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Adviser

A guide to benefits, housing, employment, consumer and money advice

_Prisoners and housing: How to keep hold of the home while inside _National Insurance: Incapacity Benefit and an incomplete record _Casual workers: Establishing rights by examining employment status _Credit brokers: Backhanders, bungs and finders fees _Housing allocation: How the Ombudsman can help with complaints

November/December 2007

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Printer - please drop in new ad for PG Debt File “adviser09-07.pdf”

Printer - please drop in new ad for CPAG File name = “Adviser Oct 07.pdf” also sent as Word file


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Adviser Issue 124. November/December 2007

In brief

Administration and advertising Telephone: 01902 310568 Rates (excluding VAT) from 1 January 2007 Back page (full page only) Full page (inside magazine) Half page Quarter page Inserts from £400 - please call for prices

Institutions/organisations Voluntary organisations/individuals Multiple copy rates available. Subscription rates are for six issues and include a free benefits wallchart. Back copies (from 121 onwards) Back copies (issue 1-120) NEW Adviser binders (from issue 121 onwards) Adviser binders (issue 1-120) Each binder holds 10-12 issues

Families on the outside - Lucy Keenan describes the assistance available when a family member is in prison. 6 A day in the life - Kate Smith tackles problems with insufficient National Insurance records and Incapacity Benefit. 9

Money advice

Secret commissions - Guy Skipwith investigates the murky world of undisclosed fees and credit brokers. 15 Consultancy corner 1 - How will the courts deal with undocumented catalogue agreements in future? 19 Consultancy corner 2 - Are so-called 'hybrid orders' now a thing of the past? 21

£45 £33

£7 £4 £8 £5

Housing

Editor: Alan Markey Email: alan.markey@citizensadvice.org.uk Editorial Board Housing – Subject Editors Mathew Cunningham and Sarah Credland plus Chris Fuller, Miriam Mackreth, Clare Williams, Mark Robinson and Jo Agnew. Benefits – Subject Editor Kate Smith plus Fiona Seymour, Rachel Hadwen, Jean French and Morna Rae. Employment – Subject Editor David Jones plus Tamara Lewis, Philip Tsamados, Ian Moss and Gary Hodkinson. Money Advice – Subject Editor Chauntelle Wilkinson plus Janet Wilson, Sue Edwards, Guy Skipwith and Marina Gallagher. Consumer – Subject Editor Loraine Hunt plus Sue Marks, Alison Hopkins and Sue Cook. The Adviser gratefully acknowledges the contributions of National Consumer Council and Shelter. Thanks also to the Information Team, Citizens Advice Scotland.

Employment The Adviser welcomes your articles, letters and comments. The views expressed in the Adviser do not necessarily reflect the views of the Editorial Board or Citizens Advice. Citizens Advice is an operating name of The National Association of Citizens Advice Bureau 115–123 Pentonville Road, London N1 9LZ Registered company 1436945. Registered charity 279057 VAT number 726 020 276 Printed by Printflow Limited, Citybridge House, 235-245 Goswell Road, London EC1V 7JD ISSN 0950-5458

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Benefits £700 £650 £350 £250

Subscriptions Telephone: 020 7833 7029

A round up of news and reviews

General

No place like home - Barry Vernon & Alexandra Mullet outline the options available for people in prison who are looking to keep their home. I shall be released - Lianne Lawrence reviews the options and obstacles that prisoners face in trying to secure accommodation on release. Unfair allocation - Tracey Sanderson explains the Ombudsman's role in dealing with housing allocation complaints. Introductory tenancies and rent arrears - Martin Coates examines the role of advisers in helping prevent tenants losing their homes. Casual workers - Suzanne Henderson analyses their employment status. Dispute resolution round-up - David Jones takes a further look at the operation of the statutory procedures. Advising victims of gun culture - Jeremy Vanes outlines some steps for giving effective advice. The Adviser is published by Citizens Advice. The Adviser, The Development Centre, Coxwell Avenue, Wolverhampton Science Park, Wolverhampton WV10 9RT Telephone: 01902 310568 Fax: 01902 710068

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ADVISER 124 NOVEMBER /DECEMBER 2007

NEWS & REVIEWS

In brief Editor’s notes

Remission of Court Fees

a range of grant-making organisations. Despite the existence of Among the many Unfortunately, we are nearly 800 charities providing On 2nd October the Civil issues that sentenced unable to carry any grants to UK residents in need, Proceedings Fees prisoners have to face consumer articles in research suggests that are those affecting this edition due to (Amendment) (no2) awareness of support available their housing status. circumstances beyond Order 2007 came into from the sector remains low. What happens to their our control. I apologise force. This will affect the Additionally, around 13 million home when they are in to readers for this and way in which entitlement people in the UK are living prison and what about can reassure you that to remission from below the poverty line and yet their housing options normal service will be payment of court fees is on release? What about resumed with the next assessed and introduces £8 billion in income-related support for the families issue. Please don't benefits goes unclaimed qualification for of prisoners? These are forget that we remission on the grounds every year. some of the issues we welcome all Chief Executive, Jolanta that annual income or focus on in this edition contributions, whether monthly disposable Lasota, said ‘Never before has of Adviser. in the form of articles income is below a certain all this information from across or letters - this is your level. We are planning an the public, voluntary and We look at the hidden magazine, after all! private sectors existed in one article outlining the payments offered to place. This is a unique changes in the next credit brokers, examine Can I take this opportunity to unite and edition of Adviser. For the status of so-called opportunity to wish all more information see the provide support to people in 'casual' workers, study readers the very best the greatest need. Together we court service website at the current situation for the festive season can be part of something that www.hmcourtsregarding unsigned and hope we will all delivers positive change.’ service.gov.uk catalogue agreements meet again in 2008! Mike Barter, Director of and discuss some New charity Welfare at the Royal Air Force practice issues for Alan Markey launched Benevolent Fund, supports the agencies dealing with Adviser Editor launch of turn2us: ‘We A new charity has victims of violent welcome this excellent launched a drive to crime. initiative, bringing grant-giving deliver more support organisations together through Pathways contracts A number of charities are now direct to people in a single information service. querying the contracting financial need. ‘turn2us’ Although the DWP had process. Trade Unions have also has developed a website The website will enable benevolent funds to reach out made positive noises warned that successful private that provides users with to people in need, who might about its intention to sector contractors may try to details of benefits and otherwise not know that we’re include the ‘third sector’ circumvent TUPE regulations charity grants available. here to help.’ in its delivery plans, just following legal advice that they The site, two of the 16 new did not need to factor in these www.turn2us.org.uk, provides Debt relief orders ‘Pathways to Work’ costs to their bids. The information tailored to contracts have gone to government maintains that all individual circumstances and voluntary sector contracts were awarded ‘fairly allows users to apply directly to The Tribunals, Courts and Enforcement Act 2007 providers. and transparently’.


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introduces the Debt Relief Order (DRO) which seeks to help people in England and Wales who are currently financially excluded. The Insolvency Service says that DROs will enable those who meet financial and other criteria to apply for an order that will lead to the debts being discharged after one year. During that period, people with DROs will be protected from enforcement action and will be subject to similar restrictions to bankruptcy. Those whose financial circumstances improve during the Order will be expected to make arrangements to repay their creditors and there will be penalties for those who abuse the system. Uniquely, a key part of the new procedure is that it will only be possible to obtain a DRO by applying to the Official Receiver through an approved intermediary from the advice sector. The main condition is that the intermediary is a proficient money adviser, verified as such by a 'competent authority'. The Insolvency Service is looking to engage with organisations for this purpose and information is available from angela.crossley @insolvency.gsi.gov.uk.

