1. Lord Woolf's interim report on Access to Justice proposed a new system of civil litigation in which the courts would take an active part in managing and monitoring the progress of cases. Defended cases would be allocated, for purposes of case management, to one of three 'tracks':

   small claims (with an increased financial limit of £3,000);

   a new fast track, with limited procedures and costs fixed as a moderate percentage of the amount in issue (for relatively straightforward cases up to about £10,000); or

   a new multi-track (for more complex cases over £10,000).

2. The report included a brief section on housing cases in the chapter on Litigants in Person. The main points were that:

   there was a need for proper advice and representation for those who were less able to pursue proceedings on their own in areas such as disrepair;

   reform of the substantive law on housing could do more than anything to reduce cost and delay;

   information technology could help in extending the availability of guidance, for example through the use of legal information systems to support non-specialist advisers;

   given the complexity of the present law, the court should be prepared either to transfer all defended non-possession cases involving an unrepresented litigant to the small claims jurisdiction, or to transfer them to the new fast track on grounds of complexity or the litigant's inability to manage unaided; and

   it would be helpful to establish a cadre of district judges with specialist expertise in housing law.

3. In the second stage of the Inquiry Lord Woolf is looking at specialist jurisdictions and areas of litigation which present special difficulties, to see how far they can be accommodated within the general procedural framework proposed in the interim report, and what special provisions are needed. A number of working groups have been set up to consider in detail these specialist areas, which include housing, and a separate working group is developing a procedure for the fast track. Lord Woolf's final report will be submitted to the Lord Chancellor in the summer of 1996, and will be accompanied by the draft of a single, simpler code of procedural rules for High Court and county court cases.
4. Since the publication of the interim report Lord Woolf and members of his Inquiry Team have had a number of discussions with people involved in housing litigation, and the Inquiry has set up a working group to consider how court procedures in housing cases might be improved, bearing in mind the cost both to individuals and to the public purse of litigation in this area. Any changes should take account of the interests of all those involved, including both landlords and tenants (public and private sector) and mortgage lenders and borrowers. It is also intended, wherever possible, to take account of the needs of tenants who are not eligible for legal aid, as well as those who are. In line with Lord Woolf's approach to civil litigation in general, it is particularly important to keep costs in proportion to the value of cases, and to consider how this might be achieved in any new procedure.
5. This paper incorporates comments and suggestions made by the working group and others about the need for reformed procedures in various types of housing cases. It should be borne in mind that, although this paper is looking specifically at housing issues (and largely those concerned with secure, assured and Rent Act tenancies) similar issues arise in relation to lessees both under residential and business lettings. Procedures have to apply to these as well as to the larger group with which the paper is primarily concerned.

   Respondents are invited to comment on the topics covered in this paper, and to suggest any other reforms of housing procedure which may be helpful, bearing in mind that reform of the substantive law is not within the scope of the Inquiry. Comments are invited both on Lord Woolf's general approach, as outlined in paragraph 2 above, and on the specific issues covered in the rest of this paper.

   Small claims

6. Following Lord Woolf's recommendations in the interim report, a number of changes have been made to the small claims jurisdiction. First, with effect from 8 January 1996, the financial limit has been increased to £3,000. Secondly, special provision has been made for limited costs to be recoverable in cases involving applications for injunctions and orders for specific performance, in the light of the Court of Appeal’s ruling in Joyce v. Liverpool City Council ( The Times , 2 May 1995) that such applications could be dealt with under the small claims jurisdiction. Thirdly, the amount recoverable for experts' fees has been increased to £200. A further rule change has made it possible for district judges to transfer cases out of the small claims jurisdiction on grounds of 'complexity' rather than 'exceptional complexity'.
7. The new system will take some time to settle down, and the practical impact of the changes on housing cases will need to be assessed in the longer term. At this stage, it may be helpful to consider their likely effect in general terms.

   a) Are there any types of housing cases in which the increased small claims jurisdiction (with the associated rule changes) is likely to be of particular benefit?

   b) Could any further steps be taken to assist litigants to deal with housing cases as small claims?

   c) Are there any types of housing cases which are inherently unsuitable to be dealt with as small claims? If so, what are the reasons for this? What alternative procedure would be appropriate, bearing in mind the need to keep costs in proportion?

   d) How should the 'complexity' criterion for transfer out of the small claims procedure operate in relation to housing cases?

