Back to the future? Scottish private sector tenancy reforms would leave tenants in a worse position than those in 1980

Govan Law Centre (GLC) has expressed dismay that the Scottish Government's proposed private sector tenancy reforms are considerably more regressive for tenants than the then Conservative Government’s introduction of the short assured tenancy in Scotland some 34 years ago.

The Government's proposals are set out in its document, 'Consultation on a new tenancy for the private sector'. The proposals appear progressive at first glance, with the suggestion of abolishing the 'no-fault ground' for eviction in short assured tenancies, however, when one reads further it becomes apparent the provision of greater security of tenure for tenants is wholly illusory as the Scottish Government set out eight new mandatory grounds of eviction that would enable landlords to choose to evict on the flimsiest of reasons.

In GLC's response to the consultation response we argue that the mandatory repossession grounds undermine the entire policy exercise:

In relation to rent arrears, the proposed ground 6 (three months’ arrears of rent) is in direct conflict with the will of the Scottish Parliament in legislating in the Homelessness etc., (Scotland) Act 2003 to provide a reasonableness defence for the current three months arrears of rent (ground 8, schedule 5, Housing (Scotland) Act 1988). Where is the evidence now that this defence should be repealed in relation to rent arrears which may be due to housing benefit errors or delays."

"The proposed new mandatory grounds 1 to 3 are couched in very weak language: the use of the word ‘want’ sets the bar very low. For example, it would not be necessary to provide evidence that a house was being marketed for sale, or that the mortgage lender had required a sale to repay the lending secured over the property.  Instead, all that would be required to evict a tenant in the private sector is that the landlord ‘wanted’ to move back in, or sell, or that their lender wanted to sell. In other words, there would be no need to establish an actual sale was taking place or that the landlord really did need to and was moving back into the property".

"Ground 4 is even more open to exploitation by landlords to the detriment of tenants: all that a landlord need say is that he or she intended to ‘refurbish’ to evict a tenant/family. What is ‘refurbish’? It might never materialise, or indeed it could be as little as painting a wall or installing a new sink. Why should this be a mandatory ground of eviction?"

"Ground 7 makes provision for a mandatory ground of repossession for ‘anti-social behaviour’. If the anti-social behaviour was a symptom of an illness or behaviour that had since been modified why should the tenant be subject to mandatory repossession? The requirement on the court to consider reasonableness is an essential requirement to ensure fairness and justice."

"Ground 8 enables a mandatory ground of eviction where the tenant has otherwise breached the tenancy agreement. Without the common sense protection of a defence of ‘reasonableness’ will tenants be evicted for the most minor contractual breaches?

Finally, we note PRS evictions will no longer be dealt with by the Sheriff Court and instead will be dealt with by the First Tier PRS Tribunal. This change in policy (for reasons of cost savings) does concern us because losing the roof over your head is such an important issue that it should be dealt with by an experienced and more senior judge.  We also question how can PRS Tribunals be seen to be genuinely impartial when their chairs are often part-time judges employed or engaged by landlords in private practice to undertake eviction actions?"

Back to the future? Scottish private sector tenancy reforms would leave tenants in a worse position than those in 1980

Housing (Scotland) Bill must be amended to protect tenants and prevent homelessness in Scotland

This week the Housing (Scotland) Bill received approval at Stage 1 in the Scottish Parliament, however, Govan Law Centre believes the bill contains some regressive and unnecessary provisions, but most of all is a missed opportunity to provide meaningful protection for tenants, especially in the private rented sector, and prevent needless homelessness in Scotland.

We believe the bill can be amended to deliver real protection and positive change for Scottish citizens, and we will be working with MSPs across all political parties to try and achieve this. In addition, we believe more research and work is required to resolve some particularly acute housing problems in Scotland, which we have identified. Below is a summary of our calls, which are more fully set out in our Parliamentary Briefing on the Housing (Scotland) Bill available here as a PDF. If you support any of these calls, please write to your local MSP(s) and ask them to support them please.

