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Housing associations hired lobbying firm to ‘reduce the capacity of tenants’ to pursue ‘inappropriate’ disrepair claims
A group of eight housing associations jointly commissioned a lobbying firm to help “reduce the capacity of tenants” to pursue “inappropriate” disrepair claims.
In an internal report, seen by Inside Housing, Riverside Housing Association revealed that a consortium of associations had contracted a public affairs agency to develop an “influencing strategy” to reduce inappropriate claims.
The move came after a rapid increase in the number of disrepair claims being issued against social housing providers in recent years.
In the document, the association labeled the rise in housing conditions claims across the sector an “epidemic” that it said was being “driven by unscrupulous claims management companies”.
However, social housing campaigners have urged associations to focus on fixing disrepair over campaigning as they said the claims being brought forward by tenants are legitimate.
Written in February last year, the report written by Riverside’s asset management team outlined what it and other housing associations were doing to tackle the rise in disrepair claims, which was described as a “sector-wide issue”.
The plans included the commissioning of public affairs agency, Connect PA, “to develop an influencing strategy, identifying the legislative and policy changes we might seek to reduce the capacity of tenants to pursue inappropriate claims and for solicitors and claims management companies to profit from them”.
The eight housing associations that jointly commissioned Connect PA were Riverside, ForHousing, Onward, Prima, Regenda, Salix Homes, Shepherd’s Bush Housing Group and Torus.
Riverside said in the document that it was also chairing a “best practice group”, which included 34 providers representing over 620,000 homes in December 2020.
At the time the report was written, Riverside said it was managing 353 live housing conditions claims, with a projected risk to the business of £3.55m based on an average cost of £11,000 per claim settled.
Since 2015, the group said it had received 1,261 housing conditions claims, representing 3.5% of its rented general needs stock.
According to Riverside, housing associations have “been working to settle these claims outside of court for a number of years in good spirit – with a view that reputational risk outweighed the financial risk”.
“However, the issue continues to grow and is now posing a very real risk to financial performance,” the report said.
Lawyers have previously warned that social landlords are seeing a rise in the number of housing claims being brought forward by tenants, who are being approached by ‘no win, no fee’-type firms, which previously focused on payment protection insurance (PPI) claims.
According to sector figures, the introduction of a cap on how much a claimant can win in PPI claims has led to these firms targeting housing conditions claims, where costs are currently not capped.
In its report, Riverside said “the biggest opportunity to arrest this epidemic would be for a fixed-fee cap to be introduced in terms of claimants’ legal costs”, which it said will make “housing condition claims a less attractive proposition for the CMCs and their legal partners”.
Inside Housing understands that on average the percentage of the claim costs being paid by the eight housing associations to lawyers over a 12-month period was 47%, which was more than triple the amount of compensation residents received.
In September last year, the government confirmed that it plans to cap the amount of legal costs that can be claimed in housing conditions cases, however it has not said when these changes will be implemented.
Currently the social housing sector is facing increased scrutiny for the conditions of its homes after a long-running investigation by ITV News revealed terrible conditions faced by social housing tenants living in homes owned by landlords such as L&Q, Clarion, Croydon Council and Bromford.
The media attention has led the Levelling Up, Housing and Communities (LUHC) Committee to launch its own investigation into regulation and conditions within the sector.
Suzanne Muna, secretary of the Social Housing Action Campaign, said Riverside should “shelve their disgraceful project and address the real problem of disrepairs”.
“These are not bogus claims, they are people having to endure mould, damp, lift breakdowns, and all sorts of other hazards. Their actions, and those of all associations in their group, bring the sector into disrepute,” she added.
Speaking at a hearing of the LUHC Committee last week, during which the topic of claims management firms was raised, Darren Hartley, chief executive of tenant charity Taroe Trust, said that there was “anecdotal evidence” that CMCs “prey on areas where tenants are most vulnerable and receiving a poor service”.
“In some respects, the best way of defending against that is to make sure you’ve got high-quality services in the first place,” he said.
A spokesperson for Riverside said its “priority… is getting our repairs services right and tackling disrepair” and said its actions were “not in any way an attempt to undermine the rights of tenants”.
However, Riverside acknowledged in its internal document that there were “political risk factors when campaigning around this issue”.
The document said "any action to limit [residents’] right to hold their landlords to account could be considered as disadvantaging social housing tenants", while registered providers could be viewed as "looking to avoid their responsibility".
The report said Connect would "appropriately mitigate the risks and control the messaging around this issue".
The spokesperson for Riverside said in its statement to Inside Housing that it was “widely acknowledged there is an issue with some claims management companies and law firms exploiting tenants for their own financial gain”.
“We have been working with other housing associations which share these concerns to explore the merits of a campaign to highlight this issue, looking for ways to speed up the resolution of genuine cases of disrepair in the interest of the tenant, and limiting the costs that can be claimed by law firms, including excessive deductions from damages awarded to tenants,” they added.
All of the other housing associations who jointly commissioned Connect pointed to the response provided by Riverside.