   Possession cases: general

8. Fixed date proceedings, which include actions for the possession of land, do not fit in to the three-track framework proposed in Lord Woolf's interim report. They are already dealt with under a relatively simple procedure, and it is not proposed to change that. There are, however, a number of ways in which the existing procedure could be improved.
9. At present there are several different High Court and county court procedures for possession of land, including summary proceedings for the eviction of squatters under RSC Order 113 and CCR Order 24. The general principle of the new code of procedural rules will be to aim for uniformity and simplicity unless there is good reason to depart from this. Accordingly, it has been suggested that the new code should provide a single repossession procedure, with all cases starting in the county court of the district in which the property is situated. Normal transfer provisions would apply, so that, for example, a major dispute relating to possession of a commercial property could be transferred to the High Court.
10. One problem common to all possession cases is that very few defendants seek advice, complete the forms of defence or attend the court hearing. This is despite steps taken by the plaintiff or by the court, for example sending out information leaflets about in-court or local advice services, to encourage defendants to participate in the proceedings. There is some anecdotal evidence that, at least in some cases, public sector landlords advise their tenants that attendance at court is unnecessary, but it is likely that other factors are also involved.

    a) Should all possession proceedings start, and generally stay, at county court level?

    b) What are the essential features of possession proceedings, bearing in mind the substantive law? Can all these features be accommodated in a single procedure?

    c) Why do so many defendants to possession actions not seek advice or attend court? Is it always necessary, or desirable, for them to attend?

    d) What steps could be taken to encourage defendants to participate more positively in the proceedings?

    e) Would some of the problems associated with possession proceedings be alleviated by Lord Woolf's general recommendations on housing, e.g. specialist judges or more advice and representation for individual litigants?

    Possession cases: rent or mortgage arrears

11. The point has been made that the majority of possession actions by mortgage lenders and public sector landlords are wasteful of court time and legal costs, because in many cases the plaintiffs are really seeking repayment of arrears rather than repossession of the property. Under the present system, however, landlords' options are limited, and possession proceedings are perceived as the only effective means of achieving this. Indeed, the county court rent action, which was abolished in November 1993, had been little used because it did not provide an effective mechanism for the recovery of arrears.
12. Serious difficulties can arise when the court grants a suspended possession order with the intention of allowing the tenant a last chance to pay. Such orders are frequently breached, and the unintended effect is often the loss of the secured or assured tenancy. This arises from the Court of Appeal's decision in Thompson v Elmbridge Borough Council ((1987) 19 HLR 526 CA), where the court held that a secure tenancy determines as soon as there is a breach of the terms of a suspended order.
13. Some judges avoid the problems associated with suspended possession orders by making an order requiring the repayment of arrears, current rent and costs, while the possession claim itself is adjourned. This 'adjournment on terms' approach still has the disadvantage that the parties are required to attend a hearing.
14. A new procedure, to be effective, would need to avoid the cost and inconvenience of a court hearing in every case, while at the same time carrying a genuine threat of repossession if the attempt to recover arrears failed. There is a precedent for a papers-only procedure in the accelerated possession procedure which was introduced in November 1993. This applies only to assured shorthold tenancies under the Housing Act 1988, and to certain other types of assured tenancy where there is no security of tenure beyond a fixed date or where the landlord has a mandatory ground for possession under the Act.
15. It is not suggested that the accelerated procedure should be extended for issues related to possession. A new, two-stage model could, however, include as its first stage a paper procedure leading to a court order for repayment of arrears. Breach of the order would lead to a second stage involving a hearing, which might then result in an order for possession.

    a) Are the present papers only procedures for certain assured tenancies, and for certain residential squatters, working satisfactorily? If not, what are the problems?

    b) Would a new procedure for recovery of arrears be advantageous to the parties involved and help to make more effective use of court resources?

    c) What would be the essential features of such a procedure in terms of both providing an effective service for claimants and safeguarding the defendant’s interests?

