How disrepair can lead to costly public liability claims
- The volume of disrepair claims against registered providers (RPs) of social housing has increased significantly in recent years
- Disrepair claims are often accompanied by costly public liability claims
- We discuss how RPs can reduce the risk of public liability claims linked to disrepair
In recent years, civil law reforms and the introduction of Fixed Recoverable Costs have made certain types of litigation – for example claims relating to road traffic accidents – less profitable for solicitors.
As a result, claims management companies have sought out new avenues for business, in particular housing disrepair claims.
Matthew Hyam, a partner at law firm BLM, who has acted for many registered providers (RPs) of social housing facing disrepair claims, says: “Claims management companies are marketing themselves in social housing estates across the country, knocking on doors and dropping off leaflets, in order to identify people who have had problems with their properties so they can put them in contact with solicitors.
“I am aware of some housing associations that have seen a 400% increase in the volume of disrepair claims against them.”
The link between disrepair and public liability claims
Disrepair claims, where tenants seek compensation from their landlord for inconvenience or distress suffered as a result of a breach of repair obligations (see boxout), are not insured losses. However, they are often accompanied by claims relating to personal injury or property damage, which can be far more costly. Such claims commonly occur in relation to damp.
“Dampness can cause respiratory issues and exacerbate pre-existing respiratory conditions,” says Matthew. “Often, after receiving a disrepair claim, a landlord accepts it was their responsibility to make the necessary repairs, and agrees to compensate the tenant for the time the property was in disrepair.
“However, the tenant might then allege that they, or their children perhaps, have also suffered respiratory problems as a result of that disrepair. All of a sudden, from having made an admission of liability to deal with what would have been a relatively simple disrepair claim, the landlord is now faced with a number of far more significant claims.”
There are a number of ways RPs can reduce the risk of such circumstances occurring.
Ensure clear lines of communication
The first is to ensure you alert your insurer whenever you have reasonable grounds for suspecting a disrepair claim could lead to a personal injury or property damage claim.
Greg Jones, Claims Service Manager, Zurich, says: “Even though we won’t handle the disrepair claim, it’s so important for us to be involved from the outset if there is a mention of injury.
“Once you have admitted liability in relation to a disrepair claim, this may put us on the back foot if we are faced with defending an injury claim. We may only be left with arguments on causation rather than a robust denial.”
Establish proper reporting systems for disrepair
While tenants will typically report most instances of disrepair via telephone hotlines, there may also be instances where RPs are not directly notified about a defect, but where a court may consider that they should have been aware of it.
This is known as constructive notice, and could include instances where, for example, somebody representing an RP has visited a property on an unrelated matter and failed to spot an obvious defect, or has observed or been told about a defect but failed to report it to the relevant department within their organisation.
“A common issue is where a tenant tells a visiting housing officer about a defect, and the officer simply tells them to telephone the repairs hotline,” says Matthew. “We cannot launch a defence of any resulting claim on the basis that an officer says he told the tenant to phone a freephone number, because as far as the tenant is concerned, they had already told somebody who represents the organisation.”
Organisations should have systems in place to make it easy for all staff members and contractors to escalate repair issues, rather than just rely on tenants to report defects. While the repairs and maintenance department will remain at the forefront of managing reports of disrepair, other areas of the organisation must remain switched on to taking ownership of any complaints they receive.
Keep detailed records
Having detailed and accurate records is extremely important to improve claims defensibility.
Matthew says: “Organisations need to have detailed digital records that make it clear what was reported, who reported it, who took the details down and what was done to escalate the issue from that point onwards. There needs to be a clear audit trail from the day the issue was reported to the day it was closed off, and if no action was taken, your records must explain why.”
Follow your own policies and procedures
Once an organisation is on notice of disrepair, they are obligated to carry out repairs within a reasonable time.
Matthew says: “The best way to benchmark what’s reasonable is your own policies and procedures. If your policies specify that Category 1 (emergency) repairs should be completed within three or four hours, that’s what you go by. There might be occasions where a tenant will argue the repairs should have been completed more quickly, but if you have followed your own policies and procedures, you will be on a much stronger footing.”