Alternative Dis[repair] Resolution

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Alternative Dis[repair] Resolution

Housing Disrepair and Alternative Dispute Resolution

Author: Alun Edmunds

Key Contacts: Liz Gibbons & Jennifer Butcher

Housing disrepair claims have made a considerable dent in the budget of housing associations and councils for many years. Claims are often pursued aggressively through the courts, where costs and fees rack up at an alarming rate, often completely disproportionate to the cost of the disrepair works.

What is Alternative Dispute Resolution?

Alternative Dispute Resolution (ADR) refers to any method of resolving a dispute outside of court proceedings. It is routinely mentioned at the outset of housing disrepair claims (usually by way of an invitation to the landlord to engage in ADR) in the tenant or contract holder’s initial Letter of Claim. Paragraph 4 of the Pre-Action Protocol for Housing Disrepair Cases (Wales) (the “Protocol”), says that the landlord and tenant should consider whether some form of ADR would be more suitable than litigation, and provides a clear reminder that litigation should only be used as a last resort.

Despite this, ADR is often overlooked or not considered to be a viable alternative in housing disrepair cases. Often, formal methods of ADR, such as mediation, will be disproportionate to the issues at hand and simply won’t be suitable in a housing disrepair cases. Even less formal methods of ADR, such as joint settlement meetings, will still incur costs with no guarantee of a resolution.

Internal complaints procedures

One form of ADR that has been in the spotlight recently is the internal complaints procedure.

The Protocol confirms that a housing association or council’s own complaints procedure is another form of ADR that should be considered in housing disrepair cases. However, more often than not, the complaints procedure is not utilised. The question that comes to mind then is whether tenants and contract holders ought to be compelled to engage in the landlord’s complaints procedure – and whether there ought to be costs penalties for those who don’t.

These questions were considered in the recent case of Churchill v Merthyr Tydfil County Borough Council [2023].

Mr Churchill’s property was suffering from damage caused by Japanese knotweed that had encroached from the Council’s neighbouring land. Mr Churchill’s solicitors sent a letter of claim to the Council on 29 October 2020, and, in their response, the Council questioned why Mr Churchill had not sought to use the Council’s formal complaints procedure. Mr Churchill was warned by the Council that it would ask the court to stay proceedings and seek to recover its costs from him should he issue court proceedings before engaging in its complaints procedure.

The claim was issued and the question of whether a court could impose a stay on proceedings and order parties to participate in ADR then eventually fell to the Court of Appeal. The Court decided that it could make such an order. However, before doing so, the court must be satisfied that the making of that order would not impair the claimant’s right to a fair trial (article 6) and would be a proportionate means of achieving a legitimate aim.

Can a court compel a claimant to use a landlord’s internal complaints procedure?

In theory, yes – according to the decision in Churchill v Merthyr Tydfil County Borough Council. So, good news for landlords.

However, any landlord seeking to convince a court to make such an order must be mindful that the court will need to be satisfied that the proposed form of ADR is:

  • capable of adequately resolving the dispute (2);
  • fair and independent; and
  • provides for legal representation and the recovery of costs.

Therefore, landlords seeking to rely on the Churchill v Merthyr decision will need to think carefully about their complaints procedures and, specifically, whether their complaints procedure is sufficiently robust to provide their tenants and contract holders with a genuine alternative to court proceedings. This will include ensuring the independence of the complaint’s procedure and provision for the complainant to have legal representation and recovery of costs if successful, to name but a few of the factors the court will consider.

Landlords will also need to consider, from a practical perspective, whether they are adequately equipped to deal with an influx of disrepair complaints. Implementing such provisions into a complaints procedure to satisfy the court will, of course, require time and investment. This casts some doubt over whether this form of ADR and the decision in Churchill v Merthyr really does provide a viable solution to landlords seeking to reduce their disrepair outlay.

What’s next?

It will be interesting to see to what extent housing associations and councils seek to rely on the decision and guidance provided in Churchill v Merthyr. It also remains to be seen how the case will be treated when the matter of costs recovery falls for consideration and, ultimately, whether a court can be convinced that a landlord’s complaints procedure should have been engaged.

For advice on your complaints procedure, or on ADR more generally, contact our Social Housing team.

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