Legal aid for settling possession cases

17th June 2022 Commercial Litigation

For those engaged in possession actions, it is often far better to reach a settlement before getting in front of a court - in terms of cutting the time spent on the process, managing legal costs, and generally trying to enjoy a stress-free life.

However, even some of the most straightforward possession cases will become protracted and fall into the court’s lap if the tenants are not able to access legal support early enough in the process that they can understand their legal position and thus enter into negotiations in a meaningful way or, in a few cases, be advised not to pursue a futile defence or counterclaim.

As a result, proceedings can sometimes escalate into series of notices, applications, claims and hearings with both sides worse off for it and the court backlog further increased. Ultimately, even if a landlord’s main focus is a successful outcome for themselves, to have the other party unrepresented and unadvised does little to serve that goal; if anything, it drives up costs and prolongs the time taken to repossess.

In its current form, the Housing Possession Court Duty Scheme provides non-means tested advice and representation for tenants facing possession proceedings on the day of their court hearing – but crucially not before. This often means that defences are entered on the day leaving potentially valid defences poorly explained and so dismissed, and weak defences being accepted leading to the case being adjourned. It also creates a perverse incentive for duty solicitors to focus on coming up with any defence possible in order to obtain the adjournment.

For tenants, while the axe of eviction may be diverted, it is often only temporary and comes at the cost of a larger judgment later for rent arrears and legal costs, undermining their credit status and increasing their debt burden. For landlords, it is an annoyance which creates the impression that the court system is biased against them.

In 2019, 37,700 claims were made through the Scheme, demonstrating just how necessary legal aid support is in property-related matters. Then, in 2020 as the pandemic set in, advisors were able to modify their service to offer virtual sessions. The Scheme is currently operated on an area-by-area basis with organisations such as Shelter, Citizens’ Advice Bureau and the Law Centre Network serving as providers.

In May, following consultation with its providers, the government announced funding of £10 million to expand and evolve the Scheme into the new Housing Loss Prevention Advice Service, with a notable shift in focus from ‘possession’ support to ‘prevention’. Alongside the injection of funding and a new name, the Service will have its remit greatly expanded so as to reach tenants facing possession proceedings before they get to court. Though, it has yet to be established exactly how early tenants can seek out the help of advisors. The Law Centres Network have recommended that it should be accessible before a landlord has even served a notice seeking possession in order to be truly effective.

In a further positive move, the Advice Service will also be on hand to assist on welfare and debt matters, which naturally run alongside housing issues. Moreover, a panel of legal experts will be formed to assist the advisors with complex legal issues that arise. Structurally, the system is changing from being area-based to court-based to ensure fuller provision of advice workers across HMCTS.

From the vantage point of tenants, then, there is a lot of promise in the plans, which will improve their access to justice (benefitting all parties involved, as above) and hopefully lead to more out-of-court resolutions.

Interestingly, the government’s rationale for this overhaul is rooted in its concern for the scheme’s longevity, as numerous providers of the Possession Court Duty Scheme have struggled to satisfy their contracts and pulled out, leading to patchwork coverage and numerous rounds of re-tendering. However, the government seems to have missed a trick in addressing this aspect. While funding has been boosted with the £10 million announced, the way in which it is allocated across the Service means that the providers are still to be remunerated at £157 per client advised, which according to the Law Society is actually loss-making once advisors are paid their hourly wages.

Clearly there is solid reasoning and healthy demand for legal aid funded advice in possession cases; particularly when you consider that marginalised groups (women, people of colour and people with disabilities) are overrepresented among those using the service, according to 2019 data. Combined with the fact that small claims are taking on average 51.4 weeks to go to trial, and multi/fast-track 74 weeks, there is an opportunity – and indeed a pressing need - here to level up access to justice and ease the civil court’s pressures at the same time, and to do so in a way that is operationally sustainable.

Nevertheless, in a climate where policy has been to diminish legal aid schemes rather than develop them over the last decade, for the government to expand a non-means tested scheme on housing is a very encouraging step towards earlier and better dispute resolution. If tenants can be helped to structure their finances, and landlord and tenant relationships are concertedly managed so that tenants can remain in their homes, this will lead to better outcomes for landlords and tenants alike.

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Chloe Wynne is a Paralegal located in Londonin our Commercial Litigation department

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David Smith is a Partner located in Londonin our Commercial Litigation department

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