A Manchester law firm has warned that social landlords could be facing a dramatic surge in housing disrepair claims, as companies chase new lines of revenue.
Atticus Law claims that following tighter regulation of the personal injury (PI) market, together with the introduction of the Homes (Fitness for Human Habitation) Act 2018, claims management companies (CMCs) are taking a greater interest in social housing as a potential new source of business.
And it’s not just councils in the firing line; housing associations, too, could face a ‘barrage’ of claims.
“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,” said Louise Shawcross LLB, a partner at the firm.
“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.”
According to the law firm, the number of claims it is being offered by CMCs has “increased significantly” in the past five years. Furthermore, it says that the kind of 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, it might have previously received calls from one or two CMCs a week offering 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 is likely happening at law firms up and down the country.
Shawcross 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.
“Of course, there are numerous instances of tenants living in barely habitable accommodation,” Shawcross added. “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.”