A special place in hell – Disrepair litigation

[The Uni’s wordpress has been out of action.  These posts were from last week]

In my view, there is a special place in hell for those people who take advantage of the vulnerable.  In two reports this week (here and here), Inside Housing have sought to isolate perches for those involved in disrepair claims brought by social housing tenants against their landlords.  I am not sure that either report necessarily hit its mark but, among landlords at least, it has certainly raised the profile of issues relating to independent expert survey reports of affected properties and certain law firms commonly labelled “claims farmers”.  It is right to say that the various firms and people highlighted emphasise that there have been no adverse findings of fact made against them by their representative bodies or courts.

Even so, I remain ambivalent about this kind of reporting and reports.  I want to explain why but it does come down to funding models and the removal of legal aid for most disrepair cases.  But also, we have a tendency to forget about the impact of poor conditions on residents when we focus on those running litigation.  There is an excellent recent paper on the effect of mould and claims on Somali residents here which makes for sobering and urgent reading.

Disrepair litigation

Disrepair claims have become high volume litigation, a kind of offshoot of motor finance and PPI claims.  In general, disrepair claims don’t attract legal aid, so they have to be run on funding models that probably encourage high volume litigation at reduced costs.  The key with this litigation is to get it over the threshold for a Fast Track claim.  That threshold requires that “the tenant is seeking an order requiring the landlord to carry out repairs or other work to the premises” (this is an order for what lawyers call “specific performance”); repairs costing more than £1k; and general damages of more than £1k. if your reach that threshold, generally the claim will be allocated to the Fast Track.

The important point is that there are costs consequences of tracking a disrepair claim – if you are on the fast track, then you will get your legal costs and disbursements, including for experts (if successful); if not, generally you won’t.  The litigation models run on the basis that these claims will be allocated to the Fast Track. The Starmer government had a call for evidence on housing disrepair claims, but I don’t think anything came of that.  The costs regime which limits costs on the fast track to fixed sums does not apply to disrepair claims.  Fixed costs tend to be a lot lower than those usually charged.  The exemption for disrepair claims was hard fought (and extended to 2028) in part because these are complex and technical claims which would be uneconomic under the fixed costs limits.  Generally, disrepair claims are funded under conditional fee agreements, under which the tenant’s lawyers take a degree of risk of the claim being unsuccessful (but get a little more if successful).

There is quite a bit of satellite litigation on whether a claim for specific performance remains extant if the landlord has done all of the works.  Different courts may take different views on this (see here).  And there has been satellite litigation on whether there should be a stay to allow a tenant to use the complaints process.  These are always interesting arguments, but what they are trying to do usually is either to move the claim on to the small claims track; or into a free complaints service which ultimately will take you to the Ombud (and we have seen that the Welsh Ombud provides very low levels of compensation compared with the courts and the English version).  Both of these are litigation “games” if we remember that what the tenant will want is the repairs to be done and, perhaps, compensation for the hassle and living in poor conditions.

The issues raised

The Inside Housing reports suggest that tenant surveyors may not be properly qualified, do not appreciate their duty to the court of being impartial and independent, and may over-estimate the cost of repairs to bring them above the £1k threshold in the rules.  These are the common refrain of social landlords which are also the survivors of this high volume litigation.  They will tell you that, once the lawyers and all walk away from the claim, their relationship with the tenant will continue and probably needs to be repaired (if possible).  Nobody talks about that element – the ongoing relationality.

We seem to have moved quite a long way from the “single joint expert” that the pre-action protocol governing disrepair claims encouraged.  That is a shame, adds to costs, and causes mistrust between the parties.  It produces adversarialism, which is problematic and against the spirit of the pre-action protocol which is designed to ensure swift resolution of disrepair and keep cases out of court.

Equally, there is a lot of discussion about “claims farmers”.  This is a pejorative label to which I probably don’t subscribe in the main because we know that vulnerable people are less likely to prosecute their rights.  Tenants living in poor conditions have rights.  Rights can be enforced and tenants are entitled to compensation.  Social housing tenants might need to have a little push or enticement to bring a claim.  So what?  To describe claims managers as “farmers” implies the wrong motivations to the social housing tenants (and labels them as what?), who may also want their landlords to be held to account.  Furthermore, there are some excellent and outstanding lawyers who are being tarnished with this label, and that is just plain wrong.

There is, of course, bad practice and the individual cases discussed in the IH article indicate that there are costs orders that reflect that bad practice.  Clearly, there is no good reason for a lawyer/paralegal/representative to impersonate a housing officer.  And, it remains an important principle that tenants should know two what they are signing up when instructing a lawyer.  However, I am afraid that you end with a legal system for which you are willing to pay.  In the absence of legal aid, how else are vulnerable people going to pay to get their landlords to take action on disrepair.

Concluding thoughts

There is a lot wrong with litigation.  I don’t suggest that everybody involved in disrepair litigation might have a higher motive to help tenants and their landlords.  But, perhaps, we should focus on the fact that a lot of claims are resolved quite quickly between the parties.  It may or may not be the case that claims have increased over time, and perhaps even a short period of time as is suggested by IH, but is this a “bad thing”?  If it roots out bad practice, remedies wrongs, and assists vulnerable people to live in the ways in which we would expect and hope that our social housing provides, surely that is a positive?  In the absence of public funding, expect claims companies to come on to the scene.  They are likely to be more acquisitive and less likely to take the proportionate view which legal aid requires but that is the policy balance struck in another place.  There might be some bad practice, which is the responsibility of professional associations and the courts to root out.