1  Age/Allocation
There is no independent evidence that removing the ban on taking age into consideration in allocating social housing would serve any useful purpose. Moreover, the Scottish Government did not consult on this proposal, and it appears to have by-passed the normal democratic route for open scrutiny in the development of public policy in Scotland. GLC hope to work with MSPs to bring forward an amendment to protect young persons from less favourable treatment in the allocation of housing by reason of their age.

2  Tenancy Support/Prevention of Homelessness
When a family or person becomes homeless there are support services put in place in order to help them through their homelessness journey. At GLC we do provide excellent interventions in relation to stopping evictions across Glasgow however we feel that there is more which can be done to help stave off homelessness. Govan Law Centre believes there is considerable scope for requiring local authorities and registered social landlords to support and facilitate access to independent sources of advice and support for their tenants not only prior to court action but also during court proceedings. We believe such duties should be backed up by primary legislation.

3  Private Landlord Registration (PLR)

The PLR scheme is a registration facility for private landlords. Currently it would appear that their main focus appears to be about registration with almost no enforcement powers at their disposal. Most PRS landlords that come to GLC attention are in fact registered but this does not modify their behaviour in acting poorly as a landlord with many cases showing they at times act illegally.  We believe there is scope for a national statutory body to be given additional powers and resources to regulate and better enforce and co-ordinate the PRS. It would be possible to give such a role to an existing national statutory body in Scotland in order to minimise cost implications.  However, we believe our suggestion would ultimately lead to major cost savings on the public purse by preventing unlawful activity and homelessness in the PRS.

4  Private Rented Sector

We also believe that private rents are excessively high for tenants, particularly if they are on low or modest incomes. The rights of private sector tenants need to be strengthened. The Scottish Government should carry out a review of the PRS in Scotland with a focus on unaffordable housing, and tenancy arrangements which create instability for those who are living with Short Assured Tenancies.

5  Recording those who disappear from the system

The most recent report on homelessness carried out by the Scottish government show that between 9%-10% of all applications "lost contact before assessment, withdrew or were ineligible". GLC would like to see these figures recorded in a more accurate way so that a true picture of those who lose contact is recorded.  GLC calls on the Scottish Government to carry out a review on this matter urgently so that local authorites are not failing in their statutory obligations, and vulnerable people do not lose out in relation to their statutory rights.

6  Private Hostels

Many of our most vulnerable and chaotic citizens are stuck living in very poor conditions in private hostels. Such establishments are well known to those who live in Glasgow, particularly those who work in homelessness and it is a Victorian response to a homelessness problem in 2014. GLC calls on the Scottish Government to use the current Housing Bill to introduce a scheme of registration and regulation for these types of private hostels. At present these hostels do not come under the Care Commission’s remit. We think they should. This would drive up standards in the sector, and ensure that those who were not fit to run such establishments were unable to do so. 

Housing (Scotland) Bill must be amended to protect tenants and prevent homelessness in Scotland

Govan Law Centre to draft Bill to prevent vulnerable Scots being evicted for bedroom tax arrears

Glasgow's Govan Law Centre (GLC) is delighted to announce that it's 'No Evictions for Bedroom Tax Arrears petition' will now be taken forward as a Member's Bill in the Scottish Parliament. The sponsoring member is Jackie Baillie, the Shadow Cabinet Secretary for Welfare and MSP for Dumbarton. GLC has agreed to provide full legal and policy support in the drafting of the proposed legislation and accompanying documents.

'Under-occupancy deductions' are losing tenants of councils and housing associations in Scotland £12 per week on average, with some tenants losing as much as £22 per week in housing benefit. Around 105,000 households in Scotland are affected by the bedroom tax, of which 80% contain a person with a disability.

When it comes to Scottish rent arrears eviction actions in sheriff courts, often the success or failure of a tenant in preventing eviction will turn on a few pounds per week, for example the standard payment for arrears direct is £3.55 per week. Accordingly, £12 to £22 per week being deducted from rent payments under the bedroom tax creates the perfect storm for a major increase in evictions and homelessness in Scotland, as tenants are unable to downsize or find extra money from very low incomes.

