Alternative dispute resolution and the Housing Ombudsman

The Housing Ombudsman has announced plans to publish individual determinations and reports based on complaints that it has reviewed. Matthew Lake examines the proposals.

The Housing Ombudsman is a dispute resolution service that aims to assist landlords and tenants resolve disputes that have arisen without the need for court involvement. Membership of the Housing Ombudsman is compulsory for registered providers of social housing and local authorities.

Following the Social Housing White Paper calling for improvements to complaints handling, the Housing Ombudsman has announced plans to publish individual determinations and reports based on complaints that it has reviewed. Performance data reports for every member of its scheme will also be released.

The decisions will cover a variety of issues including the right to buy, repairs and anti-social behaviour. The intention is that by increasing access to the decisions made by the Ombudsman, this will provide a resource for tenants, helping them to present their complaints. It will also provide an insight into their landlord through the nature and volume of complaints brought to the Ombudsman. Decisions will be released on a fortnightly basis, with decisions released not less than three months following determination. The landlord will be named but the tenant will remain anonymous.

Whilst this increased public scrutiny may not be something that social housing landlords will particularly relish, it does present an opportunity to seek to reduce the number of claims being pursued by tenants via litigation, which often results in legal costs which are disproportionate to the sums paid to the tenant by way of compensation.

The overriding objective, as set out within the Civil Procedure Rules (CPR), is to enable the court to deal with every case justly and at proportionate cost. This includes, amongst other things, so far as is practicable, ensuring that the parties are on an equal footing, and saving expense. Dealing with a case in ways which are proportionate must take account of the amount of money involved, the importance of the case, the complexity of the issues, the financial position of each party, ensuring that it is dealt with expeditiously and fairly, and allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases.

The CPR is supported by a number of Pre-Action Protocols which set out the manner in which parties must behave before a claim is issued. Should either party deviate from the applicable protocol(s) then the court has the power to punish the guilty party by ordering them to pay the other party’s costs and/or denying them the right to recover their own legal costs from the other party, even if successful in their claim.

The running theme throughout the protocols is the need for the parties to seek to resolve their differences by any means possible before seeking the assistance of the court. Often referred to as alternative dispute resolution (ADR), this can take many forms. In the context of housing conditions claims, the Pre-Action Protocol for Housing Conditions Claims (both English and Welsh versions) expressly states that ADR may include following any complaints/arbitration procedure operated by the landlord, and referring the complaint to the Housing Ombudsman Service.

We frequently remind solicitors representing tenants that the protocol includes this ADR provision, only to be met with arguments including that the tenant doesn’t have to follow that process, the matters complained of are too complex, and the sums that the tenant may be offered via those routes is less than the tenant may recover via legal action.

However, in many cases, those arguments don’t stand up to scrutiny. In the context of housing conditions claims there are many cases involving very simple factual issues, and the only matter to be decided is whether or not the tenant should be compensated for the period the property was out of repair and, if so, how much the tenant should receive by way of compensation. In many cases, the claims being advanced via solicitors go on to settle for a few hundred pounds in terms of damages, only for the tenant’s solicitor to submit a bill for many thousands of pounds. That arguably does not further the overriding objective.

In light of the Ombudsman’s announcement there should, hopefully quite quickly, be a body of published decisions on which landlords can rely in subsequent claims. Landlords may refer to any Ombudsman decisions which have similar facts to the complaints raised in a letter of claim, and landlords may submit that the tenant’s case is demonstrably capable of being determined by the Ombudsman. 

The advantage to the tenant of an Ombudsman complaint is that it removes the litigation risk and potential adverse costs consequences that may follow if the tenant pursues an unsuccessful court claim. The advantage to the landlord is that it minimises the financial outlay associated with dealing with the ever- increasing number of claims being brought against them, particularly housing conditions claims. 

In the event that the tenant refuses to submit the complaint to the Ombudsman, and either goes on to settle the claim for an amount which is comparable to those previous decisions the landlord referred to at the outset, or is awarded a comparable amount by the court at trial, it appears arguable to us that the claim ought to have been submitted to the Ombudsman at the outset, such that the tenant should not be able to recover his/her legal costs, either in whole or in part, from the landlord.

It must be caveated that every case will turn on its own facts, and not every case will be suitable for referral to the Ombudsman, due to the complexity of the matters in dispute. However, in the context of housing conditions claims, it appears arguable that this is an avenue to be explored in almost every instance. 

Matthew Lake is a Principal Associate at Weightmans.