Commonhold and Leasehold Reform Bill [Lords]

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The Chairman: With this we may discuss the following amendments: No. 115, in page 124, line 32, after 'information', insert ', or to supply any documents,'.

No. 116, in page 124, line 32, after 'may', insert

    ', on the application of a party or of its own initiative,'.

No. 117, in page 124, line 33, after 'tribunal', insert

    'and to the other party or parties as the case may be'.

No. 100, in page 124, line 36, leave out subparagraphs (3) and (4).

Mr. Cash: This group of amendments deals with the mechanics and performance of leasehold valuation tribunals. At present, an appeal to the Lands Tribunal is by way of a complete re-hearing. The parties are forced to call all their evidence again and little or no regard is paid either to the evidence given to the tribunal or to the reasons given for the decision. As a result, an appeal gives a dissatisfied party a second bite

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of the cherry. It can be used by a wealthier party as an instrument of oppression, notwithstanding the proposed requirement for leave to appeal. Mandatory appeal by way of a re-hearing is anomalous in the area of civil litigation, particularly in the light of the civil procedure rules introduced by Lord Woolf. Moreover, it suggests a lack of faith in the LVT's decision making, which hardly accords with the extension of its powers, both in recent years and in the Bill. My proposals would bring appeals to the Lands Tribunal into line with other civil appeals.

At present, LVTs have no power to direct disclosure of documents or information relevant to an application. That is anomalous in the context of civil litigation and might lead to parties withholding information or documents harmful to their case without sanction. I suggest that the LVTs need more teeth and that their new powers should be exercised more for the benefit, and on the application, of parties to proceedings before them. The explanatory notes to the Bill say that it provides a power to make regulations enabling LVTs to exclude the whole or parts of cases of parties who fail to comply with directions. That needs to be remedied.

At present, LVTs cannot make directions as to the preparation, form or conduct of an application and have no sanction except for adjourning with no power to award costs if a party does not heed its exhortations to produce reports and documents in good time before a hearing. As a result, all too often the party turns up on the day of a hearing with an expert's report that has not been disclosed before, leaving the other party with a dilemma—whether to go ahead without having a proper opportunity to verify the contents of the report and to prepare a cross-examination on it, or to ask for an adjournment, thereby losing the costs of the day. That practice has gained some notoriety among users of the LVT.

11.15 am

The Government have been considering that problem and they may suggest that they are already making arrangements under the Bill to deal with such questions. However, I want to put them on the record. The practice that I referred to can only cease if the LVT is given the teeth that it requires. I want to be sure that the Government cover the whole ground. That is why I am addressing them in these terms.

Paragraph 8 of schedule 12 provides for procedure regulations to include provision for the determination of applications or transferred proceedings without an oral hearing by a single panel member. It is not clear what sort of applications it would be appropriate determine in that way. In such circumstances, we should bear in mind the human rights convention and the right to a fair and public trial. Paragraph 10 of schedule 12 would, for the first time, provide the LVT with powers to award costs, but only where an application is dismissed on the grounds of frivolous, vexatious or abusive process or where the party in question has acted frivolously, vexatiously, abusively,

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disruptively or otherwise unreasonably in connection with the proceedings, and then the amount payable cannot exceed £500.

Bearing in mind the perception of the LVT as an informal, cheap tribunal, it would be wrong to empower LVTs to award costs following the event in all cases. However, they must have greater powers to impose sanctions in certain cases. Those include: where a party has failed to comply with directions, thereby occasioning an adjournment; where, a party has acted unreasonably in proceeding in the first place, or in pursuing the case after the other party makes a reasonable offer, although the conduct of the proceedings may not have been unreasonable in procedural terms; or, where a party has been forced to take proceedings because of the unreasonable conduct or stance of the other party. Such conduct might include: specifying a ridiculously high or low price for enfranchisement; utter mismanagement, in the case of a landlord; or, in the case of a tenant, refusing to pay service charges without any justification, thereby potentially throwing the costs of recovery on to his fellow tenants through the service charge.

Only when the LVT has the powers envisaged by the amendment will landlords and tenants, perhaps, be deterred from playing the system as both do at present. Furthermore, the costs limit is both arbitrary and too low to operate as a sanction in the case of wealthy parties. The LVT should be empowered to award costs at such a level as it thinks fit up to the full amount incurred by the innocent party, subject only to an obligation to have regard to the paying party 's needs.

