Articles

Possession Proceedings: Where are they now?

5th October 2020

When the stay on possession proceedings first came into force on 27 March 2020, it appeared to be a straight-forward (albeit blunt) tool to help the Courts manage the effects of the Coronavirus.

But with a clarification as to the scope of stay imposed by PD51Z[1], a new rule in the CPR extending the stay by a further three months to 23 August 2020[2], numerous trips to the Court of Appeal[3], a new Practice Direction for Part 55 Possession Claims[4], a further last minute extension to the stay on possession proceedings to 20 September 2020[5], and changes to the notice periods for certain grounds of possession[6], all in the space of six months, it’s no wonder that property practitioners have been left in a spin.

With the stay now having ended, it’s a good time to take stock and check the state of possession proceedings.

Practice Direction 55C

Introduced on 17 July 2020, PD55C was intended to come into force on 23 August 2020 (i.e. when the stay was supposed to expire) to set out how “stayed claims” (those brought on or before 22 August 2020) and “new claims” (those brought after 22 August 2020) would proceed going forward.

The key element is the introduction of a ‘reactivation notice’ without which stayed claims cannot be listed, relisted, heard or referred to a Judge under CPR 55.15. The purpose of the reactivation notice is to confirm that one of the parties wishes the case to be listed, relisted, heard or referred. There is a further nuance in that reactivation notices are not required for stayed claims brought on or after 3 August 2020.

When the Practice Direction was initially announced, there was no model reactivation notice and hence practitioners were feeling their way through the dark. Thankfully that has been remedied, and a number of template forms have been provided.

These forms identify the information that is required by PD55C, including:

  • A statement as to the Claimant’s knowledge of the effect of Coronavirus on the Defendant and their dependants;
  • In claims based on rent arrears, the rent schedule for the past two years;
  • In claims where directions have already been made, a copy of those directions and either a statement that new directions are required (with a draft order attached) or a statement that no new directions are required[7].

Where a trial date was laid down before the stay came into effect, the reactivation notice must be served no later than 42 days before that trial. If not, the trial will be vacated and the case stayed. Further, if no reactivation notice is file and served by 4pm on 29 January 2021, or if in relation to a claim where directions have been made the third bullet point above has not been complied with by 4pm on 29 January 2021, those claims shall be subject to a further automatic stay.

Importantly, this is not a sanction within the meaning of CPR 3.9, and hence relief from sanctions applications are not applicable. One would presume, therefore, that the appropriate route to lifting such a stay is to apply under CPR 3.1(2)(f) – although that refers to the power to impose a stay, Arkin v Marshall confirmed that it must also include a power to lift a stay.

Where a reactivation notice is filed and served, the parties will be given at least 21 days’ notice before the relisted hearing.

The remaining part of PD55C (paragraph 6) relates to ‘new claims’ and ‘stayed claims’ brought on or after 3 August 2020. That requires compliance with certain pre-action protocols and notices to be served on the Defendants 14 days before the hearing setting out the Claimant’s knowledge as to the effect of the coronavirus pandemic on the Defendant and their dependents. Both items must also be brought to the hearing itself. In accelerated possession proceedings brought under Part II of CPR 55, the notice as to the impact of coronavirus must be filed with the Claim Form as well.

This Practice Direction is to remain in force until 28 March 2021; it’s going to be here for a while, so it’s worth familiarising yourself with its provisions. Given the manner in which the policy and procedure in respect of possession proceedings has developed to date, it would not be surprising if there are further changes or extensions in the future especially if the country experiences further “spikes” in coronavirus (whether national or local).

Notice Periods

The notice periods for residential possessions claims were well known prior to the Coronavirus Pandemic[8]. Since then, they have undergone two revisions – the first at the outset of the pandemic and introduced by Schedule 29 of the Coronavirus Act 2020, and then by a revision to that Schedule effected on 29 August 2020 by the Coronavirus Act 2020 (Residential Tenancies: Protection from Eviction)(Amendment)(England) Regulations 2020. That latter revision ameliorates to some extent the reality faced by landlords that they might not recover possession of their properties for many months (even years) notwithstanding potentially very serious breaches by their tenants.

