Tag Archive for 'quantum'

Illegal Eviction and Disrepair damages

Published
by
NL
on 5 June 2008
in Housing law
. 2 Comments

There were a couple of cases mentioned in the June issue Legal Action that are worth a consideration when looking at quantum in illegal eviction cases, and also to some extent in disrepair cases. Legal Action has the full details, but in brief…

Addison v Croft Preston County Court April 2008
Assured Shorthold tenant. Landlady turned up with estate agent and buyer with no notice. A fortnight later, the tenant was physically ejected by four men, with some bruising. The tenant was out, sleeping at friends and in his van for 20 nights, before obtaining an injunction for re-entry, which was complied with.

  • General damages £3000 for fright and upset, and 20 days out of home without possessions.
  • Aggravated damages £1000 for manner of eviction
  • Exemplary damages £1000, following Law Commission guidance in Aggravated, exemplary and restitutionary damages (LC 247)

Rubio-Manzano v Ace Lettings and Pedonomou Clerkenwell and Shoreditch County Court April 2008
Assured Shorthold tenant who threatened to withhold rent due to disrepair (of which more below). Three men turned up and forced their way into the flat, threatened the tenant, pulled the telephone out of the socket. One caused injury to another tenant by kicking the door. Defendants then delivered a letter stating that the bearer was a certificated bailiff with powers to enter and seize goods. The tenant left to stay with a friend and put most of her belongings in storage. A couple of weeks later she returned to find locks changed and belongings interfered with. Police and tenancy relations advised the tenant to break in to remove her goods. The property was then left.

In criminal proceedings, the company pleaded guilty to two counts of harassment under the Protection from Eviction Act 1977.

  • Fines £2000 and £200 for the two incidents. (The Court said if the company directors had been individually charged, there would have been a likely custodial sentence).

In Civil proceedings

  • General damages £6000 for harassment and aggravated damages
  • Exemplary damages £2000
  • Special damages £840.40

There was also a disrepair claim. Disrepair ‘throughout the tenancy’ (May 2001 - Feb 2003).

  • radiator leak in hallway, causing staining and fungus growth
  • leak to bathroom ceiling
  • mice infestation
  • bannister loose and dangerous
  • windows in disrepair and draughty
  • poor decorative state
  • oven and grill did not work

Damages for disrepair were assessed at 30% of rent for a year (£3500) with a set off of one month’s rent owed (£840.40).

Comments

On the disrepair claim, this is another data point suggesting that the Courts are open to arguments for damages based on percentage of rent following English Churches v Shine and Earle v Charalambous, rather than the Wallace scale, as I have suggested before. That said, although the report doesn’t give detail on the disrepair, 30% on the headline items seems a little low. But there are so few disrepair claims getting to trial, it is hard to be sure. Counsel for the Claimant was Robert Latham, solicitors were Hopkin Murray Beskine - anyone care to comment further?

This case also appears to be support for the view that damages based on a percentage of rent is not based on the proportion of the property that was/is occupiable or useable - the percentage is not directly a question of useable floorspace, which is an argument I have heard advanced by some Counsel. Personally, I don’t think that Niazi, Shine or Charalambous entail that view, and that this is an unnecessarily mechanistic approach to a percentage calculation.

On the illegal eviction, clearly Rubio-Manzano is more generous than Addison, particularly given the actual physical eviction and period of homelessness in Addison. £6000 for harassment and aggravated damages on the facts given for Rubio-Manzano is a high award, particularly given the previous criminal fines for harassment, and useful to cite for that reason.

Addison appears to pretty much follow the ‘£1000 per week of being out of the property’ rubric, but the aggravated and exemplary damages are also useful to cite.

By the way, Legal Action also has a report by Shelter Gloucestershire on Stankova v Glassonbury, the rent deposit case discussed here, confirming the details of Housed and my earlier reports.

 

Quantum in Disrepair

Published
by
NL
on 13 September 2007
in Housing law
. 12 Comments

point at the problemI’ve been meaning to post on this for a while and have been prodded into life by quite a few searchers on the topic. The reason I’ve been delaying is that, frankly, it is a bit of a sod. Unlike the carefully calculated, quantified, actuarialised and tabulated scales of Personal Injury claims, disrepair quantum is at best foggy, at worst an aporia.

There are reasons for this, mostly the lack of cases taken to trial, and with it lack of detailed ‘authorised by the higher courts’ means of assessment. It is also because the heads of damages aren’t as clear, being allegedly contractual but with a vague importation of tort.

This is my attempt to summarise the current situation, with a suggestion of where matters might move and why they are unlikely to.

