Government’s “Levelling Up” really means levelling down for tenants
The MOJ’s Fixed Recoverable Costs (FRC) policy contradicts Michel Gove’s initiative of “Giving residents a say”.
By bringing in fixed fees for disrepair cases the government will effectively take away the ability for most tenants to bring a legal action against their landlord for disrepair. This will leave families exposed to dilapidations and disrepair affecting their health and safety. The most vulnerable in our society: the young, the sick and the disabled would be left unprotected from rogue landlords.
Discussing the government’s policy to increase standards in housing on Radio 4’s Today Program, Michael Gove said: “That is one of the reasons why we are taking steps in order to make sure that people in existing social homes in council houses have their voice heard… Why we are making sure people in the private rented sector can benefit, that bad landlords be tackled.”
And lastly his desire to, “Provide all renters’ peace of mind”.
The end of no win, no fee?
This stated intention completely flies in the face of what the MOJ is proposing. The FRC proposals make it unworkable for law firms to offer no win, no fee arrangements for clients. This will mean that tenants would have to fund cases themselves, which would be financially impossible for most people.
In proposing fixed fees, the government has failed to take into account the nature of a disrepair claim. They ignore the specific performance element of a case (that is, the part of the case that requires the landlord to resolve the ongoing disrepair issues) and have focused only on the damages. They say that the fixed fee should be linked to the amount of damages you can get. This is hugely problematic, because:
- The necessary works at a property can be complicated and difficult for parties to resolve. This means the case can drag on and it is something not within the control of the claimant.
- It is therefore impossible to offer a no win, no fee CFA in disrepair cases under a fixed fee. The risk would be too high as we would not be able to reasonably assess how long or how much work would be needed to complete the case.
- Liability is ongoing and issues of disrepair can easily arise after the case has started. E.g. a simple case of mould in a property could, after further inspection, be discovered to be chronic rising damp. What could easily follow is a protracted argument involving experts as to the extent of the works needed to resolve the problem and consequently the extent of the landlord’s liability.
- Damages are historically low as they are based on rent values. They do not reflect the value to the client in getting the disrepair resolved. Therefore it is wrong to base the FRC ratio around the value of damages.
- Landlords and their representatives would be able to drag the case out knowing that the Claimants representatives simply could not afford to continue to work on the case.
No savings for the taxpayer
The incredible thing about this policy is that it doesn’t save the taxpayer any money whatsoever. It only benefits landlords and their lawyers. Landlords’ representatives have no restriction on their fees and therefore will not be compromised by lengthy litigation. Quite the opposite, it is now in their interests to have protracted cases. The government is taking away the principal of equality of arms when it comes to tenants.
In the foreword to the Governments Charter for Social Housing Residents white paper, Boris Johnson states: “The proposals in this White Paper will make clear the standards that every social tenant in England is entitled to expect from their landlords. They will ensure that people feel safe and secure in their homes, can get problems fixed before they spiral out of control, and see exactly how good their landlord is at dealing with complaints.”
So in reality it seems that with this Government, one department giveth and the other taketh away.