Currently, the notice periods are as follows:

  • Assured Tenancies & Section 8 Notices
    • Ground 1 (Resident Landlord) – Six months’ notice
    • Ground 2 (Mortgage repossession) – Six months’ notice
    • Ground 3 (Out of season holiday let)– Six months’ notice
    • Ground 4 (Let to a student by educational institution) – Six months’ notice
    • Ground 5 (Property required for minister of religion) – Six months’ notice
    • Ground 6 (Demolition or redevelopment) – Six months’ notice
    • Ground 7 (Death of tenant) – Three months’ notice
    • Ground 7A (Serious anti-social behaviour) – One months’ notice
    • Ground 7B (No right to rent for breach of immigration rules) – Three months’ notice
    • Ground 8 (Substantial rent arrears)
      • Where there are rent arrears of 6 months or more – Four weeks’ notice
      • Where there are rent arrears of less than 6 months – Six months’ notice
    • Ground 9 (Alternative accommodation available) – Six months’ notice
    • Ground 10 (Some rent arrears)
      • Where there are rent arrears of 6 months or more – Four weeks’ notice
      • Where there are rent arrears of less than 6 months – Six months’ notice
    • Ground 11 (Persistent delay in paying rent)
      • Where there are rent arrears of 6 months or more – Four weeks’ notice
      • Where there are rent arrears of less than 6 months – Six months’ notice
    • Ground 12 (Breach of tenancy agreement) – Six months’ notice
    • Ground 13 (Tenant deteriorated property) – Six months’ notice
    • Ground 14 (Nuisance/ annoyance, illegal/immoral use of property) – No notice
    • Ground 14A (Domestic Violence) – Two weeks’ notice
    • Ground 14ZA (Rioting) – Two weeks’ notice
    • Ground 15 (Tenant deteriorated furniture) – Six months’ notice
    • Ground 16 (Tenancy granted as part of employment) – Six months’ notice
    • Ground 17 (False statement induced tenancy) – Two weeks’ notice
  • Assured Shorthold Tenancies & Section 21 Notices – 6 months’ notice period, and proceedings can be brought within 10 months from the date of service of the notice.
  • Secure Tenancies
    • Ground 1 (Rent arrears or breach of tenancy)
      • Where at least six months’ rent is in arrears and no other ground except ground 2 specified in notice – Four weeks’ notice
      • Where there are rent arrears of less than 6 months – Six months’ notice
    • Ground 2 (Nuisance/ annoyance or illegal/ immoral use of property) – No notice
    • Ground 2ZA (Rioting) where no other ground except ground 2 specified in notice – Four weeks’ notice
    • Ground 2A (Domestic Abuse) where no other ground except ground 2 specified in notice – Four weeks’ notice
    • Ground 5 (False statement induced tenancy) where no other ground except ground 2 specified in notice – Four weeks’ notice
    • In all other cases – Six months’ notice.
  • Rent Act Tenancies
    • Case 1 (Rent arrears or breach of tenancy)
      • Where there are rent arrears of 6 months or more – Four weeks’ notice
      • Where there are rent arrears of less than 6 months – Six months’ notice
    • Case 2 (Nuisance/ annoyance or illegal/ immoral use of property) – Four weeks’ notice
    • Case 10A (No right to rent for breach of immigration rules) where no other ground applies – Three months’ notice
    • In all other cases – Six months’ notice
  • Introductory and Demoted Tenancies
    • Four weeks’ notice for nuisance/annoyance, illegal/immoral use of property, rioting or domestic abuse
    • In all other cases, six months’ notice

Pursuant to section 4 of the above-mentioned regulations, the new notice periods do not apply to notices given or served prior to 29 August 2020.

Further, pursuant to section 3(2), the notice periods will remain in place in England for all notices given up to and including 31 March 2021.

The ‘Overall Arrangements’

Introduction

This document [9] is the product of the work undertaken by the Working Group on Possession Proceedings. The introduction begins by recognising the unprecedented challenge faced by the legal system as a result of (a) accrued demand from the stay, (b) forthcoming major demand caused by economic consequences of the pandemic, and (c) reduced physical court capacity because of social distancing.

The plans to deal with that challenge are set out in the ‘Overall Arrangements’.

The strategy reflected in the Overall Arrangements is directed to (a) reducing volume in the system by enabling earlier advice and increasing settlement, (b) taking account, within limits that the law has imposed, of the effect of the pandemic on all parties, and (c) maintaining confidence in the fairness of outcomes.

To achieve these aims, we are told to expect a number of changes, which include: (1) further amendments to the CPR and practice directions; (2) the introduction of a scheme of prioritisation for listing to be used by the Judiciary; (3) further guidance for possession claims from the Court Service, the Ministry of Housing and the Financial Conduct Authority[10]; (4) greater provision of legal aid duty scheme legal advice; and (5) specific training and preparation of Judges and Court staff.

Unsurprisingly, the Overall Arrangements also emphasise the critical role of everyone, collectively, in tackling the challenge. This no doubt will feed into the ‘Overriding objective’ and is reflected in the requirement in the Overall Arrangements to show compliance with any relevant pre-action protocols.

There remains an emphasis on social distancing in Courts however, and there is a hint that further suitable premises may be made available for courts where necessary. Who will decide what is “necessary”, and when, remains unclear. What is more promising is the suggestion of a dedicated possession email address for each court centre, which would hopefully make it that much easier to contact the Court and get responses in an appropriate timeframe. Further, block lists for possession hearings are a thing of the past (which is a positive or a negative depending on who you ask).

