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Residential Landlords – are your advisers committing a crime, which could also see your possession case thrown out of Court?

Terrace houses Print publication

23/10/2018

Following a recent cautionary case for residential landlords, Walker Morris partner and specialist Housing Management and Litigation solicitor Karl Anders explains why possession claims should be handled by properly qualified legal professionals.

Market context

There has been a proliferation, in recent years, of unregulated ‘eviction specialist’ businesses. These businesses seek to help landlords with the conduct of the eviction process through the County Court and in return charge fees that are usually comparable to specialist solicitors’ firms.

The recent case of Kassam v Gill [1] represents a salutary warning for landlords that instructing a non-regulated entity could be a false economy and could also entail significant risks.

Cautionary case

When its tenant had accrued rent arrears of over £15,000, the landlord instructed a non-regulated, self-proclaimed ‘eviction specialist ‘ called Remove a Tenant (RAT) to assist it with obtaining possession.  RAT prepared and served the notice seeking possession; pre-completed the possession claims online form (albeit the landlord finally approved and submitted the form); paid the court fee on the landlord’s behalf; gave its address as the correspondence address; drafted the witness statement for the landlord; prepared the court bundle; instructed the advocate who attended the hearing, and managed the litigation process generally.

The court found that RAT had ‘conducted litigation’ which, by virtue of the Legal Services Act 2007 (LSA 2007), may only lawfully be carried out by properly authorised persons/firms.  (RAT’s letterhead and online rubric, which stated expressly that RAT were not litigators and merely offered assistance in the preparation and administration of claims, was found to be irrelevant).

The LSA 2007 provides that the conduct of legal proceedings by a non-authorised entity is a criminal offence. There are good reasons for that: an unqualified person may not have the requisite skill and experience to deal with some of the more complex or unusual aspects which can arise in any possession claim and they will also not be regulated by the Solicitors Regulation Authority.  In many cases, they will also lack the requisite professional indemnity insurance.  If and when anything does go wrong, there will therefore be little or no comeback for the landlord.

In the subject case, the court considered that, notwithstanding the illegality, it would not be just and proportionate to strike out the landlord’s claim. However, the landlord’s claim failed in any event.  RAT had made a technical error in its preparation of the eviction notice, and that was fatal in respect of the possession claim based on the mandatory rent arrears ground.  The landlord therefore wasted time and money in dealing with RAT and, as at the date of writing, it has still not recovered possession.

WM Comment and lessons for landlords

While parties continue to instruct non-qualified, non-regulated eviction ‘specialists’, we are likely to see more outcomes along these lines, particularly in light of this recent decision.

Following this case, it is not entirely clear where the boundary lies between lawful assistance that any person/firm may provide to a party to litigation, and the criminal offence of conducting legal proceedings without authorisation.

In addition, whilst the court in this case indicated that, had it not been for the eviction notice error, it would have allowed the landlord’s claim to proceed, that was a decision made purely on the particular facts. In another case, a court may well decide that illegality in the conduct of proceedings would result in the claim being struck-out.

It is clear, however, that attempted repudiations or disclaimers on their letterhead will not assist these businesses – what they actually do in terms of the progressing the case will determine whether they are conducting litigation. In addition, the fact that these businesses charge a fee for their services is likely to be taken into account by the court, and may give rise to a presumption of unlawful conduct of litigation.

In the majority of cases, therefore, landlords will be well advised – in terms of both quality of service and cost-effectiveness – to steer clear of unregulated businesses and instead instruct a legally qualified possession professional.

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[1] 13 August 2018, HHJ Worster, Birmingham County Court

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