Govan Law Centre's Chairman, Tommy McMahon said: "Govan Law Centre has suggested a small amendment to section 16 of the Housing (Scotland) Act 2001 which would prevent 'bedroom tax rent arrears' being used to establish or justify a crave for eviction, and instead the landlord could obtain a payment decree for these 'type of arrears', and pursue them an ordinary debt".

"We are very grateful that Jackie Baillie MSP has agreed to champion this law reform proposal, and stand up for Scotland's most vulnerable tenants. It makes no economic sense to evict tenants, disabled people and children for bedroom tax arrears when they cannot downsize to a smaller property in practice, obtain a smaller specially adapted home, or find an extra £50 per month from breadline benefits. The Scottish Parliament has the power to protect tenants from the bedroom tax and it's time to act'.

GLC is also supporting the calls - along with Shelter Scotland and many others - on the Scottish Government to find £50m for social landlords to off-set the impact of the bedroom tax.

Govan Law Centre to draft Bill to prevent vulnerable Scots being evicted for bedroom tax arrears

Scots face postcode eviction lottery from Scottish Government approach; 150,000 Scots denied protection from bedroom tax evictions

Scotland's Housing Minister has written to the Scottish Parliament's Petitions Committee rejecting GLC's call for legislation to prevent bedroom tax evictions in Scotland, and instead has suggested the approach of Dundee City Council (DCC) is to be preferred.

The temporary one year approach of DCC involves not evicting council tenants for bedroom tax arrears 'where the Director of Housing is satisfied that affected tenants are doing all they can be reasonably expected to in order to avoid falling into arrears'.

GLC believes DCC's approach is a step in the right direction - albiet we prefer an independent and impartial court based solution  - but remain puzzled as to how the Scottish Government can on the one hand support DCC's approach to no evictions for bedroom tax arrears, yet fail to ensure that all tenants of social landlords enjoy the same approach in Scotland? 

Only a handful of Scotland's councils have agreed to the approach embraced by the Housing Minister, which means there are approximately 150,000 Scots who reside in tenancies in the social rented sector exposed to a postcode eviction lottery from the bedroom tax. Many of these Scots are particulary vulnerable through disabilities, physical or mental ill-health, or financial exclusion.

None of the half a million or so Scots who reside in housing association properties are being offered any protection against bedroom tax eviction from the Scottish Government DCC approach, nor are the vast majority of council tenants in Scotland offered any hope - despite the fact, the Scottish Government could easily legislate to provide the same protection for all Scots in the social rented sector, which the Housing Minister believes is right and proper for a handful of council tenants to currently enjoy.

GLC believes that the Scottish Government has a responsibility to ensure that all tenants of social landlords in Scotland enjoy the same equality of protection against eviction for bedroom tax arrears; and that at the very least, the Scottish Ministers should use their powers to ensure all such tenants have the same equality of protection which the Housing Minister's supports in her letter to the Petitions Committee.

Scots face postcode eviction lottery from Scottish Government approach; 150,000 Scots denied protection from bedroom tax evictions

GLC's launches draft Housing (Scotland) Bill to meet the needs and aspirations of Scots

Govan Law Centre (GLC) believes that in the 21st century it is time to strengthen and improve the rights of tenants (in both the social and private rented sectors), and the rights of homeless Scots and Scottish gyspy-travellers; it is not a time to undermine, weaken or remove the rights of people in Scotland.

We understand the Scottish Government may be introducing a new Housing (Scotland) Bill in the near future. Here is what we would like to see in that Bill. We believe our recommendations can meet the needs and aspirations of Scots, and make a positive and meaningful difference to the quality of life for hundreds of thousands of people.

We would like to hear your thoughts and views on our ideas, and you can either leave a comment below or e-mail us on m@ govanlc.com with your feedback. We have set out examples below of what we think Scotland needs to see in a forthcoming Housing (Scotland) Bill.