Working in the UK: Newcomer’s Handbook (2nd edition) Will Somerville (editor) Centre for Economic and Social Inclusion 669pp £19.95 Since the first edition of this handbook in 2004, there has been a significant increase in the demand for advice from migrant workers. As advice agencies will know, the problems faced by newly arrived workers can be considerable and can vary from immigration, housing, discrimination and employment issues. This second edition continues to be a vital tool in providing up to date, accurate and practical advice to advisers, representatives, advocates and other parties who are interested in ensuring that migrant workers are aware of their rights and the help that is available to them both in and out of work. The new edition has been considerably expanded and includes 24 chapters, covering all essential areas of advice such as immigration, asylum and refugees, benefits, employment and training, education work documentation, employment rights, racial discrimination, housing and

employment tribunals. The individual chapters are clearly written and provide excellent legislative references in the footnotes. I should say that whilst reviewing the handbook, I have had cause to use it on a number of occasions and each time the handbook provided the answers to my queries with both ease and speed. The handbook is essential for anyone who is required to advise migrant workers and needs a single source book to help provide the answers to the variety of problems that such clients may present.

programmes including Work Trials, Work Focused Interviews, New Deal programmes, Employment Zones, Progress2Work and Pathways to Work. It describes the programme elements, eligibility criteria, how each scheme operates and whether the scheme is mandatory. The handbook also includes practical guidance, useful tips and tactics for interviews carried out by Jobcentre Plus to review a claimant's job search activity. The book begins with an 'introductory level' guide to the main benefits. The largest section is devoted to JSA (46 Gul Khan pages) while Income Support is covered in just over six pages. Most advisors may find this Welfare to Work general overview too basic for Handbook their needs compared with 3rd edition other reference books (such as the CPAG Handbook), although Ilse Mogensen (editor) the endnotes do provide Centre for Economic reference to the legislation and & Social Inclusion other source documents. The 298pp ÂŁ24.95 final section covers in-work benefits followed by This handbook describes itself appendices containing current as 'a reference guide for anyone involved in the welfare benefit rates and the Incapacity Benefit PCA descriptors. to work agenda or seeking For advisers whose information on the financial support and provisions currently predominant client group is unemployed jobseekers, the available to those moving welfare to work and JSA towards work.' sections of this book should It provides useful prove to be a useful resource. information, in a clear and accessible manner, on the Sandie Lock various welfare to work


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Families on the outside The service provided by the Prisoners' Families Helpline can be invaluable to clients whose families are in prison, threatened with imprisonment or expecting a release date. Lucy Keenan describes the assistance available and discusses one of their most common enquiries; help with the costs of prison visits.

The article is principally concerned with England and Wales, but services in Scotland and Northern Ireland are also mentioned.

There are over 80,000 people in prison in England and Wales who leave behind their families and 1 children . Recent figures published by the National Offender Management Service found that there are 160,000 children affected by imprisonment 2 every year . When someone is sent to prison more often than not the family are left in the dark. They are not routinely given any information about where a prisoner is being held, how they can visit, what they can send in and crucially how losing a family member to imprisonment will affect their income - whether the prisoner was working or claiming benefits. Imprisonment increases the number of effectively lone-parent families and prisoners' families may become significantly worse off financially when a partner is imprisoned. The Prisoners' Families Helpline was set up to be the first port of call for families and friends desperate for information and in

many cases emotional support. The helpline covers England and Wales supporting nearly 14,000 callers a year. The service is provided by two prisoners' family support organisations, the Ormiston Children and Families Trust in Cambridge and Partners of Prisoners' Families Support Group in Manchester. It is managed by Action for Prisoners' Families (APF), the national umbrella organisation that works to raise awareness of the impact of imprisonment and to ensure that the vital links between prisoners and their children and relatives are maintained. In Scotland, the Scottish Prisoner's Family helpline is run by Families Outside, and in Northern Ireland, NIACRO provides an advice service to families Families Outside www.familiesoutside.org.uk Scottish Prisoner's Family Helpline 0500 839383 Northern Ireland NIACRO www.niacro.co.uk

of prisoners and ex-offenders. Over 20% of calls to the Prisoners' Families Helpline this year were from callers wanting information about visiting with nearly 10% asking about how to get financial help to enable them to do this. There is financial help available through the Assisted Prison Visits scheme. This is run by the Assisted Prison Visits Unit which covers England and Wales and also administers the scheme for the Scottish Prison Service. In Northern Ireland, the Assisted Prison Visits scheme is run by the Social Security Agency for the Northern Ireland Prison Service. Visitors qualifying under any of the schemes can apply for help with the costs of visits to prisons in England, Wales, Scotland or Northern Ireland. To qualify for the scheme the visitor must be3: 1.A close relative of the prisoner (wife, husband, daughter, son, parent, grandparent, sister, brother, civil partner or a step or adoptive parent/child/brother/sister) or partner (the couple must have


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“Visitors can get help with travel expenses every two weeks.�

been living together in an established relationship). Other sole visitors may be eligible if the prisoner has no other visitors (excluding official visitors and voluntary prison visitors); and 2. Be in receipt of either:_ Income Support _ Child Tax Credit, Working Tax Credit with Child Tax Credit, or Working Tax Credit with a disability element, (for all tax credit routes, annual income used to assess the award must not be more than ÂŁ16,017) _ income-based Jobseeker's Allowance _ Pension Credit _ Help with healthcare costs because of low income (an HC2 or HC3 certificate must have been awarded). Visitors may also be able to claim for bringing a prisoner's children to visit. Other visitors than those listed above may be able to get help, for example, escorts for elderly or ill relatives or partners, or for children and young people under 18. An escort for an adult visitor does not need to meet the above rules on income. An escort for a child visitor, other than the parent or carer, is also exempt from the income rules. However, their parent or carer must meet the income rules and have arranged for the other person to accompany the child. The scheme is crucial because if a visitor is entitled they can get help with travel expenses every two weeks or a maximum of 26 over a year. Visitors may also be entitled to extra visits, for example for particular family days or where they are involved with sentence planning. The Helpline can give more details about when this is

possible, and provide further information about the Assisted Visits Scheme. Unfortunately many visitors do not know (60% in a recent survey conducted by APF4) that this scheme exists and, since many prisoners are held more than an hour away from home, visiting with children can be very expensive. The Helpline can send out the booklet and forms for the Assisted Prison Visits Scheme and also has general information sheets covering the scheme and answering frequently asked questions about visits. Callers can get help about any benefits that they may be entitled to if their partner has been imprisoned, as their circumstances will have changed if they were living with their partner prior to imprisonment. Information can also be given for families of prisoners who are not living with the caller. Who is going to pay the mortgage, council tax and what about housing benefit? What happens to tax credits which are

being claimed by a couple? Prisoners, depending on the length of their sentence, may be entitled to Housing Benefit and details of this are contained in the housing information sheet5. Families are often worried about the cost of having a prisoner staying with them on home leave (a community care grant may be possible) or whether the prisoner can claim any benefits if they are on Home Detention Curfew (most benefits can be claimed as normal). Again there is a free information sheet about this. If families get into debt the Helpline can signpost the caller on to specialist debt counsellors. The Helpline produces information sheets covering many other issues affecting the families of prisoners such as telling the children, sentence calculations and indeterminate sentences, transfers and complaints. The advisers can also send out other information, for example the 'Outside Help' booklet which is produced by NACRO in partnership with APF. This gives practical information for

EXAMPLE Siobhan's partner Kieran has recently started a prison sentence of two years. The couple were claiming income-based Jobseeker's Allowance, plus Child Benefit and Child Tax Credit for their three children. They also got Housing Benefit and Council Tax Benefit. Siobhan needs advice about what to do and how to manage financially. She's worried because Kieran always signed on, and she wouldn't be able to because of looking after the children. She is advised that she can claim IS as a single parent, and stop the JSA claim, avoiding any need to look for work or sign on. HB and CTB were being claimed by Kieran - depending on how long his imprisonment is actually likely to last, it may be payable during a temporary absence, but the safest option for Siobhan may be to make the claims herself (she can be treated as liable to pay rent for this purpose). She can continue to get CB and full CTC for the children. She will qualify for the Assisted Prison Visits scheme.


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the families of people in prison and covers benefits for family members, keeping in touch, the prison system and release and resettlement. The Helpline has its own website which has around 3,500 visitors a month and this is on the increase. Visitors can download all the free information sheets, look at common frequently asked questions and if they wish can email helpline staff with any queries they may have. As the release date for a “As the release date comes closer prisoner comes closer there are new challenges for the family, who there are new can be extremely helpful in helping challenges for a prisoner find a job on release or the family.� housing. The Home Office Reoffending Action Plan found that prisoners who had at least one visit from family or partners were twice as likely to have an employment, education or a training place arranged on release and three times more likely to have accommodation arranged as those who did not receive any visits. The frequency of visits also increased the likelihood of having a job or accommodation. The research

The Helpline is available free of charge by calling 0808 808 2003. For information about Action for Prisoners' Families, including information sheets, go to www.prisonersfamilies.org.uk concluded that 'opportunities for involving families in the resettlement of prisoners should be increased'. The Home Office (now Ministry of Justice) recognizes that maintaining family ties can be a protective factor against a prisoner re-offending and the Prisoners' Families Helpline gives families the correct information and support to be able to do this. One visitor to the Helpline website wrote: 'Your website and the telephone helpline were invaluable during the first few weeks that my Dad went to prison. It was all a big shock and nobody told us anything. My mum was crying all the time and was unable to cope. Things are getting better, but with both my parents in their 60s, the world of prison is very frightening. Thank you for explaining

everything to us and we will continue to use your website for information.' FOOTNOTES 1. 80,937 in 'Prison Population and Accommodation Briefing - 14 September 2007', National Offender Management Service (available via www.hmprisonservice.gov.uk) 2. Lords Hansard 12 June 2007 3. HM Prison Service Order (PSO 4405) 4. Unpublished research funded by the then DfES; further information can be obtained from Action for Prisoners' Families 5. For detailed information on benefit rules affecting prisoners and their families, see Morna Rae's article 'Prison benefits?' in Adviser 119

Lucy Keenan is the Prisoners' Families Helpline National Coordinator. Prisoners' Families Helpline is managed by Action for Prisoners' Families and the service is provided by Ormiston Children and Families Trust and Partners of Prisoners Families' Support Group.

