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a costly reminder to tenants claiming for disrepair

18 December 2018

The Pre-Action Protocol for Disrepair and Housing Claims came into force in December 2003 and was intended to give clear guidance to both landlords and tenants on how to conduct a housing disrepair claim in order to prevent costly court action.

Plugging ‘housing disrepair’ into Google produces numerous solicitors offering ‘free initial advice’, ‘no win no fee’, ‘getting the compensation you deserve’ and encouraging use of an online compensation calculator – all of which go a long way to raising expectations for claimants in this area. It therefore won’t come as any surprise to report that housing disrepair claims have risen significantly over the last few years resulting in millions being paid out in compensation, and with legal fees often outstripping compensation payments.

Couple that with the historical propensity for landlords to settle a claim because it costs more to fight than settle, it seems many tenants may be tempted to start legal action without proper evidence and thought. Maybe it is time for landlords to be seen to be taking a more robust line with spurious claims.

The case of Wood v Cornwall Council (Truro County Court 7 September 2018 unreported) is a stark reminder to tenants of how things can go badly wrong if a claim is started without any evidence or regard to the pre-action protocol.

There was nothing unusual about the claim other than the Defendant landlord, Cornwall Council, was sure that the claim by its tenant for damages for disrepair along with the claim for loss of amenity (because of that disrepair) were misconceived. Cornwall Housing, faced with the decision to either pay out to make the claim go away or pay out significant legal costs to disprove it, actually chose the latter – an unusual position but a step forward in questioning why Councils are using up a considerable amount of their precious reserves as pay outs to tenants who cannot back up their disrepair claims.

The problem of proportionality and costs

The case, did not as most do, settle prior to proceedings. Cornwall Housing took a robust view based on the conclusion that little hard evidence had been produced. By the time proceedings were issued for circa £25,000 damages, the costs of the claimant were already over half of the damages claimed. The important point here was that this made the claim virtually impossible to settle before it had even begun. Cornwall Housing were not prepared to pay as much (or more) again in costs than in their view the unmeritorious claim was worth.

This could have been avoided had the tenant followed the Pre-Action Protocol for Disrepair and Housing Claims. That pre-action protocol envisages that the tenant’s Letter of Claim will suggest the instruction of a single joint expert, with a suitable expert subsequently being agreed by both parties. It is then envisaged that the expert inspects the property within 20 days of the landlord’s response to the tenant – in other words, the inspection occurs pre-action.

Although this incurs costs early in the litigation process for both sides, instructing an expert usually makes it clear at an early stage whether the claim is well-founded or not, which surely increases the chances of a case settling before it has been issued.

In this case, no expert was instructed in accordance with the pre-action protocol, and it was late in the day (over a year after the issue of proceedings), that a single joint expert appointed by the court identified works of no more than £650 and no diminution at all to the value of the claimant’s tenancy. Cornwall Housing reasonably expected that the claimant would drop her claim. But the claim was now about costs and misguidedly the tenant soldiered on with little hope of success and, more importantly, further increasing costs for all parties. Had the pre-action protocol been followed, it is fairly likely that this case would have settled at a time when both parties had incurred relatively modest costs.

The Truro County Court saw behind the tenant’s attempt to simply carry on in the hope of being awarded legal costs if nothing else. The claimant ended up with a very modest award of damages (just over £500), but facing not only her own legal costs but a judgment for a hefty chunk of Cornwall Housing’s costs. The tenant walked away with absolutely nothing other than a CCJ for her trouble.

It is very rare to see a party who is awarded damages be ordered to pay the other side’s costs. Tenants will surely be wary in future that bringing a spurious claim that results in only nominal damages being awarded is likely to lead to the court finding that the tenant is in reality the ‘unsuccessful’ party in the litigation.

Most would think that this represented no victory for either party after nearly 4 years of fighting, and they are probably right. However from Cornwall Housing’s point of view it is hoped this will at least act as a wake-up call and deterrent for claimants’ solicitors and their clients in submitting frivolous disrepair-related claims.

This article was first published by Local Government Lawyer on 30 November 2018.

Pamela Shepherd of Browne Jacobson LLP and Daniel Scott of Wilberforce Chambers represented Cornwall Council

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