Part XII      

The powers of the courts

Introduction

                          12.1              This project is principally concerned with substantive housing law But we cannot wholly ignore the procedural implications of our proposals. This Part considers how the powers of the court might be amended in the light of our proposals. The court’s powers in relation to anti social behaviour cases are given separate treatment in Part XIII below. Detailed changes to rules of procedure will be made by the Rules Committee in the normal way.

                          12.2              This part considers

                          12.3              The principles which underpinned Lord Woolf’s reforms of the civil justice system are reflected in new rules relating to possession proceedings, introduced into the Civil Procedure Rules in October 2001.[1]

                          12.4              The principle of proportionality is reflected in the rules which provide that, unless there are very exceptional circumstances,[2] all possession proceedings should be brought in the county court. Further, while no proceedings should be allocated to the small claims track unless all parties agree,[3] the court may direct that a case be allocated to the fast track even though the value of the property is in excess of £15,000.[4] All disputed cases, save the most complex, should be dealt with in the fast track.

                          12.5              The principle of reducing delay is reflected in the new rule that the standard period between the issue of the claim form and the date fixed for the hearing must be no more than 8 weeks.[5]

                          12.6              These principles do not conflict with our proposals; indeed we support them.

                          12.7              Under the current law, the court has a considerable discretion as to whether or not to make any order for possession, where the application is based on the discretionary grounds. The judge must make an overall assessment as to whether it is reasonable to make the order sought by the claimant.

                          12.8              In addition, under each of the three current regimes, the court is given a wide range of powers as to how it should dispose of possession cases based on these grounds.[6] These powers allow courts to adjourn proceedings; or to stay, suspend or postpone orders on appropriate conditions; and to discharge possession orders when conditions are complied with. These powers are commonly used to adjourn cases before trial, to make suspended possession orders on conditions that occupiers make good their breaches of the agreement, and to grant suspensions of warrants.

                          12.9              We think it important that judges retain the flexibility to determine the outcomes of possession applications.

                      12.10              We provisionally propose that the court should have an extended discretion, when dealing with applications for possession orders on a discretionary basis. This discretion would allow the court to adjourn proceedings, to stay, suspend or postpone orders on appropriate conditions, and to discharge possession orders when conditions are complied with.

                      12.11              There is a clear attraction to a broad discretion. The court can shape its decision to the circumstances of the case. The disadvantage is that the outcome of individual cases, particularly from the claimant’s perspective, may appear inconsistent, even arbitrary.

                      12.12              We are quite clear that, if they have discretionary powers, courts should exercise them. Indeed it has long been the law that merely “rubber stamping” a consent order drafted by the parties is not a proper discharge of the judicial functions in this context.[7]

                      12.13              We have thought about the criticism that the outcomes of court process are insufficiently certain. We have no compelling empirical evidence that this is in fact the case. There is only limited case law on “reasonableness”, other than in the context of anti social behaviour[8]. The usual position is that “reasonableness” is regarded as a matter for the trial judge and, in the context of secure tenancies, reasonable means having regard to both the interest of the parties and to the interest of the public.[9] The Judicial Studies Board offers both induction and continuation training in housing law which seeks to encourage some uniformity of approach.

                      12.14              The problem would not be solved even if it were only one of perception.

                      12.15              To the extent that it is a problem, we think that it may in part be resolved by proper litigation practice before the court. Our sense is that well-prepared cases tend to turn out more predictably than poorly-prepared cases. In this context we note that the Department for Transport, Local Government and the Regions and others have recently issued guidance aimed at helping social landlords with the procedures.[10]

                      12.16              Nevertheless we think there is an argument that the discretionary powers of the court – currently very open-ended – should be more structured. In Part XIII below we suggest that, in anti social behaviour cases, this structuring should take the form of requiring a possession order to be made unless a defined exception applies. We feel that that approach is only suitable in the particular context of anti social behaviour. On other issues, we prefer to see discretion structured by means of a list of factors the court should take into account. In the cases referred to in Part XIII, the Court of Appeal has given guidance on the factors which must be taken into account – in particular, consideration of the interests of landlords and the impact on other occupiers if an order is not made – which could be relevant in cases other than anti social behaviour.

                      12.17              Apart from the anti social behaviour cases referred to above, the other major recent influence on thinking about discretion in reasonableness cases is the Human Rights Act 1998. As was explained in Part V above, the Court of Appeal currently considers that any eviction procedure engages Article 8(1) of the European Convention on Human Rights.[11] The question then becomes whether such a procedure can be justified under Article 8(2).