Citizens Advice Specialist Support Supporting advisers through training and consultancy Welfare Benefits 12/11/07 13/11/07 21/11/07 22/11/07 05/12/07 11/12/07 Bookings made 16/01/08 three months 17/01/08 in advance 22/01/08 qualify for a 24/01/08 10% discount.

Industrial Disablement Benefits Social Security Appeals (2 days) Maternity, Paternity & Adoption Benefits DLA & Attendance Allowance Challenging Decisions Appealing to the Social Security Commissioners Introduction to Social Security Law Incapacity Benefit - the descriptors in detail Habitual residence & the right to reside test Tax Credits - the tricky bits

Birmingham Birmingham Cardiff Narberth Leeds Birmingham Cardiff Birmingham Birmingham London

For enquiries and bookings please ring 0113 389 5504 or email adviser.training@citizensadvice.org.uk


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A day in the life… (Goodbye) Blue Monday. In the first of an occasional series looking at frequently asked questions, Kate Smith tackles the problems raised by Derek and his insufficient National Insurance record.

Derek comes to see you commencing work in April 2006. on a Monday morning in _ Derek paid class 1 NI November 2007. He has contributions from April to been refused incapacity October 2006 before reclaiming benefit (IB) as he has not JSA. paid sufficient National _ After discussing Derek's recent Insurance (NI) contributions work record you realise that in the previous three tax he would meet the contribution years. Is there anything he conditions if he made a claim can do to get IB? in 2008 but are concerned that he will have to break his period of incapacity to claim. FACTS _ Derek is currently receiving ADVICE income support and NI credits There are two contribution due to incapacity for work. “There are two _ Derek will move in with his conditions for IB, both of which contribution must be met: conditions for IB, partner, who works full time, in February 2008. _ You have paid class 1 or class 2 both of which _ Derek was unemployed and in NI contributions producing and must be met.” earnings factor of 25 times the receipt of Job Seekers Allowance lower earnings limit. The (JSA) for three years prior to Derek working paying NI for 26 wks

Derek unemployed receiving Class 1 NI credits

April 2003

April 2004

contributions must have been paid in one of the last three complete tax years before the benefit year in which the claim is made; and _ You have been paid or been credited with NI contributions producing and earnings factor of at least 50 times the lower earnings limit in each of the last two complete tax years. Derek's current claim for IB was made in the benefit year 2007 so he would have to have paid/received credits of NI in the relevant tax years which were 2005/06, 2004/05 and 2003/04. Derek met the second condition as he received a class 1 NI credit for each week he was in receipt of JSA. However, he had not paid any

April 2005

April 2006

Derek claims IB and refused as insufficient NI paid

October April 2007 2006

New claim for IB

January 2008


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“A claimant must satisfy the contribution conditions at the beginning of a period of incapacity for work�

NI in those years so was unable to satisfy the first condition that he had paid NI contributions producing an earnings factor of 25 times the lower earnings limit. Derek does not meet any of the conditions for relaxation of the first condition contained in reg.2B of the Social Security (IB) regulations 1994. Derek will satisfy the first condition in the new relevant benefit year beginning January 2008. At this point the relevant contribution years will be 2006/07 and 2005/06 and the NI contributions Derek paid in 2006 will be taken into account for IB purposes. A claimant must satisfy the contribution conditions at the beginning of a period of incapacity for work and will be deemed to continue to satisfy them throughout that period. Once a claim for IB is made the claimant has entered a period of incapacity for work which will continue until s/he becomes or, is found to be, capable of work. At first sight this suggests that Derek will have to break his period of incapacity for at least eight weeks. Fortunately, Schedule 3 paragraph 7 Social Security Contributions and Benefits Act 1992 allows a claimant who has been refused IB for failing to meet the contribution conditions to make a later claim for IB in a new benefit year and have the claim assessed as though the earlier claim had not been made. The claim Derek made in 2007 will be disregarded if he makes a new claim in the new benefit year of 2008 (beginning on the first Sunday in January). Providing he then meets both NI contribution

conditions he will be entitled to IB. Derek will begin to receive the short term lower rate of IB for the first 196 days of his new claim for IB. However, he will qualify for inclusion of the disability premium within meanstested benefits 52 weeks after his period of incapacity began in November 2007.

Kate Smith works for Citizens Advice Specialist Support and is a member of the Adviser editorial board.

CARERS ALLOWANCE GCSE examiner's earnings are self employed earnings CG/4139/2006

Commissioner Mesher, 1 June 2007 The claimant's CA award was superseded, disallowing entitlement for two fixed periods during which work had been undertaken as a GCSE examiner. The DM and Tribunal applied the employed earnings rules and the earnings exceeded the limit. The claimant appealed. HELD: Appeal allowed. Under REG 2(3) SS (CATEGORISATION OF EARNERS REGS 1978, a gainfully employed person responsible for the conduct or administration of any examination leading to a qualification is deemed to be selfemployed, where certain work is performed under a contract of less than twelve months. The type of work, listed in column (A) of Part II of SCH 1, includes work as an examiner, moderator, invigilator, or setting examination questions. Consequently, the claimant was deemed self-employed and, in accordance with REG 2(1) COMPUTATION OF EARNINGS REGS 1996, earnings should be averaged over a year, bringing her below the earnings limit for the periods concerned.


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DISABILITY LIVING ALLOWANCE Autistic child - different routes to higher rate mobility component CSDLA/202/2007

Commissioner Parker, 8 June 2007 The claimant was a three year old autistic child, with behavioural problems. She was awarded DLA highest rate care component only. An appeal was made to the Commissioners regarding eligibility for HR mobility

are relevant to whether there is severe impairment of intelligence and of social functioning. The claimant also has to satisfy the stringent behavioural criteria under regulation 12(6), the three provisions of which are cumulative.

solely by reference to the ability to transfer the fee simple. The claimant could, despite the leases, dispose of the fee simple.

HOUSING BENEFIT 'Owner' includes freeholder where long leases granted

CIS/647/2007

INCOME Overpaid WTC is income for means-tested benefits

Commissioner Jacobs, 10 July 2007 HMRC continued, for two months, CH/4373/2006 to make payments of WTC to the claimant after she had notified that Commissioner Turnball, her work had ended. The 7 June 2007 claimant's application for IS was The claimant owned the freehold refused as the income from WTC of a house converted into flats HELD: Appeal allowed and case meant that her income exceeded leased under 99 year agreements. remitted to a new tribunal. There the applicable amount. The One lease was owned by the were two possible routes to claimant's appeal was allowed on claimant's former partner who entitlement to HR mobility: virtual the grounds that WTC lost its rented the flat back to him. HB inability to walk and severe mental character as income once HMRC refused on the grounds that the impairment with severe decided that it had been overpaid. payments were made by an owner behavioural problems [under The SoS appealed. and excluded under REG 10(2)(c) SECTION 73(1)(c) and (3) & REG HB(GEN) REGS 1987. The claimant 12(5) and (6) of the REGS]. HELD: Appeal allowed. Decision The correct approach under route appealed. substituted that the claimant had 1, where behavioural problems excess income and was not HELD: Appeal dismissed. The affecting walking stem from entitled to IS from the date of Tribunal had correctly interpreted physical disability, is set out in REG 10(2)(c), any payments made claim. The Commissioner decided R(M)3/86. The tribunal erred in by the claimant were payments as that he was bound by LEEVES failing to give adequate v CAO [R(IS) 5/99] [Adviser 65] and an 'owner'. 'Owner' is defined by consideration to whether there it could not be distinguished. reference to the ability to dispose were sufficient refusals to walk, LEEVES decided that a student of the fee simple in the dwelling, and whether these refusals arose and not by reference to the ability grant was the claimant's income from physical disablement. Under unless and until he was under an to dispose of any long leasehold route 2 the Commissioner cited interest. The definitions in REG 2(1) undisputed and immediate R(DLA)1/00 [Adviser 72] and apply unless the context otherwise obligation to repay. The decision R(DLA) 7/02 for guidance. makes clear that the effect of a requires. Long leasehold interests A tribunal must first consider the demand for repayment is only are common, and REG 10(2)(a) claimant's likely IQ and then effective as regards income to be refers to payments under a 'long consider the evidence as a whole attributed to the future. The tenancy', defined by regulation in order to be satisfied that the demand and the obligation to 2(1) as a tenancy for a term of child has severe impairment both repay do not have retrospective years certain of more than 21 of intelligence and of social effect to remove the quality of years. The draftsman clearly had functioning. The intelligence score income from the payments already the possible existence of long is relevant but not conclusive, and made. The key date is the date of leases in mind, and yet the factors such as insight and sagacity definition of "owner" was framed the demand for repayment. It is


