Section 20 Consultation and Major Works

Changes to Section 20 Consultation for Private Landlords, Resident Management Companies and their Agents

A High Court decision in the case Phillips & Goddard v Francis earlier this year overturned previous views on how consultations on major works to residential buildings were applied. It has brought about considerable uncertainty for freeholders, managing agents and residents alike as the judge’s ruling is, at best, unclear about how it is to be managed practically.

When major works to a building with leaseholders/tenants need to be carried out which cost over £250 per resident, landlords, managing agents or residential management companies have to go through a statutory consultation process in accordance with Section 20 of the Landlord and Tenant Act 1985.

This new case throws doubt over when the consultation process applies, as it has always been widely considered that it referred to major works only. The decision in this case was that the consultation process now also applies to relatively minor repair works as well, so confusion reigns about whether this covers one set of works, if works are split into different components, if they take place over a year or beyond, and so on.

To follow the ARMA (Association of Residential Managing Agents) guidance on the case:  

http://www.arma.org.uk/files/Phillips_v_Francis_public_brief.pdf

If you need help on any aspect of the above either as a landlord, managing agent or a member of a resident management company, contact Samantha Dawkins.

Civil Litigation - the Jackson Reforms

Civil Litigation - the Jackson Reforms

On 1 April this year, we'll see important civil justice reforms based on Lord Justice Jackson's recommendations from his 2010 review of civil litigation costs in England and Wales.

These extensive reforms are aimed at giving access to justice at a fair cost, and will have a major affect on the way legal action is funded and conducted in the courts. The main objectives are to eliminate ways of funding which increase costs and to create a more efficient litigation procedure.

Summary of key changes:

• “No win, no fee” conditional fee agreements (CFAs) will still be available in civil cases, but claimants who win their court case will have to pay their own lawyer's success fee and any after-the-event insurance (ATE) premiums from the compensation awarded ie no longer from the losing party.  The theory behind the reform is that ATE will no longer be needed.

• There will be a new form of litigation funding called damages based agreements (DBAs). Claimants' damages are protected; the fee a successful claimant has to pay their lawyer (the lawyer's “success fee” in CFAs, or 'payment' in DBAs) in personal injury claims is capped at 25% of the damages recovered, excluding damages for future care and loss.

• Claims worth £100,000 or less will no longer be able to be heard in the High Court and instead will be dealt with by the County Court (the current limit is £25,000).

• In the County Court, the small claims limit will increase from £5,000 to £10,000 with a view to increasing it again to £15,000 subject to evaluation.  The limit for personal injury claims will remain at £1,000.

• Referral fees are banned in personal injury cases (intended to be implemented later in the year).

• General damages in nuisance, defamation and all other torts which cause suffering, inconvenience or distress are increased by 10%.

• General damages for pain, suffering and loss of amenity in personal injury are increased by 10%.

• A new sanction on defendants to encourage earlier settlement of claims.

• Parties seeking permission for expert evidence should provide the court with cost estimates.

• A new regime of 'qualified one way costs shifting' (QOCS) is introduced in personal injury cases which limits the amount claimants may have to pay to defendants.  Claimants who lose, but whose claims are carried out in accordance with the rules, are protected from having to pay the defendants’ costs.

What do the reforms mean for you?

For individuals

The main impact is that success fees will not be recoverable from the other party.  However the aim is that the 10% increase in damages will go some way to offsetting this.

For businesses

Legal costs are not usually recoverable in the small claims court unless you can show the other side has behaved unreasonably, which can be very difficult to do.  Businesses, you need to be reviewing your Terms & Conditions to check there is provision for legal costs to be paid. If included, you can argue for costs even in a small claim.

Samantha Dawkins


This is a summary only, for full information on all the changes, see www.justice.gov.uk/civil-justice-reforms

If you think any of the above could affect you and you need advice, call us on 01273 662750 or email sdawkins@edward-harte.co.uk