Challenge housing disrepair claimsÂ
Ivan Goodsell looks at housing disrepair claims and why they are rising
As of November 2021, Lambeth Council revealed the number of housing disrepair claims brought against it had increased by 600 per cent in four years, paying out £3m a year, on average, for damages. These claims, available to those living in a council home, social housing or a housing association property, are often made to try and force the landlord to complete work on the premises, fixing problems such as damps, cracks and mould.
The rise in claims has been driven by the Homes (Fitness for Human Habitation) Act of 2018, which came into law in 2019. This act prevents tenants from living in ‘dangerous and unhealthy conditions', and ensures rented houses and flats are ‘fit for human habitation’.
Despite the implementation of this act, the government’s 2022 Regulation of Social Housing report has revealed “appalling levels of disrepair in some social housing”, noting ”the extremely serious impact on the mental and physical health of those affected”. This impact is particularly poignant after the disastrous and tragic impact of the 2017 Grenfell Tower fire on the social housing sector, which drove several reports.
These include the Social Housing in England after the Grenfell report of 2019 and the Social Housing Regulation Bill of 2022, with many reforms a direct result of Grenfell. As a result, tenants are justified to turn to housing disrepair claims out of desperation for a suitable home, terrified that the level of disrepair evident in their homes may have consequences.
Despite this, Citizens Advice advises those considering court that this “can be costly and time-consuming and should only be taken as a last resort”. Why is this? While the Social Housing Regulation Bill 2022 indicates there are drastic changes required to social housing, introducing measures such as ‘Ofsted-style’ inspections for landlords and unlimited fines, these housing disrepair claims often leave tenants worse off.
Consequences of claims?
While housing disrepair claims should punish incapable landlords, social housing is overseen by landlords and councils, many of whom are struggling financially, particularly after the impact of the covid-19 pandemic. This trend is not localised to London, with 70 councils experiencing nearly 17,000 disrepair claims in the last five years and in excess of £55.1m paid out in figures gathered by Inside Housing. Combined with an exponential rise in legal costs, many are struggling to pay extortionate costs, which nearly doubled in the 2020 - 2021 period.
One of the key problems arising from these situations is moreover the involvement of claims management companies offering ‘no win, no fee’ representation in respect of disrepair to tenant’s property. This problem was instigated by the Legal Aid and Punishment of Offenders Act (LASPO) of 2012, which meant disrepair cases were no longer viable to be funded by legal aid, except in cases of risk of ambiguous health and safety breaches.
Now, some lawyers are allegedly extensively leafleting and targeting social housing tenants, telling them not to allow the landlords to undertake repairs. This action enables them to pursue claims under the aforementioned Homes (Fitness for Human Habitation) Act of 2018, under the guise of being promised thousands of pounds in compensation. As such, barristers have reportedly observed that while the act is intended as “a very good piece of legislation”, it is being exploited by “predatory solicitors” on “people who are vulnerable”.
Once tenants have pursued a claim with the no win, no fee representatives, they are often put in contact with a solicitor at the other end of the country. This solicitor will promptly contact the housing department, seemingly to ensure that not enough time is allowed for investigation, before issuing proceedings within the County Court for damages.
Usually, no attempt is made to double-check the housing or tenancy file, with landlords often at a disadvantage for failing to document maintenance thoroughly. A small number of damages will be awarded to the tenant, a minor victory before the representative provides an extortionate bill of costs, which is often five or six times the value of the claim.
With little defence, landlords are forced to settle, to avoid expensive legal proceedings and bad publicity. Simultaneously, housing and council authorities’ legal departments are often very busy, dealing with multiple claims at once, with claimants relying on quick settlements so that they can proceed with the next client. In a result of a settlement, the Local Authority is ordered to pay the legal costs, to be assessed if not agreed, therefore invoking a taxation process (as in any civil proceedings).
The direct result is excessive settlements, similarly to situations wherein a claimant has legal aid but gets an inter partes cost award, wherein the landlord or losing party has to pay at commercial rates. This inflated bill is resultantly not beneficial to the tenant or landlord, with the landlord or council unable to afford to repair the original problems due to the cost, and the tenant achieving a meagre award that will not cover the cost of repairs or further legal fees. Lambeth Council discovered that in some cases, the success fees charged to the tenant were in excess of 80 per cent, which revealed the extent of how deceptive these proceedings are.
In addition, the money sorely needed to assist tenants and council housing is being spent on claims that, in most cases, should never have been issued. As such, the no win, no fee representatives are the only party that benefits from the exploitative process.
External costs draftsmen
Law cost draftsmen use an expert team of specialist cost lawyers with comprehensive knowledge regarding all aspects of cost drafting. Thus, there can be success by instituting a robust challenge to the bill of costs put forward by the no win, no claim representatives, and advice on offers that result in reduced settlements.
Councils are often very busy with separate legal costs and issues, some local authorities may fail to respond to default costs, with an order resultantly made for the full amount of costs. However, in acting as external costs draftsmen, law cost draftsmen have been able to reduce costs payable in the majority of cases – a significant success.
Despite this, we have noted that they are often instructed following an offer by the paying party, which is subsequently rejected. As such, they suggest that anyone challenging a housing disrepair claim contacts an external cost draftsman as soon as possible when a bill of costs is served. This will reduce parties having to withdraw the offer to settle due to the extremely high figures and may lead to a reduction in success for the predatory legal firms.
Ivan Goodsell is a costs draftsman at IG Legal iglegal.co.uk