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irrelevant whether that date is before or after the DMs decision on the IS claim. JOBSEEKERS ALLOWANCE Human Rights Discrimination against female FT students CJSA/2663/2006

Commissioner Jupp, 14 June 2007 The claimant, a lone parent, FT student, claimed JSA during the summer vacation. The claim was refused under REG 15(a) of JSA REGS 1996, which states that fulltime students shall not be regarded as available for employment during summer vacations unless they have a partner who is also a FT student and they are responsible for a child or young person. Appeal made on the grounds that rule breached ARTICLE 14 of the ECHR (prohibiting discrimination), engaged with ARTICLE 1 of PROTOCOL 1 (protection of property).

student should be disregarded. COMMENT: This reading of REG 15 (a) may only apply to female, lone parent, full-time students. NATIONAL INSURANCE CONTRIBUTIONS Credits for incapacity - late claim

recent years, the delay was not reasonable given that claimant had been alerted in 1992 and 2003. OVERPAYMENTS S71(5A) requirement to revise or supersede Decision must pre-date recovery decision CPC/3743/2006

CIB/2445/2006

Commissioner Mesher, 12 July 2007 In 1989/90 claimant presented sick notes to DHSS who apparently advised he could not claim benefit due to capital. In 1992 he received notification showing nil NI contributions/credits for 1989/90. A pension forecast in 2003 indicated a shortfall in contributions for tax years 1996 to 2000. In May 2005 he claimed and was refused IB and credits back to 1989.

HELD: Appeal dismissed. REG 8B SS(CREDITS)REGS 1975 provides for NI credits in respect of days of HELD: Appeal allowed. Decision incapacity where a claim for credits substituted that REG 15(a) JSA is made before the end of the REGS 1996 is not to be applied benefit year following the year in insofar as it is incompatible with which entitlement arose. An the claimant's rights under the ECHR. The Commissioner held that extension of the time limit is allowed if reasonable in the REG 15 would adversely affect circumstances of the case. The more women than men, due to claim was refused and the the higher proportion of female FT students who are lone parents. claimant appealed. There was no error in application of REG 8B in a As confirmed by R(IS) 6/04 case of misdirection as any [Adviser 97], where subordinate legislation is incompatible with the extension of the time limit must be ECHR rights and the incompatibility reasonable given all the circumstances. Whatever the is not required by primary specific advice to claimant, the legislation, the Court should interpret it so as to be compatible. tribunal were entitled to reach the conclusion that the 16 year delay The Commissioner held that the reference in REG 15(a) to having a in claiming credits was not reasonable. In relation to more partner who is also a full-time

Commissioner Mesher 2 July 2007 The claimant appealed a decision that she had been overpaid PC from 2003. She did not disclose a property she owned and subsequently transferred to her son on 4/4/05. A decision was made superseding entitlement on the grounds that the claimant had deprived herself of capital from 4/4/05. There was no effective decision revising entitlement from the date of claim at the date of the recoverability decision. Such a decision was made after the appeal. The claimant appealed the Tribunal decision that the overpayment was recoverable. HELD: Appeal allowed. Decision set aside and remitted for rehearing. The appeal raised a question about how SECTION 71(5A) SSAA 1992 operates in conjunction with SECTION 12(8)(b) of the SSA 1998. SECTION 71(5A) makes it a condition of recoverability that the decision authorising payment of benefit has been revised or superseded. It would breach SECTION 12(8)(b) if the decision to make good a deficiency was made before the hearing of the appeal. It is necessary for the SoS to have all his ducks in a row, in terms of proper decisions altering entitlement for all parts of the


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period of the alleged overpayment, at the date on which the overpayment recoverability decision is made. However, where there is a decision that complies with SECTION 71(5A) for part of the overpaid period, that decision is to be regarded as effective in relation to the amount overpaid in that period. The ineffective part can clearly be severed from the effective part. PERSON CAPABILITY ASSESSMENT Continence Partial loss of control if not 'de minimis' CIB/3339/2006

Commissioner Rowland, 31 May 2007 The claimant appealed against a decision that awarded nil points under activity 13. The Tribunal found that he was able to control the urge to defecate for sufficient time to locate a toilet. The claimant appealed. HELD: Appeal allowed. Decision set aside and case remitted for rehearing by a differently constituted tribunal. The Tribunal erred in failing to make any finding on whether the claimant, as he had maintained, did occasionally lose control. A claimant who merely feels an urgent desire to go to the toilet and is able to control his bowels for long enough to get there, is not entitled to any points under activity 13. However, if he is not always able to get to the toilet in time, he 'loses control' on those occasions when he fails. Applying a purposive construction to this

legislation the Commissioner decided that it is clear that an occasional partial loss of control is sufficient to meet the terms of descriptor 13(e) unless the extent of the loss of control can be said to be de minimis in its effects.

not necessitate detailed consideration of probable content of a Jobseekers Agreement. Given the type of work for which he would be required to be available, there was no substantial risk to self or others.

Exceptional circumstances - correct test of 'substantial risk'

Exceptional Circumstances Assessing "substantial risk to health"

CIB/143/2007

CIB/360/2007

Commissioner Williams, 2 July 2007 The claimant appealed a PCA decision, one ground of appeal being that the exceptional circumstances provision in REG 27 SS(IFW)(GEN) REGS 1995 applied. The Tribunal referred to CIB/26/2004 in that the risk must be assessed in relation to the type of work for which the claimant would otherwise be required to be available. The Tribunal found no evidence of substantial risk if the claimant was found capable of work. The claimant appealed to Commissioners.

Deputy Commissioner Paines, 15 June 2007 The claimant had been in receipt of IB since 1999 when he failed a PCA in 2004. A psychiatrist had stated that the claimant suffered from chronic depression and was totally unfit for work. On appeal to the Commissioner, the question of whether REG 27(b) SS (IFW) (GEN) REGS 1995 applied arose.

HELD: Appeal allowed. Decision set aside and case remitted to a new tribunal. The Commissioner directed that the tribunal should consider the necessary degree of risk to health, under REG 27(b). HELD: Appeal allowed. Decision set The starting point is to identify a aside and substituted with a disease or disablement before decision to the same effect. In considering the nature of any adopting the passage from health risks posed by that disease CIB/26/2004 the tribunal failed to or disablement in the context of consider the range of case law and workplaces that the claimant also failed to explain how their might find himself in, with a view interpretation of the substantial to answering the question whether risk test had been applied to the any such risk is substantial. claimant. The issue of incapacity under the PCA must be applied PRACTICE AND PROCEDURE before considering the exceptions S12(8)(b) SSA 1998 under REG 27. Any substantial risk Retrospective variation of to self or others must be linked to Jobseeker's agreement the finding of capacity to work. CJSA/2472/2005 Whilst consideration should be given to the work context, given Commissioner Mesher, skills and experience etc, this does 19 March 2007


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The claimant sought to vary a Job Seekers agreement. A DM indicated that a new varied agreement would be prepared but did not arrange for the claimant to sign it. Decisions were then made superseding and removing entitlement to JSA as the claimant was not complying with the original agreement and varying the agreement on terms the claimant did not agree. A Tribunal dismissed appeals against both decisions. The claimant appealed.