The Overall Arrangements do not appear to have a fixed expiry date.

Practice Direction 55C, Reactivation Notices and Priority Listing

The first substantive point to note is that the Overall Arrangements confirm Practice Direction 55C. The two marry-up at the moment, and it is to be assumed that any future changes to either will attempt to keep that consistency. However, it should be remembered that the CPR and PD55C are rules of Court, whereas the Overall Arrangements are (in essence) guidelines to assist in managing the current challenges posed by Coronavirus. If there were to be some inconsistency, whether on the present iterations or in the future, the CPR and Practice Directions would presumably take precedence.

One minor change that has been effected is to the definition of “stayed claims” in PD55C, which now refers to those brought prior to 20 September 2020, and the definition of “new claims” has been changed accordingly. Reactivation notices still need only be served in respect of claims brought prior to 3 August 2020 however.

The model forms for these notices, as referred to above, also include the new checklist to enable the priority listing introduced by the Overall Arrangements. As to priorities, the full list is:

  • Cases with allegations of anti-social behaviour, including Ground 7A of Schedule 2 to the Housing Act 1988 and Section 84A of the Housing Act 1985;
  • Cases with extreme alleged rent arrears accrued, that is, arrears equal to at least
  1. 12 months’ rent or
  2. 9 months’ rent where that amounts to more than 25% of a private landlord’s total annual income from any source
  • Cases involving alleged squatters, illegal occupiers or persons unknown;
  • Cases involving an allegation of domestic violence where possession of the property is alleged to be important for particular reasons which are set out in the claim form (and with domestic violence agencies alerted);
  • Cases with allegations of fraud or deception;
  • Cases with allegations of unlawful subletting;
  • Cases with allegations of abandonment of the property, non-occupation or death of defendant;
  • Cases concerning what was allocated by an authority as ‘temporary accommodation’ and is specifically needed by the authority for reallocation as ‘temporary accommodation’.
  • Other

Although it is clear how to indicate which ‘priority’ applies when a reactivation notice is served, it is less clear what to do for new claims (which, of course, do not require a reactivation notice). Presumably, Claimants could either:

  • Make their position clear in any covering letter for the possession claim and/or in the possession claim itself[11]; or
  • Request that the case be ‘Marked’ from the outset (see below).

The extent of the “other” circumstances that may justify priority listing is not expanded upon at all. The Overall Arrangements suggest that further guidance may be published in the future to explain this provision. However, the model reactivation notice contains space for details of “other” circumstances to be included and so it may well already be open for individual parties to attempt to justify why their case may be exceptional and for the Court to take a view on what is written.

There is also no suggestion in the Overall Arrangements that particular ‘priorities’ trump others, and therefore satisfying one may well be sufficient to secure a priority listing. As the categories are not mutually exclusive, the system is new, and the forms are being reviewed by the Court to determine whether or not an individual case satisfied the criteria, it would seem sensible nevertheless to tick all those that apply. Whether or not a case qualifies for prioritisation will be a matter for the Judge listing the case[12].

Subject to these provisions, priority is given to those issued prior to the stay.

Case Marking

A further new element of possession cases is ‘case-marking’, which is intended to let the Court know when a case has come about because of, or has been specifically affected by, the Coronavirus.

Covid-19 Case Marking is said to serve the following ends:

  • The Marking may highlight settlement suitability.
  • Marking by the defendant will be available to claimants who have agreed as a matter of policy to give special consideration to such cases.
  • Marking by the claimant will draw attention to cases where it is the claimant that may be in particular difficulty as a result of the pandemic.
  • The Marking will be available to the Court to assist with listing (whether to take earlier or later), with case management and with exercising any discretion available in decision making.
  • The Marking will assist in monitoring.

Claimants and Defendants are both entitled to request that their case is marked, and the request can be made at any time and my any means so long as certain information is provided[13]:

  • For Claimants that will be the hardship faced, and whether they have received assistance under a Covid-19 scheme.
  • For Defendants that will include the hardship faced, whether there were arrears prior to March 2020, any assistance/ benefits obtained by the Defendant, the effect of Covid-19, whether the Defendant is shielding, and any proposals to remedy arrears (including offers made in the past).

The other parties must be informed of the request, and unless there is an objection the case will be marked. If the is an objection, the Court will decide on the papers whether or not to mark the case.

Hearings

The Overall Arrangements make clear that parties will be offered a physical hearing for substantive hearings. This is subject to three exceptions: (a) If contingency arrangements need to be introduced, (b) the existing provisions for Accelerated Possession Claims can be dealt with without a hearing in certain circumstances, (c) where the parties agree (subject to the Court) that a hearing should be by telephone or video.

