Courts and Tribunals: Administration Charges

Baroness Gardner of Parkes Excerpts

Monday 16th January 2017 Lords Chamber

Asked by

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government what assessment they have made of the impact on litigants in person of the introduction of administration charges and other costs when bringing claims in courts and tribunals.

[Baroness Gardner of Parkes (Con)]

My Lords, in opening this debate, I remind Members that my declaration of interests is in the register. I am raising this matter today because I find it cause for great concern that the rights of the individual to deal with their own problems have been seriously eroded. It is essential that this does not go unrecognised. Whereas in the past everyone had direct, affordable access to some fair processes of resolution, these have been and are being removed. In my opinion, this is a retrograde step and, whatever our means, we should not be forced to line the lawyers’ pockets. I deplore the changes to tribunals, which were accessible and affordable for so many people. It seems wrong that self-help has gone.

I intend to concentrate my remarks on the employment tribunal and the leasehold valuation tribunal, where I have had direct personal experience. Employment tribunals were introduced by Ted Heath in 1974 under the name “industrial tribunals”. At the beginning, panel members were appointed as individuals and it was only later, when the value of the system was appreciated and agreed, that the lay nominations came from the TUC and the CBI. Normally, two lay members sat with a chairman. I sat in central London. Because so few women had been appointed at the beginning, my appointment was picked up by the CBI and I served from 1974 to 1997. The cases were very wide-ranging and some were very lengthy. No fee was payable by the applicant. Now it is £160 to £250 to issue a claim, and £950 to have a hearing. Any employee who considered they were wrongly dismissed or unfairly treated was entitled to bring their case in person to the tribunal. I believe they always got a fair hearing.

One day my faith in the fair hearing was thrown into question when the hearing panel members assembled prior to the case. We had a considerable quantity of paper about the case of a man who had worked for a large beauty products company for 40 years. The TUC representative said to the other two of us, “This is a scandal. This man has worked for the company for 40 years and they are putting him off. It is not right”. The chairman said we would know more when we heard the case. I said nothing but I was worried that a member’s mind might be set prior to the hearing. There were many witnesses and the case took all day. We retired to consider our decision. The chairman sought our views and the TUC man immediately said, “Forty years? I don’t know how they stuck him for that long. They did everything they could, moving him from job to job in the firm. They could do no more”. This restored my faith in the importance of actually hearing both sides of these cases. I believe the system was fair and well used.

When this House was on Report on what became the Commonhold and Leasehold Reform Act 2002, I was responsible for an amendment which outlawed frivolous or vexatious litigants. The head of the Tribunals Service advised me in the drafting of the amendment and the Government, after changing one lower-case letter to a capital, accepted the wording in its entirety. The need for that amendment was brought to my attention when an applicant appeared before our tribunal and it emerged that he was making a full-time living travelling around the country, basing his cases on failed job applications. He was a qualified radiographer. He applied for every hospital radiology job advertised and if he did not get an interview he went to the tribunal on grounds of discrimination. He had all travel and accommodation expenses paid, in many interesting places, and often got good compensation. He was abusing the system and being paid to do so. If he did get an interview, he never got the job as hospitals needed radiographers who had worked with human beings and his experience was specifically with concrete blocks and other inanimate objects.

There are charities which try to help individuals with advice. As they do not charge fees, they rely on grants and donations and the lawyers are generally not very well paid. The citizens advice bureaux still exist but their resources are really stretched and in many cases are simply not available to people. My neighbour, an employment lawyer since 1990, has volunteered to help others through the citizens advice bureaux for years. Welfare and debt account for the largest number of cases. Employment cases were 6% of 10% of the more than 10,000 applications they had last year. She has told me that a major problem is that the individual very often has no idea what their terms of employment are, and that they do not know that under Section 1 of the Employment Rights Act 1996 they are entitled to a statement of particulars of employment. There is often a real problem in identifying the correct name of the employer. Many employers use an organisation whose name appears on the payslip but it is not the employer and getting hold of documents can be very difficult. Individuals have often had but lost their copy of the terms of employment.