Fair hearing Whether claimant had waived right to complain

will always be to refer the case to a differently constituted tribunal

CSIB/85/2007

RIGHT TO RESIDE Economically inactive EEA nationals

Commissioner Parker, 8 June 2007 The claimant's appeal against a PCA decision was disallowed at a paper hearing but the decision was subsequently set aside. Although not required by REG 57 SS&CS (D&A) REGS, a direction was made for a re-hearing before a differently constituted tribunal. However, the new Tribunal was chaired by the HELD: Appeals allowed. Decision same person who had heard the substituted adjourning the first first appeal. The claimant appealed appeal to allow time for the to the commissioner, arguing that claimant to sign a varied she had not been given a fair agreement. Decision substituted on hearing. the second appeal altering the terms of the agreement and HELD: Appeal allowed. Decision set directing that the claimant be aside and case remitted for regiven the opportunity to sign. If hearing. The record of proceedings signed, the new agreement would indicated that the claimant had replace the first and there would opted to proceed when informed be no grounds to supersede the that the chair had heard the JSA decision. Although SECTION previous appeal. Had this been an 12(8)(b) SSA 1998 prevents a effective waiver, the claimant Tribunal taking into account would lose the right to challenge circumstances not obtaining at the the tribunal decision on the date of the decision appealed, ground of bias. Reviewing CJSA/2375/2000 found that a established case law on waiver, the tribunal may take account of any Commissioner found that the factor known to it that relates to a claimant had not made an past period that was relevant to effective waiver. The record of the decision, even if the position at proceedings failed to show the date of the hearing is different whether the claimant's decision from that at the date of the was made freely with sufficient decision. If the claimant signs a appreciation of the import of her varied agreement the existing choices. The Commissioner agreement would be replaced concluded that there had been a retrospectively thereby altering the real possibility of subconscious bias circumstances at the date of in this case. As a matter of good appeal and removing the basis for practice when re-hearing appeals the first decision removing and drawing support from entitlement. CDLA/1312/2006, unless there is a positive reason for referring to the same tribunal, the safest option

ABDIRAHMAN v SoS for Work & Pensions [2007] EWCA Civ 657

Court of Appeal, 5 July 2007 This was the claimants' appeal against the Tribunal of Commissioners' decision CIS/3573/2005 (heard with CH/2484/2005 & CPC/2920/2005), in which the Commissioners held that the claimants, as economically inactive EEA nationals failed to satisfy the Right to Reside test. This was on the grounds that they were not "qualified persons" under REG 5 of the IMM(EEA) REGS 2000. The claimants were born in Somalia and were nationals of Sweden and Norway respectively and had legally entered the UK as EEA nationals. HELD: Appeals dismissed. The Court upheld the Tribunal of Commissioners' decision and cited Directive 90/363/EEC in that "beneficiaries of the right of residence must not become an unreasonable burden on the public finances of the host member state." The judgment differentiates between Baumbast, Trojani et al, and confirms that they cannot be helped by European law, in that the appellants were not economically active at the material time.


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Secret Commissions - backhanders, bungs and brokers For a number of years it has been suspected that in the sometimes murky world of sub-prime lending, many brokers dealing with non-status borrowers have not only received fees from their borrower clients but also secret, undisclosed fees or commissions from lenders to whom they introduce their clients. Guy Skipwith investigates.

“At least two cases have been decided in the borrowers' favour in the county court.”

The 'secret commissions' in the title of this article are sometimes known as 'finders' or 'procuration' fees. The brokers concerned may be tied to a particular lender by a secret 'right of first refusal' agreement (ROFRA) with a lender under which all prospective borrowers are referred first to that lender or may have no direct connection or arrangement with any particular lender. At least two cases involving secret commissions and sub-prime lending have been decided in the borrowers' favour in the county court. These are City Mortgage Corporation v Ferrier-Smith and Capital Credit ltd (third party)1 and Rozak v Capital Credit Limited2. However Wilson and another v Hurstanger Ltd3 is the first case on the issue to come before the higher courts. The relevant area of law is that of agency with, in loan cases, the borrower being the 'principal', the broker being the 'agent' and the lender the 'other party'.

FACTS OF THE CASE In early 2003 the defendant borrowers applied for a loan of £8,000 from Hurstanger through a local broker. The purpose of the loan was to repay mortgage arrears of some £5,500, to pay their broker's fee of £1,000 and to provide them with some cash. On receipt of the loan application from the broker, Hurstanger sent the borrowers a number of documents. These included a document that was headed: 'Please read this communication carefully. By signing same where indicated you confirmed that you have studied and understood the contents, prior to our proceeding further with your application for a loan.' The document, which the borrowers signed, included a number of statements designed to show that they understood what they were letting themselves in for, including a clause which stated: '(d) The broker who assisted us in making this loan application, is acting as our agent and is not tied in any way whatsoever to the

company. We have not been persuaded, pressured or induced in any way to accept this loan or to borrow more money than we require or can comfortably afford to repay together with interest. In certain circumstances this company does pay commission to brokers/agents. In so far as it is possible to do so; it endeavours to ensure that the Broker conducts their business activities in a fair and proper manner. We will pay monies to your broker strictly in accordance with your signed authority by deduction from this advance; this is not a condition of the loan.' On completion of the agreement, £1,000 was deducted from the loan and paid to the broker on the borrowers' authority and the broker also received a commission of £240 from Hurstanger. COUNTY COURT The law At first instance in Coventry County Court, Mr Recorder Michael Douglas QC proceeded on


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the basis that it was common ground that where a lender makes a payment to the agent of a borrower with whom it is dealing, knowing of that agency, and fails to disclose that it is making the payment (i.e. the payment is secret) then the borrower is entitled to rescind, that is annul or cancel, the contract.

and of the nature and extent of (the broker's) interest'5, and where this consent is not obtained there is a breach by the broker of its fiduciary duty to the borrower, with the lender who pays the commission an accessory to that breach. Given that informed consent must be obtained by a broker, it is then a matter of fact to be decided The issue and the decision in each case whether there was At issue in the case was whether sufficient disclosure by the broker the £240 commission paid by or the lender. “The secret Hurstanger to the broker was The Court then considered commission secret or not. It was held that whether the fiduciary relationship is a form of commission was not secret between a principal (borrower) and bribe and is because clause (d) made it the agent (broker) requires the treated as a sufficiently clear to the borrowers disclosure of the amount of the form of fraud.” that the broker might receive a commission paid by the lender to commission from the lender, with the broker. It held that where the borrowers' consent inferred by borrowers know that a the fact that they proceeded to commission is to be paid by execute the agreement without lenders to their brokers, it is not objection. This decision, together generally necessary, where the with others relating to whether the payment of such commissions is necessary prescribed terms were common place in the type of included in the agreement, were business involved, for borrowers to appealed to the Court of Appeal. know the precise details of the amount of the commission. COURT OF APPEAL However, where the payment of commissions is not common The law place in the type of business The Court of Appeal stated that concerned, the borrower's the borrowers retained the broker knowledge may have to be more to act as their agent for a specific, with yet more specific substantial fee and that there was requirements where non-status a fiduciary relationship4 between lending is involved6. them, requiring the broker to act loyally for his borrower clients and Non-status lending not to put himself into a position In respect of non-status lending, where a conflict of interest is “Brokers the Court emphasised the created by accepting a commission importance of the Office of Fair can only from a lender. legitimately Trading Non-status Lending Brokers can only legitimately receive Guidelines7 and stated that: receive commissions from lenders commissions 'Borrowers like the defendants if borrowers have consented to from lenders coming to the non-status lending their doing so 'with full knowledge market are likely to be vulnerable if borrowers have consented.” of all the material circumstances and unsophisticated. A statement

of the amount which their broker is to receive from their lender is, I think, necessary to bring home to such borrowers the potential conflict of interest. There is nothing about any of this which should come as a surprise to any lender working in the non-status lending market.'8 If there has been no disclosure, the broker will have received a secret commission and this is a blatant breach of the broker's fiduciary duty. The secret commission is considered to be a form of bribe and is treated by the legal authorities as a special form of fraud where it is unnecessary to prove motive, inducement or loss. A 'halfway house' Having set out the law in situations where there is no disclosure of a secret commission, the Court went on to consider whether there is a 'half way house' position where there is sufficient disclosure to defeat any allegations of secrecy but, nevertheless, the borrower's informed consent has not been obtained, concluding that 'logically, I can see no objection to this'9. Therefore, where disclosure has been partial or inadequate but sufficient to negate secrecy, the transaction is not tainted with fraud although there is still a breach of fiduciary duty. THE DECISION Secrecy Upholding the county court decision, the Court of Appeal held that the commission paid by the lender to the broker was not secret because the agreement, at clause (d), stated that a commission might be paid to the broker by the