    Possession cases: chambers or open court

16. At present mortgage possession actions are heard in chambers, whereas rent cases are heard in open court. This is distressing for tenants, and it is widely perceived as unfair that borrowers have the advantage of privacy when tenants do not. Reluctance to have one's personal affairs discussed in open court may create an additional deterrent to attendance at the hearing. On the other hand, it can be argued that the principle of open justice requires all proceedings, including mortgage cases, to be held in open court, unless there are strong reasons for privacy. One possible approach would be to separate the issues relating to possession in principle from those relating primarily to ability to pay.

    a) Is there any justification for treating rent and mortgage possession cases differently?

    b) Is it feasible to separate 'possession' issues from 'ability to pay' issues? If so, would each of these be better dealt with in chambers, or in open court?

    Possession cases: harassment and nuisance

17. It has been pointed out to the Inquiry that particular problems arise in cases where possession is sought on grounds of harassment or nuisance. First, it is said that these cases are often subject to unnecessary delay because the courts do not give them adequate priority. The second problem is that witnesses may be reluctant to give evidence of harassment or nuisance through fear of intimidation.
18. The Housing Bill, which is currently before Parliament, contains a number of provisions aimed at tackling anti-social behaviour by tenants. It gives social landlords, and private landlords of properties occupied by secure and assured tenants, a new right to start possession proceedings as soon as a notice for possession has been issued, where there is nuisance or annoyance to neighbours. It extends the ground of nuisance or annoyance to include behaviour likely to cause nuisance; this ground applies to behaviour in the vicinity of the tenant's property, and includes behaviour by visitors to the property. The Bill also provides a power of arrest for breach of injunctions against anti-social behaviour by tenants of social landlords.
19. The Government has recently issued a draft guidance note for local authorities on how to get the best out of the court system in cases involving nuisance neighbours. The points covered include:

    applying for injunctions for the protection of people or property before or during possession proceedings;

    requesting an expedited hearing, or a shortened timetable between issue and hearing;

    applying for non-molestation orders for witnesses or non-disclosure of their addresses; and

    providing information on court procedures to witnesses, and arranging for them to use a separate waiting area in court from the defendants.

20. In the context of Lord Woolf's Inquiry, it is for consideration whether there are other procedural steps that could be taken, to address in particular the specific problems of delay and witness intimidation.
21. It has been suggested that the introduction of a paper procedure for recovery of arrears would in itself create a new order of priority, enabling cases where possession is genuinely sought to be handled faster. More specific measures, perhaps including special rules for these cases, may also be desirable.
22. It has been suggested that one possible way of overcoming the threat of witness intimidation might be a system of 'anonymous' evidence, with vulnerable witnesses interviewed in private by a neutral third party (perhaps a district judge or solicitor acting for the court, or a police officer or housing officer) who could give evidence on behalf of the anonymous witness. New rules on hearsay, under the Civil Evidence Act 1995, will make this approach easier, but it still presents a number of problems. In particular, it would be essential to ensure that the defendant had a proper opportunity to be heard, and to challenge evidence against him or her. In any event, the 'anonymous' witness would probably still be readily identifiable in the majority of cases.

    a) What specific steps should be taken, by the Court Service and others, to expedite cases where possession is sought on grounds of harassment or nuisance? Can this be done through administrative action by the courts, or are special rules needed?

    b) Should any special procedures be introduced to enable the court to hear evidence from witnesses who are reluctant to come forward because of the possibility of intimidation? How could such a procedure best combine protection of the witness with appropriate safeguards for the defendant?

    c) Are there any other ways of tackling the problem that are likely to be effective and acceptable to everyone involved?

