After the case of Gill v. Kassam

The Chickens are gradually coming home to roost

There are a number of practices in the (largely unregulated) private rented sector, which we lawyers have known all along were wrong, but which we have had to put up with because ‘everyone’ did them – but which are now being shown up.

The most recent being the use of unregulated eviction companies.

The eviction problem

Landlords have a problem that most other businesses don’t have.

• If a diner refuses to pay his restaurant bill, he is barred from that restaurant
• If a club member fails to pay his club membership he is expelled from the club
• If you don’t pay for your airline ticket you are not let onto the plane
• But if a tenant fails to pay his rent, landlords have to spend up to six months in the courts getting a possession order in order to evict them and are forced to house them for free until this is done

The main reason why landlords evict tenants is non-payment of rent. And it stands to reason that, not having been paid their rent but still having to pay their ‘buy to let’ mortgage and other expenses, most landlords are not in a good position to pay Solicitors fees at that time.

So they look for a cheaper option.

This is what Mr and Mrs Gill did when they instructed a company called ‘Remove a Tenant’ to help them evict their tenants, Mr and Mrs Kassam, who were in serious arrears of rent.

The Gill v. Kassam case

Mr and Mrs Gill were very unfortunate. Hundreds of landlords have used unregulated firms like Remove a Tenant without any problem.

Which is surprising when you think about it.  But the issue had to come before the courts at some stage – and it happened to Mr and Mrs Gill.

At first, everything seemed normal. Proceedings were issued and a possession order was made at first instance. Then their problems started.

The tenants appealed, one of the grounds for their appeal being the fact that the firm which had acted for Mr and Mrs Gill (Remove a Tenant) were not a proper solicitors firm, and that they were, therefore, acting illegally.  Which meant (so their appeal went) the Gills’ claim should be struck out.

So what’s all that about then?

The rules about representing litigants in court proceedings

You can always represent yourself in court proceedings. All the way up to the Supreme Court, should you want to.

However, if you want to employ someone else to act for you, you come up against the Legal Services Act 2007.  This provides that certain types of legal work, known as ‘reserved activities’ – which include conveyancing, the conduct of litigation and obtaining a grant of probate – are reserved for solicitors. Or firms which have been specifically authorised by the Solicitors Regulation Authority (SRA).

There are actually very good reasons for this. For example:

• Issuing legal proceedings is a serious business. If you get it wrong you can be ordered to pay your opponents legal costs, which (if they are represented) could come to many thousands of pounds.
• In the context of eviction proceedings, tenants may be able to raise a defence and counterclaim which could also result in landlords having to pay substantial damages (and legal costs) to their tenants.
• Then although it is easy to start legal proceedings it is not always easy to stop them. If you just pull out your opponent is automatically entitled to have their costs paid by the party pulling out.

Now a properly trained ligation solicitor (or paralegal under the supervision of a trained litigator) will (in most cases) check the case out thoroughly before issuing proceedings – and being properly trained, will know what to look out for.  For example, when I did eviction work I never let my clients start their court proceedings until all possible issues had been resolved.

Even if they do get it wrong (and of course they do sometimes, no-one is perfect), all solicitors are covered by extensive and comprehensive (and very expensive) professional indemnity insurance.  So their clients are protected.

Back to the Gill case

Remove a Tenant are not solicitors or a (non-solicitors) firm which is regulated by the Solicitors Regulation Authority. So although it is legal for them to advise clients, it is not legal for them to represent them in court proceedings.

It seems that what actually happened was that Mr and Mrs Gill attended at their offices where Mr Turner, the Remove a Tenant adviser acting for them, had pre-completed the PCOL (Possession Claims Online) form. Mr Gill approved it and then clicked the final button (there is a very good article which looks at what happened in more detail here).

Remove a Tenants’ address was also given as the correspondence address and they managed the proceedings generally, including payment of the court fee, instructing the solicitor advocate who attended the initial hearing and so on.

After hearing evidence, the Judge in the Gill v. Kassam case decided that all in all, this did constitute “conduct of litigation” – which is reserved for solicitors under the Legal Services Act. So, Remove a Tenant were committing a criminal act – and no doubt the SRA will be in touch with them in due course about this.

Whether assistance in court proceedings is illegal under the rules or not is quite a fine line and the Judge accepted this. There is, for example, a difference between a friend or relative helping someone out for free, and a commercial firm which does this sort of work for payment. The former is far more likely to be acceptable than the latter.

However, the Judge’s view was that in this case, they were acting illegally. So the decision then was – what should he do about it?

What the Judge did

During a hearing Judges’ form definite opinions of witnesses and the Judge, in this case, formed a favourable opinion of Mr Gill, saying

I regarded Mr Gill as an honest witness. He was obviously angry at having to go through the process of proving his case when, to his mind, his tenant owed him a lot of rent and had no good reason for not giving back possession of the property.

The Judge was less impressed with Mr Turner of Remove a Tennant, but as Remove a Tenant were not a party to the litigation, he was not able to make any order against them.

He decided in the end that it would be unfair to penalise Mr and Mrs Gill as innocent parties for something that was not their fault and so he allowed the possession order to stand.

However, unnoticed by the earlier Judge, the section 8 notice had actually been defective which meant that the Gill’s lost their mandatory ground and were just left with the discretionary grounds 10 and 11. Which could cause them problems in enforcing their order in due course.

Another reason why unregulated firms are not a good idea.

A sign of the times?

We live in an age where those with genuine expertise are regularly disrespected and many people like to think that they can do complex jobs without any proper training or experience (the prime example being Mr Trump across the pond).

You might think that it is wrong to have rules which reserves litigation to solicitors, but litigation is complex and difficult.  The rules are there to protect the public.

Eviction work may be at the ‘easy’ end of the litigation scale, but someone inexperienced can still cause a huge amount of expense and grief for their clients if they get things wrong. An unregulated firm is less likely to have insurance to cover this.

I wonder whether Mr Gill is going to recover the costs he has incurred in this case from Remove a Tenant? Or the unpaid rent if the Kassams are still living in the property without paying rent? Had the Gill’s used a regular solicitor the Kassams would probably be gone by now.

What this means for you

If you help landlords with evictions

Maybe you are a letting agent or maybe you offer assistance at a lower fee than solicitors do.

If so – you should read this judgment very carefully. It is now on record that certain types of assistance by unregulated advisers are an illegal act.

You may want to change the way that you work. Now this issue has been looked at by the Courts and made public, the authorities are likely to be less forgiving.

If you are a landlord

You need to be very careful who you use to do your eviction work. It is better to use a proper firm of solicitors as then you will not have the problems that Mr Gill had.

If you are looking for a firm online, their website should say if they are solicitors or check the ‘about us’ section. Or you can look them up on the Law Society directory.

If you want to know how much it will cost you, I wrote about this here.

Or of course, you can always do the work yourself – perhaps with the assistance of our online guide.

But do be careful. I will end with some comments made by David Smith of Anthony Gold (also Director of Policy at the Residential Landlords Association) in his post here

It may appear that these type of unregulated “specialists” are keenly priced and so a good deal.

But the costs of their mistakes and the fact that they are not actually permitted to offer legal services leaves landlords at risk of far greater legal fees further down the line.

To make matters worse their unregulated status means that there is little comeback for landlords if things go wrong.

In the increasingly complex world of residential landlord and tenant law it is perhaps better to rely on a skilled firm of solicitors rather than an “eviction specialist” who is anything but.