Tuesday, 21 October 2014

The other Bill

From: Inside edge

As we gear up for more battles over the Welfare Reform Bill in the House of Lords, it’s worth remembering it’s not the only controversial Bill currently before their lordships that will have a big effect on housing.

Among a range of measures designed to cut costs, the Legal Aid Bill will limit legal aid in housing cases to cases involving homelessness or imminent loss of home and serious disrepair that poses a serious risk to life and remove most benefits work from the scope of the scheme. (Any lawyers out there feel free to correct this summary). 

So far the housing aspects have not received as much attention as they should, which is perhaps not surprising when you consider the potential impact of restrictions of legal aid in family cases on victims of domestic violence and a rebellion by Conservative peers including Lord Tebbit against cuts in legal aid in cases of medical negligence. 

On Wednesday the implications became much clearer (to me anyway) when the Lords debated the housing aspects at the committee stage.  The ministerial villain may be different (former Labour and SDP MP Lord McNally) but the rest of the cast is similar to the one that will feature in the report stage debate on the Welfare Reform Bill on Monday.

Opponents of the Bill successfully teased out the way that its tightly drawn definitions of who will be entitled to legal aid under the new system risk excluding large numbers of people with serious housing problems without necessarily saving anything like the amount the government claims. 

One big problem, said Lib Dem peer Lord Shipley, is that means that ‘although the government have said that the loss of the home will continue to be prioritised for legal aid funding, the Bill will in fact prevent advisors from resolving benefits problems that lead to eviction proceedings’.

Despite clear evidence that early intervention to resolve benefits issues can stop evictions, he went on:

‘The danger is that the exclusion of benefits work from legal aid will tie the hands of advisers who are trying to prevent homelessness and will lead to many more unresolved cases filling the county courts. The courts will have more adjourned hearings and will ultimately have to make more possession orders because there is no one to resolve the benefits issue. This could result in higher costs to the taxpayer as a consequence.’

A second problem is the drafting of the Bill to ensure that squatters cannot get legal aid to fight the loss of their home also means that anyone legally defined as a ‘trespasser’ cannot get help either. That could potentially affect all sub-tenants, tenants of landlords who are in default on their mortgages and joint tenants whose relationship breaks down.

Next out of the blocks was crossbencher Lord (Richard) Best, the hero of the successful Lords rebellion against the bedroom tax before Christmas. The private rented sector has no regulator or ombudsman, he pointed out, which put tenants in a completely different position to customers of utilities or the banks. ‘If tenants are in dispute with their landlords, the only way of obtaining redress may well be to go to court,’ he said.

Problem number three is therefore that disreputable landlords will see that any threats of legal action from their tenants were empty threats unless the case concerned the imminent loss of their home. He went on:

‘Informing bad landlords that, however awful their behaviour, they will not be taken to court is like telling Somali pirates that they will never be held to account if they board ships and demand fantastic ransoms. It seems bound to lead to an escalation of criminality.’

Problem number four was the sheer complexity of housing cases, meaning that there is no way tenants can cope without professional advice. ‘Take this away and not only will landlords be able to break the law with impunity but tenants who are ignorant of their entitlements or who are victims of incompetence at the hands of bureaucrats will never see justice.’

Lord Best concluded: ‘With benefits advice being taken out of scope and the likely closure of many citizens advice bureaux as a result, housing is badly affected by the Bill. This surely is one area of our national life where legal aid is essential. Its withdrawal will not only cause misery but will cost central and local government money in picking up the pieces.’

Problem number five was summed up by Labour peer Lord Howarth of Newport. While there would still be legal aid to fight illegal eviction, few tenants would want to go back to the same landlord. ‘Under the Government’s proposals, the worst landlords will be able to get away with the worst behaviour and their victims will not be protected and will not be able to obtain compensation.’

Problem number six is that all of this may not save much money. Peers raised again and again to the way that changes to save money on the Ministry of Justice’s budget will just shunt extra costs around Whitehall. An independent report by King’s College estimates that the government will save less than half of the £240m claimed from cuts in legal aid in family law, social welfare and clinical negligence cases. A report by Citizens Advice estimates that every £1 spent on advice on housing advice saves the government £2.34. 

Needless to say, these arguments were rejected by Lord McNally for the government and opposition amendments were either withdrawn or not moved. However, exactly as with the Welfare Reform Bill, you sense that their lordships are not going to let this go without a fight further down the line. 

Readers' comments (4)

  • Jono

    One of the most hateful things about this Government, and to a degree the previous one, is the ongoing erosion of individual access to an effective justice system.

