Barrister Amanda Gourlay – who has her debut in the new tribunal tomorrow – guides leasehold owners through the new tribunal service
The new context
The new rules begin with a definition section. The four jurisdictions now gathered under the First-tier Tribunal umbrella are defined here. Do not be caught out: service charge, enfranchisement and right-to-manage cases are known as “leasehold cases”, not “residential property cases”.
The rules then set the application process in context. The Tribunal is now guided by an over-riding objective, under which the parties are obliged to co-operate with the Tribunal, which itself is obliged to draw methods of alternative dispute resolution to the parties’ attention “where appropriate”.
There are provisions for formalising the appointment of a representative to act for a party: that representative need not be legally qualified.
Issue and service of applications
Rule 26 is the rule that explains how to start an application: the procedure is the same as it was under the old rules. An applicant must complete an application form.
At the date of writing, these forms have not yet been finalised.
If you are intending to begin proceedings before the forms become available, it is probably prudent to write a free-form application, following the format of the old LVT form, checking that any new requirements are complied with.
It is always sensible to include with the application a copy of the lease and any relevant paperwork, for example section 20 consultation notices, service charge demands or accounts: these documents are normally uncontentious, and will need to be disclosed at some stage in any event.
I understand that there will, in the near future, be a practice direction that will broadly require an applicant to provide the same information that was required by the Leasehold Valuation Tribunal in Schedule 2 to the old rules. Again, if in doubt, the best policy is probably to provide that information pending the arrival of the practice direction.
As before, a fee is payable when an application is issued. If it is not paid, the application will not see the light of day.
A respondent, on receipt of an application, is not under any obligation to send a response to either the Tribunal or the applicant.
The Tribunal is no longer a one-way street for transfers. Cases continue to be transferrable to the First-tier Tribunal from other jurisdictions such as the county court.
The Tribunal is however no longer only a receiving jurisdiction: it now has the power to transfer cases to other jurisdictions.
The Tribunal can also refer a case up to the Upper Tribunal if, amongst other things, the issues in dispute are likely to be further appealed to the Upper Tribunal and will:
(a) require lengthy or complex evidence or a lengthy hearing; or
(b) involve a complex or important principle or issue; or
(c) involve a large financial sum.
The Tribunal’s case management powers
The Tribunal has been empowered!
In the old days, the only real power to manage cases was contained in rule 11, which allowed the LVT to strike out a case if the applicant could overcome some seriously high hurdles.
In my experience, statements of case were regularly misconceived, but it was very rare that the LVT equated misconception with frivolity or vexatious behaviour.
Now however, there are rules setting out the procedure for:
(a) Applying for directions;
(b) Striking out a case for failure to comply with the rules;
(c) Adding, substituting and removing parties;
(d) Disclosure, evidence and submissions;
(e) Summoning witnesses, and
(f) Referring a person to the Upper Tribunal for contempt.
One of the major changes to the rules is the lifting of the £500 cap on the Tribunal’s powers to order one party to pay the other’s costs, and the wider discretion vested in the Tribunal when considering whether to make an order for costs against a party. Rule 13(1) reads:
“(1) The Tribunal may make an order in respect of costs only—
(a) “under section 29(4) of the 2007 Act (wasted costs) and the costs incurred in applying for such costs;
(b) “if a person has acted unreasonably in bringing, defending or conducting proceedings …”
When the Supreme Court’s judgment in Daejan v Benson  UKSC 14 is factored in, this means that the new Tribunal’s costs-shifting powers have increased considerably over those of the LVT.
As a side note, the jurisdiction to make an order under section 20C of the Landlord and Tenant Act 1985 is untouched by these rules.
As before, there is provision for a decision to be made on the papers, provided that all parties consent.
Will there be any change in the way that hearings themselves are run? I think it unlikely. The over-riding objective aims to avoid unnecessary formality and to achieve flexibility, although witnesses can now be required to give evidence on oath.
The new rules expressly provide for the site inspections that are already a common feature of cases where the main focus is on the quality of works carried out. The Tribunal now has the power to request the attendance of the parties.
There was nothing in the old rules about the instruction of experts and disclosure of their reports.
That gap has now been filled by rule 19, which imposes on experts a duty “to help the Tribunal on matters within the expert’s expertise”.
Service charge disputes frequently involve experts, whether accountants, surveyors or other property professionals. It is therefore well worth taking the time to read this rule, which also introduces the concept of the single joint expert. Paragraphs 16-24 of Lord Woolf’s Access to Justice Final Report of July 1996 make interesting reading in that regard.
There are no changes to the decision-making process.
For the purposes of appeals and any application to set aside a decision, it is important to draw a distinction between the decision and the written reasons that must support it.
The Tribunal can give a decision orally, but that decision must be followed by written reasons so that the parties know how and why the decision was reached.
New is the requirement that the decision must be accompanied by information explaining the parties’ rights of appeal, any relevant deadlines and the manner in which a right of appeal may be exercised.
Appeals and other animals
At first glance, Part 6 of the new rules appears to be rather a spaghetti junction of powers to correct, set aside, appeal and review decisions, but it unfurls well and provides for treatment of decisions on a sliding scale of complexity:
(a) Accidental slips and errors can be corrected by a new slip rule;
(b) Reasons can be amended – but the decision itself not reversed;
(c) A decision can be set aside on procedural grounds such as non-receipt of a document at “an appropriate time”;
(d) An appeal can still only be brought with the permission. As before permission must still be sought first from the Tribunal. On receipt of an application for permission to appeal, the Tribunal must first consider whether to review the decision. If it does review the decision it can:
- Do nothing;
- Correct an accidental slip or omission;
- Amend the reasons, or
- Set the decision aside.
(e) If the Tribunal decides not to review the decision, or reviews it and takes no action, it must then consider whether to grant the appellant permission to appeal to the Upper Tribunal. As before, if permission to appeal is refused by the First-tier Tribunal, the application can be renewed before the Upper Tribunal.
I have described the new rules on my blog as the little brother to the Civil Procedure Rules.
There are undoubtedly areas where the two sets of rules diverge, but I suspect that some of the case law which informs interpretation of the Civil Procedure Rules will be useful when the new First-tier Tribunal puts its shoulder to the wheel.
For my part, I am glad to see more regulation of procedure.
I am not a subscriber to the procedure-for-procedure’s-sake school of dispute resolution, but I am keen to see the Tribunal drive cases towards an effective and fair conclusion.
For that reason, I am hopeful that, after some tweaking to iron out the inevitable wrinkles which will come to light, these bright new rules will give the Tribunal the means to achieve that end.
© Amanda Gourlay, July 2013. Not to be reproduced without the author’s written permission.