Unless there are pre-existing directions, the procedure will be as follows:

  • There will first be a Review Date.
    • The Claimant will be required to produce an electronic and a paper bundle 14 days before the Review Date. The electronic bundle is for the Court, and the paper bundle for the Defendant. The Claimant must confirm that the bundle includes all relevant material, including the “enhanced information” about the Defendant and coronavirus.
    • The Claimant must be available on the Review Date to discuss the case with the Defendant or Duty Advisor (by telephone is sufficient).
    • The Review Date has been introduced to give a fixed date for the Defendant to obtain duty scheme advice and to facilitate settlement between the parties.
    • The Review will principally be undertaken by the Judge on the paper. Attendance by the parties is not required, although the Review is to take place at the end of the day specifically to cater for the circumstances where the parties settle the case earlier in the day (hence the requirement to be ‘available’). If it is not settled, the Judge will either list for a Substantive hearing, dismiss the claim (with liberty to apply for an oral hearing) or make other directions.
  • At least 28 days after the Review Date, there will be a Substantive Hearing. This will be given a 15-minute hearing time, and will function in a similar way to the previous ‘first hearings’ that property practitioners were used to prior to Coronavirus. The case will therefore be decided or given further directions. It appears that adjournments will be more readily granted.
  • Accelerated possession claims are not subject to the above, and will be referred to Judges at a ‘manageable frequency’.
  • Notices of Eviction, of at least 14 days, are now required in the County Court and the High Court. Applications to transfer County Court cases to the High Court for enforcement are “not able to be treated as of High Priority”. The reality of this is that such applications may take longer to be heard, and when they are heard Judges may be less sympathetic to transfer.

What’s over the horizon?

The Overall Arrangements make clear that the current system will be monitored and under review, with data being collected to permit adjustments in light of experience. There are also full contingency arrangements to facilitate the deployment of more buildings to be used as Courts, the deployment of more Judges, and more remote hearings.

What does that mean in practice? Simply put – no one really knows. As matters seem to have developed to date in a reactive, as opposed to proactive manner, much will depend on how the Country fares against Coronavirus. If matters progress smoothly, then hopefully the Court system can get a handle on the current situation. If, however, there is a second wave (as appears likely), then there may a range of consequences from national changes to the operation of possession cases, to local lockdowns preventing the enforcement of possession orders[14].

Hopefully the guide above assist with determining the position as it stands now. But the safest bet is to keep an ear to the ground to see whether any further changes come about – no doubt LinkedIn and various other places on the internet will be flush with new articles and podcasts the moment any news drops!

Edward Blakeney

 

[1] https://www.judiciary.uk/announcements/120th-practice-direction-update-to-the-civil-procedure-rules-coronavirus-pandemic-related/

[2] CPR 55.29

[3] Arkin v Marshall [2020] EWCA Civ 620; London Borough of Hackney v Okoro [2020] EWCA Civ 681; TFS Stores Ltd v BMG (Ashford) Ltd & Ors [2020] EWCA Civ 833

[4] Practice Direction 55C

[5] The comment from Terence Etherton MR as to the “extremely unusual nature and timing” of the request from the Lord Chancellor to extend the stay by a further four weeks just three days before it was due to expire is somewhat conspicuous in its tone.

[6] The Coronavirus Act 2020 (Residential Tenancies: Protection from Eviction)(Amendment)(England) Regulations 2020

[7] NB other parties will have 14 days to object if they do not agree with the proposed new directions.

[8] Notice periods as they relate to business tenancies are not covered by this article. However, the government has extended the moratorium on forfeiture of business tenancies for rent arrears until 31 December 2020.

[9] This is the later version available on the judiciary.uk website. An earlier version dated 14 September 2020 referred to a mediation pilot and outlined how that would work, however those references have now disappeared. The current status of the pilot is therefore uncertain (i.e. is it shelved or scrapped?) It may be that it resurfaces in the coming months, and therefore practitioners should be aware of this possibility.

[10] Note paragraphs 12-14 of the Overall Arrangements – the guidelines mentioned there will be important. See https://www.gov.uk/government/publications/understanding-the-possession-action-process-guidance-for-landlords-and-tenants; https://www.nrla.org.uk/resources/ending-your-tenancy/pre-action-plan-avoiding-possession-claims; https://www.fca.org.uk/publication/finalised-guidance/mortgages-coronavirus-additional-guidance-for-firms.pdf

[11] Anecdotes suggest the Court staff prefer any marking to be easily identifiable (e.g. bold and underlined) to assist in identifying priority cases.

[12] https://www.judiciary.uk/wp-content/uploads/2020/09/20200917-Guidance-note-MR-to-Civil-Judges-Possession-priorities-Housing-1.pdf

[13] See paragraph 30 and the associated footnotes in the Overall Arrangements

[14] https://www.gov.uk/government/news/government-sets-out-comprehensive-support-for-renters-this-winter

 

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