Yesterday I presented a talk at the Housing Condition Conference organised by Legal Futures.
I was talking about how the MOJ is looking at introducing mandatory mediation to the Court system and expanding the small claims mediation service. In fact there are already some forms of compulsory ADR in the Court system, particularly in family cases.
The key point I made was that in June the Court of appeal will be looking at whether claimants with claims against local authorities where there is a pre action protocol (which would include housing disrepair cases) should have to follow those protocols before issuing a Court claim. Part of this is looking at whether the Council’s own complaints processes constitute ADR and so have to be followed. Housing lawyers are up in arms because they feel that council’s complaints systems are slow and ineffective. However, what about arbitration like Lambeth has introduced, or the Housibg Ombudsman or mediation? The Civil Justice Council has already suggested that mandatory mediation does not constitute a breach of the right to a fair trial.
Why do councils want to mediate or use ADR?
• SAVE COST – NHSR – has introduced a mediation panel for clinical negligence claims SIMILAR LEARNING/IMPROVING PATIENT CARE/HOUSING
• SAVE TIME
• SAVE STRESS
• WITHIN BUDGET – FIXED COSTS
• FLEXIBLE – ONLINE TELEPHONE
• CONTROL
• RELATIONSHIP – can preserve relationships
• AVOID COSTS SANCTIONS
• CONFIDENTIAL
• IDEALLY SUITED TO HOUSING DISREPAIR CASES
In a mediation all problems can be aired and imaginative solutions proposed which would never be available in Court. Primarily though it is about saving money at a time when there is a shortage.
I have seen many cases where tenants recover damages of a couple of thousand pounds and the costs are in the thousands.
The case of Churchill which the Court of Appeal is considering is but actually a housing case. It is a Japanese knotweed nuisance case.
• JAPANESE KNOTWEED. THE NEXT BIG THING
• PROTOCOL SAYS USE ADR
• CLAIMANT ISSUES PROCEEDINGS.
• DOES NOT USE COMPLAINTS PROCESS.
• COSTS: CLAIMANT’S COSTS £36,000/£122467.44
• DAMAGES: £42,840/£25840 KNOTWEED. D SAYS £260.
• COUNCIL APPLY FOR STAY ALLEGING FAILURE TO USE COUNCIL COMPLAINT PROCESS.
• CLAIMANT APPLIES TO STRIKE OUT MENTION OF WP CORRESPONDENCE.
The Council won the case at the interim hearing: As can be seen above, the Claimant in the case was claiming over £45,000 in damages to sort out the knotweed problem whereas the Council thought it would only cost £260! The Claimant’s legal costs were over £35,000 at the time of the hearing. The costs to trial were over £125,000. So understandably the Council were arguing that it had been unreasonable to start legal proceedings without trying to resolve the case first through the complaints process. The judge agreed and said that it had been unreasonable.
The Protocol for Housing disrepair cases is pretty clear:
“4.1The parties should consider whether some form of alternative dispute resolution (ADR) procedure would be more suitable than litigation and if so, try to agree which form of ADR to use. Both the landlord and the tenant may be required by the court to provide evidence that alternative means of resolving their dispute were considered.
The courts take the view that litigation should be a last resort, and that claims should not be issued while a settlement is still actively being explored. Parties should be aware that the court will take into account the extent of the parties’ compliance with this Protocol when making orders about who should pay costs.”
This all has to be viewed in the context of an exponential rise in claims and costs of claims against local authorities. Inside Housing reported costs of housing disrepair claims had risen to £14m in 2020-2021. Personally I would not be surprised if they increase owing to the cost of living crisis with people unable to hear their homes properly – this will encourage mould. Lambeth council’s disrepair costs were over £2.4m hence presumably setting up an arbitration scheme which it is trialling until June 2023
When deciding whether to allow the appeal to proceed the judge said that:
Summary
• “This case raises an extremely important issue relating to access to justice, namely whether a Claimant, who unreasonably refuses to engage in ADR in breach of the requirements of the Practice Direction (Pre Action Conduct and Protocols) can be precluded from bringing or advancing a claim in court. “
• Consider whether Halsey is affected by the Practice Direction 11 years later
• Council defending a number of claims – limited resources – stay of other proceedings
• Expedited appeal refused even if “local authorities unaware of possibility of using ICP as a means of deterring costly litigation..in many different fields (including housing)”
The Court of Appeal will make its decision in June and Claimants could face having to use ADR such as mediation if it is available, before launching a legal claim in future. The previous case of Halsey which famously set out what constitutes an unreasonable refusal to mediate, pre dated the Pre-Action Protocols and so perhaps the Court will take the opportunity to add to the list of unreasonable conduct?