First-tier Tribunals and Freeholders

Debate between Bob Stewart and Jim Fitzpatrick

Tuesday 24th July 2018 Commons Chamber

[Jim Fitzpatrick]

The hon. Gentleman makes a good point about the advice available to individuals who seek redress in law and where they might seek it. As I will go on to explain, the playing field is not at all level in these tribunals. I hope that the Minister will comment on that later.

[Bob Stewart (Beckenham) (Con)]

I was under the impression that first-tier tribunals were meant to be informal. We do not really want lawyers there; we want tribunals to look at the case and to give a decent, sensible, honest judgment.

[Jim Fitzpatrick]

The hon. Gentleman makes a good point. He is quite correct that these tribunals are supposed to be an informal means of dispute resolution, although it is thought appropriate for people to have some legal advice if they need it. However, we now regularly see highly specialist barristers and even QCs appearing for landlords before what are often part-time solicitor judges in what are meant to be our lowest form of court. Cases often go on for days, with landlords’ counsel ponderously reviewing the most basic elements of a lease and the simplest issues of law. In some cases, tribunals seem to allow counsel to pontificate on the rights supposedly provided to leaseholders, which can be either uneconomic or impossible to apply. It may be true to say that the tribunal procedure rules are less formal than the civil procedure rules in the main courts, but this often seems to work to the benefit of well-represented landlords rather than leaseholders. Landlords are often able to ignore tribunal procedure rules with impunity.

There is a total costs imbalance at the tribunal. What was meant to be a low-cost forum has now become a costs regime that benefits only one side, and that side is the landlord. It is a one-sided arms race. In almost all cases, the landlord now arrives at the tribunal knowing full well that they will probably have a right to their costs under the terms of the lease. The tribunal has some powers to limit costs, but those powers are often ineffectual and may not be applied, even if the leaseholders win. Conversely, the leaseholder arrives at the tribunal knowing that they have no right to recover their costs under almost all circumstances.

Let us take a hypothetical situation in which a landlord overcharges 1,000 leaseholders £250 each. If the individual leaseholders want to dispute those charges, a single letter from their solicitor will probably cost them more than they could ever recover, but the landlord can afford to invest a substantial amount of the £250,000 that they may have overcharged to defend their position.