Fixed recoverable costs could have a devastating impact on the provision of housing legal aid and leave vulnerable tenants struggling to find a solicitor if the government presses ahead with changes, a law centre solicitor has warned.
Last month Professor Dominic Regan, a costs expert, said the government remains ‘mad keen’ on imposing fixed costs on most civil claims valued up to £100,000.
Islington Law Centre solicitor Serdar Celebi told the Gazette this week that the Ministry of Justice’s proposal to introduce fixed recoverable costs in the fast track, with a fixed fee inclusive of counsel’s fees, would be 'devastating' for legal aid as 'many if not all housing providers would likely have to close'.
Celebi said most housing legal aid cases, such as possession claims, disrepair and unlawful eviction, are allocated to the fast track.
‘Recovery of inter partes costs from opponents in such cases which are successful - ie at market rates from the opponent rather than legal aid rates from the Legal Aid Agency - is the only way housing legal aid as an area is sustainable given there has been no increase in legal aid rates since 1996 and there was a 10% cut in rates in October 2011,’ Celebi said.
‘Limiting inter partes recovery would be a cut via the back door and mean housing would no longer be sustainable financially as an area of legal aid. Many if not all housing providers would likely have to close... A significant number of tenants in housing legal aid cases are disabled and would not be able to access housing solicitors.'
At present, Celebi said, ‘costs on assessment by the court are only allowed anyway at a proportionate amount’.
The Law Society highlighted the impact that fixed recoverable costs could have on housing in its response to the Ministry of Justice’s consultation last year.
The Society said: ‘The value of housing claims can be low but they can be complex and of profound importance to the client, especially when they may result in a client losing their home. Illegal eviction and housing disrepair matters over £1,000 but below £5,000 have not been allocated to the small claims track for the simple reason that those drafting the Civil Procedure Rules were aware of the very real complexity of housing matters.
‘Whilst some forms of housing disrepair cases can be relatively straightforward, many cases arise by way of counterclaim in possession proceedings and the issues become far more complex. Equally, homelessness appeals are very difficult pieces of litigation which are invariably handled by specialists. Costs are driven by a variety of factors including defendant conduct and the vulnerability of a claimant which cannot be generalised. Many of these clients will be unable to pay any shortfall in cost.’
A Ministry of Justice spokesperson told the Gazette today: 'We consulted on extending fixed recoverable costs in 2019 and the government will set out the next steps in due course.'