                      12.18              The discretionary grounds are most relevant to type I agreements. They will mostly be granted by social landlords, but can be used by private landlords if they choose. They are also available in type II agreements, and will be particularly relevant during the currency of fixed terms.

                      12.19              In relation to the issue of reasonableness, the Court of Appeal has made a statement of support of the doctrine of “horizontal” applicability[12] of human rights to cases involving private landlords, on the basis that section 3 of the Human Rights Act 1998 requires the word “reasonable” in housing legislation to be construed in a Convention-compliant way “whoever the lessor may be”.[13]

                      12.20              We consider that the circumstances in which we propose it should be possible to seek an order for possession subject to the discretion of the court[14] are all compliant with Article 8(2) of the Convention at the general level. We regard the provisions for eviction in these circumstances to be “in accordance with the law, for a legitimate aim, and necessary in a democratic society in the interests of… the prevention of disorder or crime… the protection of health … or for the protection of the rights and freedoms of others”.

                      12.21              We think this is so, even in relation to the suggested estate management grounds for seeking an order for possession, which requires the availability of suitable alternative accommodation. This would be particularly so if use of this ground for seeking possession was triggered not simply by the availability of suitable alternative accommodation but by more precisely defined circumstances equivalent to those found in the Housing Act 1985.[15] Even if the estate management ground based simply on suitable alternative accommodation, it might still be justified by its objective of enabling social landlords to manage their property more efficiently in the public interest and of allowing respect for the rights of private landlords to use their property in an economically efficient way.

                      12.22              The discretionary element in these grounds allows the court to undertake an analysis in the individual case, to determine whether there is a pressing social need for the eviction and whether eviction of this particular household is proportionate to the legitimate aim to be achieved.

                      12.23              The Court of Appeal has recently confirmed a line of cases holding that, so long as the court exercises its discretion in a proper manner, this will satisfy the requirements of Article 8(2). Particular emphasis was given to the idea that the exercise of considering reasonableness should be treated as the application of proportionality to the particular case.[16] This case and Poplar[17] confirm the approach taken in the anti social behaviour cases mentioned above, namely that the court should take into account all factors affecting not only the occupier but also the landlord, the landlord’s interests, the landlord’s other occupiers and the general public.

                      12.24              A more structured approach to the exercise of discretion, contained in the legislation, will not prevent human rights issues being taken into account wherever relevant. Indeed it will provide a framework to assist in this. The way in which the structured discretion is constructed should seek to ensure that the same objective standards are imposed on both categories of landlord. In practice, that would mean that it would be necessary to read across requirements generated in respect of public authority social landlords to private landlords. This does not mean, of course, that the court would not be able to take account of the human rights of the private landlord – unlike a public authority which does not have human rights – or that the balancing act would not be affected by the nature of the landlord, but they should be factors to be taken into account when the judge performs the balancing act.

                      12.25              There is a model from Scotland, in section 16(3) of the Housing (Scotland) Act 2001, for how to approach structuring the equivalent discretion in that Act. Under this provision, in deciding whether it would be reasonable to grant an order for possession on one of the occupier-default discretionary grounds, a Scottish court must have regard the following matters.

                      12.26              The Scottish Act applies only to social landlords. Our proposals are designed to cover private landlords as well. The approach in the Scottish Act will therefore have to be developed to take this factor into account.

                      12.27              We provisionally propose that our new regime should include a framework to structure the exercise of discretion in cases based on reasonableness grounds. It should explicitly require the court to consider whether the eviction of the household concerned is proportional to the benefit to be obtained by not doing so. It should explicitly refer to the effects of granting or not granting an order, not only on the occupier and the occupier’s household but also on the landlord, the landlord’s interests, the landlord’s other occupiers, and the general public. Where possession of a fixed term tenancy is for decision, the length of the term remaining should also be considered.

                      12.28              We invite views on other factors that might be included in the structured discretion.

                      12.29              The Lord Chancellor’s Department is currently reviewing enforcement procedures. In this context, the idea has been raised of having a practice direction on the treatment of applications from occupiers to suspend possession warrants. We do not wish to intervene in this review. Nonetheless, it seems that the introduction of a structured discretion would be helpful in obtaining consistency across the range of the extended discretion given by the housing legislation in reasonableness cases.

                      12.30              The Court of Appeal has given some guidance on applications for the suspension of warrants, in particular holding that courts can consider at that point issues which were not raised by the landlord at the possession order stage.[18] The Court has however held that section 85 of the Housing Act 1985 only contemplates “summary hearings” at the enforcement stage.