Whereas in the past many of these things could be done on a do-it-yourself basis, now it seems that people find that they have no choice but to use legally qualified people, which involves extra costs that they can ill afford. Some lawyers help people on an ex gratia basis. There are many good specialists who do pro bono work, either because they dislike a system which fails to protect vulnerable groups in society or because they need the practice; for example, junior barristers cutting their teeth. Large firms encourage junior solicitors to do pro bono work, perhaps because it impresses corporate clients. Organisations such as the Employment Lawyers Association have a pro bono arm, where people can volunteer to take on a case. This is not and should not be a substitute for the right to a fair trial, which should be available without relying on the kindness of strangers. It is essential that individuals should have the tools made available to enforce their rights, otherwise these rights are meaningless. Those who have savings and therefore do not qualify for remission of fees have to find the money before they can start a claim. This means that “bad” employers can benefit from the fact that people who save are hit with having to pay a fee to claim their employment rights.

My other direct experience was with leasehold valuation tribunals. These were abolished in 2013 and many people are disadvantaged by this. I took a full part in what became the Commonhold and Leasehold Reform Act 2002, which introduced these tribunals. It was fully debated in your Lordships’ Chamber and after hearing that the Government proposed covering full costs,

“down to the milk for the office cat”,—[Official Report, 10/7/1996; col. 348.]

the House’s decision was that those who brought their cases, even if they lost, would not be required to pay more than £500. Now these cases go straight to the First-tier Land Tribunal and I understand that it is at least £500 to enter your case.

An important role of the leasehold valuation tribunal was determining the value for a lease extension and the terms thereof. Most flats and some houses are held on leasehold tenure and, if the lease drops to too few years, its value becomes very small and the amount that has to be paid to extend the lease increases exponentially. The hearing of my own application for a lease extension took the form of four days in front of the tribunal and a visit to the flat by the chairman of the hearing panel. Everything seemed to be done very thoroughly. As other cases were heard by different members of the tribunal and there were periods when you had to just sit and wait, I sat in on a lot of cases and the standards were very high.

The 2002 Act made it clear that normally, if costs were charged, they would not exceed £500 per application. Now these cases have to go to the First-tier Land Tribunal. One of the worst things is that unscrupulous head lessees or freeholders often employ a QC and, win or lose, they charge those high legal fees back to the leaseholders as part of the service charge. This is not fair and I consider it an abuse of the system. The leasehold valuation tribunal was abolished by statutory instrument in 2013 and I was the only Member to speak in opposition, perhaps because with those instruments you have to say yes or no; you cannot consider any review.

The Prime Minister has spoken and made it clear that those who work hard and whose family budgets are already under heavy pressure should not continue to be disadvantaged. Surely it is time to look again at helping with access to tribunals and their replacements. Unless ordinary people can access a system available to help them enforce their rights, those rights are meaningless, as I said. These fees are preventing genuine cases being heard.

Housing: Leaseholders

Baroness Gardner of Parkes Excerpts

Thursday 25th June 2015 Lords Chamber

Asked by

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government what plans they have to review the procedures by which resident leaseholders in blocks of flats agree to a Right to Manage or a change to commonhold tenure.

[Baroness Gardner of Parkes (Con)]

My Lords, I declare my interest as recorded in the register, and as a leaseholder for many years. My continuing interest in this subject will not surprise Members, as I have been concerned about progress in these leasehold matters for a long time and have taken an active part in most new property legislation since I took my seat in the House years ago.

Some of the key issues are simplification of the law, regulation of managing bodies, transparency in the complaint processes, closing loopholes, protecting leaseholders’ rights, standards of service and value for money. I raised these same issues in a debate in March 2012—three years ago. Progress has been made only on regulation of managing bodies—managing agents must now be members of the Association of Residential Managing Agents—and in the complaint process; there is now access to a redress scheme. While I regret the loss of the process whereby ordinary individuals had access to less expensive means of raising issues through the leasehold valuation tribunals, brought in under the Housing Act 1980 and price pegged in the later 1985 Act, in which I was involved, their replacement by the First-tier Tribunal Property Chamber from 1 July 2013 is a change consistent with consolidation, which is my aim. The substantive law should now follow to create an efficient and coherent system.

It is estimated by the Federation of Private Residents’ Associations—the FRPA—that there are more than 4 million leaseholders in private blocks, retirement homes and local authority and housing association properties. I commend their latest leaflet, Empowering Leaseholders, to all, as it sets out the problems and needs very clearly.

