With this it will be convenient to take the following Lords amendments: Nos. 21 and 22.
No. 23, in page 19, line 27, leave out
proceedings are begun to enforce the liability
the date on which proceedings to enforce the liability are finally disposed of
All the amendments are concerned with the new civil right to damages created by clause 27, the new offence under the Protection from Eviction Act 1977 which is created by clause 29 and the existing offence. Amendments Nos. 20 and 21 take account of the fact that the clause was widened on Report to cover actions by superior landlords in cases where the landlord knew that the tenant might leave as a result of harassment or persistent withdrawal of services. The amendments provide that the clause shall be effective as from the date of those amendments on Report and not retrospective in the sense in which we would deplore it.
Amendment No. 22 clarifies the meaning of the word "calculated," as used to describe the actions of a landlord who may be liable for damages under this clause. Amendments Nos. 28 and 30 make similar amendments to the existing criminal offence in the Protection from Eviction Act 1977 and the new offence in clause 29. Since this widening of the offence covers both acts of commission and the withholding of services, amendments Nos. 26 and 27 widen the defence provided by clause 27(7)(b). Amendments Nos. 29 to 33 similarly widen the defence provided in clause 29.
Amendment No. 23 provides that a landlord shall not be liable under clause 27(3) if he reinstates the tenant before proceedings are finally disposed of. Amendments Nos. 247, 248 and 269 make amendments that have a similar effect to the Housing (Scotland) Act 1988.
Opposition amendment (a) to Lords amendment No. 23 would make it a requirement that liability under clause 27(3) would arise if the tenant were not reinstated within six months of the date of proceedings starting. The aim of the amendment is to prevent a landlord from dragging out proceedings and thus deterring the tenant from pursuing his case to its conclusion, but there is no need for a time limit in this case. The tenant does not have to accept the landlord's offer to reinstate him. If he accepts an offer before bringing proceedings, he will not get damages under clause 27. If he accepts at any point afterwards, he may not get clause 27 damages but it will still be open to him to bring an action against the landlord for breach of covenant for quiet enjoyment. The longer the landlord spins out the proceedings, the greater the potential loss to him if he loses. If the tenant wins his case, he could also get interest on the damages. It is the tenant's choice whether to accept the landlord's offer of reinstatement, knowing that if he accepts at a late stage in the proceedings he will lose any prospect of clause 27 damages. He gains nothing by the amendment, and I am afraid that I cannot accept it.
Opposition amendment (a) to Lords amendment No. 25 wants the wording of amendment No. 25 to specify that the court shall consider mitigating damages only where it would be wholly unjust not to do so. It was the intention of the noble Lords who drew attention to the inability of the court to mitigate damages that damages should be reduced only in exceptional circumstances. The present wording of the amendment employs a well-tried concept—that of reasonableness. It is not necessary to ask the court to decide whether something is manifestly unjust.
The whole thrust of clauses 27 to 29 is against harassment. The clauses introduce a new criminal penalty and swingeing civil penalties. The conduct of a tenant will have to be very bad indeed for a court to decide that it is reasonable to mitigate damages that are clearly designed as a penalty for committing an illegal act. These are not normal compensatory damages; they are penal damages. The court will be aware of that, so I am afraid that I cannot accept the amendment.
Then I shall take advice on that point.
Amendment (b) to Lords amendment No. 25 would make it a requirement that the offer to reinstate a tenant should be made in writing. In practice, written evidence is not necessarily any more valid or compelling than oral evidence. Both can be equally subject to dispute. Any sensible landlord will make any offer in writing, but a tenant can deny that he ever received it. Copies can be forged. The court would still need to make up its mind whether a bona fide offer had been made, taking account of all the circumstances. I am afraid, therefore, that I cannot accept the amendment.
Amendment (c) to Lords amendment No. 25 would remove all the references in amendment No. 25 to the reasonableness of the tenant refusing reinstatement if he had obtained alternative accommodation. The Lords amendment enables the court to consider fully the reasonableness of the tenant refusing an offer of reinstatement.
