First-tier Tribunal for Scotland Housing and Property Chamber procedures: consultation

Part Two: Provision of publicly funded legal assistance in the

First-tier Tribunal for Scotland Housing and Property Chamber.

69. Part Two of this consultation refers to operational procedures contained in the 2017 rules at Annex A and seeks your views on proposals:

a. To make publicly-funded legal assistance available to cases due to transfer to the First-tier Tribunal relating to private rented sector housing tenancy disputes including:

• Chapter 6 - Procedure for Landlord Registration
• Chapter 7 - Procedure for applications under the 1984 Act
• Chapter 8 - Procedure for applications under the 1988 Act
• Chapter 9 - Procedure for adaptations of rented houses applications
• Chapter 10 - Procedure for tenancy deposit applications
• Chapter 11 - Procedure for private residential tenancy applications

Chapters 6-10 include the private rented sector housing tenancy disputes currently heard in the Sheriff Court using summary cause procedure

Chapter 11 provides for the new residential tenancies due to come into force in December 2017.

b . that there is no provision for publicly-funded legal assistance for procedure in respect of Letting Agent Applications under Chapter 5.

70. Scottish Government Tribunals' policy intention is for publicly funded legal assistance in the First-tier Tribunal to be considered on a jurisdiction by jurisdiction basis in advance of the tribunals transferring into their respective chambers of the Tribunal. There is currently no provision for publicly funded legal assistance in the Housing Chamber.

71. During the parliamentary passage of the Private Housing Tenancies (Scotland) Act 2016, concerns were raised about funding for publicly funded legal assistance in the First-tier Tribunal for private rented sector cases. In particular, the potential removal of eviction cases from the scope of civil legal aid as jurisdiction transfers from the Sheriff Court to the First-tier Tribunal through the implementation of the Housing (Scotland) Act 2014. The former Minister for Housing made a commitment to consult on the provision of publicly funded legal assistance as part of the consultation on the operational procedures.

Transfer of Private Rented Sector Tenancy Related Disputes to the First-Tier Tribunal

72. The main difference for private rented sector housing disputes in the transfer from the courts to the First-tier Tribunal will be the move to more informal and inquisitorial proceedings. In the courts a Sheriff is required to make a decision based on the evidence presented by parties. This may lead to disadvantage where a party does not have assistance from someone with knowledge of the courts system or a lawyer. In the First-tier Tribunal, a case may be heard by a legal member and an ordinary housing member with specialist knowledge who will have the time and expertise to ask questions and seek additional information as required. The operating rules are designed to foster an active, interventionist and enabling approach.

73. The proceedings of the First-tier Tribunal must be managed in accordance with the application of the overriding objective set out in rules 2 and 3 of the 2017 rules. This ensures that the Tribunal will help parties understand the procedure to ensure that the parties are able to present their case whilst maintaining fairness and impartiality. The overriding objective of the First-tier Tribunal is to deal with the proceedings justly including:

(a) seeking informality and flexibility in proceedings

(b) ensuring, so far as practicable, that the parties are on an equal footing procedurally and are able to participate fully in the proceedings, including assisting any party in the presentation of the party's case without advocating the course they should take.

74. Parties are currently able to bring their own representation, including legal representation, if they wish, as outlined in rule 9.

75. Individuals who are parties may be accompanied by another person to act as a supporter under rule 10.

Legal Assistance General

76. The Legal Aid (Scotland) Act 1986 Act ("the 1986 Act") makes publicly-funded legal assistance available to people to pursue or defend their rights or pay for their defence where they could not otherwise do so. It can be provided for criminal or civil matters, or in relation to children's hearings and associated court proceedings. The costs are demand led and paid from the Legal Aid Fund ("the Fund"), which is not cash-limited and is administered by the Scottish Legal Aid Board ("the Board").

77. The 1986 Act defines the different types of legal assistance and sets out the eligibility tests for each. Although "legal aid" is commonly used as an umbrella term, it is only one type of publicly-funded legal assistance. This document therefore uses "legal assistance" as the umbrella term.

Advice and Assistance

78. Advice and Assistance (A&A) is available, subject to a financial eligibility test, on any matter of Scots law for various forms of legal advice and assistance short of representation. It can include advice on whether there is a legal case to take forward, negotiating a settlement, and writing letters on the applicant's behalf. A&A will not usually cover representation although in some circumstances, the solicitor may grant a type of A&A called Assistance by Way of Representation ( ABWOR) in order to represent their client in proceedings.

79. Where it is available for civil matters, this is subject to the usual A&A financial eligibility test but may also be subject to a test of "reasonableness" (as with civil legal aid) and whether the person can participate effectively in proceedings without publicly-funded legal representation.

