R (Baron, Peat & Othrs) v Hyndburn District Council, Administrative Court, Manchester District Registry, 14 April 2011 (Not on BAILII as yet)

J has previously alluded to this case involving an application for permission for Judicial Review of a local authority decision to make a selective licensing designation. However, we now have a full transcript.

Selective licensing is found under Part 3 of the Housing Act 2004. It allows local authorities to designate all landlords in a specified area as requiring a licence to let their property. This is only permitted if the local authority reasonably considers that the area is or is likely to become an area of low housing demand (section 80(3)(a)) which will be improved by making the designation or that the area is one of anti-social behaviour which is being exacerbated by the actions (or failings) of private sector landlords (section 80(6)) and the making of the designation will alleviate the problem. As with all such designations the local authority must conduct a consultation of those persons likely to be affected by the making of the designation and consider representations made (section 80(9)).

In 2006 the DCLG issued guidance on the carrying out of consultations and the making of designations which was revised in April 2010 (the, snappily named, “Approval steps for Additional and Selective Licensing Designation in England“). One of the key passages, regarding consultations, stated:

LHAs will be required to conduct a full consultation. This should include consultation of local residents, including tenants, landlords and where appropriate their managing agents and other members of the community who live or operate businesses or provide services within the proposed designation. It should also include local residents and those who operate businesses or provide services in the surrounding area outside of the proposed designation who will be affected. LHAs should ensure that the consultation is widely publicised using various channels of communication.
During consultation, LHAs must give a detailed explanation of the proposed designation, explaining the reasons for the designation, how it will tackle specific problems, the potential benefits etc. For example, in the case of selective licensing, LHAs must be able to demonstrate what the local factors are that mean an area is suffering from low demand and/or anti-social behaviour, how those factors are currently being tackled, and how the selective licensing designation will improve matters. Affected persons should be given adequate time to give their views, and these should all be considered and responded too.

Hyndburn made a selective licensing designation on 3 March 2010 which was confirmed by the Secretary of State on 31 March 2010 (just a day before he removed the need for confirmation altogether). The consultation relied on to make the designation was, however, conducted a little in advance of this, in August 2008.

The claimants (who are a small group of professional landlords acting with the support of another 341 of their peers) now seek to quash the designation on the basis that Hyndburn misled the Secretary of State as to the nature of their consultation and also that the consultation they carried out was inadequate.

The main ground relied on by Hyndburn at the permission stage was that the claimants had delayed excessively in the making of their application. It was submitted for H that they were first notified of the review by a letter from solicitors at the beginning of September 2010 at which stage they immediately pointed out that the attempt to review the decision was out of time.

The Court (in the person of Mr Justice Owen) disagreed, pointing out that a lettings agent (acting on behalf of the claimants) had written to H questioning the scheme in early April 2010. H were hampered here by the fact that they did not actually respond to this communication until near the end of May 2010 and only then with a holding email. In August 2010 H held a landlord’s forum after which the same agent emailed H stating that the scheme was ‘seriously flawed’. H then responded to this email on 3 September stating that they had complied with their statutory requirements while responding to the claim letter offering to amend some of the licence conditions. There was a degree of to-ing and fro-ing in an effort to work something out but the delays that attended these negotiations were attributed by the Court primarily to H.

H was ultimately scuppered by the simple but elegant argument that the negotiation process itself should not have been required if H had conducted a proper consultation in the first place.

Permission to apply for review granted.

The moral here is for Council’s to make sure they really consult properly and think very carefully about what they are trying to do with a licensing designation and why. Hyndburn is not the first Council to have found itself becoming caught up in threats of messy and expensive litigation for want of carrying out a proper consultation. The normal response of councillors to blame the lawyers is not sufficient. It should not be necessary for lawyers to become involved in the first place and it probably would not be if a more sensible and robust consultation was carried out. Councils seem to forget that the object of a good consultation is to build a consensus on the best course of action so that most people are then satisfied about the final proposed plan. Actually, they may not be the only ones to have forgotten that….

UPDATE: Since writing this I have noticed that another selective licensing scheme is being threatened with review. Local Government Lawyer has a brief report here. Anyone have more information?