Reforming Renting and the Courts

22nd June 2022 Commercial Litigation

Following on from my overview of the Renter’s Reform White Paper and a much more detailed look at the ending of s21 and the new grounds for possession it seems appropriate to consider the role of the court and possession proceedings. A fair bit of this is within the response to the call for evidence on the housing court. This is quite interesting as the role of the Courts is one for the Ministry of Justice but DLUHC is clearly able to exert a considerable degree of influence here, at least as it applies to housing.

One of the most important changes is that accelerated possession proceedings will be removed as a concept. This is not a huge surprise as they are only for evictions proceedings from s21 notices and so there would be a limited ability to use this in future. However, there had been suggestions that they would be retained for cases involving substantial rent arrears where defences would be more limited. This will be a big concern to many landlords and agents who tend to use accelerated proceedings themselves to avoid the costs associated with solicitors. It is likely to lead to further increases in the number of “eviction specialists” who are not regulated legal professionals and tend to undercut insured and regulated suppliers like solicitors but who also provide questionable service quality and no independent complaints process. Requiring more cases to be dealt with by way of hearings will also lead to an increase in the number of hearings and the court time required to deal with them. The government may think that the removal of s21 will substantially cut the amount of court resources required to deal with possession as there will be less of it going on but, given that the evidence is that most s21 notices are issued for a reason it seems unlikely that there is going to be much fall off in the overall numbers. Indeed, some landlords may be less likely to show forbearance for tenant breaches if they are unable to secure possession in the more general sense allowed for by s21 which might actually increase possession claims.

The reforms also say that they will find ways to expedite more serious issues such as ASB. However, the court has always done this on an informal basis anyway so it is debateable how much can be done.

The Ombudsman is seen as a means of cutting court usage by resolving disputes elsewhere. However, the Ombudsman is only able to resolve tenants complaints about landlords. Landlords are not being given any other place to go and so are likely to use the court in the exact same volume as before. It may be the case that the Ombudsman diverts some tenant disrepair claims but this does not seem likely as legal aid funding is likely to remain tied to court action. The previous announcement on funding for earlier action in dispute resolution in housing possession is also intended to reduce the load.

So what wider reform is on offer in the Courts? There is a new digital possession process in the works which provides more guidance for landlords and will do more of the process online. This may enable landlords to do more for themselves. However, it should not be forgotten that many possession cases are complex and we continue to have key cases going to the highest appeal courts about relatively basic parts of the possession process. So, while digitisation may speed up some work it will not remove fundamental blocks around having sufficient judges and court availability to hear cases.

Purportedly steps have also been taken to review bailiff capacity by making the process more efficient and reducing their administration load. However, it is notable that a lot of this has happened already and there is no noticeable increase in speed at the moment, despite the number of cases not having returned to pre-Covid levels.

A lot of the more interesting reform is to the manner in which the FTT and county court work together. This is largely to do with the issues around long leasehold property. There have been pilots already in moving service charge matters which sit between the county court and FTT into the FTT completely with FTT Judges acting as District Judges for the county court parts of this work. This will be widened and made the normal practice leading to a reduction in this work in the county court.

However, the FTT is also likely to see more work. By making all rent increases flow through the s13 process the government is expecting a big increase in the number of these cases going to the FTT. FTT resourcing has always been patchy and it still has significant administrative problems. For example, payment of tribunal fees has always been difficult and it is not done in the same way as the rest of the court service. There is also substantial delays in some of the regional FTTs with a shortage of judges. To what extent this can be rectified remains to be seen. But simply adding work into the FTT is not going to resolve issues in the Courts and risks simply shifting the problem elsewhere.

In summary, the changes promised in the courts service as part of the reform programme are potentially significant and welcome. But a lot of it is quite far down the line and reliant on IT projects and other items coming on stream. Whether these changes line up with the other parts of the white paper reforms is uncertain and past experience of changes that cut across DLUHC and MoJ give grounds for scepticism.

We're Social

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

View other posts by David Smith

Let us contact you

View our Privacy Policy

Areas of Interest