As Personal Injury (PI) becomes less lucrative local authorities are facing a perfect storm of an increasing number of housing claims and a declining amount of funds and resources to deal with them effectively, warns legal firm Aticus Law.
Aticus Law points out that claims are currently being stockpiled and local authorities and housing associations will soon be facing an avalanche of HFHHA claims and housing disrepair claims which, they are unlikely to have the internal resources to deal with.
Under the Homes (Fitness for Human Habitation) Act 2018 (HFHHA 2018) which came into effect on 20th March 2019 landlords have to ensure that their properties are safe, healthy and hazard free.
Aticus Law Partner Louise Shawcross says she believes many social landlords are completely unaware that they are set to be the next big thing for claims firms and it is particularly important local authorities take action now if they want to avoid needlessly paying out hundreds of thousands of pounds in claims.
Tactics being employed include targeting one authority with a high number of claims making it more difficult for the landlord to have the resources to interrogate the claims thoroughly.
Each week Aticus Law sees first hand local authorities and social landlords across England needlessly incurring tens of thousands of pounds in housing disrepair legal costs
Cash-strapped local authorities are about to be hit by an avalanche of claims as housing disrepair becomes the next big thing after Personal Injury (PI), warns legal firm Aticus Law.
Most local authorities are already struggling to make ends meet and deliver vital services. Being targeted in a systematic way by firms who have honed their skills in the PI sector is the last thing they need – and is also exactly what is about to happen – warns Aticus Law Partner Louise Shawcross LLB.
Aticus Law, which has offices in Manchester, Wilmslow and London says that claims management companies who were previously involved in the PI sector are turning their attention to social housing as PI regulation is tightened up and so becomes less profitable. Similarly, many solicitors who relied on PI business are now looking for another source of revenue.
Aticus Law says that the number of claims it is being offered by claims management companies (CMCs) has increased significantly in the past 5 years, and that tactics used in the PI market to generate claims – such as cold calling and leaflet dropping – are now being used to ‘harvest’ housing disrepair claims against social housing providers.
Whereas in 2014 Aticus Law might have previously received calls from one or two claims management companies (CMCs) a week offering them around five housing disrepair cases in total, it is now getting calls every single day and in far bigger numbers – commonly batches of 20. Aticus Law says this will be happening at law firms up and down the country.
Partner Louise Shawcross LLB warns: “Local authorities are facing a perfect storm of an increasing number of housing claims and a declining amount of funds and resources to deal with them effectively. Perhaps most worrying of all claims are being stockpiled so that many local authorities and social housing providers will soon find themselves hit by a barrage of claims that with the best will in the world they are unlikely to have the internal resources to deal with.”
She says CMCs quickly learn to identify local authorities and housing associations that are ‘easy targets’, for example those that pay out on claims without investigating them properly or that sit on claims for months without dealing with them effectively meaning legal costs – and therefore payouts – mount up.
Aticus Law has become concerned by the vast increase in claims- driven firms in this sector piling into the market that it is using its experience and expertise to work alongside landlords by starting a new defendant housing disrepair legal service department specifically for housing professionals.
Comments Louise Shawcross: “Of course there are numerous instances of tenants living in barely habitable accommodation. These need to be taken very seriously and addressed, and we entirely agree that tenants should have legal recourse if their complaints are not taken seriously or acted upon.
“But at a time of austerity and funding cuts no one – least of all local taxpayers – wants to see local authorities and social housing providers seen as an easy target for a whole feeding system which includes surveyors, claims management companies, funders and after the event insurance firms. It is vital that as much money as possible goes on providing safe, comfortable homes and vital local services. We’d really advise local authorities to get specialist legal advice in place now as there is no doubt they will soon be facing an avalanche of harvested housing disrepair claims and claims brought under the new legislation Homes (Fitness for Human Habitation) Act 2018.”