A landlord should not be liable for extremely heavy damages because his tenant happens to find more congenial alternative accommodation. Amendment No. 25 focuses the court's mind on the reasonableness of a theoretically homeless tenant going back to accommodation from which he has been illegally evicted. Amendment (a) to Lords amendment No. 27 seeks to prevent a landlord from claiming that he had reasonable grounds for doing acts or withdrawing services where he had a case for proceeding against the tenant or someone living with him on one of the misconduct grounds.
The amendment is not helpful. The grounds referred to in clause 27(7)(b) are not the statutory grounds for possession in schedule 2, and it is misleading to insert a reference to them as amendment 27(c) does. The subsection as amended enables a landlord to offer a defence that he had reasonable grounds for some act he had committed, which caused the occupier to leave the premises or otherwise interfered with his enjoyment of them. Misconduct by the tenant which provoked him to a particular act might or might not be considered by the courts to be reasonable grounds for that act. The courts will of course always be aware that illegal eviction and the withholding or withdrawing of services can be criminal offences, and that the proper way in which to obtain possession is through the courts, and will have that in mind in assessing any situation. There is no case for an amendment on the lines of amendment (a), and I am afraid I cannot accept it.
The manner in which the Under-Secretary of State dismissed the question asked by my hon. Friend the Member for Hammersmith (Mr. Soley) about the availability of legal aid to people who complain of harassment by their landlords will have caused a great deal of anxiety among those of us who advise and assist the victims of such harassment. It will cause even more concern to the victims of harassment. I urge the Minister to take immediate advice before the debate on this amendment closes.
The idea that legal aid is readily available in cases such as these—to all manner and classes of person, as the Minister describes them—is absolute nonsense, and I choose my words advisedly. One of the major causes of concern to practitioners of all party political persuasions about the resourcing and administration of the legal aid scheme is precisely that there are groups of people of relatively modest means and people who have little or no income but must rely on savings who are excluded from legal aid because of the civil legal aid regulations. It is not good enough for Conservative Members to say that that is not true, as those of us who spent many hours considering the Legal Aid Bill in Committee expressed our concern over that. There is no room for complacency.
I have taken the hon. Gentleman's advice and taken legal advice as quickly as possible. The hon. Gentleman is in danger of misleading hon. Members by suggesting that changes to legal aid are affected by what we are talking about. I am not sure that what the hon. Member for Hammersmith (Mr. Soley) said is on the record, as it was semi sotto voce, but he was speaking of cases of this kind. My understanding was that he was talking about housing matters and said that legal aid was being withdrawn in housing matters. That is not the case. I am sorry, but there appears to be a dispute between the hon. Member for Brent, South (Mr. Boateng) and the hon. Member for Hammersmith.
The Government's proposals for legal aid, which they are changing, will make people less eligible for legal aid, and in some cases, people who would have got legal aid will not get it in future.
That is the point. Nothing that the Minister said in response to my hon. Friend the Member for Hammersmith gives any comfort when it comes to the availability of legal aid for the victims of harassment. That is because of the changes in the regulations pursuant to the Legal Aid Act 1988 and changes in the quantum of damages, the likely remedy available to those who allege harassment and their chances of success. Those who apply for legal aid in cases of alleged harassment by landlords do not stand the sort of chance that they should have of receiving legal advice and the assistance that they so desperately need. It is on these issues that we seek clarification from the Minister. When he reflects upon them in the fullness of time, he may return with a more considered and reassuring response.
I shall reflect generally on the impact of the amendments on the mischief that is recognised by hon. Members on both sides of the House. There are several ingredients that would feature in an effective law against harassment. Central to these is the likelihood of the landlord who is determined to ride roughshod over the rights of the individual tenant not being in any way facilitated by the processes of the court. The issues that we seek to address in considering the amendments go precisely to that point.
