The government has confirmed it will delay the implementation of fixed costs in housing cases for two years. The Ministry of Justice said that it remains committed to the principle of fixed costs but wanted to wait to see the effect of other changes in the sector.
But ministers are resolute that the extension of fixed recoverable costs for other civil cases will go ahead as planned from October.
An MoJ spokesperson said: ‘We want to reform civil justice costs because giving all parties certainty upfront will ensure no one is locked out of justice for fear of how high their legal fees might be if they lose. However, it is important that our reforms are aligned with wider reforms in the housing sector which is why we’ve taken the decision to delay introduction in these instances by two years.’
The two-year extension takes any possible implementation date beyond the next general election, so the policy could be reconsidered in any case by an incoming government.
The present government had come under pressure from various sources to rethink its plans to limit costs for running housing cases. The calls grew louder last summer when the MoJ opted to delay extending the regime to legally aided housing possession cases by two years.
Critics argued that if lawyers were not properly paid for bringing successful cases against landlords then tenants and borrowers would not have access to justice.
The MoJ is understood to believe that ensuring costs are known upfront and controlled is the best way to help parties pursue litigation without the fear of spiralling costs. It argues that parties will be able to more effectively plan litigation and consider whether it is appropriate.
The delay will allow for the impact of other reforms to the housing sector to ‘become clearer’ over the next two years. In particular, the Social Housing Regulation Bill is intended to rebalance the power between renters and landlords and to strengthen regulators’ powers to take tough action against rogue landlords.
Housing secretary Michael Gove has also written to the legal profession asking it to refer social housing tenants to the housing ombudsman for advice about resolving disputes with landlords.
The MoJ said last November that it would not meet its April 2023 target for extending fixed costs to most civil claims valued up to £100,000.
The delay to housing fixed costs was accompanied by an assurance that the government is ‘pressing ahead’ with wider costs reforms, ahead of them being implemented this October.
The Law Society welcomed the decision to delay the implementation of FRCs in housing cases but urged the government to consider scrapping the implementation entirely.
Society president Lubna Shuja said: 'The complexity and unique nature of housing cases makes them unsuitable for the application of FRCs. The delay in the introduction of these fixed costs will enable housing solicitors, including legal aid providers, to continue their important work in helping clients resolve housing issues efficiently.
'We are encouraged that the MoJ has listened to our concerns and is taking a holistic approach to costs in housing disputes. If the government does not completely abandon the implementation of FRCs in housing cases, there will be a real risk that those facing a housing crisis will not have access to justice.'
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