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The Earl of Kinnoull: My Lords, on the previous occasion that this matter was discussed we heard powerful advocacy from the noble and learned Lord, Lord Archer, and the noble Viscount, Lord Bledisloe. They have achieved the same success today, but their efforts have been added to by a number of distinguished noble and learned Lords. On that occasion my noble friend said that he had his heart in his boots, that he would take away and consider what had been said and come back with his own amendment. In fairness to him, that is what he has done. The question is whether that amendment goes far enough. No doubt he will explain it later.

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The purpose of Amendments Nos. 22 and 23 is to provide a base figure--which has been discussed before--so that leaseholders who choose to use this new tribunal on the issue of service charges have an understanding of their maximum commitment in terms of costs. I am not wedded to the figure of £500; I would much prefer £150, £100 or nothing. My first option is to support the noble and learned Lord, Lord Archer. My second option is to support the noble Viscount, Lord Bledisloe.

In correspondence which he passed round to those who took part in the earlier debate, my noble friend explained that there would be a consultation period in the autumn. I assume that, as a result of that, he will come up with an answer to the problem. I hope that tonight he will be able to give an undertaking that mention will be made of clear guidance figures either in the guidance or in some government statement on the issue, so that leaseholders will know whether or not they should use the tribunal or perhaps the county court. It would be a great shame if the new tribunal was lost because it was prohibitively expensive. It has many good ingredients. As a surveyor I recognise those ingredients and its expertise. I hope that it will go forward and that my noble friend will be able to convince the House by his amendment and undertakings that the Government have very much in mind what is being discussed today.

Lord Coleraine: My Lords, I join other noble Lords in paying tribute to the noble and learned Lord, Lord Archer of Sandwell, for drawing attention to the way in which a fundamental principle is being breached. But we are dealing with the Housing Bill. For the moment I descend to the more mundane question of how his amendment will affect other provisions in the Bill. During Committee stage my noble friend Lord Selsdon moved an amendment which drew attention to the fact that in the county court, where at present service charge disputes are resolved, lawyers' costs, surveyors' fees, and so on, had to be paid. Leasehold valuation tribunals work in an entirely different manner. Costs are not paid.

The amendment of my noble friend Lord Selsdon was backed by a number of eminent bodies, property owners and surveyors, and the Federation of Private Residents' Associations, to whom I am an honorary consultant. I was embarrassed by having to say that I did not agree with the amendment. To go back one stage, one of my reasons for disagreeing with the amendment was that it was directed to the situation where a recalcitrant tenant who had a dispute over a small part of the service charge could go before the tribunal, spend a long time there and waste a lot of money trying to get an answer in his favour. That was something with which neither the landlords nor tenants organisations was happy because it would considerably interfere with the management of buildings. I disagreed with the amendment because it seemed to me that, given the way in which the Bill was structured, there were provisions which would enable LVTs to deal with frivolous tenants. A tribunal could strike out frivolous claims and would have power to ask the landlord or tenant to pay its fees. It emerged from

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an answer by my noble friend on the Front Bench that the fees would not be £500 a day but could amount to as much as £2,000 a day. If we accepted the amendment proposed by the noble and learned Lord, any tenant could go to a LVT at no cost to himself and foul up the management of his block of flats, or whatever it might be. Nevertheless, I entirely accept the principle that is involved here. I believe that a sum of £2,000 a day is grossly excessive, but probably the correct course is to adopt the amendment proposed by the noble Viscount, Lord Bledisloe. That would provide some disincentive to irresponsible tenants.

Lord Selsdon: My Lords, I had not intended to intervene in this debate. Sometimes I trust the wisdom of my noble friend on the Front Bench, although he has a humour which sometimes exceeds my own. We are talking here about frivolity, wasting time and the cost of justice. If costs are too high justice is never given. Before this matter goes any further I should like to hear from my noble friend. I know that he is an honest and honourable man. Having listened to opinions from all sides of the House, he is in the difficult position of accepting that the status quo is not correct but he is probably not sure what to do next.

Lord Lucas: My Lords, I am on at last! I have listened carefully to noble Lords and looked carefully at the amendments they have tabled. A variety of options have been suggested on how the level of tribunal fees, if any, should be set for service charges, and I shall comment upon them in a moment. Noble Lords will also recall that there was a full debate on this issue on Report. Similar concerns were raised and I said that I would take those concerns away and discuss them with my right honourable friend the Minister.

That I have done, and that is why the Government have tabled Amendments Nos. 21 and 25. They are almost exactly the same as amendments moved on Report by my noble friend Lord Gisborough and the noble Lord, Lord Dubs. The amendments would provide that both for proceedings in relation to service charge disputes and the appointment of a manager, the tribunal will be able to charge a level of fees which, taking one year with another, does not exceed the costs of providing the service.

