ADR, the failure to respond to a Letter of Claim and the Pre-Action Protocol for Housing Disrepair claims
The growth of firms who specialise in assisting tenants with claims relating to the condition of their housing has meant that landlords, and in particular social landlords, have been subject to a surge of claims for disrepair. They are, accordingly, finding ever more creative ways to limit litigation.
There is barely concealed loathing towards meddling claims farmers who, it is said, have no regard to the tenant and are only interested in an inflated bill of costs.
In response to one letter of claim, a local authority wrote: “Thank you for your letter…for the reasons which I shall explain it is not accepted that there is any need for external solicitors to be involved at this stage.” The letter went on to indicate that the letter of claim would be dealt with as a Stage 3 internal complaint. Disclosure was refused as unnecessary. The letter confirmed that the local authority would continue to liaise with the tenant directly and would not be dealing with the tenant’s chosen solicitor.
The obligation to engage with the Pre-Action Protocol is relevant both to the landlord and to the tenant. The relevant provisions in the Protocol are paragraph 4, which encourages the parties to agree a method of Alternative Dispute Resolution (ADR), and paragraph 5 which sets out the requirement for an early notification letter and letter of claim for which there are examples set out in Annex A of the Protocol.
If the landlord fails to engage with the tenant by, for example, failing to provide a letter in response pursuant to paragraph 6 of the Protocol, the tenant is entitled to simply issue a claim. However, some tenant solicitors have attempted to shore up their position by applying for pre-action disclosure under CPR r.31.16 before committing to litigation.
CPR r.31.16 provides a two-stage test. The first is usually met so long as the party to whom the application is directed would be a party in anticipated litigation. The second stage is discretionary. Disclosure must be desirable in order to dispose fairly of anticipated proceedings, to assist the dispute to be resolved without proceedings or to save costs.
The case of Natasha Atkins v Bristol City Council (Bristol County Court, 20 February 2019 unreported) concerned applications under CPR r.31.16 for pre-action disclosure following the landlord’s failure to respond to a letter of claim.
Bristol City Council was already engaged in litigation against their tenant in respect of rent arrears, and a damages claim for disrepair should properly have been brought by way of a counterclaim and set off against damages. The application would have failed for that reason alone, however, the judgment went further. The relief was refused on the basis that paragraph 4 of the Protocol (the provision relating to ADR) comes before paragraph 5 (early notification letter and letter of claim), and therefore the tenant was not entitled to disclosure as sought in the letter of claim because “…the bypassing of paragraph 4 is not just a breach of the letter but it is also a breach of the spirit of the protocol which is that litigation should be a last resort and not a way of enabling solicitors to make a living by incurring what would – very often – be completely disproportionate costs to the level of disrepair which is complained of”. This decision was not subject to appeal.
In Andrews v Swindon Borough Council (Swindon County Court, 28 October 2019, unreported), the court held that even though paragraphs 4 and 5 are not sequential within the Protocol, relief was refused because, the Judge said “I cannot accept, given the overriding objective, that it is appropriate to leap straight into the final letter of claim and formal applications for pre-action disclosure…the parties are strongly signposted at paragraph 4.2 [of the protocol] to another form of provision for documentation to these types of case. The compliance with that [ADR], will comply with the overriding objective and save the expense of the application”.
The argument, which county court judges appear to be accepting, is that the second stage of the test in r.31.16 is not met because the tenant is able to seek disclosure through the ADR process.
The sixth edition of Housing Conditions Tenant’s Rights published by LAG in 2019 says at paragraph 3.60;
It makes sense to send [the Letter of Claim] as soon as possible after the first interview even if the advisor cannot include all the information set out above. The advisor can then allow the 20-working-day period to run while gathering further information about the general and special damages claim.
This reflects the aims of the Protocol. Volume 1 of the White Book at C10A-001 explains the main features;
The main features are:
· The tenant should notify the landlord as early as possible that a claim for disrepair is being considered—this letter should propose instruction of an expert (where necessary only) and request disclosure of the tenancy and repair files for the property.
· A full letter of claim should be sent as soon as possible after the early notification letter and should detail the defects in a schedule, their history and the effect on the tenant and any special damages claimed.
· Within 20 working days of either letter the landlord should reply in detail, send relevant documents requested, and respond to the tenant’s proposals with regard to expert evidence.