                      12.31              This raises the issue of whether our new scheme ought to adapt that section, so that hearings which make decisions to order evictions are not summary. We deal below with problems related to suspended possession orders and the apparent illogicality of imposing onerous requirements on hearings which only produce a suspended order, while allowing a summary procedure for the actual eviction.

                      12.32              We invite views on whether the new structured discretion should apply to the full range of the court’s extended discretion on suspension, adjournment and postponement of both orders and warrants or whether enforcement issues should be left to the Lord Chancellor’s Department enforcement review process and the developing case-law.

                      12.33              Suspended possession orders are most common in rent arrears and anti social behaviour cases. Anti social behaviour is dealt with in Part XIII. The use of possession proceedings to deal solely with recovering rent arrears has been recognised as a problem for many years. Various attempts have been made to tackle it. In particular there are concerns that applications for possession are made, particularly by social landlords, when in fact what is really wanted is payment of the debt. The Rent Action was meant as an alternative to possession proceedings, but was finally abolished in 1993 because of under use.[19]

                      12.34              In his Final Report on Access to Justice[20] Lord Woolf said “It is generally agreed that the present procedure for possession of tenanted property on grounds of arrears is unsatisfactory.” There have been concerns that suspended possession orders for rent have been too readily given out, made in hearings listed in bulk for only a matter of minutes each, with very low attendance rates and poor participation by occupiers. It also appears illogical to focus the statutory regulation on a hearing which produces only a suspended order, with very little statutory regulation of the process for dealing with the breach of the order which then leads to the actual eviction. Furthermore, the legal consequence of a breach of the order is that the agreement will terminate immediately,[21] converting the occupier to a “tolerated trespasser”.[22] This takes place wherever there is any breach of the order, no matter how trivial. [23]

                      12.35              The Woolf Report recommended a two-stage procedure.[24] If adopted, this would effectively replace the suspended possession order with an order to pay the rent. Instead of terminating the agreement as now, breach of the order would lead to a hearing, if the landlord wanted an outright possession order. This would replace the current procedure involving the issue of a warrant followed by an application by the occupier to suspend the warrant.

                      12.36              It will be argued that many occupiers with rent arrears only take their problem seriously if any action on the debt is accompanied by a threat of eviction. Arguably this lack of linkage was the reason why the former Rent Action was not used. Our proposals clearly retain the linkage. They are not intended to make it more difficult to obtain possession for rent arrears. Instead they commend themselves to us by saving the decision to order possession for the point where the landlord is actually seeking possession.

                      12.37              Indeed, the first stage could be altered to provide for a simple administrative procedure under which the occupier is warned by the court that failure to pay the rent – and take steps to pay off the arrears – will be likely to lead to further proceedings. The substantive hearing will then take place only when the landlord really wants an outright possession order. This would operate to reverse the current position, where there is a full hearing of the matter at the stage when the landlord has no real intention of evicting the occupier but there is no hearing when the occupier’s home is genuinely at risk.

                      12.38              More radically still, the court could at that point be barred from making suspended possession orders, effectively limiting it to choosing between dismissing the application, granting an outright possession order or issuing a renewed warning (with or without a money judgement).

                      12.39              It is important to stress that such a procedure would only apply to rent arrears applications made on a discretionary basis. It would not apply to any mandatory proceedings based on the equivalent of ground 8 of the Housing Act 1988.[25] Nor would it apply to the notice-only basis for seeking possession that we have proposed should apply to type II agreements, which does not require proof of any ground for possession.

                      12.40              Currently the Civil Procedure Rules only require the landlord’s particulars of claim to detail what attempts, including court proceedings, have been made to recover the arrears in any other ways and what the landlord has found out about the occupier’s welfare benefits.[26]

                      12.41              We invite consultees to comment on the following options and any practical problems they might cause.

                      12.42              As noted above, we are aware of the Lord Chancellor’s Department’s review of civil courts enforcement procedures which includes housing. It is not within the scope of this paper to make provisional proposals on the workings of the bailiff system, but there are some relevant substantive legal issues in enforcement that we need to consider.

