Fixed Costs In Housing Disrepair Costs Delayed By Two Years

Housing Disrepair Legal Costs Two Year Freeze

The government's decision to postpone the implementation of fixed costs in housing disrepair expenses for two years will be a major letdown for landlords. This delay was somewhat anticipated due to the significant amount of pressure from tenant lawyers and charities in recent months. The media has also highlighted several high-profile cases, including the unfortunate death of toddler Aawab Ishak.

A Ministry of Justice (MoJ) spokesman said:

"We want to reform civil justice costs because giving all parties certainty upfront will ensure no one is locked out of justice for fear of how high their legal fees might be if they lose."

Almost all cases brought by tenants are under a Conditional Fee Agreement, commonly known as "no win no fee" agreements. Without this type of fee arrangement, the majority of tenants would not have the financial ability to bring a claim, which makes the likelihood of facing un-favorable legal fees quite low.

The MoJ spokesman went on to say:

"However, it is important that our reforms are aligned with wider reforms in the housing sector which is why we've taken the decision to delay introduction in these instances by two years."

The Social Housing Regulation Bill is currently making its way through Parliament. This bill is aimed at regulating social housing and approved schemes for investigating housing complaints. The goal is to ensure that housing complaints are dealt with quickly and fairly, with the Housing Ombudsman having increased powers.

While the changes to the Housing Ombudsman are expected to provide tenants with a better way to address issues with non-compliant landlords, it is unfortunate that tenant solicitors may still encourage tenants to pursue legal claims for financial gain.

Public services, including social housing landlords, are under financial strain. The costs associated with addressing disrepair cases in court consume valuable resources that could be better spent on improving properties and supporting tenants.

Fast claim resolutions v costs?

The implementation of fixed costs could have helped ensure that claims focused on quickly resolving issues for tenants, rather than being driven by costs, which often result in delays. Some law firms even discourage tenants from allowing their landlord's surveyor access to their property, instead instructing their own surveyor at a significantly higher cost. This can leave the client in a property that may be in a state of serious disrepair. These surveyors are often instructed through an agency that shares directors with the tenant's solicitors, causing concern around conflict of interest as the courts require experts to be independent.

Despite other cost reforms, such as the introduction of the law on proportionality, legal costs still far exceed the costs of damages and repairs.

Landlords often end up paying higher legal costs simply to avoid the threat of court proceedings during settlement. The same issues arise with costs, as the only opportunity for a landlord to have the court consider matters such as proportionality is through a court assessment of the costs. While costs below £75,000 are assessed on paper and the costs of the process are capped at £1,500 plus VAT and the court fee, this still carries a degree of risk and adds to legal expenses. However, there may be cases where it is better for landlords to ask the court to determine costs. Part 36 offers can be made on costs, which means that if a landlord makes an offer on costs and the tenant fails to exceed that offer on assessment, the court will award the costs of detailed assessment (costs) proceedings to the landlord.

Currently, the next general election is not until January 2025, and the current government is unlikely to revisit fixed costs for the housing disrepair sector. It is difficult to predict whether fixed costs will be a priority for the next government. As inflated cost claims are likely to continue for the next two years, landlords may want to consider a more robust approach for cases that require a stronger challenge. While an assessment of costs may seem disproportionate based on the figures of a single case, it would benefit landlords if the court had the opportunity to consider common issues, such as whether the agency uplift applied to surveyor's reports are reasonable and proportionate. This would create a body of case law that could help bring costs to a more sensible level.

Housing Disrepair Experts thoughts

Housing Disrepair Experts are part of Evans Hughes Ltd, a Claims Management Company that is regulated by the Financial Conduct Authority (FCA). They have been granted specialist permissions to investigate, advise, and represent clients in housing disrepair claims.

As an ethical company, they are committed to providing their clients with honest and accurate advice, ensuring that their clients fully understand their rights and the claims process. They will not encourage clients to pursue claims that are unlikely to succeed, and they will always work in their clients' best interests.

As a regulated company, they are required to meet certain standards, including being transparent about their fees and charges, providing clients with clear and accurate information, and treating their clients fairly and respectfully. This is not only applicable to clients but also work ethically with landlords, councils and housing associations.

Their specialist permissions allow them to provide expert advice and representation in housing disrepair claims. They have the knowledge and experience to assess the extent of disrepair, advise on the tenant's rights and obligations, negotiate with landlords, and pursue claims through the courts if necessary.