Govan Law Centre’s proposed future Housing (Scotland) Bill

[1] Statement on the abolition of the eviction of Scottish secure tenants - the Scottish Ministers must by 31st December 2015, prepare and publish a statement setting out the measures which social landlords have taken, are taking, and intend to take for the purpose of abolishing eviction for rent arrears in Scotland, and the statement must specify a target date for abolition (which must be no later than 31 December 2018 for the achievement of that purpose, and must also specify interim objectives towards the achievement of that purpose);

[2] A new duty on the Scottish Ministers to develop and implement a national prevention of homelessness strategy;

[3] A new duty on Scottish local authorities (amending section 11 of the Homelessness etc., (Scotland) Act 2003) to provide access to a range of free co-ordinated services, including independent legal advice and representation, money advice, welfare benefits advice and social care services to prevent people facing eviction or repossession becoming homeless; and for local authorities to provide or facilitate dedicated tenancy sustainment protection officers in their localities;

[4] An amendment to section 16 of the Housing (Scotland) Act 2001 to prevent tenants of registered social landlords from being evicted due to the non-payment of the bedroom tax;

[5] To extend the landlord’s Pre-Action Requirement obligations to help tenants in rent arrears after the Notice of Proceeding for Recovery of Possession is served and not just before; and to require social landlords to provide such advice and assistance to enable unbanked tenants in receipt of the Universal Credit obtain access to appropriate banking services;

[6] To introduce a new system of regulation for fair rents in the private rented sector;

[7] To introduce a new form of Scottish secure tenancy for gypsy-travellers in Scotland;

[8] To amend section 5 of the Housing (Scotland) Act 2001 to enable local authorities to request registered social landlord to provide interim or temporary accommodation to those homeless persons to whom the local authority owes a duty under section 31(2) of the Housing (Scotland) Act 1987.

GLC's launches draft Housing (Scotland) Bill to meet the needs and aspirations of Scots

Shelter Scotland and STUC endorse 'No eviction for bedroom tax' campaign

GLC is delighted that Shelter Scotland and the STUC have endorsed the principles of the 'No eviction for bedroom tax' campaign, which is already supported by local tenants and residents in Glasgow, following two public meetings in Govan.

GLC had suggested the need for urgent minor law reform amendment to implement a 'No eviction for bedroom tax' policy in Scotland, upon the basis the bedroom tax cuts would be affecting tenants within 4 months or so, and Scotland needed a new safety net otherwise we would be unable to prevent evictions based on rent arrears caused by the bedroom tax.

Many defended eviction actions in court can often turn on £3.55 per week payments to arrears, and with £12 to £22 per week being deducted from housing benefit it could become almost impossible to defend such eviction actions in the near future.

GLC has suggested bedroom tax rent arrears could be pursued as an ordinary debt, and should not be founded upon as a ground of eviction or to establish the reasonableness of local authority and housing association evictions. Such a policy could either be considered on a permanent or transitional basis with a sunset clause.

The support from Shelter Scotland and the STUC to this proposal is very welcome and will help forge much wider civic Scottish support to the 'No eviction for bedroom tax' campaign.

Shelter Scotland and STUC endorse 'No eviction for bedroom tax' campaign

Northern Rock drops appeal as Scottish Government promises law reform for lenders

Northern Rock (Asset Management) plc (NRAM) has asked the Court of Session to dismiss its appeal against the decision of Sheriff Deutsch in the NRAM plc v. Millar GLC test case. NRAM's appeal was dismissed on Friday, 7 September 2012 (the procedural hearing date of the case) with judicial expenses awarded in favour of the defender.

The reason given by NRAM for abandoning its appeal to the Inner House was because it had become aware the Scottish Government was now willing to bring forward law reform to amend its 2010 Pre-Action Requirements Order (PAR) so that 'default' would mean a simple missed mortgage payment. The ruling in Millar meant that key information - and a final last chance to remedy mortgage 'default' - had to be provided on or after the expiry of the calling up notice, generally served before court proceedings were raised.

