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FREE BOOK CHAPTER: An Introduction to Housing Disrepair and Cavity Wall Claims (From 'A Practical Guide to Running Housing Disrepair and Cavity Wall Claims' by Andrew Mckie, Ian Skeate, Simon Redfearn)

08/06/17. The 23rd February 2017 was a day that will stick in the mind of many Personal Injury Lawyers – the day we found out that the small claims track would increase for RTA claims from 1st October 2018 and the limit would increase to £2,000 for EL/PL claims. There is no doubt that EL/PL Lawyers will survive these changes, as well as PI firms who deal in clinical negligence, dental negligence, disease, travel claims etc. However, for those who work in an RTA firm, these changes are dramatic and will likely mean it is very difficult for RTA Lawyers to run a practice beyond October 2018, without diversifying into new areas of law. One does not pretend that is an easy feat; it requires learning a new area of law, training staff, changing systems, and learning a whole new area of practice – but it can be done.


Housing Disrepair Claims: An Overview

One area that PI Lawyers may look at is housing disrepair claims. Claims for housing disrepair can include compensation for the cost of repairs to the property, inconvenience in respect of the landlord’s failure to repair and any disruption caused by the works, as well as any personal injury related conditions such as asthma caused by issues such as damp or mould. The claimant can also claim for a reduction or refund of rent if they haven't been able to use part or all of their home because of the disrepair, as well as a potential claim for damage to belongings or furniture caused, for example, by damp or mould. This is an area that ties in very nicely for PI Lawyers who have experience of claims brought under the Defective Premises Act 1972, as the issues are very similar.

By way of illustration a common disrepair is penetrating damp or rising damp causing condensation and mould growth in a property. This could be caused for example by a leaking roof, gutter or cracked wall, leaking pipes or rotten window frames. Condensation is the most common form of damp in rented properties. Condensation appears when moisture in the air comes into contact with a cold surface, such as a window or a cold wall. Mould can grow on walls and window frames. Severe mould growth can be a health problem for people with asthma or other chest problems.

Housing disrepair claims can be a good source of fee income. For disrepair claims where the only claim is for compensation (damages), the small claims limit of £10,000 applies. However, if a claim includes an application for an order for repair work it will only be allocated to the small claims track if both: the estimated damages are less than £1,000, and, estimated cost of the repair work is less than £1,000. If either amount is expected to be more than £1,000, the court will normally allocate the case to the fast track. Hence provided the estimated repairs/damages are more than £1,000, the case will be a fast track case, and will be a cost bearing case in the normal way.


How complex are they to run?

There is a certain amount of complexity to running a housing disrepair case. The values of the claims may be fairly low but the issues are important to the tenants who for many years have often lived with the consequences of poor housing and associated disrepair issues. EL/PL Lawyers will have no difficulty adapting to this work, as it is very much akin to similar issues found in a defective premises claim.

For those looking to diversify and, for those who are new to the area, it is a good idea to obtain a book which deals with the fundamentals and also to go on a full day training course to get to grips with the basics and procedure. The same is dealt with in detail in the author’s book and associated training courses throughout 2017.

There are some practicalities one needs to deal with however. For example, it is likely that if you are an SRA Regulated firm, under the code of conduct, you will need to ensure that your staff are adequately trained to deal with these cases and they have appropriate expertise. You may also need to tell your professional indemnity insurer if you are going to be undertaking a new area of work. Readers are requested to bear this in mind.


The Pitfalls

Claimant Lawyers running PI cases, will have become accustomed to Qualified One Ways Costs Shifting (QOCS) protection. Housing disrepair claims per se will not be protected by QOCS. QOCS will only likely apply to a claim where there is a personal injury element and will only apply to the Personal Injury element, and not the housing disrepair part of the claim. There is therefore a potential liability for the Defendant’s costs. As a result, it is important, that the claimant’s lawyer considers LEI/BTE protection in the normal way to fund the case, and if no such policy is available, the claimant may be advised to take a suitable ATE policy to cover the risk. Depending on income and the nature of the case the claimant may be eligible for help with legal costs under the legal aid scheme. However, it is noted that, from 1 April 2013, legal aid is only available where disrepair is a serious risk to a claimant’s or a family member's health and safety, thus, most cases will not benefit from legal aid.