Civil Legal Aid

80. Civil legal aid can cover circumstances where an applicant's case is going to court. It can help pay for the costs involved with this, including all legal preparation work, the gathering of any evidence necessary for their case, representation in court and so on. It is assessed and granted by the Board. It is available subject to three tests: whether the applicant is financially eligible; whether they have probable cause ( i.e. there is a sound legal basis for the proposed action); and whether it is reasonable in the circumstances to make legal aid available (which can, where appropriate, include consideration of whether attempts have been made to resolve the dispute without litigation). It is available in relation to proceedings on almost any subject in the Sheriff Court, Sheriff Appeal Court, the Court of Session, the Employment Appeals Tribunal, Land Tribunals, Scottish Land Court and appeals to the UK Supreme Court.

81. The Scottish Legal Aid Board provides further information on publicly funded legal assistance.

Provision of publicly funded legal assistance for private rented sector housing Disputes

Current provision

82. Schedule 2 to the Legal Aid (Scotland) Act 1986 makes civil legal aid available in civil proceedings in the Sheriff court. Housing disputes are generally heard under summary cause procedure (heritable property) in the Sheriff court. The majority of cases involving heritable property (mostly tenant/landlord evictions) are currently undertaken either by law centres or the Civil Legal Assistance Office (" CLAO "; which is directly funded by the Legal Aid Board).

Simple Procedure

83. Provision has been made for civil legal aid to be available for cases heard in the Sheriff Court under Simple Procedure. The new procedure is being introduced in two phases - the first phase commenced on 28 November 2016 and the second phase, including heritable property (housing cases) will be introduced at a later date in 2017.

Upper Tier Tribunal and Appeals

84. The Legal Aid (Scotland) Act 1986 Amendment Regulations 2016 make civil legal aid available for permission to appeal a decision of the First-tier Tribunal on a point of law and subsequently to take the case to the Upper Tribunal.

Existing housing tribunals

85. There is no general provision for publicly funded legal assistance in respect of the existing housing tribunals (the private rented housing panel (prhp) and homeowner housing panel (hohp)) which transferred to the First-tier Tribunal in December 2016. This reflects the continued approach that, at first instance, cases are handled inquisitorially and informally. This has worked well for prhp since it was established in 2006 in handling cases dealing with property repairs, housing conditions and landlord registration. Similarly, there is no need for legal assistance for the hohp in handling cases relating to property factoring and maintenance, registration matters and enforcement of a code of practice.

Proposed Provision: Expansion of the First-tier Tribunal from December 2017

Letting Agents

86. Chapter 5 provides for the procedures in relation to Letting Agent Applications. The new letting agent regime is due to come into force in January 2018. Disputes may include alleged failures to comply with the new letting agent code of practice and registration.

87. The procedures are similar to Homeowner Applications in Part 1; therefore, we propose that these new cases will be heard in the First-tier Tribunal without provision for legal assistance which align with the arrangements for the existing housing tribunals.

88. Chapters 6-10 provide for procedures in relation to PRS housing tenancy disputes expected to transfer mainly from summary cause to simple procedure in 2017 before final transfer to the First-tier Tribunal in December 2017. The case types include a wide range of tenancy related disputes including rent arrears and evictions. We propose to make legal assistance available for procedures in respect of applications relating to landlord registration, and tenancy related applications under the 1984 Act, the 1988 Act, the 2006 Act, and the 2011 regulations.

89. Chapter 11 provides for procedures in respect of Private Residential Tenancy Applications. These new tenancies ^[1] are due to come into force in December 2017 to coincide with the expansion of the Housing and Property Chamber. Disputes in relation to the new tenancies will be similar to those currently heard in the Sheriff Court as they relate to tenancy disputes including rent arrears and evictions. We propose to make legal assistance available for procedures in respect of private residential tenancy applications under the 2016 Act.

Financial implications

90. When the Government introduced the Bill for the Housing Act, it estimated that the cost of legal assistance for the 700 private rented housing cases each year that would transfer from the Courts to the Tribunals would be about £25,000 - comprising £14,000 for Advice and Assistance, and £11,000 for Civil Legal Aid. That was based on continuing the same form of legal assistance in the First-tier Tribunal as is currently available for these cases in the Courts. The Government noted if another form of legal assistance were to be provided, such as Assistance by way of Representation, that the cost could be less.

91. We estimate that disputes relating to new tenancies, due to come into force through the implementation of the 2016 Act will be between 845 and 1,100 cases each year. The impact that these cases will have on the Legal Aid Fund will depend on the form of legal assistance that is to be provided in the First-tier Tribunal for private rented housing cases, and on the net increase in total cases being heard (given that cases relating to current tenancies will reduce as the tenancies themselves come to an end and are replaced by the new tenancy). It is estimated that around 195 of these may be eligible for either advice & assistance costs or civil legal aid costs. The cost of this is estimated to range between £24,000 and £80,000 and is likely to fall somewhere in between. The more cases that are eligible for legal aid, the higher the cost will be.

Next Steps

92. Responses to this part of the consultation will determine the availability and type of legal assistance that will be provided in the Housing Chamber from December 2017.

93. If legal assistance is to be provided in the First-tier Tribunal then we will draft relevant legal aid amendment regulations, to be accompanied by a Business and Regulatory Impact Assessment subject to further consultation and parliamentary scrutiny around summer 2017 depending on the parliamentary business timetable.