It is understood* (see update below) the Scottish Government will amend the definition of 'default' in the PAR, so that there will be no need to provide key PAR information prior to proceedings being raised.

GLC's Principal Solicitor, Mike Dailly said: "We believe the Millar judgment was fantastic news for Scottish consumers because it meant they would always get an extra and final chance to avoid court proceedings after a calling-up notice.  Govan Law Centre is dismayed to hear that the Scottish Government will now scrap this final last chance for Scottish homeowners, and in so doing render the Pre-Action Requirements toothless, and in effect a duplication of the FSA's existing equivalent MCOB rule. The Scottish Government should be backing struggling homeowners and not legislating for lenders".

GLC notes that Sheriff Deutsch had eloquently explained the logic of PAR information being sent after the expiry of a calling up notice in his judgement in Millar (at paragraph 84, which is reproduced below).

The first public mention of the Scottish Government legislating for lenders was raised in an article in the industry magazine, the Mortgage Finance Gazette, where Mr Rob Aberdein of Aberdein Considine & Co., Solicitors (a Scottish firm who act for a number of lenders in repossession proceedings in Scotland) said in relation to the NRAM v Millar case:

"Should an appeal not be forthcoming or be unsuccessful then I did meet the Scottish Government at the start of the year on the matter of the impending Glasgow cases decision and have exchanged correspondence with Alex Neil MSP, the cabinet minister for infrastructure and capital investment, on the topic.  Both are supportive of corrective secondary legislation as they believe the decision is not consumer friendly and potentially damaging to their goal of avoiding repossession and resultant homelessness".

GLC is not aware of evidence whatsoever to support the assertion by Mr Aberdein, which he ascribes to the Scottish Government.  We note that lenders have already changed their practice since earlier this year to comply with the legal reasoning in Millar. Further, we note that any proposed law reform cannot be retrospective.

Note
NRAM plc v. Millar &; RBS plc v. McConnell judgment:
[84] Regardless of whether those responsible for managing the bill which gave rise to the 2010 Act operated under a misunderstanding as to whether non-payment constituted a default for the purposes of section 19 of the 1970 Act, now that the position has been clarified, it appears to me that the required information will actually be sent to debtors at a time when, given the recent expiry of the calling up notice, they might be more inclined to pay that information some serious regard. At that point the debtor should be in no doubt that the creditor may apply to the Sheriff court for warrant to repossess and to sell the property. That level of understanding on the part of the debtor might be less likely to exist if, in accordance with the pursuers' interpretation, the default which triggers the requirement to provide information, need be no more than one month of arrears. The possibility must exist that there will be debtors with a tendency to pass in and out of an arrears position on a regular basis. One corollary of that situation might be that such persons would receive a regular stream of correspondence providing the required information. Such a volume of similar correspondence might be expected to be ignored. It might also be expensive for creditors.

* Update from 24 September 2012: Scottish Government confirms it has not made any decision to amend the 2010 Order: link to letter confirming same.

Northern Rock drops appeal as Scottish Government promises law reform for lenders

GLC supports Margo's proposal to cap interest rates in Scotland

Govan Law Centre (GLC) has offered to draft Margo MacDonald's proposed Interest Rate Cap Bill if she is re-elected. Ms MacDonald is reportedly delighted with GLC's support for her proposal to use Scots criminal law to set a cap on interest rates to protect low paid workers and vulnerable consumers in Scotland.

The proposal is in response to the growing prevalence of loans and credit at excessive rates of interest - often several hundred to several thousand percent - all at time when the banks' base interest rate is historically very low: currently 0.5%. The UK removed interest rate caps in 1974, however, consumer interest rates caps are common in Europe and many US states. Excessive interests rate are lawful in the UK.

GLC's Principal Solicitor, Mike Dailly said: "Two and half thousands year ago the Romans capped interest rates at 8.3%, rising to 12% some 355 years later. Usury laws have a long history around the world for good reason: it is unjust and immmoral to exploit people and trap them in a cycle of debt due to excessive interest".

