My Lords, I thank the noble Lord, Lord Bailey of Paddington, for introducing this group, setting the context for this debate about
insurance payments and asking for clarity in relation to his amendment, which I am sure was also the intention of the noble Lord, Lord Moylan, in asking for clarity with one of his amendments and probing efficiency in his other amendments. I agree with the noble Baroness, Lady Thornhill, about the extortionate increases in insurance charges passed on to leaseholders. We found that the risk price that insurers charged between 2016 and 2021 pretty much doubled. The brokerage charge increased by more than three times. The service charges added on increased by about 160%, so they more than doubled, and those charges were passed on to leaseholders.
I will quickly speak to Amendment 82, in the name of my noble friend Lady Taylor of Stevenage. This new clause would prohibit landlords from claiming litigation costs from tenants other than in limited circumstances determined by the Secretary of State.
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We support scrapping the presumption that leaseholders will pay their freeholders’ legal costs when they have challenged poor practice but, in merely limiting the ability of landlords to do so, the Government are creating an incentive for freeholders to litigate in a way that is likely to erode the general presumption that they are seeking to implement. As we argued in the other place, a far more sensible approach would be to legislate for a general prohibition on claiming litigation costs from leaseholders and then to provide for a limited number of defined exceptions to that general rule by means of regulations; for example, in cases where the landlord is a leasehold-owned company or the costs are, in the opinion of the tribunal, reasonably incurred and for the benefit of the leaseholders or the proper management of the building. Our Amendment 82, which would create a new clause to replace Clause 80, provides for a general prohibition on claiming legal costs from tenants and for a power to specify classes of landlord who would be exempt from it.
I look forward to the Minister’s response and, I hope, to some positive engagement in relation to these amendments.