    Disrepair

23. The majority of disrepair actions under the new system are likely to be dealt with either as small claims or as fast track cases. Detailed procedures for the fast track, including housing cases, are being developed as part of Lord Woolf’s Inquiry by a Fast Track Working Group, and proposals will be included in the final report.
24. There is an enormous potential for litigation on disrepair, and improvements to court procedures may be of less ultimate benefit to tenants than the provision of an effective means of redress without recourse to litigation. One existing alternative for local authority tenants is provided by the 1994 Right to Repair Regulations, but it appears that this option is not widely used.
25. It has been suggested that unnecessary litigation might be avoided, and repairs carried out more speedily, if landlords' and tenants' representatives could agree a pre-action protocol, which would be enforceable by the courts in the event of breach. Such a protocol should, ideally, apply to private as well as public sector landlords, and should, so far as possible, ensure equality of access for tenants who are not eligible for legal aid. In line with Lord Woolf's proposals for fast track cases generally, it would need to include provisions for the appointment of an independent expert, and for the disclosure of relevant records by the landlord.

    a) Why is the statutory right to repair scheme not more widely used as an alternative to litigation?

    b) Is it agreed that a pre-action protocol would be a useful means of avoiding unnecessary litigation and resolving disputes more cheaply and speedily? To what extent could it be effectively applied and adhered to as between individual landlords and tenants?

    c) What would be the benefits of such a protocol for landlords, and what reciprocal obligations, if any, should it impose on tenants?

    d) What provision should be made in such a protocol for the appointment of an independent expert? Would it be feasible, for example, to establish local panels of suitably qualified experts?

    e) What other points should a protocol cover?

    f) Is it possible to devise a protocol that could be adopted by private as well as social landlords?

    g) Are there any special problems associated with housing disrepair cases, as compared with other cases falling within the financial limits for the small claims jurisdiction and the fast track? To what extent can these problems be tackled by Lord Woolf's suggested approach to smaller cases generally (including wider provision of advice and representation for individual litigants and more specialist training for district judges)?

    Judicial review

26. At present the only way of challenging local authorities' decisions in cases involving homelessness is by way of application to the High Court for judicial review. There is also a growing tendency for judicial review to be used in other housing disputes, for example by tenants seeking transfer or owners seeking house renovation grants, or in disputes about housing benefit. It is questionable whether judicial review, which is primarily concerned with issues of wider public interest, is the appropriate procedure for these cases. There are also practical difficulties: the process is a relatively lengthy and expensive one, and is perceived as inaccessible by many of the people involved because applications for judicial review can only be made in London.
27. The Law Commission's report on judicial review (LAW COM. No.226) agreed that there should be a simpler procedure for homelessness appeals, butexpressed the view that an internal review procedure could not be regarded as a substitute for a right of appeal to an independent court or tribunal. The Commission therefore recommended that judicial review in homelessness cases should be replaced by a right of appeal either to an independent tribunal or to a county court. (The report pointed out that the county court had the advantage of being locally based and that it already dealt with other housing matters.) In response to this, the Government has sought to improve the standard of local authorities' decision making on homelessness, and thus reduce the volume of applications for judicial review in this area, by requiring each authority to establish a formal internal appeal mechanism. The new Housing Bill provides a right to request a review of an authority's decision.

    a) What are the most common types of judicial review cases involving housing? Is judicial review the right procedure for the adjudication of the issues such cases raise?

    b) Should any or all of them be dealt with outside London?

    c) Should judicial review be replaced by a new right of appeal to county court, or to an independent tribunal, in any or all of these cases? If so, what form of procedure would be appropriate?