"This is a highly complex area of law and practice - not least because unfair lending can occur with hidden charges and extras, as well as APR rates - but I believe GLC has the trackrecord and expertise in this field to support Margo MacDonald, and work with other civic groups in Scotland, to make this fantastic proposal a reality".

GLC supports Margo's proposal to cap interest rates in Scotland

Scotland ill-prepared for ‘summer repossession spike’ - GLC calls for proactive solutions

While the UK Council of Mortgage Lenders (CML) predicts a 11% increase in mortgage repossessions across the UK in 2011 as against the figure for 2010 [1], there are a number of reasons to think this figure could be optimistic; however there is absolutely no doubt that Scotland is on course for a ‘summer repossession spike’ according to Scotland’s Govan Law Centre (GLC).

The principal reason for the Scottish spike is due to the fact that between 3,000 and 5,000 mortgage repossession court actions had to be abandoned following the decision of the UK Supreme Court in RBS plc v. Wilson and others, at the end of November last year. Many of these cases have had to be re-raised, and these new cases will start to call in court (following the time it has taken to undertake the pre-action ‘calling-up notice’ and the re-raising of proceedings in compliance with the Home Owner and Debtor Protection (Scotland) Act 2010).

In addition, the CML had estimated there were 15,000 historic cases in Scotland where lenders had obtained decree but not enforced it, because payment arrangements were in place; many of these cases will now require fresh court actions as such decrees are no longer sound following the Wilson case [2].

In addition to these Scottish drivers, there are also UK-wide drivers which could not only result in more repossession actions in Scotland, but critically, lead to an increase in the number of cases which are very difficult to resolve:  

1. The UK Government’s decision last October to significantly reduce the level of Support for Mortgage Interest (SMI) for those out of work;
2. The impact of UK Government public spending cuts on jobs, and the wider impact of welfare cuts too;
3. The fact that additional forbearance by lenders – since April 2009 at the request of the UK Government – may now be masking the true number of financially difficult cases; and
4.  The uncertainty over when mortgage interest rates will ultimately begin to rise.

Govan Law Centre’s position is that three urgent solutions are required to help address the expected additional pressure in Scotland:

1. Scrap the restrictive Mortgage to Rent rules introduced by the Scottish Government in March 2009, invest more in the Scheme, and extend this excellent Scottish safety net. In June 2009, we contributed to a report which predicted the Scottish Government’s rules would result in a ‘post code lottery’ for vulnerable homeowners facing repossession with many households rejected due to the restrictive eligibility criteria.[3] A FOI response to Govan Law Centre from the Scottish Government confirms we were correct[4].

For the period 31 August 2009 to 31 August 2010 almost half of the people applying to the Scottish Government Home Owner Support Fund (the Mortgage to Rent Scheme and Shared Equity Scheme) were refused help; out of 719 registered applications, 315 did not proceed.

Worryingly, of those Scottish households turned down for help, 37% were refused help because their home was valued more than the Scottish Government new valuation limit (which is a crude figure based upon the lowest quartile value of houses within a local authority area in relation to the number of rooms); while another 37% were refused help because no local authority of housing association was willing to participate in the Scheme. Clearly, the Scheme is unable to cope with the current demand, never mind the expected significant increase in demand which GLC predicts later this year.

2. Introduce a new ‘Post Repossession Tenancy’ in Scots law so that occupiers whose homes had been repossessed could lease them back from their lender until the properties were sold. At present lenders would be highly unlikely to do this, as they would be granting a Short Assured Tenancy of at least six months, with complex liabilities for repairs etc., However, we know that many properties can take several months or considerably longer to be sold and it would benefit lenders, repossessed occupiers and local authority homelessness departments if former owners could enter into a simple ‘no frills’ tenancy until the property was sold. Former owners who were unemployed or on low incomes would be eligible for housing benefit, and such an initiative would utilise otherwise empty properties in Scotland.