From 1998, the main case has been Wallace v Manchester 30 HLR 1111 (also as [1998] EWCA Civ 1166). Wallace said firmly that the base of quantum is contractual, not tort, the principle being the restitution of the difference in value between the property with disrepair and the property if the landlord had fulfilled the repairing obligation. Discomfort and inconvenience for the tenant are a part of this head, not a separate, tortious, head of damages.

But how to assess this? Wallace was wonderfully vague. Either a Global Award - an assessment of damages as a whole - or a Nominal Reduction approach - an award for reduction in rental value - or both as one. But Wallace did suggest that a global approach should be cross checked against a nominal approach.

However, Wallace did unofficially set up a tariff of an award of between £1,000 and £2,750 per year as a scale for disrepair. Updated for inflation, that is now £1264 to £3477 per year of disrepair, depending on the seriousness of disrepair.

proverbial mould[Now, before any non-housing lawyers and tenants reading this start getting their calculators out to work out what their compensation payout will be, it isn't that straightforward. This is assuming that there are no liability issues, no issues about notice or access, the tenant has excellent records and, for reasons explained below, no settlement offers are made. It is safe to say that this never happens. This is a tool for considering a range of likely compensation, no more. Settlements therefore tend to be lower than the tariff figures suggest, read on for other reasons why.]

Oddly, this tariff has become the norm. Most settlements work on some form of the Wallace scale. I say oddly because the Nominal Reduction approach, based on rent payable, could, even at the time of Wallace, produce higher awards.

More recently, Niazi Services Ltd v Van der Loo [2004] EWCA Civ 53, and English Churches v Shine [2004] EWCA Civ 434 have gone some way to affirming a Nominal Reduction approach, based on a proportion of rent. While this means that the maximum award is limited by the rent ( and that higher rental property will attract a much higher award for relatively small disrepair), given that even a low average social tenancy rent is worth £4000 per year, an assessment of damages is likely to be higher than the Wallace tariff (even adjusted for inflation. The Wallace tariff in that case amounted to a scale of something like 50% to 100% of rent, as far as I recall).

By the way, Earle v Charalambous [2006] EWCA Civ 1090 confirms the use of the nominal approach, but also gives leaseholders the route of a proportion of an assessed open market rental value as the base for the rent value. The argument rejected was that a nominal rent approach was not open to leaseholders claiming for disrepair.

Why haven’t calculation and negotiation of damages moved to a nominal rent model? This would be likely to raise damages on the whole, even if not by a very large amount in many cases.

The answer is not straightforward. But the main reason is risk and the Civil Procedure Rules (CPR).

Hardly any disrepair cases get to trial, as most get no further than a negotiation over settlement. But trial is the only place where the valuation approach will be tested and confirmed, also giving a useable precedent.

Why do the cases usually settle? For the non or student lawyer readership, the answer is risk resulting from the effects of Part 36 of the CPR. For instance, if a few weeks before a trial date (or indeed at any point before that), the landlord makes an offer of settlement that is reasonable but at the lowish end of the scale from your estimation of the claim, the calculation goes like this:

If the matter proceeds to trial, the extra legal costs from the point of the offer are likely to be c. £5000 (at an absolute minimum for both sides’ costs). If the claimant does not get a damages award at trial that is better than the offer, they will be liable for the legal costs of both sides from the closing date of the offer. So, if the offer is in the range that a court may award, there is a genuine risk that the claimant will end up liable for the £5000(+) costs. This will wipe out or severely dent any damages award actually made, because the costs will come out of the damages.

The same calculation pretty much applies for legally aided, private and ‘no win no fee’ (CFA) clients. So, the discrepancy between the offer and what the claimant’s solicitor (and barrister) think is the likely range of damages at trial has to be very large to go ahead. This takes a strong claimant’s case and a rather bad defendant - which rarely happens. Alternatively, it takes a private client who is happy to bear the risk and go on even after advice, which rarely happens. Neither legal aid funding nor a CFA will usually support the burden of risk.

The Part 36 offer rule was intended to make cases settle, and it works. But in disrepair, I’d suggest it is keeping disrepair damages artificially and unfairly low.

I would be delighted to hear any accounts of disrepair damages awards at trial from readers. I do have a couple of recent examples, but the circumstances are both utterly distinct and relevant to the award, so anonymity, alas, forbids. Suffice it to say that in both cases, the Court inclined to a nominal percentage of rent approach, rather than the Wallace ‘tariff’.

What counts as serious or less serious disrepair is a matter of fact, evidence and some common sense. But is also a topic for another post.