    Multi-party actions

28. Where large numbers of cases are brought by individuals in similar circumstances, common issues of law and fact arise. In the context of housing litigation, this could apply to:

    tenants of the same public or social landlord all experiencing the same problem, e.g. of disrepair;

    people affected by a decision of a public body (who under the existing arrangements might apply for judicial review); or

    long leaseholders of the same landlord with a common problem such as the appointment of receivers.

29. At present, however, there is no convenient procedure for representing collective rather than individual interests in the courts, and as a result most lawyers involved in housing tend to deal with individual claims without addressing the wider issues. This means that individual cases cost more than necessary, and costs for the courts and legal aid are increased because effective action can be achieved only through litigation on a case by case basis.
30. The Inquiry is looking separately at multi-party actions, building on the Law Society's report Group actions made easier (September 1995). This suggests a new procedural rule for multi-party actions, taking account of the wider problems raised by actions following major disasters or claims against pharmaceutical companies. It may be possible to adapt such a procedure to enable multi-party housing disputes to be resolved more expeditiously and cost effectively than under the present system.
31. The features of a procedure for group actions could include:

    identification of claims with common issues of law and / or fact, and similar losses;

    selection of lead cases;

    resolution of common issues and establishment of liability (where appropriate); and

    assessment of damages on behalf of each individual claimant.

32. There may be other possible ways of representing collective interests in housing cases, such as a representative action taken by a tenants' association or other similar body.

    a) What specific problems arise from the lack of an effective procedure for group actions in each of the types of housing cases mentioned in paragraph 28 above? What are the alternatives to claimants suing on an individual basis?

    b) How do housing cases differ from other types of multi-party actions? Could they be dealt with effectively by a procedure based on that of the High Court, and intended mainly for personal injury actions?

    c) What should be the detailed characteristics of a multi-party procedure for housing cases? For example, should there be a lower limit on the number of cases permitted to form a group? Are there any particular ways of reducing delay and cost, such as a papers only procedure for the assessment of individual damages?

    d) What funding issues would arise from the introduction of a multi-party procedure in this area of litigation?

    e) Could multi-party housing actions be handled effectively in the county courts, assuming Lord Woolf's suggested system of case management were adopted? Would there need to be restrictions on the types of cases dealt with in the county courts, or a right to opt for the High Court procedure?

    f) Are there any types of housing cases in which a representative action would be more useful than a multi-party procedure?

    Alternative dispute resolution

33. It is fundamental to Lord Woolf's approach to civil litigation in general that potential litigants should be encouraged to regard court proceedings as a last resort, for use when attempts to resolve their disputes by other means have failed. One way of achieving this, in the context of housing cases, is by the use of pre-litigation protocols along the lines of that suggested in paragraph 25 above. Another is by improving local authorities' internal complaints systems, supported by a right of appeal to an independent body such as an Ombudsman.
34. There may be some cases, particularly those involving disputes between neighbours, where mediation offers the best solution. Mediation UK is one organization that provides such a service. It has also been suggested that arbitration could offer a quicker and cheaper solution than litigation in some types of housing cases, such as disputes involving leaseholders on service charges, disrepair, and other matters.

    a) What are the advantages and disadvantages of the Ombudsman system in relation to housing cases?

    b) What should be the relationship between the Ombudsman and the courts? For example, should the courts be encouraged, or required, to refer certain types of housing cases to an Ombudsman for investigation? Should the Ombudsman's report be usable as evidence in any subsequent litigation?

    c) What other forms of ADR are most useful in particular types of housing litigation? Are there any circumstances in which the parties should be required to attempt ADR before starting litigation?

    d) Are there any problems that would make certain types of housing cases unsuitable for mediation or arbitration?

Please send any comments on this paper, by 11 March 1996, to:

Miss B M Griffith-Williams
Lord Chancellor's Department
Room 6.22
Selborne House
54 / 60 Victoria Street
London SW1E 6QB