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_ They can recover damages for fraud to the extent of any actual loss incurred by entering the fraudulent transaction _ They can avoid the agreement by electing to rescind it providing that 'counter-restitution' can be made, i.e. the borrower can repay the principal sum borrowed. Where a commission is found Informed consent The Court held that the borrowers not to be secret but the borrower's should have been clearly informed informed consent has not been that a commission was to be paid obtained, borrowers 'are not entitled to deploy the full armoury and given details of the amount of remedies which would have involved, and this should have been available if this had been a been done in a way that made it clear to them that they were being true secret commission case.'12 asked to consent to it. Also, the In cases of breach of fiduciary borrowers should have received duty as opposed to fraud, the the warning recommended by the remedy of rescission is not a right OFT in paragraph 20 of the Nonbut is at the discretion of the status Lending Guidelines10 to the Court. Johnson v E.B.S. Pensioner Trustees Limited13 was cited where effect that a payment to the broker by the lender might mean a solicitor with a conflict of interest that the broker was not in a was ordered to repay to his client position to give unbiased advice. the fee that the client had paid for The Court found, therefore, his services but rescission was that the case fell into the 'half way refused. house' category and held that: Likewise, the Court held that 'The claimant (lender) did not pay the broker could be made to repay the broker a secret commission but to the borrowers the £240 procured the broker's breach of commission that was paid to it by fiduciary duty by failing to obtain the lender. Alternatively, the lender, the defendants' informed consent which procured the broker's to the broker acting in the way breach of fiduciary breach, could that he did.'11 be made to compensate the borrowers for the amount of the The borrowers' remedies commission. Where a commission is found to The Court refused the have been secret, with the borrowers the remedy of agreement tainted by fraud as a rescission, stating that they would consequence, a borrower has a be fully compensated by an award range of remedies against both the of £240 plus simple interest at the broker (the recipient of the bribe) contractual rate from the date the and the lender (the payer of the agreement was executed: 'To bribe): rescind the transaction altogether _ They can recover the amount of would be unfair and the bribe disproportionate … irrespective of lender. The Court found that this was sufficient to negate secrecy: 'If you tell someone that something may happen and it does, I do not think that the person you told can claim that what happened was a secret. The secret was out when he was told that it might happen'.

“Borrowers have a range of remedies including the right to rescind the agreement.”

whether the defendants would be able to make counter-restitution.'14 CONCLUSIONS Wilson v Hurstanger makes it clear that there are two separate elements to consider where a commission is paid to a borrower's broker by a sub-prime lender: Was the commission secret? Where it is not disclosed to borrowers that their brokers may, or will, be paid a commission, the commission is secret and is treated by the law as a bribe, tainting the whole agreement with fraud. In this situation borrowers have a range of remedies, including the right to rescind the agreement and avoid the contract. However, this right is dependant on 'counterrestitution', i.e. the borrowers being able to repay the balance of principal sum that was borrowed. In calculating this, all payments that have already been made should be deemed to have been paid towards that principal. Where there is still a balance owing, borrowers may wish to consider whether they should try to borrow the money to repay that balance, although this may be problematic in multiple debt situations. Where 'counter-restitution' cannot be made by a borrower, the court will not order the contract to be rescinded. Was the borrower's informed consent obtained? Where a commission is not secret, it is still nevertheless necessary for a borrower to give informed consent to the broker receiving the


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“Brokers and lenders should be asked if any fees or commissions were paid.”

commission from the lender. In the case of sub-prime lending, before informed consent can be given, it is necessary for the amount of the commission, or the way it is to be calculated, to be disclosed. Significant weight must be given to the OFT's Non-status Lending Guidelines15 on the subject, and lenders and brokers who do not comply with them do so at the risk of being found to have failed in their duty of disclosure. Where a commission is not secret but there has been insufficient disclosure for there to have been informed consent by a borrower, the case falls into a 'half way house' situation which affects the remedies available to the borrower. Rescission is at the discretion of the court and the most appropriate remedy will usually be to compensate the borrower up to the amount of the commission plus simple interest at the contractual rate. PRACTICALITIES Where borrowers have accessed sub-prime secured lending via brokers, it is not unreasonable to suspect that brokers may have received commissions from the lenders concerned in addition to the fees paid by their borrower clients.

Both brokers and lenders should be asked formally whether any fees or commissions were paid by the lender to the broker. Lenders should be asked to provide copies of their 'underwriting sheets', their 'published lending criteria' and any 'right of first refusal' agreements with brokers. Agreements should be checked to see if they say anything about commissions payable by lenders to brokers and borrowers should be asked if such commissions were ever mentioned. Where it is suspected that a secret commission has been paid or it can be ascertained from the documentation that there has been insufficient disclosure, specialist advice should be sought with a view to making a formal complaint to the creditor and broker. The Financial Ombudsman Service may have jurisdiction to deal with a complaint. If legal action is being considered, clients should be referred for legal advice although this will be problematic where clients are not eligible for legal aid or do not have legal expenses insurance, e.g. as part of a household insurance policy. The National Association of Mortgage Victims (NAMV) may also be able to assist16.

FOOTNOTES 1. August 1999, Haverfordwest County Court, HHJ Michael Evans QC, unreported, which involved a secret commission of £8,200 2. 21 March 2000, Basingstoke County Court, HHJ Anthony Thompson QC, unreported, which involved a secret commission of £6,849 3. [2007] EWCA 299 4. A relationship founded on trust and confidence that requires agents to act in the sole interest of their principals and not put themselves in a position where their interests conflict, or may conflict, with the interests of their principles 5. Paragraph 35 of the CA judgment, quoting Bowstead and Reynolds on Agency, Article 44 [6-055], 18th Edition, Sweet and Maxwell 6. Paragraph 37 quoting Bowstead [6-084] 7. Non-status Lending Guidelines, paragraphs 15,16 and 20: see http://tinyurl.com/ywwanv 8. Paragraphs 37 and 38 9. Paragraph 40 10. See endnote 5 11. Paragraph 46 12. Paragraph 47 13. [2002] Lloyds Reps 309 14. Paragraph 51 15. See endnote 5 16. www.namv.org.uk

Guy Skipwith is a member of the Adviser Editorial Board and works at Citizens Advice Specialist Support Wolverhampton.

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Consultancy corner 1 How will the courts deal with undocumented catalogue agreements entered on or after 6th April 2007 following the abolition of irredeemable unenforceability by the Consumer Credit Act 2006? Guy Skipwith considers a recent query to Citizens Advice specialist support service and provides some helpful advice.

“By failing to enter properly executed agreements, catalogue companies are deliberately flouting the requirements of the CCA 1974 .�

Q. I have a new client who has an unsigned catalogue agreement that was made in June 2007 and I know that the CCA 2006 has abolished irredeemable unenforceability in respect of agreements made on or after 6th April 2007. If the catalogue company issues a claim against my client, do they have any defence?

considers it just to do so having regard to: _ The prejudice caused to any person by the contravention in question and the degree of culpability for it _ Its powers under s135 to impose conditions on, or suspend, any order it makes, and its powers under s136 to vary or amend an agreement. Also, under s127(2) the court can, when making an enforcement A. You are correct to say that order, if it considers just to do so: improperly executed CCA _ Reduce or discharge any sum agreements made on or after 6th payable by debtors or hirers to April 2007 cannot be irredeemably compensate them for any unenforceable. Instead, they are prejudice they have suffered. enforceable only on an order of This means the court could the court1. allow the agreement to be As your client's agreement is enforced subject to conditions, unsigned and undocumented, it is allow it to be enforced improperly executed and the unconditionally or refuse to allow it catalogue company would have to to be enforced at all. apply to the court for an Therefore, if the catalogue enforcement order. company issues a claim and your The provisions relating to these client challenges the enforceability discretionary enforcement orders of the agreement, in considering can be found in s127. Section whether to make an enforcement 127(1)(i)and (ii) state the court shall order, the court must look at the dismiss an application for an prejudice caused to her and the enforcement order if, but only if, it blame that should be attributed to

the company for failing to ensure that it was properly executed. In cases where clients have received all the goods ordered and have no complaint about them, it is difficult to see what obvious prejudice they have suffered. However, catalogue companies, by failing to enter properly executed agreements, are deliberately flouting the requirements of the CCA 1974 and the regulations made under it2. This disregard is illustrated by the fact that, as part of a government consultation3, the home shopping industry requested that the law be changed to allow unsigned catalogue agreements to be enforced. The DTI declined this request, stating that there was 'clear evidence' of some consumers suffering detriment due to confusion about the debt owed and the terms and conditions on which credit has been provided, which can also reflect unfairly on credit worthiness4.' It is difficult to predict how the court would balance the apparent lack of prejudice to your client and the serious nature of the catalogue


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“The debtor had been prejudiced by being deprived of the opportunity to shop around for a lower rate.”