We are anxious to ensure that landlords do not drag out proceedings in a way that is beneficial to their purposes. We are anxious, too, to ensure that the quantum of damages will act as a real deterrent to the landlord who is determined to make a quick buck by inflicting hardship and suffering on the tenant and excluding him or her from the premises. I am talking of the landlord who will be prepared to winkle out a tenant by putting him or her at a disadvantage in terms of occupancy of the premises.
We are concerned to ensure that nothing gives the impression to the landlord that he stands to gain anything by going to court and telling a pack of lies. Experience shows those who have had anything to do with advising professionally, whether they be citizens' advice bureau workers, lawyers, or tenancy relations officers, that when a landlord will benefit from lying, he will lie shamelessly and blatantly to maximise the opportunity for profit. Our concern is that he should be deterred from so doing. If he believes that he can minimise his loss by making allegations about the conduct of the tenant, he will do so. The amendment seeks to ensure that that will not substantially reduce damages.
If he can say that he has given notice and has made an offer to a tenant of reasonable alternative accommodation when he has not, and he is not required to show that he has made that offer in writing, he will do so. That is why we require the individual to make the offer in writing. Then it is there in black and white. It is that sort of amendment that gives the tenant and those who advise him the certainty that he does not simply have rights on paper but remedies in reality. When one talks of harassment in the real world, a right without remedy is meaningless when it comes to seeking to achieve a particular purpose.
Recently in my constituency, a landlord offered tenancies to two young women and said that dogs, other animals or children were not allowed. Subsequently, one of the women became pregnant. The landlord attempted to remove her from the tenancy on the basis that he and his solicitor wrote saying that she had broken the terms of the tenancy by becoming pregnant and so should remove herself forthwith from the premises. That has happened. Given what my hon. Friend has just said about the right of access to legal assessment, will the amendment help such a tenant?
The Opposition's amendment would at least give such an individual a greater sense of security and certainty that there would be an effective remedy; that there would be an appropriate quantum of damages if the case were made out; and that there would be a greater and more stringent test that the landlord would be obliged to fulfil than is currently the case. That is self-evident on the face of the amendment.
However, one must recognise the market context into which the amendments fall in which there will be every economic incentive for the landlord to get the tenant out, come hell or high water. The great danger of the path down which the Government have sought to go in this area of housing; their reliance on the private market; their obeisance to the mythology that somehow the private sector and resources within it will free accommodation into the housing market, is that even with the safeguards, even as we seek to amend the Bill, there will not be sufficient protection for the individual tenant.
That is why, when this matter was considered in the other place, time and again noble Lords on both sides and on no side sought reassurances from the Minister of State. We say that the reassurances that they gleaned are inadequate and need to be supplemented in the way that we seek tonight.
Is not one of the dangers that landlords with regulated tenants feel that they are being discriminated against? Clearly, if the letting occurred once the Housing Bill becomes an Act, market rents would be the order of the day. Therefore, those landlords and property companies with existing tenants will ask why they should continue to be discriminated against by their tenants not being forced to pay the full whack.
Rachmanism emerged at the time of the 1957 Rent Act and the great danger is that the gangster element in the private sector—I hope that most landlords will not use such methods—will use any means to get a tenant out and not be particularly concerned about a fine, because once a tenant is out he will have achieved his objective.
Of course that is so. Under this legislation, the pressure will be on to get the old tenant out and a new tenant in under the new arrangements. Once that is done, the landlord can charge what he likes and get the tenant out whenever he wants. That is the whole philosophy behind this Bill.
I am anxious that the Minister should respond, amendment by amendment, to our arguments. I begin with Lords amendment No. 23, the purpose of which is to prevent a landlord from dragging out proceedings brought by a tenant under clause 27 with the aim of discouraging a tenant's claim for compensation. In other words, the landlord might otherwise deter a tenant from bringing the matter to trial by dragging out the proceedings for as long as he could. Under clause 27 as drafted, a landlord could avoid liability either by reinstating the tenant before proceedings begin or by observing a court order that the tenant be reinstated.