Finally, under clause 86 of the Bill an RTM would be liable for a landlord's costs before the LVT if the tribunal dismissed its application for a determination that it was entitled to the right to manage premises. As things stand, such a power would be anomalous in the context of the LVT's limited powers as to costs in general.

Although the Government have heard some of these arguments before, my object in presenting them now is to weigh them against the actions of the Government to date in the light of what has already been said and to hear the Government's thinking at this stage.

Mr. Sanders: The hon. Member for Stone said that the schedule relates to the procedure of the LVT. Amendment No.100 is intended to remove the criminal sanction included in sub-paragraphs (3) and (4) of paragraph 4. It is inappropriate to introduce a criminal sanction into civil proceedings in this way. Failure to comply with the notice should invoke a sanction, of course. However, it should be civil, not criminal. Civil contempt of court provisions applied in the county court would appear, in our view, to be more appropriate as a model, so it is a simple amendment, with a simple explanation. I look forward to receiving a simple response.

Ms Keeble: The hon. Member for Stone made some points that relate to the amendments Nos. 118 to 120 and some relating to amendments Nos. 123 -126, which we are not considering.

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The Chairman: Order. We are considering amendments Nos. 115, 116, 117 and 100. We shall shortly come to the group to which the Minister refers.

Ms Keeble: I want to make it clear that I am not evading the hon. Member for Stone. It will be better if I answer his points later, if he is happy with that.

Amendments Nos. 114 to 117 relate to the power of the LVTs to demand information. I am happy to assure hon. Members that we believe that the power in paragraph 4 to schedule 12 already enables LVTs to do all the things that amendments Nos. 114 to 117 seek to allow them to do. Documents are but one form of information that an LVT might require. It is the normal practice of LVTs to share any information that they receive with all the parties involved as a matter of natural justice. The LVT can exercise that power under its own initiative, although it may, equally well, decide to do so in response to a request made by one of the parties.

The hon. Gentleman spoke about the procedures for appeals to the Lands Tribunal from the LVT. Whether an appeal should involve a full hearing or be limited to a review of the original decision is a complex matter and one that arises in many different contexts. It is an issue that deserves careful consideration. As the Committee may know, the Government are examining reform of the tribunal system as a whole, in the light of the report by Sir Andrew Leggatt. We have completed a comprehensive consultation exercise on the recommendations made in the report, including the issue of onward appeals, and intend to announce our conclusions in the summer of 2002.

I am sure that hon. Members will agree that an important and complex issue such as this is best considered as part of, and in the context of, the

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Government's wider-ranging work. That will enable us to ensure that a sensible and consistent approach is taken across the tribunal system. I hope that that deals with the hon. Gentleman's point.

Amendment No. 100 deletes the provisions of the Bill that make it an offence to fail—without reasonable excuse—to provide such information as is requested by the LVT in accordance with paragraph 4. These provisions are similar to those contained in paragraph 7 of part 1 of schedule 22 to the Housing Act 1980, which would be deleted by this Bill.

As hon. Members may be aware, LVTs sometimes find it difficult to deal with parties who refuse to comply with directions or who act abusively at a hearing. Therefore—there is some conflict in the arguments about whether an LVT should have more or fewer powers—we aim to give LVTs greater powers to deal with those who fail to co-operate in proceedings. The amendment would take those powers away. Bearing in mind that I shall deal with the other matters raised by the hon. Member for Stone at the appropriate point, I would ask him to withdraw the amendment.

Mr. Cash: Having heard what the Minister has said, at any rate for the time being, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

        It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

        Adjourned till this day at half-past Two o'clock.

The following Members attended the Committee:

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Hurst, Mr. Alan (Chairman)
Cash, Mr.
Crausby, Mr.
Doughty, Sue
Hendrick, Mr.
Hepburn, Mr.
Iddon, Dr.
Keeble, Ms
Lewis, Dr. Julian
McIsaac, Shona

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Moffatt, Laura
Sanders, Mr.
Selous, Andrew
Stringer, Mr.
Taylor, Mr. John
Thomas, Gareth
Wiggin, Mr.
Woolas, Mr.
Wright, David

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