Written evidence from Islington Law Centre (housing unit)
The housing unit at Islington Law Centre would like to make the following submissions in connection with the future of legal aid inquiry.
The only housing disrepair cases that remain in scope of legal aid post-LASPO are those where there is a serious risk of harm to health and safety. This excludes any claim for damages. This is however completely unworkable for numerous reasons and which has resulted in housing disrepair having virtually been removed from scope;
It is not possible to effectively commence and run a disrepair claim under the current legal aid rules. Disrepair is therefore severely restricted to the extent it is effectively no longer in scope. This is shown by the drop in funding granted for housing disrepair. The number of housing disrepair legal aid cases granted funding dropped by 94% from 2010/11 to 2018/19.
Disrepair clients are often vulnerable with physical disabilities and/or mental health issues. Such clients are clearly now not able to get advice on housing disrepair and as a result are having to live in poor housing conditions with no remedy. Conditional Fee Agreements (CFAs) are not appropriate for vulnerable clients. They offer no costs protection. In particular, since LASPO after the event insurance premiums are no longer recoverable from the opponent. Disrepair damages can be modest whereas insurance premiums are substantial and clients face recovering little in terms of compensation after insurance premiums are accounted for. Private solicitors are likely to only take on disrepair cases under a CFA where the damages are over £10,000.
Post-Grenfell especially, housing conditions are in the spotlight. The Homes (Fitness for Human Habitation) Act 2018 gives tenants potential remedies in relation to dangerous cladding and other fire safety issues as the Landlord & Tenant Act has been amended to include fitness for habitation. However, most tenants will simply be unable to enforce such remedies due to the aforementioned problems with commencing housing conditions claims under legal aid. The removal of the threat of legal proceedings, and the resulting awards of damages and costs, is a disincentive for landlords to maintain tenanted properties and to address issues of disrepair in a timely manner.
During the pandemic we have seen tenants confined to their homes and which are in disrepair and with landlords not carrying out the required repairs.
Housing disrepair being removed from scope has not only affected access to justice for clients but also financial sustainability for housing legal aid providers. Housing disrepair was always an unusual area for the MoJ to remove from scope as the costs are in the vast majority of cases paid by the opponent landlord rather than the Legal Aid Agency. Costs recovered in housing disrepair cases would often be the main source of income for housing providers. It cannot be a coincidence that since LASPO and with the removal of legal aid for disrepair there are now housing advice deserts where tenants have no access to housing advice. Firms and law centres have found housing legal aid to be financially unsustainable without housing disrepair work.
Housing disrepair should be brought back fully into scope of legal aid. This will increase access to justice and also improve housing legal aid sustainability. This would be at minimal cost to the MoJ given in such cases costs are usually payable by the opponent.
One of if not the biggest threats to legal aid housing sustainability is the proposal that fixed costs be extended to the fast track. Legal aid sustainability cannot be looked at in isolation from the inter partes costs rules. It is proposed by the MoJ to fix the amount of costs that can be recovered in fast track cases and they consulted on this in 2019. Inter partes costs are crucial to housing legal aid being sustainable. If fixed costs are introduced, we submit fixed rates should not apply where the litigant is publicly funded.
Housing possession is the main area now of work in terms of housing legal aid and most housing possession cases are allocated to the fast track. Recovery of inter partes costs (at market rates in successful cases) from opponents gives housing legal aid a modicum of sustainability given there has been no increase in legal aid rates since 1996 and there was a 10% cut in rates in October 2011. Limiting inter partes recovery would be a cut via the back door and mean housing would no longer be sustainable financially as an area of legal aid. Under fixed recoverable costs barrister fees would not be treated as a disbursement i.e. the fixed figure is inclusive of profit costs and barrister fees.
To give some examples of the losses that would be suffered we have set out below some examples from our caseload of what has been recovered at inter partes rates from opponents and what would be recovered under the fixed costs regime.