On Report in the House of Lords, a Government amendment was accepted allowing the landlord to avoid liability by reinstating his tenant at any time prior to the completion of the court case. However, that claim is wide open to abuse by landlords. The Under-Secretary of State and those who advise him must surely appreciate that all too often, a tenant will be unable to secure a court order for reinstatement. One of the most common tricks—it is one that predates Rachman—is that the landlord relets the property. He will then have every incentive to spin out the proceedings, expecting that the original tenant will give up his case.
Those of us who have been in legal practice—there are practitioners in all parts of the House—know that to be so. We have been party to such attempts and have sought to negate them when they impact adversely on our clients. However, the fact remains that many tenants will give up. The point rightly made by my hon. Friend the Member for Hammersmith, and dismissed so disparagingly by the Minister, was that under new legal aid regulations, the plaintiff in such a case will have to make his legal aid contributions as long as the case continues.
It must be clear even to the Minister that there is a positive advantage to the landlord in spinning out court proceedings, knowing that the longer will be the period in which the tenant must continue making legal aid contributions. Not only will the tenant be without a home, but he or she will be paying for being homeless. It may or may not be the case ultimately that the tenant concerned will get his money back—but he will have to take that risk. That will cause many tenants to give up.
My understanding is that, if the landlord makes an offer to reinstate the tenant towards the end of a court case, the proceedings will stop—but that, if afterwards the landlord again takes steps to get rid of the same tenant, that tenant will have to start proceedings all over again.
That is the horror of the situation, and we hope that the Minister will respond. We are making these points not for the sake of doing so, but because we are anxious for clarification. We do not want to believe that such may be the case, but all the evidence from the plain words of the Bill, and from our experience of such cases, is that that is what will happen. In the case that I described, only in the unlikely event that the tenant pursues his case to its conclusion, which could take several years, will the landlord have to decide between reinstating that tenant or paying compensation under clause 27.
Although, as my hon. Friend the Member for Hammersmith has said, the last-minute reinstatement of the tenant will not enable the landlord to avoid liability for ordinary compensatory or exemplary damages—unless the tenant gives up that claim as well—the amount of such damages is usually far lower than the gain to the landlord from illegally evicting. That is why clause 27 is in the Bill. Its deterrent effect will be substantially reduced, because any unscrupulous landlord—in fact, any landlord determined to maximise the value of his property—is bound to use the "wait and see" tactic.
>: It is interesting to note that, on Second Reading, the Secretary of State said in reply to an intervention of mine about the strong possibility of a repeat of Rachmanism that one of the changes from the Rent Act 1957 was that powers were being taken against unscrupulous landlords. Do not the Government anticipate a number of Rachmans, Bergers and Hoogstratens who will use every means possible to try to get out tenants who are at present protected by law? They will have every incentive to do so, because lettings will then be subject to market rents and tenants will have to pay far more than they do now.
During the various stages of consideration of the Bill in another place, the Minister of State was quite candid. He said, as we do, that while the Hoogstratens of this world were not necessarily typical of all landlords—mercifully—the pressure would nevertheless be there. As long as the pressure is there, we have a responsibility, here and in the other place, to get the matter right. We say that the other place did not get it right, and we want to know how we can try to get it right now.
Dragging the case out would not necessarily lead to any increase in the amount of ordinary damages. [Interruption.] I hear an hon. Member, from a sedentary position—[HON. MEMBERS: ?It is the same one."] It is the hon. Member for Wirral, South (Mr. Porter) again. He is accusing us of dragging out this debate. Let me tell him that we will drag it out for as long as it takes to protect those in this city and elsewhere who, day in, day out, live in fear of the sort of landlord whom we have a duty to deter. We will do it if it takes all night. This is not a cause for ironical cheers or hand clapping on the part of the hon. Member for Wirral, South. He does no credit to himself or his party by acting in that way. Many Conservative Members take this matter seriously. I hope that the Minister takes it seriously, because we certainly do, and we intend to persist with it.