Limitation may also be an issue. In most cases, the claimant will have to take court action within six years. If the court action is based on the landlord not meeting the terms of a tenancy agreement, this is a claim for breach of contract. If the court action is based on negligence or nuisance, the six years starts when the damage to property took place. However, be aware that for personal injury cases, the limit is three years from the date of the injury or date of knowledge and this limit applies to the whole claim. Readers should therefore be very careful, given the varying limitation periods to watch out for.

CFA risk assessments are also key to housing disrepair cases. To justify a case on a CFA, especially if an ATE premium is involved, one needs to make sure that there will be sufficient damages to cover the premium and damages for the client, to justify taking on the case. The court can make the landlord do the repair work by making an order called an order for ‘Specific Performance,’ or an injunction called a, ‘Mandatory injunction.’ The court also has the power to make a declaration that a tenant can do the repairs themselves and deduct the cost from future rent. The actual net compensation recovered on a case may therefore only be quite small. If the likely damages recovered for inconvenience are not likely to cover the ATE premium, because the period of disrepair was minor and thus damages for rent reduction, inconvenience will only be a few hundred pounds, it may not be suitable for a CFA. It may be difficult to run a case without ATE due to exposure to defendant’s cost and the need to cover the disbursement for the costs of the surveyor which is likely to be between £500-1,000, depending upon the complexity of the case.


Timescales

The pre-action protocol which can be found at:- https://www.justice.gov.uk/courts/procedure-rules/civil/protocol/prot_hou gives the landlord 20 working days to respond to the letter of claim, so the timescales are tight. Anyone who is interested in this area of work should read the protocol, as it sets out in detail the procedure and is a good introduction to this type of work.

Cavity Wall Claims

Another area of practice a number of firms are looking at is cavity wall claims. In November 2016 MP Hywel Williams raised an early day motion that stated:-

That this House notes that cavity wall insulation (CWI) has been installed in millions of homes in successive government-backed schemes, but that in many cases the insulation has failed, acting not as a barrier to keep heat on the inside but as a bridge to allow water penetration from the outside; further notes that the actual number of failures is unknown and that the consequential damp and other related and very serious problems have blighted the lives of householders for years; notes that many victims are older, disabled or vulnerable people; notes that many installation companies have gone out of business and that the industry guarantee scheme has serious failings, including a defensive and sometimes hostile attitude to claimants and provides a guarantee not compensation; notes that successful extraction of CWI is difficult and sometimes poorly completed, leading to further problems; commends the tireless work of Civalli, the victims support group; and calls on the Government to institute measures to actively identify potential victims, rectify failed installations and provide proper compensation”.1

Practitioners undertaking housing disrepair claims, are now regularly seeing cases of damp and mould caused by failed cavity wall insulation.


What is a cavity wall and how does it fail?

The government website, the energy saving trust, says2:

A cavity wall is made up of two walls with a gap in between, known as the cavity; the outer leaf is usually made of brick, and the inner layer of brick or concrete block. If your house was built after the 1920s, it is likely to have cavity walls. Older houses are more likely to have solid walls..If you can see the brickwork on the outside of the house, look at the pattern of the bricks. If your home has cavity walls, the bricks will usually have a regular pattern.

Cavity wall insulation fills gaps often found between external walls in homes built after 1920, keeping the warmth in to save energy. It can also help reduce condensation inside the house if this is a problem stemming from your external walls. It is blown into the cavity from the outside of a house.

Every part of the wall must be filled with insulation, so it's important that the installer can reach all your external walls.

Your home will usually be suitable for cavity wall insulation if it meets these criteria:

Its external walls are unfilled cavity walls.

Your cavity is at least 50mm wide.

The masonry or brickwork of your property is in good condition.

It is more than 10 years old (most newer houses will have insulation already).

The walls are not exposed to driving rain.

If you have any damp patches on your internal walls then they should not be insulated until the problem is resolved. Speak to a builder who specialises in damp prevention.

If your home's external walls are joined to another house, the installer will need to insert a cavity barrier to contain the insulation so your neighbours aren't affected.

Cavity wall insulation can generally be made from three types of material: mineral wool, polystyrene beads, or foamed insulants.

All three are manufactured according to British standards. Foam insulation systems should be certified by the British Board of Agrément and installed according to strict guidance laid out in the associated certificates.

