My Lords, I thank the noble Baroness, Lady Gardner, and the noble Lord, Lord Beecham, for their interventions. As I mentioned in my opening remarks these orders almost complete the work set out by the Leggatt report. In spite of the points raised by the noble Baroness most people agree that the creation of a Property Chamber is a positive step that will bring benefits to users and consistency in this area of the law. Nevertheless, the questions raised are pertinent. As the noble Baroness, Lady Gardner, has acknowledged, I have a wonderful team behind me, which I hope has been taking note of her comments. She is probably right that at some stage there will be a strong case for a consolidated housing Act. When that will find its way into the parliamentary timetable, I do not know. However, the points that she raised illustrate the fact that we are talking about an area that cuts across a number of departments and pieces of legislation. Nevertheless, I hope these measures illustrate that we have made progress in terms of consistency and efficiency.
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The noble Baroness referred to costs and has tabled Parliamentary Questions about the costs which a party to proceedings may be ordered to pay. As she rightly says, these cannot exceed £500. These fees have never
been increased, even to reflect inflation, since 2003. When the transfer order 2013 comes into effect, it will remove the £500 cap on costs, which the noble Baroness mentioned. However, there are concerns that removing the cap on costs could prevent a party bringing a case to tribunal. It is rare for costs to be awarded in the Property Chamber. The decision to award costs is a judicial matter, made by the tribunal. Usually, parties will pay their own costs. Tribunal procedure committees have replaced the current test of frivolously, vexatiously and so forth with the wider test of behaving “unreasonably”. Only where the tribunal considers a party has behaved unreasonably could it make a costs order award against them. The noble Baroness is right that the cap will be removed but the protection is still there in that people will be responsible for their own costs.
On leasehold valuation, some leases permit the recovery of the landlord’s legal costs via the service charge but the tribunal does have powers to prevent this. Section 20C of the Landlord and Tenant Act 1985 enables a leaseholder to apply to the tribunal for an order that all or any costs incurred by the landlord in coming before the LVT are not to be included in determining the service charge payable by the leaseholder. There may be other circumstances where landlords may recover legal and other costs from lessees, depending on the terms of their lease. The Leasehold Advisory Service, the non-government public body funded by DCLG, is considering whether there is any further clarification it can provide on costs in its guidance to users, which is available on the Justice website.
I was asked whether the Government would take action to amend the law in light of the recent county court judgment whereby a leaseholder living in Plantation Wharf was in danger of forfeiting his flat as a result of legal costs incurred by the landlord at a leasehold valuation tribunal. I cannot comment on a particular case but where a freeholder is able to recover costs in connection with proceedings from a leaseholder, this will be a contractual matter between them and will be set out in the lease. The Government are aware, however, that leaseholders are increasingly concerned about recovery of such costs as administration charges. Residential leasehold law is a matter for the Department for Communities and Local Government, but I can say that my honourable friend the Housing Minister, Mark Prisk, is looking into this issue and giving it detailed consideration.
The noble Baroness, Lady Gardner, also asked me when the public will know about the amount of fees to be charged. The fees order will be made in the period between approval of the transfer order and the chamber implementation date of 1 July 2013. Changes to fees will be made in line with inflation and will not therefore require public consultation. A fee remission scheme will continue to operate for applicants who are in receipt of benefits. As I explained, when the chamber is launched and the cap on fees is removed, there will be no statutory limit to fees charged for cases going through the Property Chamber. However, the MoJ will not increase the fees more than the rate of inflation without public consultation and without agreement from the Treasury. In cases involving a hearing and the highest fee for a leasehold case, the aggregate fee
would be £630—£440 plus £190 hearing fee. The current fees are £350 for an application and £150 for a hearing fee, hence the £500. The highest application fee will be £515.
On the point about Third Reading, I am sure that the MoJ is not aware of problems between the departments on this matter. Careful note has been taken of what the noble Baroness, Lady Gardner, said. If there are blockages in communications we will endeavour to unblock them by 20 March. The noble Baroness has given us due warning that that should be the case. She mentioned the expertise of the new tribunals. The composition of the panels that hear cases becomes the responsibility of the judiciary. The senior president of tribunals, in his policy regarding composition, is required to have regard to the previous arrangements on the composition of panels. The current qualifications order will be amended in due course to include, as well as judicial members, other members who have substantial relevant experience in land drainage, farm management or ownership of agricultural land, and in matters relating to valuation of residential property, housing or housing conditions and landlord and tenant relationships in residential property.
On the question of the assessment of the impact of these changes, as I indicated, this will be carried out in the annual report of HM Courts and Tribunals Service. We will publish our key indicators online in time for people to assess what we are looking at and what judgments we are making. The noble Lord, Lord Beecham, knows that legal aid is retained in housing matters where there is a threat of the loss of a home. Appeals will be on a point of law but the person will have to persuade the tribunal that an appeal is arguable on whatever point is being channelled. That has nothing to do with legal aid.