Before I explain to the House the precise value of that change I should like to remind the House why we have decided to give this important new jurisdiction to leasehold valuation tribunals.

The measures in the Bill to help protect leaseholders were prompted by the unscrupulous actions of a minority of landlords who were imposing unreasonable and in some cases outrageous service charge demands. Any leaseholder who contested those claims was faced with the immediate threat of forfeiture and an action, usually in the High Court. There are measures in the Bill which deal with that abuse, and forfeiture proceedings can no longer be taken until the disagreement over service charges is resolved. That is a very significant step to assist leaseholders.

Leaving the problems of forfeiture to one side, leaseholders currently have the right to challenge unreasonable service charges or to seek to have a new

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manager appointed if they can show fault with the current manager, but those jurisdictions lie with the county court. Because of the complexity and cost of court proceedings--in court proceedings there are lawyers' fees which are likely to be far in excess of those payable in a tribunal--those remedies have been little used. The second stage of our proposals is therefore to switch those cases to the tribunals. That move has been widely welcomed because leasehold valuation tribunals offer a less formal procedure, can bring their expertise to bear, and as my noble friend Lord Coleraine said, do not award costs. It is very important not to lose sight of those key advantages.

The noble Earl, Lord Russell, raised the prospect of tenants and others taking the law into their own hands. They have not yet done so. They will have a far easier time now than they have in the past, and I do not see that as a danger.

The noble and learned Lord, Lord Roskill, was eloquent in his praise of the virtue of tribunals. I am happy to agree with him on that. But I think it is right that there should be provision for fees to be charged by the tribunal. Not to do so would impose a potentially open-ended burden on the public purse, and, as my noble friend Lord Coleraine said, leave open the possibility of oppression by tenants. That, among other reasons, is why we cannot accept Amendment No. 18 moved by the noble and learned Lord, Lord Archer of Sandwell.

Amendments Nos. 19 and 20 would link the scale of tribunal fees in various ways to fees charged in the county courts. We do not find that acceptable either, particularly in the light of the other advantages which will flow from access to the tribunals to which I have referred.

Amendments Nos. 22 and 23 would restrict the fee to be charged to a maximum of £500 or to cover the cost of the service, whichever is the lower. We cannot accept that it would be sensible to place a limitation on the face of the Bill of a monetary amount. That would unnecessarily restrict our scope for designing an appropriate fee structure and then to prescribe the required amounts in an order making power.

I shall turn now to the Government's amendments. They will give us additional flexibility to set an appropriate fee structure which is reasonable and which will deliver affordable justice to leaseholders. I cannot say now what the precise level of fees will be. If our amendments are accepted the Bill will say no more than that the amount raised by fees, taking one year with another, should not exceed the cost of providing the service. Subject to that overall requirement, the tribunals will have the power to waive the fee in part or in whole by reference to the financial resources of the applicant. They may also require any party to re-imburse the other party with the whole or part of the fee. Within that overall framework we will consider and consult on a fee structure which ensures the regime we are proposing operates efficiently and fairly to all. That is the key phrase.

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My noble friend Lord Gisborough raised the subject of rogue landlords getting away with oppression of tenants. If the fee structure operated in a way that allowed that, it would not be operating efficiently and fairly. I can also assure him that if an unscrupulous landlord brings the case, and is shown to have been unreasonable, the LVT has the power to make him pay the fee by reimbursing the tenants.

My noble friends Lord Kinnoull and Lady Gardner of Parkes asked for a fixed fee. They said that it was right that someone appearing before a tribunal should know what fee they were in for. That is very much a matter that we shall take into account when we set the fee structure, but I cannot make any commitments now.

The noble and learned Lord, Lord Ackner, referred to illusory access to justice. The noble and learned Lord, Lord Archer of Sandwell, said it would nullify access to justice. The noble Baroness, Lady Hamwee, said that it would make justice inaccessible. If the fee structure that we put together does any of those things, it would not operate efficiently and fairly.

The maxim which will guide us is the famous one about always keeping hold of nurse for fear of finding something worse. It is clear that if we put together a fee structure which does not enable this part of the Bill to work well and efficiently, and to wipe out the abuses that we have seen in the past, we shall be faced with something much worse, and, indeed, much worse things have been proposed during our discussions by members of the Labour Party, among others, such as the tenants' right to manage.

5.15 p.m.

Lord Renton: My Lords, before my noble friend sits down will he be so good as to say whether he stands by what he said on Report; namely, that in order to be self- financing the fee might have to be about £500 for straightforward cases and possibly £2,000 a day for the more complicated ones? Is he saying that what he has proposed will avoid such high fees or that, despite what he has proposed, they may remain?

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