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Baroness Hanham: I thank the Minister for that reply. The intention behind the amendment was, first, to save tenants some expense and, secondly, to make it compulsory upon the landlord to declare that a caution had been issued. I note the Minister's reply and I thank him for it and for all that sympathy. I am hugely grateful. I beg leave to withdraw the amendment.
The noble Lord said: In moving Amendment No. 252, I shall speak also to Amendments Nos. 253 to 255 and to Amendments Nos. 256 to 258. As far as Amendments Nos. 252 to 255 are concerned, at present leasehold valuation tribunals have no power to direct disclosure of documents or information relevant to an application. As the Committee will be aware, this is anomalous in the context of civil litigation and may lead to parties withholding information, or documents harmful to their case, without sanction. In short, leasehold valuation tribunals need to be given teeth and their new powers should be exercisable for the benefit, and on the application of parties to the proceedings before them.
As far as Amendments Nos. 256 to 258 are concerned, the Explanatory Notes to the Bill state that the Bill provides a power to make regulations enabling leasehold valuation tribunals to exclude the whole or parts of cases of parties who fail to comply with directions. However, no such power appears in the Bill, as far as I am aware or, at least as far as I can see.
At present, leasehold valuation tribunals cannot make directions either about the preparation for or about the conduct of an application, and have no sanction except for adjournment--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 a party turns up on the day of the hearing with an expert's report which has not been disclosed before thus leaving the other party with a dilemma: whether to go ahead without having a proper opportunity to verify the contents of the report or to prepare a cross-examination on it, or whether to ask for an adjournment, thereby losing the cost of the day. This practice--as some Members of the Committee will no doubt be aware--has gained notoriety among users of leasehold valuation tribunals. It must cease, and it can cease only if the tribunal is given the teeth envisaged by this group of amendments. I beg to move.
Lord McIntosh of Haringey: I accept the implied criticism of some of the aspects of leasehold valuation tribunals in the past, but I hope I can assure the noble Lord, Lord Kingsland, that the provisions we are making in the Bill, although largely by regulation, address the issues that he has raised.
Starting with Amendments Nos. 252 to 255, the power in paragraph 4 of Schedule 11 already enables leasehold valuation tribunals to do all the things that these four amendments would seek to allow them to do. Paragraph 4 is about information, and 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 parties involved, as a matter of natural justice. The LVT can exercise the power under its own initiative although, of course, it may equally well decide to do so in response to a request made by one of the parties.
Amendments Nos. 256 and 257 would allow LVTs to issue directions at a directions hearing. However, it is the usual practice of LVTs to use pre-trial review hearings to issue any necessary directions and, if they see a need, they can also use the review to try and find common ground between the parties. We think that it would only confuse matters to create the concept of a directions hearing as something separate from the pre-trial review.
Amendment No. 258 provides that the procedure regulations may include provisions enabling LVTs to enforce their directions by dismissing applications and so on if a party fails to comply. We agree that the LVTs need this kind of power. In other words, I accept the case which the noble Lord, Lord Kingsland, is making. He is certainly right that the fact that they have not had these powers until now has been a hindrance to their work and it has been a major factor in the disappointingly long time it can take for LVT cases to be dealt with.
However, I am advised that, as they stand, the powers in this Bill to make procedure regulations are wide enough to allow us to provide that the LVT may exclude the whole or part of any party's case where that party has failed to comply with directions. I think that would answer the specific point made by the noble Lord, Lord Kingsland; for example, an expert opinion of which no notice had been given. Obviously, where the whole of the applicant's case is excluded, that will amount to dismissing the case.
I turn now to Amendment No. 266. Although the noble Lord, Lord Kingsland, has not spoken to this amendment, it might speed things up if I reply to it because it was spoken to on the second day of the Grand Committee proceedings. The noble Lord, Lord Kingsland, said that he moved the amendment because he wished the LVTs' powers to appoint managers to remain unchanged. I want to reassure him that we have no intention of taking away the existing rights that leaseholders enjoy under Sections 21 to 24 of the 1987 Act.
