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Housing work threatened by fixed costs regime

The Ministry of Justice plans to extend the fixed recoverable costs (FRC) regime in April 2023. After a recent announcement that there would be a delay of this regime to legally aid housing possession cases by 2 years.

Many housing lawyers are pushing for an exemption from fixed recoverable costs for all housing cases funded by Conditional Fee Agreements or Legal Aid due to concerns that those providers will no longer be able to continue, saying they pose an ‘existential threat’ to the sector. FRC’s in housing disrepair counterclaims and standalone claims, also unlawful eviction and others which will hit firms and organisations the most. There is a real concerns that FRC need to be re-evaluated for all housing cases if there is to be a housing advice and representation sector to deliver the governments commitments to access to justice.

Those who provide housing legal aid need the financial sustainability of the ability to recover reasonable or assessed costs, or inter partes costs from the opponent due to the low legal aid rates at which providers are paid. In the case where a client is legally aided and successful in its case and the opponent is Ordered to pay costs, the provider is entitled to costs at inter partes rates rather than the lower legal aid rates.

A report has been commissioned by Hawke Legal, a consultancy specialising in legal management has estimated the average fees of private practice las firms would fall by 23% as a result of FCR’s whilst the average income of a Law Centre or other non for profit would fall by about 20%. This study was based on 131 housing cases at 19 providers of housing law services, the majority being private practice and a third law centres. As a result of the study on FRC’s into housing, it appears likely solicitors firms and non for profit organisations will have to close their housing departments. The knock on effect could be significant and could lead to some legal aid providers closing altogether.

After LASPO many legal aid providers ceased trading, creating legal aid deserts, now with the plan to introduce the regime in April next year, this could have a significant impact of further practices closing and certainly does not assist with the governments commitments to access to justice.


By Laura Hannan – Housing Law Solicitor

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