A government call for evidence, ‘Housing disrepair claims’, issued last week, asks whether ‘lessons from the approach taken to personal injury claims’ could be applied to housing disrepair. Banning referral fees, for example, would enable claimants to choose the most appropriate solicitor rather than the ‘highest bidder’.
Reforming ‘no win no fee’ arrangements, introducing rules to deter exaggerated or fraudulent claims, and raising the threshold for the small claims track (where both sides pay their own costs) could also be borrowed from the personal injury reforms. Currently, the small claims threshold is £1,000 for housing disrepair. It was raised to £5,000 for whiplash claims in 2018.
The joint Ministry of Justice and Ministry of Housing, Communities and Local Government paper notes the low threshold can ‘encourage unmeritorious claims’ as the defendant will often settle rather than risk having to pay the other side’s costs as well as the repair if they lose.
It also warns of bad practice in law firms, stating: ‘We have heard reports of [claims management companies] and solicitors targeting tenants... encouraging claims when it may not be in the tenant’s best interest, failing to warn tenants of risks involved, and offering counterproductive advice—for example encouraging a tenant not to let landlords in to carry out inspections or fix issues.
‘This can result in tenants having to live with disrepair for longer and discourage them from accessing more effective redress routes.’
The Solicitors Regulation Authority has previously raised concerns about some solicitors operating in the housing disrepair sector, in its August paper, ‘High-volume consumer claims thematic review’. It found evidence some firms were not adequately informing clients about potential costs, risks and alternative options.
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