Spot the difference

‘It won’t be long before housing association staff are all civil servants.’

Simon Randall, housing and local government services consultant with law firm LG, might have his tongue in his cheek, but he is not laughing. 
He is pondering the implications of last month’s landmark legal ruling that housing associations are public bodies under the Human Rights Act.

And he does not believe that associations should take the consequences of the hotly anticipated Weaver v L&Q judgement lightly.

‘I have been contacted by clients who have said: “What on earth is this going to mean to me?”,’ he says. ‘I think that this is going to be become the [single] most serious issue for housing associations.’

Mr Randall is not wrong. Housing association chiefs have long feared classification as public bodies. The ruling - which London & Quadrant Group plans to appeal - potentially affects almost every area of housing association life, from finances to housing allocation and management. It also means that associations are likely to face more court battles and will possibly assume the same statutory responsibilities as local authority landlords - all of which associations could do without.

Yet some people think the change is long overdue, arguing that the sector’s considerable public funding makes associations’ claim to privacy ring hollow. If the ruling stands, its implications reach way beyond the changes housing associations will have to make.

The judgement arose from the actions of a single L&Q tenant, Susan Weaver. The association attempted to evict Ms Weaver from her home in Hampton, south west London, because she had at least eight weeks’ arrears - mandatory grounds for possession under ground 8 of the Housing Act 1988. 

Ms Weaver retaliated and fought to bring L&Q to judicial review for allegedly breaching her human rights. Judicial review proceedings could not be taken against the landlord if it was considered a non-public body under the Human Rights Act.

Ms Weaver lost her claim that eviction would have breached her human rights but, crucially, the High Court ruled that L&Q was a public body under the act. Last month the Court of Appeal upheld the ruling, and the landlord now plans to appeal to the House of Lords. It is still unclear when this appeal will take place.

Borrowed time

Until that appeal is heard, housing associations must face up to a future in which their status as private organisations is compromised. Their greatest fear is that they could be brought under public borrowing restrictions. The Council of Mortgage Lenders has already said it is looking at the ‘implications any legal ruling may or may not have for lending to housing associations’.

David Montague, chief executive of L&Q, says he believes the independence of housing associations is ‘vital to our continuing investment in housing’. The G15 group of London’s biggest housing associations is so concerned it is considering helping L&Q fund its House of Lords appeal (Inside Housing, 26 June). 

Even the government should worry, says Mr Randall. ‘It could have a huge knock-on effect for the government if all housing association borrowing is immediately added to the public sector borrowing requirement.’

At the last count associations’ ‘private’ status had enabled them to borrow £48 billion off the UK’s balance sheet.

Next up there are concerns that the services those finances pay for could be subject to a barrage of litigation. Associations will have to examine carefully any activities considered ‘public’, as these may be open to legal challenge. They will also have to ask whether their decisions affect their tenants’ human rights in relation to housing and family life. The way associations allocate and manage housing will be particularly vulnerable.
The chief threat could come from ambitious lawyers looking to help clients or make their reputations by pushing the boundaries and quoting the Weaver case as a precedent.

‘This [case] is the authority everyone is going to use to bring a challenge against a housing association’s allocation policy,’ says lawyer Brian McKenna, who represented Ms Weaver.

‘[This type of challenge] was always at the back of my mind to be honest with you,’ he adds. ‘It was just waiting for the appropriate case to turn up.’

At the moment, the layman’s guess about which parts of housing association business are most vulnerable to challenge is probably as good as the experts’. Whatever the future holds, he sector is braced for the worst. ‘I think we are likely to see quite a lot of litigation as the limits of this are explored,’ says John Bryant, policy leader at the National Housing Federation. 

‘This means that associations are going to be spending time and money exploring the law that could much more appropriately have been used to increase housing and housing related services to people in need. This is not the ideal use of resources.’

He believes the association activities now most likely to face legal challenge are anything that ‘affects somebody’s ability to live in their home’.

‘I think tenancy management issues are going to be paramount,’ he says. ‘Beyond that it is really a question of how far the ripple effect goes from [the] Weaver [case].’

Another potentially expensive consequence of the case is the possibility that, as public bodies, housing associations will be forced to release information under the Freedom of Information Act.

‘Freedom of information is arguable and I’m sure it will be tried,’ Mr Bryant concedes. ‘But I don’t think anybody can say, on the basis of Weaver, that there is a clear, direct and indisputable read-across to FOI.’

Under scrutiny

Of course there are those - many tenants included - who would delight in the chance to FOI their landlord. They are among the many people overjoyed by the landmark judgement. The Equality and Human Rights Commission, for example, intervened in the Court of Appeal case to argue that housing associations should be treated as public authorities when it came to certain functions.

John Wadham, group legal director for the EHRC, argues: ‘It is only correct that registered social landlords, who are providing these public functions, be treated as a public authority and be subject to the Human Rights Act.’

Of course Ms Weaver’s solicitor agrees. ‘I think it has been a long time in coming,’ says Mr McKenna. ‘I think [housing associations] have a significant amount of grants and properties from government and some of them, I think, behave almost as private landlords.’

For him, it’s a win for tenant rights - he suggests that before this ruling some housing associations habitually acted outside the spirit of the law, summarily evicting tenants eight or more weeks in arrears.

For or against, the Weaver case has already made a huge impact on the housing landscape. Housing associations are a long way - and a court case or two - from the full consequences of public classification being realised. Their staff may not yet be indistinguishable from town hall employees, yet resumption of business as usual is unlikely.

For every housing association pinning its hopes on L&Q’s House of Lords appeal - likely to cost well into six figures - there are as many Ms Weaver supporters. And as with every good row, the prospect of a new wave of litigation will have the lawyers rubbing their hands in glee.

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