3. Enhance the requirement for early intervention to prevent homelessness in Scotland – we recommend an upgrading of section 11 of the Homelessness etc., (Scotland) Act 2003 to require local authorities to use innovative techniques (such as embedded homelessness triggers within their computerised client contact systems) to detect and prevent threatened homelessness much earlier, and to provide a co-ordinated and holistic response in terms of legal, money advice, welfare rights and social care services.

---

[1] http://www.cml.org.uk/cml/media/press/2836

[2] www.cml.org.uk/cml/filegrab/rbs-v-wilson-nw.pdf

[3] http://www.govanlc.com/help_is_at_hand_report.pdf

[4] Scottish Government Housing and Regeneration Directorate written response dated 12 November 2010, from Keith McDowell, HOSF Scheme Co-ordinator for Scotland. 

Scotland ill-prepared for ‘summer repossession spike’ - GLC calls for proactive solutions

Time for banks and big business to err on the side of good, not greed

GLC has assisted Glasgow MP, Anas Sarwar, in the drafting of his Common Good (Directors Duty) Bill.  The proposed Bill would amend section 172 of the Companies Act 2006 to place a new legal duty on all directors of UK companies with 250 employees or more, to contribute to the common good of the communities or localities where the company operates or provides a service.

Section 172(1) of the 2006 Act requires a director to promote the success of the company and in so doing 'have regard' to a number of other factors.  However, there is no explicit obligation to consider the impact of corporate decisions on wider society, and the proposed Bill would remedy this clear imbalance in UK company law. 

Where the likely consequence of a director's decision would cause significant detriment to consumers, or particular groups of consumers, or the environment, the Bill requires the duty to contribute to the common good to take precedence. ‘Common good’ means contributing to the good of communities or localities where the company operates or provides a service.

Anas Sarwar MP said:
"Unacceptable culture within our banks was a major contributor to the UK's financial crisis. It's right that company law requires directors to promote the success of their companies, but that success shouldn't be at the expense of UK taxpayers, our local communities or environment. The balance in law isn't right, and directors of our largest companies need a stronger incentive to recognise their obligation to wider society. I want to amend the Companies Act to make that happen".

"Where the decision of a big company is likely to cause serious harm to our communities or the environment, the common good must prevail and companies should err on the side of good, not greed. A statutory ethical framework would improve corporate behaviour and help prevent future financial disasters and ecological harm. Leading figures in the financial services industry have acknowledged the need for a cultural change, so there is an appetite for change".

GLC's Mike Dailly said:
"Govan Law Centre is delighted to assist a Glasgow Member of Parliament to introduce a progressive law reform proposal which could have a radical impact on the culture and behaviour of the UK's biggest companies.  Often ecological disasters are a direct consquence of large companies pursuing profit margins at the expense of common sense, and the common good". 

"Within the field of UK banking, it is clear to us that its the bank's business model which causes significant detriment to the most vulnerable group of UK consumers and we believe the time is right for a sea change in the culture of senior directors of major UK financial institutions to address this unacceptable position.  Clearly, Anas Sarwar's proposed Bill will require cross-party support to progress, but we are grateful to him for launching this vitally important debate at Westminster".

Time for banks and big business to err on the side of good, not greed

Priced out of justice?

The Herald has reported on the GLC case of Walls v. Santander UK plc, where Sheriff Cubie granted the defender's application for a bank charges claim to be remitted from small claims to ordinary cause procedure.

The effect of leaving the small claims system in Scotland, and indeed the UK, is that consumers lose the 'fixed limit' protection against an award of expenses in the event of failure. For example, you can sue for £3,000 and if unsuccessful your opponent would only recover £300 under small claims procedure in Scotland. However, expenses can quickly mount up in the ordinary court and as banks are using counsel to conduct their defences, litigation in the ordinary court will expose consumers to potential levels of expenses many times the value of their claim. 

