests”, it said, while tenants “may also face unclear or unexpected costs”.
The comments came in a call for evidence issued jointly by the Ministry of Justice and Ministry of Housing, Communities and Local Government. It focuses on county court claims for housing disrepair and underlying claims management activity.
It said: “We have heard reports of CMCs and solicitors targeting tenants who might be more vulnerable to exploitation, encouraging claims when it may not be in the tenant’s best interest, failing to warn tenants of risks involved, and offering counterproductive advice – for example encouraging a tenant not to let landlords in to carry out inspections or fix issues.
“This can result in tenants having to live with disrepair for longer and discourage them from accessing more effective redress routes.”
Tenants making a claim under conditional fee agreements “may also be unaware of the need to pay theirs and their landlord’s court fees if they are unsuccessful, or that they may have to pay their landlord’s legal expenses”.
The government said “too many renters put up with poor conditions in their homes: it’s unacceptable that 10% of social housing and 21% of privately rented homes do not meet decency standards”.
It acknowledged too that claims management “can play a valuable role in connecting tenants with legal remedies”, but there may be cases where “unscrupulous activity is resulting in vulnerable tenants being exploited”.
The evidence gathered will be used to determine if the claims management activity of solicitors and CMCs is causing issues, how big these issues may be and what form they take, and whether government action is necessary.
One of the questions is “whether there any lessons from the approach taken to personal injury claims in recent decades that could be applied to housing disrepair claims”, reflecting some of the reforms aired.
The call for evidence said: “Banning referral fees would tackle the issue of claimants being passed to the firm willing to pay the highest referral fees, rather than to the one most appropriate for their claim.
“Banning their use would not prevent claimants with valid claims from pursuing their case but would enable a claimant to choose a solicitor based on their specific needs, rather than being referred to the highest bidder.”
On track limits, it went on: “The ability to recover costs can also encourage unmeritorious claims to be made as defendants can often choose to settle such claims rather than risk the expense of fighting a claim.
“Increasing the small claims track limit to ensure all housing disrepair claims are heard in the small claims track could reduce and rebalance these costs across both parties to the claim.”
The small claims track limit for housing disrepair claims is £1,000 for both the estimated cost of repairs or other work and any claim for damages.
Laura Coyle, co-chair of the Housing Law Practitioners Association (HLPA), criticised the call for evidence for its description of the availability of legal aid. The document said a tenant may qualify for legal aid “if the disrepair is posing a serious risk to their health and safety, and if they also meet certain financial tests”.
Ms Coyle said: “It does not make clear there is no legal aid available for bringing action for damages for disrepair, following the Legal Aid, Sentencing and Punishment of Offenders 2010.
“It is this change that has pushed more and more tenants experiencing housing disrepair into the arms of the unscrupulous CMCs and firms.
“Legal aid housing providers are not in the business of exploiting vulnerable people; we are dedicated to getting the best possible outcome for our clients. We are also subject to the oversight of the Legal Aid Agency.”
The “easy answer” to the problem identified by the government was to reintroduce legal aid for housing disrepair, Ms Coyle went on.
“HLPA and others have repeatedly called for this, including in response to the recent civil legal aid review. It’s time the government listened.”
Research published last month by Manchester law firm Pabla & Pabla showed that the number of housing disrepair claims made against local councils has increased almost five-fold this decade.
Jacob Poole, its housing operations co-ordinator, said the call for evidence, though a surprise, should be welcomed by all in the market.
“Whilst there are clear issues which need to be addressed, the government must consider that at their root, housing conditions claims can be a complex area of law involving the most vulnerable sector of our society and their access to justice.
“The inclusion of specific performance and the fact that it is not simply financial restitution at stake, means that resolutions often take both time and expertise. Such claims cannot be easily categorised by simple compensation figure or the cost of repair.
“All stakeholders need to ensure that it is never the case that the condition of housing is at risk due to economic reasons. It is the responsibility of all concerned in this industry, that we ensure the tenant is at the forefront of any changes that are being considered.”
Leave a Comment