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New Practice Direction for Possession Claims22nd July 2020 Commercial Litigation
At the end of last week, late on Friday in fact, the government unveiled a change to the civil procedure rules relating to possession claims. Slightly unhelpfully this change merely referred to a new practice direction, Practice Direction 55C. However, that Practice Direction was not published and so we were left to speculate on what was actually happening.
Practice Direction 55C has now been revealed and it deals with the long-anticipated re-opening of the courts to hear possession claims. The Practice Direction (PD) will apply for an “interim period” from 23 August 2020 until 28 March 2021 only and will cease to have effect after that period unless it is extended.
The first thing to note is that the, much vaunted, Pre-Action Protocol (PAP) for private landlords appears to have been dropped. This is despite both the Secretary of State, Robert Jenrick and the Housing Minister, Chris Pincher, stating that there would be one. The PD requires that social landlords (who already were subject to a Pre-Action Protocol) must bring a notice to any hearing showing how they have complied with the PAP. But this is really a variant of something they had to do anyway.
Coronavirus effect notice
For private landlords, instead of a PAP, they must attend any court hearing with two copies of a notice setting out what they know about the effect of the coronavirus on the defendant tenant and any dependents. This notice also needs to be sent to the tenant well before the hearing.
Accelerated possession claims are not exempt either. When filing a claim for accelerated possession a similar notice must be included with it. This is important as the accelerated claim form is not going to be amended to remind people of this requirement.
Naturally, many landlords and other claimants will have limited knowledge of the effects on defendants. This may be particularly true if there has been a refusal to communicate by the defendant, as too often occurs. So many notices are likely to say little more than the claimant has no knowledge of any effects on the defendant caused by coronavirus.
Restarting existing cases
PD 55C separates all existing possession claims in two groups: those which were issued before 3 August 2020 and those which are issued on or after 3 August 2020. The PD sets out the process parties will need to follow in order to get their cases up and running again. This will be done through the filing and service of a reactivation notice.
Rather confusingly, the PD provides for another set of terminology in respect of claims. It refers to “stayed claim” (a claim issued on or before 22 August 2020) and “new claim” (a claim issued after 22 August 2020).
The requirement for reactivation notice does not apply to stayed claims brought on or after 3 August 2020 or stayed claims in which final possession order has been made. No stayed claims issued before 3 August 2020 will be dealt with by the courts unless the parties serve and file a reactivation notice. That said, it is probably sensible for anyone who has had a case stayed to issue a notice anyway.
No template for reactivation notice has been provided, but this will need to set out:
- what a party is asking the court to do; and
- any information about the effect of the Coronavirus pandemic on the tenant and their dependants.
The apparent intention is to ensure that the court has all relevant Coronavirus information in advance so that this can be given the necessary consideration. However, just as with the notices needed for hearings, many claimants will have little idea of any effects and may well not be able to obtain such information from a tenant who is not cooperating. The PD does not say anything about what the court is meant to do with this information or how it should deal with defendants who refuse to provide the information in advance but seek to rely on it at a later stage.
There is also an additional requirement for landlords to provide an updated rent account for the previous two years where a reactivation notice is filed and served in respect of a rent arrears claim. This seems to intend to provide more context to the court in order to establish whether rent arrears are largely caused by the pandemic, or a tenant simply has a history of failure to pay rent.
All trial dates which were set prior to 27 March 2020 will be vacated and the cases stayed, unless a reactivation notice is filed and served, and the parties provide additional information in respect of any case management directions, no later than 42 days before the hearing date. Therefore, parties with hearings listed after 23 August 2020 should take urgent action to ensure they do not lose these dates.
If parties fail to file and serve a reactivation notice in respect of a claim issued before 3 August 2020 by 4pm on 29 January 2021, the claim will be automatically stayed. A normal application to lift the stay will then be required. Helpfully, the PD confirms that this will not be treated as a breach and the application will not need to be one for relief from sanctions under CPR 3.9.
The court will give a minimum of 21 days’ notice to parties in respect of any listed or relisted hearings. The rule that a hearing is listed within 8 weeks of issue has been dis-applied. This is an indication that significant delays are expected in order to deal with substantive backlogs, which were considerable even before the pandemic stay.
What this means
It is hard to avoid the conclusion that this is all a set of procedural devices to make cases just go away. The various notices about the effects of coronavirus will have no effect on a court making a possession order under s21 or under a mandatory possession ground because the court simply has no discretion in these areas. However, as the new requirements are buried in the procedural rules and will not be mentioned on any forms it is likely that a fair few claimants will fail to provide the proper notices at the right times, at which point court staff or judges will simply dismiss their cases. Likewise, as existing cases will mostly remain stayed without a reactivation notice being served and the court is very unlikely to write to claimants to tell them this, these cases will simply remain stayed without many claimants actually realising they have to do anything. This will have the effect of spacing out cases and making it look like the court is handling matters quickly, even though they will in fact be simply using procedural devices to get rid of stuff without dealing with it at all. It seems that the government’s master plan therefore to avoid an eviction “cliff edge” is simply to try to sweep it all under the carpet and make it more complex for landlords to progress their cases. This is not really solving any of the underlying issues at all.
In the circumstances it is imperative that landlords take legal advice and commence the relevant steps set out in the new PD without delay, as this is likely to make a significant difference to the timescales they can expect in recovering possession of their properties.