We now have the new rules which are going to take effect when the stay on possession proceedings in the Courts ends on 24 August.
It does not include any ‘pre-action protocol’ as was suggested earlier by the government.
What is a Pre-Action Protocol?
A pre-action protocol is a set of rules telling you what you need to do before starting a particular type of claim. For example, we have pre-action protocols for personal injury claims, for housing conditions claims and for possession claims by social landlords.
We were told initially that a pre-action protocol for possession claims by private sector landlords would be published. However, in view of the fact that the most common grounds for possession – serious rent arrears and section 21, are mandatory, it may be that the powers that be thought there was little a pre-action protocol could do.
So the Courts have opted for a temporary practice direction setting out new rules to be followed, which no doubt they hope will help stem the tide of cases.
Mediation for landlords and tenants
In anticipation of a pre-action protocol requirement for possession claims, two mediation services have been launched:
The website describes the remit of the service as follows:
… to help landlord and tenants to resolve issues that may have arisen during their tenancy or to help the parties to end a tenancy. These issues could relate to rent payments being made by a tenant and or other issues that have developed and require resolution to prevent the matter progressing to court. Where there are other issues that have arisen we will expect both parties to be reasonable in their positions to help reach an agreement to prevent the matter from proceeding to court.
You request a mediation service online and the cost depends on how far the procedure goes:
- Initial instructions – £120
- The Mediation – £270 (but could be more if more than 2 hours work done)
- Agreement drafting – £150
So if the process goes all the way the cost would be £540. Or possibly more if it is lengthy mediation. However, this could be worth it if it resolves the matter and your tenants start paying rent again.
This service is aimed specifically at situations where tenants are not paying rent:
TDS Resolution offers a service in which we will reach out to your tenant if they have fallen into rent arrears and try to reach a suitable rent repayment plan for both parties. The aim is to prevent evictions and secure mutually acceptable rent repayment plans.
This is a cheaper service and the costs and stages are as follows:
- Completing the resolution referral form – free but if the tenant fails to engage you can get a certificate confirming this for £24 (£20 + VAT)
- Resolution appointment – £180 (£150 + VAT)
- The appointment will be 60 minutes long and seek to reach a mutually acceptable repayment plan
- Resolution summary – TDS will draft up a settlement agreement. If no agreement can be reached, it will say this.
So the total cost is £204 (with VAT).
The Pre-Action Conduct Practice Direction
Although we have no specific pre-action protocol for private sector possession claims, there is an overarching practice direction here which applies in cases where no specific pre-action protocol has been made.
This makes it clear that the court will expect parties to try to reach a resolution on their own and only pass this on to the overburdened court system if this proves impossible:
Before commencing proceedings, the court will expect the parties to have exchanged sufficient information to—
(a) understand each other’s position;
(b) make decisions about how to proceed;
(c) try to settle the issues without proceedings;
(d) consider a form of Alternative Dispute Resolution (ADR) to assist with settlement;
(e) support the efficient management of those proceedings; and
(f) reduce the costs of resolving the dispute.
Going on to say that:
Where there is no relevant pre-action protocol, the parties should exchange correspondence and information to comply with the objectives in paragraph 3, bearing in mind that compliance should be proportionate. The steps will usually include—
(a) the claimant writing to the defendant with concise details of the claim. The letter should include the basis on which the claim is made, a summary of the facts, what the claimant wants from the defendant, and if money, how the amount is calculated;
(b) the defendant responding within a reasonable time – 14 days in a straight forward case and no more than 3 months in a very complex one. The reply should include confirmation as to whether the claim is accepted and, if it is not accepted, the reasons why, together with an explanation as to which facts and parts of the claim are disputed and whether the defendant is making a counterclaim as well as providing details of any counterclaim; and
(c) the parties disclosing key documents relevant to the issues in dispute.
Litigation (the practice direction tells us) should always be a last resort. If possible parties should first try one or more of the following:
- mediation, a third party facilitating a resolution;
- arbitration, a third party deciding the dispute;
- early neutral evaluation, a third party giving an informed opinion on the dispute; and
- Ombudsmen schemes.
So even though there is no specific private rented sector pre-action protocol requiring some form of mediation, this is covered by the overarching practice direction.
Back to Possession Proceedings
So bearing this in mind – how can mediation help in possession claims? It really depends on why you are seeking possession. For example
- If your tenant is in financial difficulties then the TDS scheme would be a good choice as they can help draw up a repayment plan (although no doubt the PRS Scheme would do this too)
- If your tenant has failed to pay rent due to a dispute regarding disrepair and an argument about who is responsible – the PRS Mediation service would be a good choice as they would look in more detail at the issues surrounding the tenant’s reasons for failing to pay.
If the tenants are in rent arrears and refusing point-blank to talk to you, it may be worth completing the TDS resolution referral form anyway and then obtaining the certificate confirming that the tenant has failed to engage – which will only cost you £24.
This can be provided to the court along with your reactivation notice or (for cases started after 3 August) your notice setting out your knowledge of the effect of the coronavirus pandemic on the defendants and will prove to the Court that you have at least tried to resolve the matter.
The advantages of attempting mediation
If you can prove to the court that you have attempted some form of out of court mediation and that it was your opponents who failed to take part, then this will put you in a better light and will prove that you have tried to be reasonable.
However, you may find that the tenants are willing to engage – and mediation can be surprisingly successful. Frequently tenants who will refuse to speak to their landlord as a matter of principle or because they distrust them, will be willing to talk to someone independent.
Often the main problem with disputes is that neither side will ever talk to each other meaning that they don’t really understand the problems faced by their opponent or what their issues are. This is why cases are so often settled at court before the hearing takes place – as this is the first time that they have ever been together in the same place, often with solicitors and duty solicitors who can help out.
But wouldn’t it be better if the discussions which take place ‘at the doors of the court’ could be done earlier?
You may find that you are then able to resolve your dispute without the need for court proceedings at all. Which will have the benefits of
- Resolving matters quicker – possession claims were always time-consuming and are now likely to take many more months to resolve, and
- Costing less – particularly if the mediation results in tenants paying their rent again
Plus you will have performed your civic duty and freed up more time at the courts for the really intractable cases. Which is as it should be.