I am delighted that the Minister is speaking on this subject today as he is a Scottish law officer. I look forward to hearing my noble and learned friend Lord Keen’s maiden speech, which I can add my appreciation for only now because I am not allowed to say anything after he has made it. Property law is, in my opinion, much better in Scotland than in England. People seem to have a better understanding of their property positions and rights, and conveyancers honour the long-established system of letters of obligation. The Abolition of Feudal Tenure etc. (Scotland) Act 2000 abolished the feudalism feu whereby blocks had a head lessee owner—would that we could produce a similar situation in England.

For years I have been trying to get answers from the Ministry of Justice on property law. Whenever I have tabled a Question—even when a former Lord Chancellor advised me on the wording to attract a reply from the Ministry of Justice—the replies have always been from the Minister for Housing, whose view on these matters seems to overlook, or fail to appreciate, the unsatisfactory legal situation in which many leaseholders find themselves caught.

Property law has been covered piecemeal for years and I have participated in the work done on Act after Act, each one amending a previous Act, so that any solicitor working in this field now has to refer to many Acts. This is a time-consuming and costly process and we need a consolidation Act to make it simpler for people to understand and to avoid many hours of expensive legal work. I quote the FRPA reference to the,

“glaring need to consolidate all … landlord & tenant legislation”.

In reply to an earlier discussion of this point, the then Minister replying agreed that laws should be able to be understood by ordinary people, rather than only the professionally qualified, who will of course always be needed for their expertise on complicated points.

The 2002 commonhold Act allows leaseholders to agree to convert their blocks to this tenure, but only if there is 100% agreement. In reply to my many questions on this point in your Lordships’ House, it has been admitted repeatedly that 100% is impossible to achieve. The same applies in too many cases where 50% of leaseholders in a block must agree if they want right to manage. This should not be impossible to achieve but it is still very difficult, particularly in London, as there is such a high proportion of foreign owners who simply do not reply to any correspondence on these matters. They expect the standards of the blocks to be maintained but are either unwilling or unable to play any part in ensuring that a block is efficiently managed and money wisely spent.

Not long before the general election, I was present in the other place at a very well-attended meeting chaired by Sir Peter Bottomley. The difficulty of getting any response from some of the leaseholders in a block was raised. A verbal reply from a civil servant present was to the effect that they were considering whether it would be appropriate to treat the non-replies as having been “deemed” to support the majority view. This seems to be an idea that could provide the solution that would benefit those who are presently so frustrated when all attempts fail to get any response.

Dr Lu Xu, senior lecturer in property law at Lancaster University, in a report due to be published shortly on a study funded by the British Academy, has been in contact with more than half of the existing 16 commonhold schemes. That is all there are—16 of these schemes. There are up to 100,000 new leaseholds being created every year. There is little appreciation or understanding of the commonhold system. His findings are that commonhold has never had any support from government. The lack of willingness on the part of mortgage lenders is also a very serious problem at present, particularly for those who already own commonhold property.

The Title Conditions (Scotland) Act 2003 introduced to the statute book the system of real burdens, a more practical system developed by the court and conveyancers in Scotland so that the owner of a flat could be legally obliged to pay for the repairs and maintenance of parts such as the roof of the building. English law apparently does not allow such onerous obligation on property ownership unless there is legislative intervention. Scotland has been very effective in introducing important property law statutes in the 21st century. In 1994, Lord Templeman observed in this House that nothing had been done to legislate on the recommendation of Lord Wilberforce’s committee, which reported on this issue in 1965. I am not good at maths but even I can work out that that is 50 years ago.

In 2011, the Law Commission produced another recommendation and draft Bill for land obligations. The government response in 2012-13 was that they intended to respond in 2014. However, despite

“good progress … in analysing the recommendations”,

they never had time to respond in the last parliamentary Session. We now have a new Parliament and so the time for the overdue consolidation of housing and property law should come.

Commonhold took more than 20 years of consultation and deliberation to reach the statute book. This Parliament can address any flaws in the present legislation so that it can reach its potential as part of the consolidation process. As I said, land obligation has been a legislative proposal for 50 years, in spite of being promoted by successive Law Commission reports. This Parliament should carefully consider its merits and make something happen. We need a consolidation Act for property in England and Wales.