company's culpability. The majority of the few reported cases appear to focus exclusively on the prejudice caused to the debtor. For example, in Nissan Finance UK Ltd v Lockhart5 the court allowed a hire agreement 'full of errors' to be enforced unconditionally because the hirer could show no prejudice and admitted that he would have entered the agreement anyway if it had been properly executed. No consideration seems to have been given to the culpability of the creditor. There are a number of cases where prejudice has been shown and the court has only granted an enforcement order on conditions that the debtor or hirer is compensated for the prejudice suffered. For example, in Wilkes v Nation Guardian Mortgage Corporation6 the creditor failed to provide the debtor with an advance copy of the agreement, as required by s58. The court held that the debtor had been prejudiced by being deprived of the opportunity to 'shop around' for a loan at a lower rate, and an enforcement order was made on the condition that the interest payable was reduced by 40%, a reduction of £3,200. Another example is Wilson v Hurstanger7 where the agreement was improperly executed because it failed to give sufficient details of how deferred legal fees of £295, plus interest, were be repaid8. This prejudiced the debtor as it failed to tell him the amount to be repaid in respect of the fees. The court allowed the agreement to be enforced on the condition that the fees were written off. It is hoped that a future article

will provide a more detailed analysis of these and similar cases9. So, given the apparent lack of prejudice caused to debtors by the failure of catalogue companies to enter properly executed agreements, it may be difficult to persuade courts to refuse an enforcement order for undocumented catalogue agreements entered on or after 6th April 2007. Advisers will need to emphasise the blatant disregard shown for the formal requirements of the CCA, put forward the 'prejudice' points made by the DTI and attempt to persuade courts that the culpability of the creditor is such that no enforcement order should be made. Given these difficulties, it is important to remember that where a catalogue company has failed to comply with a request made under s78(1) for a copy agreement within 12 working days10, the agreement is unenforceable unless and until the copy has been provided11 and this remains the case following the abolition of irredeemable unenforceability. Although it is only necessary, following a s78(1) request, for a creditor to provide a 'true copy' that does not have to show the debtor's signature12, many catalogue companies provide copies of blank pro-forma agreements. This does not comply with a request under s78 because, among other things, it does not contain the financial particulars of the client's agreement. Therefore, if your client has made a request for a copy agreement under s78(1) and has been provided with a blank proforma or no copy at all, the agreement is unenforceable and

the court has no discretion to allow it to be enforced. This provides a defence to any claim issued by the catalogue company in addition to any defence based on the agreement's improper execution. FOOTNOTES 1. Section 65(1) CCA 1974 2. The Consumer Credit (Agreements) Regulations 1983, SI 1983/1553, as amended 3. DTI consultation Paper 'Clarification and simplification of UK Consumer Credit Law' (1998) 4. Consumer Law Today, April 1999 5. [1993] C.C.L.R. 39 (CA) 6. [1993] C.C.L.R 1; Adviser 30 7. [2007] EWCA Civ 299; Adviser 122 8. See para 13 of Schedule 1 to the Agreements Regulations 1983 (ibid endnote 2) 9. For example: London North Securities Ltd v Meadows [2005] EWCA Civ 956; (failure of creditor to sign agreement), Hatfield v Hiscock [1998] C.C.L.R. 68 (incorrect CCA heading and no statement of rights), Rank Xerox v Hepple [1994] C.C.L.R. 1. (multiple defects including failure to state liability following default and repossession of hired photocopier) and PB Leasing Ltd v Patel [1995] C.C.L.R. 82 (failure to provide copy of unexecuted agreement) 10. An offence is committed if non-compliance continues for one month (s78(6)(b)) 11. Section 78(6)(a) CCA 74 12. See para of the 3 Consumer Credit (Cancellation Notices and Copies of Documents) Regulations 1983, SI 1983/1557, as amended

Guy Skipwith is a member of the Adviser Editorial Board and works for the Citizens Advice Specialist Support Money Advice Team.


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Consultancy corner 2 Are so-called 'hybrid orders' now a thing of the past? Peter Madge looks at a recent query to Citizens Advice Specialist Support Service.

“The district judge was carrying out a determination without a hearing.”

judge was carrying out a Q. Can you give me an update please on where we determination without a hearing1. are with county court Paragraphs 1 and 2 of the N24 'hybrid orders'? merely confirmed the effect of that judgment and did not create any A. So-called 'hybrid orders' are a new rights for the creditor or take creation of the district judges at away any of the debtor's rights. Northampton County Court to The making of a charging order whom cases were referred by the does not prevent a creditor Bulk Centre. These were cases resorting to other enforcement where the creditor had rejected the methods2 and the purpose of client's offer on form N9A and paragraph 3 was to prevent the asked the court to make a creditor taking any enforcement forthwith judgment expressly for action other than the charging the purpose of obtaining a order. It seems to have been an charging order. Where the district order made under s.71(2) County judge agreed to this, a judgment Courts Act 1984 staying or was made on form N24 stating: suspending the judgment, rather 1. Judgment against defendant than an instalment order made payable forthwith under s.71(1)3. Because the order 2. The claimant may apply for a had been made without a hearing, charging order at once paragraph 4 was intended to 3. Apart from a charging order, all comply with the requirement to other execution is stayed as long as include notice of the parties' right the defendant pays £x per month to challenge it.4 [as offered on N9A] For the above reasons, it was 4. Any party affected by this order not in a client's interests to may apply within 7 days after challenge paragraphs 2 and 3 of service to vary, amend or set it the N24. The paragraph that aside. needed to be challenged was Procedurally, what was paragraph 1, by requesting a happening was that the district re-determination under CPR

r.14.13(1)(b) within the 14-day period prescribed by r.14.13(2). Confusion was created in the minds of advisers by the fact that: _ the prescribed period for requesting a re-determination is 14 days, but the N24 only allowed 7 days; and _ the N24 appeared to contain an order for payment by instalments. Because of the conflicting information, it was unclear what, if any action was required and, if so, within what time-scale. Indeed, some clients who applied for re-determination within the 14-day period but after the 7-day period were told they were out of time and had their applications rejected. The prescribed form of judgment on determination without a hearing is form N30(2). With the hybrid order, the judgment was not being issued in form N30(2) but only on an N24, which did not contain any information about applying for re-determination. This was almost certainly a breach of the rules as, although the court is allowed to vary a prescribed form to meet the


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“The district judges decided that hybrid orders did not, after all, comply with the Civil Procedure Rules.”

circumstances of a particular case, the court is not allowed to vary a form so as to leave out any information which the form gives to the recipient5. When hybrid orders were challenged on the ground that the court had no jurisdiction to make an order in that form, Northampton replied that defendants could apply for a New Order [sic] at any time and so there was no need to put that in the order. At that stage, the court said it could not change the form of an N24 order, but, about six months later, para 4 was changed to provide for a 14-day period, but there was still no information provided about the right to request a re-determination. However, in January of this year, the district judges decided that hybrid orders did not, after all, comply with the Civil Procedure Rules and that, where a creditor rejects a client's offer of payment because they want a charging order, these should be treated as requests for determination and processed accordingly. In theory, hybrid orders should now be a part of money advice history. But, advisers may still come across a hybrid order made in another county court. Given the provisions of CPR r.3.10 (procedural error does not invalidate any step taken in the proceedings unless the court so orders), both the judgment and any charging order made on the basis of it will be valid unless the client successfully challenges them. This will have to be by way of an application to set aside the judgment on the basis that it is an order made without jurisdiction (i.e, an invalid order) so that the enforcement action also ceases to

have effect6. The court's authority to make such an order is CPR r.3.2(m) ('take any other step or make any other order for the purpose of managing the case or furthering the overriding objective'). Note, that a hybrid order made at a hearing will not transgress the CPR and so the above arguments will not be applicable. Further information can also be found in the article 'Charging on' that appeared in Adviser 115. FOOTNOTES 1. 2. 3. 4. 5. 6.

CPR rr.14.10(4) & 14.12(1) CPR r.70.2(2) See Q&A in Quarterly Account 76. CPR rr.3.3(5) & (6); r.23.10) CPR rr.4.1(2) & (3) and PD 4 para 1.2 CPR r.70.6

Peter Madge works for the Citizens Advice Specialist Support Money Advice team.

