Despite the suggestion in 2022 that housing cases may be part of the extension to fixed recoverable costs (FRC) regime, the government have just confirmed that they are delaying the implementation of FRC in this area for at least two years!

It’s said that the delay will allow for the impact of other reforms to the housing sector to ‘become clearer’. In particular, the impact of the Social Housing Regulation Bill, which will strengthen regulators’ powers to take tough action against rogue landlords.

However, with the recent high profile and emotive press in this area, it’s perhaps not a surprise that the government have taken the option of kicking this further down the road. The tragic death of two year old Awaab Ishak shone a bright light on the issues within social housing and recent findings from the Regulator of Social Housing indicate that around 1-2% of social homes (40,000 to 80,000) are estimated to have serious damp and mould problems, and a further 3-4% (120,000 to 160,000) to have notable damp and mould.

As a result, from a political and public policy perspective, the “access to justice” and “equality of arms” arguments have greater strength, and it would be a bold choice to move these cases into a FRC regime, and it is possible this current government may not be in situ by the time of the next review.

There’s clearly a requirement for social and council housing to improve and in many cases, a housing disrepair claim is perhaps the only way for a tenant to bring about improvement and a resolution.

However, over the last number of years, there have been a proliferation of case management companies and associated solicitors who are pursuing these claims simply due to the level of costs that are attracted by them.

Many of these companies have diverted their business from other less profitable areas, such as motor claims, to housing disrepair and for obvious reasons. A whiplash claim worth £1,500 now attracts zero costs whereas a housing disrepair claim worth the same amount in damages could attract costs more than 12 times that amount!

With budgetary constraints in managing housing stock for Local Authorities and Social Housing Associations, the exponential growth in disrepair claims and the delay of FRC in this area, it is almost the perfect storm. Many of the measures that can be deployed to reduce exposure to future claims require considerable time and expense to introduce and see an associated benefit.

However, as claimant costs are often disproportionately high compared to the damages awarded, this is perhaps the easiest and most effective way of reducing spend in this area.

Claimant costs in housing disrepair claims have long been out of control and subject to some of the biggest reductions we see – often over 50%. Controlling the behaviour of claimant litigators from the outset is key to controlling costs. While the opportunities that fixed costs would have brought won’t be available for a year or two, there remain plenty of opportunities under the existing regime.

Ensuring claims management processes are fit for purpose is the first obvious example. Delays by a defendant open the door to costs building by claimants so it’s important those opportunities are kept to a minimum. Part 36 retains all its teeth where claims do not include personal injury, so a strong Part 36 strategy is absolutely critical to costs control. Throughout the life of a claim, there will be multiple opportunities to start building your case on costs through correspondence, do not let those opportunities pass you by.

HF have extensive litigation experience and can provide support to develop your claims management strategies and handle the litigation, running those strategies on your behalf.

Our 35+ strong costs team have extensive experience of fighting unreasonable and disproportionate costs claims in this area and we offer guidance on how to build your case on costs as a claim develops, and what leverage is available to you. We also handle costs disputes at the conclusion of litigation from negotiation through to assessment where necessary.