If your house was built in the last 10 years or so, the walls are probably insulated. To find out whether they are you can do the following:

Ask a registered installer for a boroscope inspection. The installer will drill a small hole in your external wall to see if your walls are hollow or filled. Check with your local authority's building control department.

To insulate your cavity walls, the installer drills small holes around 22mm in size at intervals of around 1m in the outside wall of your home. The installer then blows insulation into the cavity using special equipment. Once all the insulation is in, the installer fills the holes in the brickwork so you'll barely notice them.

If you notice problems with your walls after having cavity wall insulation installed such as damp and mould, you should first call the company who carried out the installation. They should discuss the problem with you and revisit your property to establish whether the original survey or installation work is contributing to the problem. If it is, they should arrange for remedial work to fix the problem or for removal of the insulation if required.

If the installer is not willing to help or no longer exists then contact CIGA to establish whether you have a 25 year CIGA Guarantee. If you do, they should be able to help resolve the issue under the terms of the guarantee. If you don’t have a CIGA guarantee, check your paperwork from time of installation to see if you have an independent insurance backed guarantee which provides a similar level of cover. CIGA also have a contact form to report bad practice.

The symptoms of damp in a home can be very similar and could be caused by poor or inappropriate insulation, or by other issues such as inadequate home maintenance. Neither your installer nor a guarantee provider will agree to carry out or pay for remedial work if they determine that the problems were not caused by inappropriate insulation, bad workmanship or poor materials. If you believe your installer or guarantee provider is unreasonably refusing to help you, you should follow their complaints procedure.

If you are unable to get help from your installer or a guarantee provider, your final option is to speak to a company that can carry out the necessary work. We recommend that you use a company that is accredited with an appropriate scheme. If you are asking them to remove the insulation, you should use a specialist in cavity wall insulation removal accredited with a cavity wall insulation scheme such as CIGA or BBA”.

What can the client claim for?

A failed cavity wall insulation is where the cavity wall insulation fails and allows water to penetrate between the outer and inner walls, causing issues such as damp and mould in the property. It could be the product was over-packed, under filled, where it has slumped, where areas have been missed, vents have been blocked or obstructions missed.

A claim for a failed cavity wall installation seeks compensation from the installer for negligently installing the cavity wall product in the first place and/or installing the product in an unsuitable property. Which says:- “Damp could occur in properties as a result of cavity-wall insulation if there is a combination of these factors: Your home is exposed to severe levels of wind-driven rain (zones three or four in our map below) Your home is located in an unsheltered position, eg not protected by trees or other buildings The external walls are poorly built or maintained with, for example, cracks in the brickwork or rendering”.3

Compensation could include the costs of removal of the product and remedying the costs of decoration / remedial repair work to the property. As damp can lead to mould problems and thus respiratory complaints, there can sometimes be a personal injury claim attached.


Some Pitfalls

Firstly, the claims are costly, and like housing disrepair, if run on a CFA, they will need a suitable ATE product, as the claim will not get QOCS protection. The costs of a surveyor could be £500-1,000. The claimant Solicitor must make sure as above that the cost of removal and repair are over £10,000 to ensure the claim is allocated to the fast track and costs are recoverable. Claims under £10,000 can always be explored on a DBA basis.

The main risk on cavity wall cases is in relation to the installer. It is important to check the company is still trading and/or has insurance before taking the claim on. If the company has gone bust, there is clearly no point in taking the claim on a CFA. There is a recourse to CIGA but costs are not recoverable and it is debatable as to how long the scheme will last for.


Conclusions

Housing disrepair and cavity wall claims are an area that can be useful for personal injury Lawyers to explore, and tie in to personal injury claims where damp and mould is an issue. For those used to dealing with EL/PL cases, this is a straightforward step but RTA Lawyers may need more assistance. There is work out there for Lawyers to diversify into post October 2018. Those PI firms that can adapt to these changes will survive and indeed do very well in the new areas.

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1https://www.parliament.uk/business/publications/business-papers/commons/early-day-motions/edm-detail1/?session=2016-17&edmnumber=633

2http://www.energysavingtrust.org.uk/home-insulation/cavity-wall

3http://www.which.co.uk/reviews/insulation/article/cavity-wall-insulation/cavity-wall-insulation-damp-problems – Which?

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