June 30, 2021

In this blog, Marina Sergides continues her thoughts on the housing mediation pilot.

In my last blog I considered the role that mediation has in the context of housing and the pilot mediation scheme introduced on 1 February 2021 to ease the possession claims backlog. Since then, the government have announced that there would be compulsory mediation over Covid-related arrears in the commercial sector but not the residential. The Chief Secretary to the Treasury, Steve Barclay, told MPs that the ban on commercial evictions, which had been set to end on June 30, would be extended into March 2022 and that a new and binding arbitration mechanism would be introduced to help commercial tenants and landlords resolve disputes over Covid-related arrears. The Ministry of Housing, Communities and Local Government (‘MHCLG’) states:

“The legislation will help tenants and landlords work together to come to an agreement on how to handle the money owed – this could be done by waiving some of the total amount or agreeing a longer-term repayment plan.

This agreement should be between the tenant and landlord and, if in some cases, an agreement cannot be made, the law will ensure a binding arbitration process will be put in place so that both parties can come to a formal agreement. This will be a legally binding agreement that both parties must adhere to”.

It is understood that the arbitration process will be delivered by private arbitrators but in accordance with guidelines which will be set out in the legislation. The MHCLG states that they will have to go through an approval process to prove their impartiality.

The use of ADR in the commercial context is not surprising. It is merely another example of the government’s increasing use of it in areas where there would otherwise be an expected growth in litigation and I see no difficulty with this in principle. But there is unease that the rapid introduction of ADR is  seen not as an ‘alternative’ dispute resolution, but ‘the’ dispute resolution as stated by the Master of the Rolls. Something that David Watkinson addresses in the Garden Court Mediation Blog last month. .

The introduction of ADR as a mandatory requirement in the commercial property context is indicative of this approach. In respect of residential housing, however, requiring the parties to mediate to resolve litigation would be a concerning development.

Firstly, not every housing case has a ‘sweet spot’ as suggested by the MoR in his March 2021 speech. Some types of possession claims, for instance, cannot be resolved by way of an ‘agreed’ suspended/postponed possession order, even if underlying facts are undisputed.

Secondly, housing law is complex and unrepresented parties run the risk of entering into agreements that have very real and unfortunate consequences for them in the future. Most notably, the possibility that agreeing to an order for possession could undermine the strength of any future homelessness application under Part 6 of the Housing Act 1996 for example.

Thirdly, there is an inherent imbalance of power in the parties attending mediation. Tenants may often face possession for a multitude of complex reasons, many of which are not covered, and therefore cannot be resolved, by the provision of legal aid. Requiring the parties to mediate where one party is unrepresented would, in these circumstances, be unjust.

Lastly, and perhaps most importantly, there is currently no way of knowing how the pilot housing mediation scheme is being assessed.  Without clear and transparent monitoring, and a mechanism by which data is collected, the outcome of the scheme will not be judged by any reference to quantitative criteria.  This is important. A tenant for instance may be willing to give up possession during an early mediation in circumstances where they may not be fully aware of available defences (technical and substantive) and where disclosure has yet to occur. Will this be recorded as the tenant ‘surrendering their tenancy’ or a ‘possession order’ (there is a difference)? Will this be recorded as a successful mediation because a resolution has been found? And will/how will this be compared against similar claims that have been litigated but which have not resulted in an order for possession?

There is no indication that a form of ‘mandatory’ mediation will be introduced in the residential housing context. But the culture is changing. The housing mediation pilot is likely to be extended and the focus by the MoJ and MHCLG is on making sure that the uptake is high. For housing providers, the focus must now be guaranteeing that the mediation process (and its outcomes) are equal to, or better than, those had they pursued litigation and this, in short, requires that legal advice is freely available for low income tenants at all stages of the process. The availability of legal aid will be crucial to underpin this evolving dispute resolution scheme to ensure the experience does not serve to cut out justice.

Garden Court Mediation

Garden Court Mediation