    If the legal system was effective, and in a utopia, free at the point of access like the NHS, you could scrap a lot of regulation which would become unnecessary. It would empower people to tackle injustices. If you were not delivering, as a landlord what you had agreed to and were considering not resolving this, in my system you would be vulnerable to action by your tenant against you, regardless of their economic status.

    It is the protection of contractual rights that rests capitalism on firm foundations - without it the market will fail.

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  • Joe Halewood

    Presumably the individual or a collection of them free to take action against the big banks too in your argument. Im sure many would wish to see that!

    The problem with your argument - that taking away need for regulation by having free access to legal redress - is that when you have an unregulated landlord sector which is soon to become the majority landlord as the PRS in UK - then taking away access to legal redress in that absence of regulation is extremely dangerous. That is precisely what is happening.

    For the regulated social housing sector with ever larger and fewer social landlords taking taking away legal redress is also dangerous for the individual and especially so when you factor in Localism or locl councils creating 300 different variants of housing law on say allocation policies.

    Localism crates a huge increase in subjectivity and local discretion and that always leads to an increase in legal challenge whether thats a housing policy or any other.

    The removal of legal aid from many housing matters doesnt just affect badly treated private tenants it affects social tenants and vulnerable ones too. The law can only protect if you have access to it!

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  • Jono

    "Presumably the individual or a collection of them free to take action against the big banks too in your argument. Im sure many would wish to see that!"

    Actually Joe, I do question the wisdom of the way our Government bailed out the banks (at our ongoing cost). Capitalists with Government support are the worst of all economic phenomena. In real, not phony capitalism, the failed banks would have collapsed to a degree. What banks would be left in a strong and healthy position? Presumably ones making sounder judgements. If they grew to take the place of the fallen banks, I can see certain benefits arising. Can't you?

    One difficulty is establishing how much the bailouts actually cost us (£1,300 billion now? http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/). Other sources say it was a few hundred per capita. Action shouldn't be taken against the banks actually. The banks didn't force the Government to bail them out at gun point. By deciding to 'regulate' the banks, the Government must also take some responsibility for the crisis; the regulatory framework was clearly a contributory factor (as you know I am not in favour of regulation at all, preferring contractual agreements between parties voluntarily entered into). This played a role in misleading market participants.

    The Government decided it was appropriate to 'protect' the banking sector. If this has resulted in financial loss (via effectively increased tax and/or reduced services) to individuals who had no obligation to protect the banks from failing, then I would certainly agree that those individuals should be free to take action (but against the Government, rather than the banks). Those individuals should have access, in my view, to professional legal advice and support so as to get justice, which should not depend on their economic status. Unfortunately, there is not to my knowledge any meaningful kind of contract between citizen and Government whose terms can be challenged. Members of the Government (typically with democratic support from a large minority of the citizenry), can make up its own policies and change rules with not much in the way to stop it. If there was a written constitution this could implicitly serve as a contract if you will. I would want a constitution which restricts members of the Government from interfering in the economy - economic secularism makes a good companion to laissez-faire capitalism.

    In terms of getting justice, my view is members of the Government must prove that the cost of the bailout was less detrimental to its citizens than the cost of the banking sector failing, as the members of the Government are responsible for their own decisions. Members of the Government would have to defend their regulatory framework too, to show it was not a causal factor.

    I can only see the banks being liable for any of the costs if it can be shown their employees committed fraud or other forms of deception to mislead market participants. Employees of banks in this country, bailed out by the Government, are not being accused of fraud or deception. This leads me to conclude that the Government, in my own personal, not legally established point of view, could be accused of being at fault firstly for a failed regulatory regime which could have misled market participants about the risks they were taking (believing products were safer than in fact they were), and secondly for supporting a crumbling banking sector at potentially great cost to individuals who had no part in that outcome (include myself in that population). In our actual system, there is no real hope of ever getting justice. That is why I continuously call for it to be changed (sometimes significantly). Though sadly most people I discuss this with seem quite happy to rely on the Augurs of our times.

    I agree with your last statement - an effective justice system needs to be universal and free at the point of access (not only in emergencies), so all of our contractual (or constitutional?) rights are protected. This should be the main focus of members of the Government. This will help everyone in many respects - housing being just one. Of course this should be tenure blind.

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  • The problem is of course we do not have an effective justice system when it comes to tenant v housing association landlord, that why so many of the social housing specialist solicitors who have acted for tenants were forced out of business, and when you make an application for legal aid to take an action against a housing association, it is more often than not turned down by the LSC even when the tenant has a very good case. Jono and Jo have a good understanding of whats really happening, no proper justice in England any more - unless youre rich !

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