Net profit costs of £9,026.21 and net barrister fees of £4,126.66 were recovered from the opponent. Under the fixed costs regime band 3 this would have been net profit costs of £2,424.34. This is £6,601.87 less than recovered.
Net profit costs of £10,740.33 were allowed by the court (i.e. assessed as reasonable and proportionate) and £2,210 in net barrister fees. Under the fixed costs regime band 3 this would have been net profit costs of £3,211.91. This is £7,528.42 less than recovered.
Net profit costs of £10,034.94 were allowed by the court (i.e. assessed as reasonable and proportionate) and £2,841.25 in net barrister fees. Under the fixed costs regime band 3 this would have been net profit costs of £2,404.75. This is £7,193.69 less than recovered.
Net profit costs of £4,043.48 and net barrister fees of £1,716 were recovered from the opponent. Under the fixed costs regime band 3 this would have been net profit costs of £735. This is £3,308.48 less than recovered.
In all the cases quoted the Defendant tenants we represented retained their homes. In cases A-C substantial repairs works were carried out and compensation for disrepair was recovered. Tenants A-C were disabled and D had a child with health issues. Three were secure council tenants and so retained their council properties and one was a housing association tenant.
It is likely there will be also be the bizarre situation where zero profit costs are recovered in some cases due for example to the case being complex and requiring more barrister involvement.
Even if the above cases had been allocated to band 4 (complex possession cases) the amounts would still be significantly less than was actually recovered. Further, opponents are likely to at directions hearings vigorously argue for cases to be allocated to the lowest band possible and there is unlikely to be legal aid funding to appeal on a costs issue only.
It is understood there may be a London weighting of 12.5% however even with this the level of costs recovery would still be minimal and nowhere near current levels.
Use of counsel is crucial in housing possession cases as they involve questions of public law, human rights, discrimination etc. They are not typical fast track cases. Not using counsel is therefore not an option and clearly it would be discriminatory to say disabled/vulnerable tenants should not use counsel.
Costs are currently only allowed at a proportionate sum following assessment by the court.
Housing possession cases often have significant documents to consider (housing files, repair files, housing benefit files, medical records etc) and clients often have mental and/or physical health problems which make attendances longer and may also involve interpreters or social workers. Housing possession cases are as a result not suitable for fixed rates.
The ‘value’ of a secure/assured tenancy (in effect a lifetime tenancy) to a tenant and retaining the same was not considered in the consultation. The CPR ‘tracks’ are based mainly around the amount of monetary relief, whereas in possession claims the home is at risk and this far exceeds in terms of importance/value the amount of any rent arrears or compensation.
It is clear few if any law centres or legal aid firms could incur the above such losses. It would be simple for the MoJ to include in the relevant regulations etc in due course that fixed costs would not apply where the litigant is publicly funded. Further given there is no cost to the MoJ from inter partes costs it would not be clear what the policy objective could be to not include such a provision.
In the above example cases and under a fixed costs regime the amount for profit costs at legal aid rates would in fact be higher than inter partes costs at fixed rates (although still significantly less than the amount which would currently be allowed on an inter partes assessment). This will create a conflict of interest between the solicitor and client where it is in the client’s interest costs are recovered from the opponent, for example in counterclaims so the statutory charge does not apply to damages. Where legal aid rates are higher than inter partes rates there would be a disincentive to recover costs and so result in a conflict between client and solicitor. This will create significant problems in relation to professional obligations. The cost to the LAA would therefore be higher if the MoJ introduces fixed costs given firms will be more inclined to seek payment at legal aid rates rather than inter partes.
The MoJ consultation we understand did not consider the impact on legal aid and we are not aware whether there was an equality impact assessment.
Extending fixed costs to housing cases and in particular if publicly funded litigants are not excluded will result in many if not all housing providers having to close.
Given many tenants in possession claims are disabled and have protected characteristics under the Equality Act 2010 they will clearly be prejudiced by fixed costs being introduced given they will not be able to access housing solicitors.