Amendment No. 266 would retain Section 23(2) of the 1987 Act. This particular subsection merely enables procedure regulations to make provision for certain persons to be notified when the leaseholder seeks the appointment of a manager and for certain persons to be joined in these proceedings. However, paragraphs 2 and 6 of Schedule 11 make equivalent provision for the purpose of any application brought before the leasehold valuation tribunal, including an application for the appointment of a new manager. Therefore, Section 23(2) is obsolete, which is why we think it is safe to repeal it.
Lord Kingsland: I am most grateful to the Minister for his reply. When contemplating what amendments to table to Schedule 11, I considered simply one, which would have provided that the civil procedure rules
However, if I understand correctly the response of the noble Lord, he is saying that he agrees with the substance of all the amendments that I have tabled so far but that I ought to be happy with what is already in Schedule 11; that is to say, the appropriate national authority may make regulations about the procedure of leasehold valuation tribunals. May I, therefore, take it from his reply that the regulations that will be made under Schedule 11 will afford leasehold valuation tribunals all the powers necessary to achieve the objectives that are implied by my amendment?
Lord McIntosh of Haringey: I can give the noble Lord that assurance, but I cannot say that the regulations will cover all the points in the civil procedure rule, because there are other matters which are not referred to in these amendments. On the points raised in the amendments that we have been debating, yes, the regulations will cover those points.
The noble Lord said: Paragraph 8 of Schedule 11 provides for regulations to include provision for the determination of applications, or transferred proceedings, without an oral hearing and by a single panel member.
It is not clear what kind of applications are envisaged to be appropriate for determination in this way. It would be necessary, in order to satisfy the Human Rights Convention right to a fair and public trial, to require that such regulations should include provision entitling an aggrieved party to a hearing before a full tribunal.
In the circumstances, it is to be doubted whether the regulations foreshadowed by paragraph 8 will have any real use unless all parties agree to dispense with a hearing and to a determination by a single panel member. That is the purpose of the proposed amendment. I beg to move.
Lord McIntosh of Haringey: We certainly do not want to deny either party their right to an oral hearing where they honestly believe that natural justice requires that there should be a hearing. We also do not wish to open the way for machiavellian landlords to prevent leaseholders from using the written representation route merely as a way to push up costs and discourage leaseholders from exercising their rights. That might be the effect of these two amendments.
Perhaps I may explain our reasons for deciding to have a written representations route and the kind of circumstances under which we think it could be used and how we might encourage it. The written route is primarily aimed at simple cases involving small sums. In those cases, the fees payable for challenging unreasonable service charges could be disproportionate to the amount at issue. For example, disputes over insurance premiums or administration charges could involve relatively small sums. It is not worth spending £300 or more to take a case to the leasehold valuation tribunal unless substantially more than that sum is at stake.
We propose to make changes to the fee structure through procedure regulations which would relate the amount payable to the amount in dispute. That would mirror the approach adopted in the county court and reduce the minimum fee payable. However, these are publicly funded bodies and we have to consider the interest of the general taxpayer when deciding on the level of fees. The cost of a full hearing with three members in attendance might not be justified. One purpose of the hearing fee, which does not begin to cover the full cost of a hearing, is to discourage parties from wasting public funds on cases having little merit.
However, some of these small cases could be resolved by making representations to a single member with relevant expertise. For example, a dispute over insurance could be a matter of considering alternative quotations. That would reduce the cost of providing the LVT service and enable more cases to be dealt with in a shorter timescale, which is what we propose to do with the fee structure. All applicants would be required to pay an application fee, which could be as low as £50, but a further fee would be payable only if the matter were dealt with at a full hearing. The written representation route would be a more cost-effective way to deal with disputes over small sums both from the Government's perspective and that of the parties concerned.
We do not want to deny either party the opportunity of a full hearing before a tribunal. In some cases an important principle could be involved, even though the sum was small. However, we do see a danger that some landlords may insist on a full hearing simply to push up the costs to a disproportionate level and discourage the leaseholder from proceeding. Therefore, we intend to provide that where a respondent to a case wants a full hearing, he can have one provided that he pays the hearing fee. That will encourage the use of the written representation route. Amendments Nos. 259 and 260 would discourage its use.
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