Fixed costs will make it harder for vulnerable tenants to enforce their rights

November 28, 2022

Fixed costs will make it harder for vulnerable tenants to enforce their rights

The tragic death of two-year-old Awaab Ishak from exposure to damp and mould in his housing association flat in Rochdale has shone a much-needed light on the appalling conditions endured by many tenants in both social and private housing.

In her verdict this month, senior coroner Joanne Kearsley said Awaab’s death should be a ‘defining moment’ for the housing sector.

In the wake of her report, housing secretary Michael Gove told Parliament last week that he would ‘name and shame’ landlords found by the regulator to have breached consumer standards, or found by ombudsman to have committed severe maladministration.

He said changes to the government’s Social Housing Regulation Bill would create a ‘rigorous new regime that holds a landlords to account for the decency of their homes’.

But while one arm of government is making all the right noises about tenants’ rights, another limb – namely the Ministry of Justice – is introducing reforms that put tenants’ ability to enforce those rights in real peril.

The MoJ’s plans to introduce fixed recoverable costs (FRCs) in housing claims could well mean that lawyers are no longer able to take on these claims.

Housing disrepair claims are extremely important: they often involve vulnerable and disadvantaged clients, living in shocking conditions that threaten their health and wellbeing.

But from a solicitor’s perspective, these are not easy claims to run. They need an expert surveyor’s report at the outset to establish if serious, structural repairs are needed; and landlords will often refuse to engage, dragging out the time and cost of the claim.

At the moment, firms can charge an hourly rate, with their recoverable costs ultimately assessed by the court to ensure they are reasonable and proportionate. But under the current FRC proposals, claimant lawyers will instead receive a flat fee, regardless of how complex a claim may be or how long it takes. Defendants, on the other hand, will not be subject to fixed costs.

In other areas of civil litigation, if the fixed fee that can be recovered from a losing opponent is too low, this can be supplemented by asking the client to agree to give their lawyer a limited percentage of the damages they are awarded – for example up to 25% in a personal injury case. That can make all the difference in ensuring that the claim is still economically viable for the claimant solicitor.

But in housing repair claims, there are no financial damages. A successful claim will lead to a landlord being obliged to carry out a specific repairs. But there is no damages pot from which the claimant’s representatives can receive any extra payment.

There are already too few law firms willing to take on housing-related claims. If the FRC proposals go ahead as planned, the worry is that there may be none left at all.

But perhaps there is hope. Justice minister Lord Bellamy recently announced that the FRC proposals have been delayed by six months, to October 2023. In doing so, he noted that the reforms have ‘particular implications for housing cases’.

Let’s hope that the government decides to reconsider this very real threat to the ability of vulnerable tenants to enforce their rights.

November 28, 2022