· The Guidance reminds tenants to consider other options before using the protocol including the Local Government or Independent Housing Ombudsmen.
The aims therefore appear to support a view that the Protocol letters should be sent as a matter of urgency: “as early as possible” for the early notification letter, and “as soon as possible” for the letter of claim.
The battle ground could be said to lie in two areas; is the Protocol sequential, such that in order to get to the Protocol letters in paragraph 5 one must exhaust ADR in paragraph 4? Secondly, what is the purpose of the Protocol letters? Are they exchanged in anticipation of settling within the Protocol, or are they the first stages in litigation?
Surely the answer is that both ADR and the letters exist within the Protocol, together and at the same time. The first stage in the Protocol is to send either of the early notification letter or letter of claim. In response to correspondence, the landlord may suggest ADR which, if unreasonably refused, would be a point to be taken at a later date.
If a claim is issued by a tenant, and the tenant has refused to engage with ADR then the landlord’s argument would be able to develop.
The Practice Direction to the Pre-Action Protocols at C1-001 (page 2555 of Vol 1 of the White Book), places a much higher emphasis on ADR. At paragraphs 13 and 14 at C1-008;
13. If a dispute proceeds to litigation, the court will expect the parties to have complied with a pre-action protocol…
14. The court may decide that there has been a failure of compliance when a party has –
… (c) unreasonably refused to use a form of ADR, or failed to respond at all to an invitation to do so.
When read against CPR r.3.1(2)(f) which provides the court’s wide powers to stay or adjourn proceedings, and r.3.1(4) which provides the court’s power to take into consideration whether or not a party has engaged in a relevant pre-action protocol when giving directions, it is possible to conceive that the court may stay a disrepair claim, once issued, to engage in ADR which may include a requirement to exhaust the landlord’s internal complaints procedure. Indeed, there is express provision in r.26.4 for a stay to allow for settlement of a case on filing of directions questionnaires.
Can the court then force unwilling parties to engage in ADR? The case of Wright v Wright (Supplies) Limited  EWCA Civ 234 queried whether the law is indeed developing to this outcome – though in response to dealing with two litigants in person. One may feel the depth of despair in the words of Sir Alan Ward at -. The whole passage deserves attention but for the sake of brevity a short excerpt has been chosen;
You may be able to drag the horse (a mule offers a better metaphor) to water, but you cannot force the wretched animal to drink if it stubbornly resists. I suppose you can make it run around the litigation course so vigorously that in a muck sweat it will find the mediation trough more friendly and desirable. But none of that provides the real answer. Perhaps, therefore, it is time to review the rule in Halsey v Milton Keynes General NMS Trust  EWCA Civ 576,  1 WLR 3002, for which I am partly responsible, where at  in the judgment of the Court (Laws and Dyson LJJ and myself), Dyson LJ said:
“It seems to us that to oblige truly unwilling parties to refer
their disputes to mediation would be to impose an unacceptable
obstruction on their right of access to the court.”
Was this observation obiter? Some have argued that it was. Was it wrong for us to
have been persuaded by the silky eloquence of the éminence grise for the ECHR,
Lord Lester of Herne Hill QC, to place reliance on Deweer v Belgium (1980) 2 EHRR
Until or unless the law changes, it remains the case that parties to litigation cannot be forced to engage in ADR. There is ample provision within the Protocol and once litigation has commenced to explore ADR, and indeed, many cases are settled prior to final hearing. Whether or not a landlord wants to be made a defendant to a claim is entirely irrelevant. It remains to be seen whether the courts will favour the approach taken in the cases explored above, or whether the appellate courts will give guidance on the proper use of the Protocol in due course.
1 November 2019
 This is a matter of professional conduct. The Solicitor Conduct Rules provide at Chapter 11 a requirement not to take unfair advantage of third parties, which under ‘indicative behaviours’ includes at IB(11.4) ensuring that you do not communicate with another party when you are aware that the other party has retained a lawyer in a matter. Such correspondence from a solicitor should be reported to the SRA.
 I am grateful to Mr Iain Wightwick of Unity Street Chambers, who appeared on behalf of the Respondent, for a copy of the approved judgment in this case.
 Quote from Counsel’s note of the judgment
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