                      12.43              We have suggested, in Part X above[27] that the landlord’s notice of intention to seek an order for possession might refer to the earliest date on which the landlord would ask for a possession order to take effect. If adopted, this would change the current requirement that the notice give the earliest date on which proceedings would be commenced. Focusing attention on when the occupier will have to leave could help to focus the minds of both parties on what it is the landlord wants and when. We have also suggested various ways of reducing the uncertainty that can arise where large categories of agreement fall outside the statutory regulatory scheme.[28]

                      12.44              One of the most troublesome issues in this context is the status of the so-called “tolerated trespasser”.[29] Once a suspended possession order is breached, even though the landlord may not realise the breach has occurred, the present law provides that the former tenant is no longer a tenant[30] and loses the rights of a tenant, including for example the rights to have repairs done.

                      12.45              This situation can also arise where an absolute possession order, having been obtained from the court, is not actually enforced for some while after the given date (or if it is obtained even though the landlord intends not to enforce it on that date).

                      12.46              Sometimes the landlord may wish to ignore the breach. Indeed the landlord may not be interested in obtaining a warrant against a tenant who has paid only very slightly less than was due in a particular week, even though any such shortfall technically terminates the agreement from that point.

                      12.47              Subsequently the tenant may seek to suspend any warrant and can apply to discharge or rescind the possession order on compliance with the terms of the suspension.[31] Until this happens, the legal position of the former occupier is very unclear. This situation can continue for a considerable time.

                      12.48              It can become even more unclear when trying to establish the point at which a lenient response from a landlord becomes better explained as amounting to the grant of a new agreement, given the emphasis in each of the cases on the point that each case turns on its fact.[32] This will be particularly so when landlords agree not to enforce if the occupier accepts new conditions not contained in the original suspension.

                      12.49              It might be preferable, indeed, to require the landlord to execute the warrant within a defined period of time on the “use it or lose it” basis, which we considered in relation to the validity of notices of intention to seek an order for possession.[33]

                      12.50              We want to avoid the position where occupiers, who might appear to be covered by our proposals, in fact slip in and out of them in such a confusing way.

                      12.51              One solution, which appears straightforward, is to change the rule on when an agreement ends so that it only ends when the eviction is executed.

                                                        (1)      This would tie in with our proposal that agreements should continue, even after an occupier’s notice to quit, until the occupier actually leaves the premises.[34]

                                                        (2)      Arguably, there might be problems if landlords were to be required to carry out obligations, for example relating to repairs, on behalf of someone who should really have left the premises. However, if the occupier is still there because of the landlord’s delay in enforcing the order, then the landlord cannot really complain. If it is the result of delays in the court then it seems wrong to build assumptions of bad practice by courts into the substantive law. It could be the result of the occupier making repeated baseless applications to suspend warrants. But the Lord Chancellor’s Department’s enforcement review is looking at tackling problems such as this in any event.

                      12.52              We invite views on the following questions:

                      12.53              Bailiff[35] warrants to enforce possession orders can currently be obtained without any notification to the occupier, by means of a court administrative procedure without a hearing. This is logical enough in the enforcement of absolute possession orders where the occupier knows what is going to happen and should leave.

                      12.54              It is more of a problem in suspended possession orders, particularly for those in rent arrears, where the entitlement to issue a warrant is based on a breach of the terms of the suspension. The landlord does not have to prove the breach or react to the breach within any time-scale. It is the occupier who has to apply for a hearing to set aside the warrant, which must usually be done before it is executed.[36] The occupier can also apply to suspend the warrant, admitting the breach but arguing that enforcement would not be reasonable. However there is currently no statutory requirement for the occupier to be informed of these rights.[37] The landlord is currently under no obligation to tell the occupier that a warrant is being applied for, or that it has been granted, or that a date for its execution has been set.

                      12.55              This minimalist approach to a hearing, which actually decides whether someone is evicted, is hard to reconcile with the detailed statutory provisions relating to notice of intention to take proceedings and the detailed consideration of grounds at a full hearing, when that hearing usually only produces a suspended order.

                      12.56              It has been held by the Court of Appeal that the current law on summary warrant hearings is compliant with the Human Rights Act 1998.[38] However, this only means that it is compliant, not that it is necessarily a desirable feature of the present law worth replicating in a new regime. As explained above, we would like to see suspended possession orders reduced or replaced in rent arrears cases. But if they are to remain in rent or other cases, we would argue that the system for dealing with breaches of such orders needs to be improved.

                      12.57              We invite views as to the practicality of requiring a hearing before the issue of a possession warrant after a suspended possession order has been made on rent or other discretionary ground cases.

                      12.58              Alternatively we invite views whether any related problems would be best tackled by rules on court forms and/or by adopting the Woolf Report recommendations on rent arrears cases.