It does not seem unreasonable to want the purported purpose of the amendment made into a reality. We do not want the position that we fear would result if the amendment were carried in its current form, in which the landlord would be given a last chance to reconsider his position in the light of the possible salutory effect of court proceedings. Nor do we believe that our requirement would be met by giving the landlord a limited time after court proceedings have begun in which to reinstate the tenant. In practice very few landlords will be able and willing to reinstate the tenant more than six months after proceedings start. That is how it will be in the real world. In order to protect the tenant and create a climate in which responsible landlordism is encouraged and to provide a context in which the Hoogsbratens of this world and others of that kind are discouraged it is necessary that our amendment to Lords amendment No. 23 is accepted.
Amendment (a) to Lords amendment No. 25 is a short amendment in which we seek simply to leave out the words, "is reasonable" from clause 5 and insert in their place
would be wholly unjust not".
Again, the reason for that has its heart in our wish to make sure that everything possible is done to reduce the opportunity for misconduct on the part of the landlord. As the Bill was originally drafted, the court had no power to reduce compensation for alleged misconduct by the tenant. Under the Bill as amended, the court can reduce the amount of compensation by such an amount as it considers appropriate if the conduct of the tenant or any person living with him makes it reasonable to do so.
In Committee, the Earl of Caithness, speaking on behalf of the Government, rejected amendments that would give the court a wide discretion as to how much compensation to award for illegal eviction and harassment. We agree with him in saying:
We want the courts to award damages which fully compensate the tenant, not to be able to reduce the sum to a point where every landlord can afford to harass, knowing that
the gain he makes from his illegal action will outweigh the penalty imposed by the courts."—[Official Report, House of Lords, 25 July 1988; Vol. 500, c. 94–5.]
The noble Lord Jenkins took the view that full compensation should be awarded save
in wholly exceptional circumstances
if the damages as assessed under Clause 28 are manifestly unjust in all the circumstances of the case."—[Official Report, House of Lords, 25 July 1988; Vol. 500, c. 93.]
On Report, the Minister of State pointed out:
If the discretion given to the court is too wide, we suspect that damages awarded are likely to continue at present levels which often bear relationship to the tenant's loss."—[Official Report, House of Lords, 24 October 1988; Vol. 500, c. 1420.]
The noble Lord was recognising a factor with which many of us have had to deal in constituency cases. There are the most horrific examples of bad landlords. Even though the tenant has proved his case with the assistance of the tenancy relations officer—we know how hard that that can be and how difficult the evidential burden is—even though the tenant has gone through all the hoops, the amount awarded is almost derisory in terms of its relationship to the loss, hardship, suffering, mental torment and anguish undergone by the tenant.
We find it difficult and unacceptable that the Bill as amended does not achieve what the noble Lord wanted it to achieve, in that the court will still able to exercise a wide discretion, so wide as to render nugatory the aims and objectives of the Minister of State, which we entirely accept.
There is no definition of when it is reasonable to reduce compenstion for misconduct, or by how much it should be reduced. The result of that will be that landlords will be encouraged to raise false allegations of misconduct—a fear that we expressed earlier—in the hope of reducing compensation to a lower level than their gain from the eviction, so weakening the deterrent effect of clause 27 which we are anxious to see strengthened. It would also be open to the court to reduce compensation for trivial or isolated acts of misconduct. The amendment seeks to make it clear that such a reduction should be made only in exceptional circumstances when it would be wholly unfair not to do so.
The power remains with the court. The avenues by which to arrive at a just decision are not open to it. There are precedents in the wording of statutes for saying that this power should be exercised only in exceptional circumstances in which it would be wholly unfair not to exercise it. So the emphasis is on deterrence and on protecting the tenant—that is what we are trying to do. That is what all reasonable people should try to do, recognising the pressure that will be on the tenant.
The pressures have already begun to show themselves. My hon. Friends will know from their work and from messages that they receive from advice centres, law centers and local law societies the extent to which, in anticipation of the Bill and the largesse that it will make available to landlords, the winkling has already begun.
