We are often asked about the costs associated with a potential rental property claim and a tenant’s right to legal aid, the common name for public funding. This post will address the tenant’s right to legal aid.
Generally, there are 2 situations relevant to rental properties where tenants may be entitled to legal aid:
- Possession claims – where a tenant is facing the possibility of losing their home, they may be entitled to defend the case with the help of legal aid.
- Disrepair claims – if the disrepair is causing damage to a tenants or occupiers health, they could bring a claim against a landlord with the help of legal aid. It is important to note that damage to health is quite widely construed and can include for example asthma caused by mould in a rental property.
At this stage landlords usually ask why they are not entitled to legal aid where for example a tenant fails to pay their rent. In a rent arrears situation many landlords can struggle to pay the mortgage on the rental property and also run the risk of losing the property. However, running the risk of losing a rental property is not the same as running the risk of losing your home therefore legal aid is not available to landlords. In general, legal aid is not available to protect a commercial interest such as seeking possession for rent arrears.
Legal aid is means tested. This means in order to qualify for the assistance tenants must satisfy a financial test. Generally, tenants on state benefits including income support and universal credit automatically qualify for legal aid. For tenants not on benefits their income is assessed in order to determine if they qualify. Matters such as the total monthly income of the tenant and the amount of savings they may have is taken into consideration. In practice, it is quite hard for a tenant not on benefits to qualify for legal aid.
In addition to satisfying a financial test to qualify for legal aid tenants must also have an arguable case. This is assessed by the lawyer proposing to take the case initially. There is an assumption that lawyers who handle these cases are generous in their initial assessment. However, lawyers handling legal aid cases can only open a set number of cases a year so they will tend to only take cases that they believe have a reasonable prospect of success.
Lawyers handling legal aid matters must consider any reasonable offer to settle made by a landlord to a tenant. If such a reasonable offer has been made and is refused by the lawyer a landlord can complain to the legal aid agency who will investigate the matter with a view to terminating the legal aid if they feel the offer should have been accepted.
With a possession or disrepair claim there are a variety of costs awards that a court may make where a tenant is on legal aid. Where a landlord obtains a cost order against a tenant on legal aid the cost order will normally not be enforceable. This leaves the landlord with only one option which is to offset any costs award against the tenant versus any sums awarded to the tenant.
Where a tenant is successful in their claim they are entitled to their costs at full commercial rates and not at the rate applied by the legal aid agency which is usually much lower.
It is important to stress here that legal aid is a loan. It is intended to assist a tenant with their legal costs and if they win damages and costs these are used to repay this loan before they get anything. It is not, as many believe, ‘free money’.
We appreciate that many landlords feel aggrieved that tenants are entitled to legal aid. However, legal aid should be considered within the context of providing justice to all tenants with a case that has a reasonable prospect of success. While some landlords might feel that their specific tenant should not obtain assistance because they have a bad case for this to be considered too sternly by the legal aid agency or by lawyers would undermine the system as it would be taking over the role of the courts.
Published 10 January 2019