For those on a low income civil legal aid may be available and GLC is in the process of applying for legal aid in some bank charges litigation which is proceeding under ordinary cause procedure. For those of modest means eligible for legal aid there will be a contribution to pay which may exceed the value of the dispute, making the dispute pointless. While for those ineligible for legal aid it may be equally impossible to proceed.

The Herald has called for greater competition in Scotland's banking sector, and we agree that is much needed in the consumer interest. However, the case of Walls illustrates a major flaw at the heart of Scotland's civil justice system. What's the point in having an accessible simplified tier of civil justice for low level claims if any powerful opponent can come along, up the ante, and 'price' you out of justice?  There is no right to appeal or review a decision to remit under the Sheriff Courts (Scotland) Act 1971.

Access to justice requires citizens to be able to access the courts at a cost proportionate to the value of their monetary claim. The small claims system help fulfils our state's article 6(1) requirement under the European Convention on Human Rights. But there is now a 'class of litigants' who are priced out of justice. GLC believes there is an obvious solution. The small claims fixed limit on expenses should 'travel' with the case.   This would ensure that the costs of resolving the dispute remained proportionate and fair having regard to the monetary value of the dispute.  This could be achieved by a minor statutory amendment.

GLC has made this law reform call in today's The Herald.  Unfortunately, the Cabinet Secretary for Justice in Scotland appears to have rejected our call without understanding the current legal position.  Kenny MacAskill said: "People are still able to raise bank charge cases in the small-claims court – this ruling does nothing to stop that".  Yes, but this ruling makes it crystal clear that all bank charge claims are susceptible to be removed from the small claims court.  This has already happened in other cases; in Walls we tried to stop it, and were unable to do so.  Unless the Scottish Government acts, many citizens in Scotland will be priced out of justice.

We are reminded of the parable from The Trial: “Before the Law stands a doorkeeper. . . . The doorkeeper sees that the man is nearing his end, and in order to reach his failing hearing, he roars to him: ‘No one else could gain admittance here, because this entrance was meant solely for you. I’m going to go and shut it now.’”

Priced out of justice?

National regulator ‘with teeth’ needed to tackle Scotland’s dodgy landlords

Unscrupulous private landlords continue to operate with impunity and under the ‘radar’ of local authority registration schemes according to evidence from Govan and Govanhill Law Centres, submitted to the Scottish Government today, in response to its consultation paper on Scotland’s new Housing Bill.

Lindsay Paterson, solicitor at Govanhill Law Centre said:
“The very landlords who ought not to be landlords because they are not ‘fit and proper’ people continue to operate under the radar – they will never be refused registration or removed from the register as they will never apply to be registered. As things stand therefore, the private landlord registration scheme is not an effective way of ensuring those not fit to be landlords are stopped from renting out properties".

Govan Law Centre (GLC) has highlighted the major inconsistency of local authority resources deployed to private landlord registration schemes (PLRS) across Scotland.

GLC believes Scotland’s private rented sector needs a new national regulator with comparable resources as are available to the national regulator for social landlords in order to protect vulnerable tenants in the private rented sector. The current disjointed and under funded local schemes have failed to work.

GLC is calling for a new national regulatory agency with ‘teeth’, which should require all private landlords to undergo Disclosure Scotland checks in order to help establish whether they are ‘fit and proper’ persons to act as landlords. GLC is particularly concerned with the Scottish Government’s idea of giving private sector landlords the right to undertake ‘DIY evictions’ through a statutory abandonment process.

Mike Dailly, Principal Solicitor at GLC said:
“In our experience all too many private sector landlords routinely ignore the law, so to suggest they should be given the power to carry out a ‘DIY eviction’ in certain circumstances is extremely unwise. Govan Law Centre is concerned that such a power would be automatically abused with many vulnerable tenants and their families being summarily evicted at all hours of the day and night. The Scottish Government’s consultation paper has a lot of good ideas, but this is not one of them”

GLC’s full consultation response is available online here.

The Scottish Government's consultation paper is available online here.

National regulator ‘with teeth’ needed to tackle Scotland’s dodgy landlords