Amendment (b) to Lords amendment No. 25 is designed to ensure that an offer of reinstatement is given in writing: that is only fair. Lords amendment No. 25 gives the court the power to reduce the amount of compensation that the tenant would otherwise receive if it appeared to the court that before the proceedings began the landlord offered to reinstate the tenant and that offer was unreasonably refused.
Does my hon. Friend agree that one of the fallacies in the Government's thinking is the belief that the tenant and the landlord are equal parties to an agreement and that no outsider need therefore intervene when a deal is negotiated? That is sheer madness in places where there is an acute housing shortage, and where landlords have all the power and prospective tenants have none.
This Bill would merely reinforce landlords' power. We recognise that some of them abide by the law—all the same, it has been tilted in their favour—but unscrupulous landlords will consider themselves mugs if they do not take all possible steps, legal or otherwise, to get tenants out. I see the Minister shaking his head, but why on earth should not unscrupulous landlords do their utmost to get tenants out? That makes all the sense in the world. Once the tenants are out, the landlords can do what they like with the, accommodation—let it at market rents, for instance.
Does my hon. Friend agree that his proposal is the minimum required? If the Government do not accept it they are clearly indifferent to what will happen—my hon. Friend has said that it is already happening. Tenants will be pressurised and harassed.
I entirely accept that, and I welcome my hon. Friend's intervention. There is nothing onerous or unreasonable about requiring a landlord who claims that he has offered to reinstate a tenant and who has received an unreasonable refusal to give evidence of that offer in writing. We have yet to hear any reasoned objection to that proposal from the Government. What can be wrong with asking a landlord who says that his offer was unreasonably rejected for written evidence of his offer? One of the ways in which the courts have traditionally attempted to balance the unequal relationship between landlord and tenant has been to require, if not written evidence, at least something that shows the existence of an agreement which can be of value to, and can be taken into account by, the courts.
In such circumstances, what could be more reasonable than saying that the whole agreement need not be in writing but that if a landlord seeks to rely on a tenant's unreasonable refusal of his offer, he must show that that offer was made in writing? Otherwise, landlords will have every reason to maintain falsely that they made an offer, on the offchance that the judge will believe them. That sometimes happens. Some people are accomplished liars and it is not always possible for the courts to detect such persons, although mercifully they often do; one has a certain feel for such matters. It is not unreasonable to make such a requirement and so deter those who seek to reduce compensation and waste the court's time by laying a false trail. The Minister has given no satisfactory explanation as to why the amendment should be rejected.
Amendment No. 25 requires the court to determine whether it was unreasonable of a former residential occupier to refuse the offer. Clause 27(6)(a) gives the court the power to reduce the amount of compensation that the tenant would otherwise receive if it appears that, prior to the proceedings beginning, the landlord has offered to reinstate the tenant and that offer has been unreasonably refused. Under the Bill as drafted, the court cannot take into accounts in deciding whether a refusal of an offer to reinstate is unreasonable, the fact that the tenant may have obtained alternative accommodation, however well settled the tenant may have become.
Suppose that a tenant has been pushed out of his home in horrendous circumstances. Having gone through what can be an extremely traumatic experience, the natural thing for him to do is to put down roots as quickly as he can in his new abode. We say that it is wrong that the courts should not be able to take that into account when determining whether the residential occupier unreasonably refused the offer of reinstatement. It is a simple amendment strengthening the hands of the court in arriving at a just decision.
The Opposition have tabled a bundle of amendments seeking to remedy the fact that the protection given is insufficient for the purposes set out in the Bill. We seek to protect the tenant from the harassment that will result from the Bill and to give the courts the powers and discretion to exercise their function in a just way and allow them to establish the true relationship between landlord and tenant rather than to allow the landlords deliberately to obscure the truth.
We commend the amendments to the House in the context of a Bill that has already had a marked impact on the incidence of harassment in our constituencies. It is not good enough for Ministers in this House or in another place to tell us that we have no need to fear because everything will be all right and that the provisions are the best that can possibly be arrived at. That reassurance will fall on deaf ears in terms of those at the cutting edge of the housing crisis and the current spate of speculation in housing.