Pennycook, give us equal arms to fight freeholder bullying in the courts

Bringing balance to the legal cost regime in leasehold disputes was part of the 2024 Act and the secondary legislation is ready and needs to be enacted as soon as possible, LKP trustee Liam Spender told the All-Party Parliamentary Group in Westminster earlier this week.

Mr Spender is a leaseholder who for the past five years has been fighting his landlord at St David’s Square, in London’s Docklands, with a Court of Appeal victory in December last year.

His dispute was over a door entry leasing “contract for eternity” that meant that the system paid for itself multiple times at the expense of the leaseholders.

But a key feature of the dispute was that the landlord, ARC Time Freehold Income Fund – one of the freeholder litigants in the failed judicial review – ran up £250,000 of legal costs drawing on the service charge.

Mr Spender described this system as “Kafka-esque”: that leaseholders fighting the service charge face a landlord who quite lawfully can draw on the service charge itself to fund his litigation.

In the course of the dispute, the freeholder had threatened to “bankrupt me personally” by pursuing him for £80,000 in costs if the Court of Appeal case had failed.

“Had I failed in this litigation I would have lost both my flat and my job as a solicitor,” Mr Spender told MPs.

Mr Spender sought to limit court of appeal costs at £25,000, which the landlord, aided by solicitors JB Leitch and two barristers, contested.

This proved a “spectacular own goal” when the landlord lost in the Court of Appeal and instead had to pay £31,000 legal costs to Mr Spender and his barrister Philip Rainey KC.

Mr Spender repeated publicly available information regarding JB Leitch, a Liverpool firm routinely used in leasehold debt collection and disputes.

Its most recent accounts for the year ending 31 March 2025 show operating profit margin increasing from 28% to 34% and that turnover had risen from £9.9 million in 2024 to £12.5 million in 2025. Profit after tax rose from £2.1 million in 2024 to £3.4 million in 2025.

The same accounts showed that JB Leitch paid a cash dividend of £8.75 million in 2025, up £8 million from the £750,000 dividend paid in 2024. The 2025 dividend was paid to a company called BH10 Limited, which is turn owned by Jonathan and Michelle Leitch.

Mr Spender said that every day the government delayed in implementing the 2024 Act cost protections was another day of legal fees flowing out of leaseholders’ pockets and into firms like JB Leitch.

Mr Spender criticised the “despicable behaviour of so-called professional freeholders” in the course of this dispute, with two of the ARC Time Freehold Fund’s representatives sat smirking at the back of the court while he was making his argument for a cost cap to the Court of Appeal.

Mr Spender said that the first efforts in modern times to reform leasehold were in 1967 two years before Neil Armstrong walked on the moon with it looking like the 2024 Act and draft Commonhold and Leasehold Reform Bill won’t come into force until 2028 at the earliest. “This is far too long,” said Mr Spender.

But the legal costs reforms are ready and waiting and should be enacted as soon as possible to help other leaseholders taking on their freeholder in the courts.

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Kirsty McChesney, a leaseholder who had travelled up to Westminster from Margate, asked the minister how the government is measuring the effectiveness of the First Tier Tribunal.  

This is not a housing department issue, although it is a frustration expressed ad nauseam to LKP.