INSOLVENCY Transaction at undervalue Exceptional circumstances justified no order Singla v Brown and Malden-Browne

Chancery Division, 1 March 2007 Mrs M-B had occupied a property as a secure tenant since 1981. She started a relationship with B and they had two children together, born in 1993 and 2001. In May 1998, B moved into the property with M-B, after suffering a serious motorcycle accident. In September 1998, of the owner of the freehold, M-B bought the property at a substantial discount of £130,000. M-B provided the deposit and paid other expenses. After the purchase, M-B paid all the outgoings on the property, including the mortgage repayments, as B was unable to work. The property was put in both of their names, to hold as beneficial joint tenants because the mortgage lender insisted that there be a joint mortgage. Subsequently, M-B was advised that the property should be transferred to tenants in common to give effect to M-B and B's intention when purchasing the property that M would be the sole owner. Documents were signed severing the joint tenancy and indicating that M-B was entitled to a 99% share and B to a 1% share. Subsequently, B fell into debt and was declared bankrupt. B's trustee in bankruptcy, S, applied for the severance of the beneficial joint tenancy to be set aside as a transaction at undervalue (SECTION 339 INSOLVENCY ACT 1986). S argued there had been no consideration for the transfer. M-B argued that it was always the


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intention that B should only have a nominal interest in the house and the notice of severance simply gave effect to that intention.

then a series of inconclusive applications, culminating in 2002 when AN renewed the application for a warrant for possession. M did not dispute the existence or validity HELD: Application dismissed. Even of the 1991 order, but disputed the arrears and the court ordered though the severance did reflect an account to be taken. Further M-B and B's original intention in proceedings took place over the buying the property, it was a next few years until 2005 when M transaction for no consideration and, therefore, fell within SECTION appealed the validity of the 1991 possession order on the ground 339. However, the court had discretion whether or not to make that it did not bear the name of the judge who made it and had an order. In this case, it was clear not been sealed by the court. The that B had not contributed anything to the capital cost of the judge rejected the appeal on the basis that it was out of time. house or to the outgoings in the M appealed. years immediately following the purchase. M had a right to acquire the property at a discount because HELD: Appeal dismissed. It would be an abuse of process for the of her previous secure tenancy. B had received a windfall which had court to find that the order was in never been intended. If it had been fact invalid. Even if there been evidence supporting M's made clear at the time of the purchase that M-B was to hold the contention, it was far too late to entire beneficial interest, SECTION challenge the order. Both parties 339 would not have applied at all. had proceeded on the basis that the order was valid and M had This was an exceptional case sought relief on that basis. where it would be just to make no order. SOURCE: [2007] EWCA Civ 138 SOURCE: [2007] EWHC 405 PRACTICE AND PROCEDURE Alternative dispute POSSESSION resolution Suspended possession Stay of proceedings Validity of order challenged after 15 years Derbyshire Home Loans v Keaney Abbey National v Miller

Court of Appeal, 8 February 2007 Ms M fell into arrears on her mortgage. Possession proceedings were brought in March 1990. On 5 November 1991 a suspended possession order was made for payment of the current payments plus £175 per month off the arrears. In 1994 AN applied for a warrant for possession. There was

proceedings. At the date of hearing, the outstanding balance was about £269,000 and the arrears were £7,144. The property was estimated to be worth £300,000. DECISION: Proceedings stayed for two months for K to correspond with the FSA and, if appropriate, to make a complaint to the FOS in view of D's failure to respond to K's proposals. The deputy district judge relied on RULE 26.4(2)(b) CPR: 'Where the court, of its own initiative, considers that such a stay would be appropriate, the court will direct that the proceedings ... be stayed for such specified period as it considers appropriate'. D was granted permission to appeal but the claim was subsequently compromised. SOURCE: Legal Action, April 2007

COMMENT: This is a potentially useful decision for those cases where proceedings are issued before a complaint can be made to the FOS or while the FOS is actually considering a complaint. The FOS is a form of alternative dispute resolution (ADR). PARA 4.7 PRE-ACTION PROTOCOLS PD states that: 'The courts take the view that litigation should be a last resort and that claims should not be issued prematurely when a Bristol County Court, settlement is still actively being 8 January 2007 K took out a mortgage in February explored'. RULE 3.1(4) CPR allows the court to take account whether 2006 which was subsequently transferred to D. K's self-employed or not a party has complied with business failed in November 2006. any relevant pre-action protocol In June and December 2006 K had when giving directions. made proposals to D to sell the property and make reduced payments but had received no response. D issued possession


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Assessing disposable income for public funding Net rent payable not actual rent paid

enabled the LSC to have regard only to what is actually paid in determining disposable income. It said that would be tantamount R (on the application of Southwark Law to rewriting the regulation so that Centre) v Legal Services Commission it applied only to rent paid. The LSC had misconstrued the Administrative Court, 20 July 2007 regulation and, therefore, its L was a secure tenant. L got into decision was flawed. L had rent arrears and a suspended become a tolerated trespasser as a possession order was made. result of the possession order L failed to comply with its terms against her. A trespasser cannot and a possession warrant was due pay 'rent' as this presupposes to be executed. L completed the some sort of tenancy. Nevertheless, LSC's means-assessment form as what a person has to pay in order part of an application for a to be able to live in premises certificate of public funding. The should, prima facie, be taken into COMMUNITY LEGAL SERVICE account in coming to a decision on (FINANCIAL) REGS 2000 (as her/his disposable income. Sums amended) make provision for equivalent to rent and arrears means-assessment of LSC public should be taken into account. The funding certificates. Under REG 24, court quashed the LSC's decision in calculating disposable income, and ordered it to reconsider the the net rent payable by the person means-assessment in accordance concerned, or such part of it as is with the judgment. reasonable in the circumstances, shall be deducted. The LSC argued SOURCE: [2007] EWHC 1715 they had discretion, enabling them (Admin) to allow against gross income only such part of the rent as had been paid during the relevant period. The LSC, therefore, deducted the rent actually paid from L's gross rent figure and calculated that L's disposable income was too much to entitle her to public funding. SLC applied for judicial review, arguing that the regulations indicate that liability for net rent rather than the amount actually paid is relevant for the purpose of calculating disposable income. HELD: Application granted. The court noted that the word 'payable' is deliberately used in REG 24. It refused to accept that the words 'or such part of it as is reasonable in the circumstances'

CONSUMER

CONTRACT Hire agreement Early termination penalty Volkswagen Financial Services v Ramage

Cambridge County Court, 9 May 2007 R fell into arrears during year two of a three year agreement. V repossessed the car. The agreement stated that R was liable for the total 3-year rental less the rentals paid with a 4% rebate on future rentals. V sought a money judgement on that basis. R argued this was a penalty and unenforceable because it took no account of when V got the car back. V got accelerated payment of the future rentals subject only to a small rebate and could still re-sell or lease the car. The district judge disagreed with R and also placed some weight on R being an intelligent person who had freely entered into the agreement. R appealed. HELD: Appeal allowed. The term did not provide for a genuine estimate of loss and was, therefore, a penalty. The term provided only one formula for calculating loss which ignored the variable value of the car depending on when it was recovered. A clause could not be a genuine pre-estimate of loss in the absence of evidence that V had calculated the loss. Finally, whether a term is a penalty can not be determined on the basis of whether or not the hirer was a vulnerable person. SOURCE: Wragge & Co Briefing Note, July 2007


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No place like home There are currently 80,762 people in custody in British prisons1 which have room for 83,352. In Northallerton Prison alone there are approximately 100 new inmates every month with approximately the same number being released. For many, the major housing problem will be keeping their home whilst in custody. Barry Vernon and Alexandra Mullet outline the options available for people in prison who are looking to keep their home.

The options available for keeping their home while in prison will depend on whether a prisoner is a tenant or an owneroccupier with a mortgage (see box) and on how long their sentence is. TENANTS Key issues for tenants include: _ Eligibility for Housing Benefit whilst in custody; _ Does tenancy status change as a result of being in custody? and _ Does the criminal offence itself, or rent arrears that build up, give the landlord a ground for possession? Housing Benefit Where a prisoner rents their home, and there is no joint tenant who can meet the rent liability, we try to establish whether or not “The client’s s/he is able to pay their rent. This financial will usually involve establishing circumstances their entitlement to Housing and length of the sentence will Benefit (HB). The client's financial situation determine how and the length of the sentence will much HB they determine how much, if any, HB a are entitled to.

prisoner is entitled to. A client who is on remand will be eligible for HB for up to 52 weeks on the basis that they are temporarily absent from the property and intending to return, provided that the absence is unlikely to substantially exceed 52 weeks. However, a sentenced client is only eligible for HB if the total period of absence, including any time on remand, is unlikely to exceed 13 weeks2 (also see Morna Rae's article 'Prison Benefits?' in Adviser 119). However, a prisoner who has been sentenced to a year can still make a HB claim. This is because

on a year-long sentence a prisoner would only be expected to serve half (six months) which in turn could become three months if they were eligible for Home Detention Curfew (HDC). This could, in effect, see the prisoner serve only 12 weeks in prison, or even less if they are selected for an 18 days earlier release through End of Custody Licence. Therefore such prisoners could come within the 13-week limit. At the start of their time in custody many prisoners might not know when their actual release date will be so it is best to make a

OWNER-OCCUPIERS If the client has a mortgage, there are some options available to help avoid possession action. For example, it may be possible to ask the lender to: _ freeze the payments for a short while until the client has enough money to make a payment, _ allow interest only payments or make half monthly _ to take what is known as a mortgage holiday. These options may be restricted by the terms of a client's mortgage agreement, or by other limits imposed by the lender, for example, the length of a mortgage holiday. We often refer clients with a mortgage to a specialist debt advisor at the Citizen's Advice Bureau to ensure that their options are given comprehensive consideration.


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“Advisers also need to be aware of the rules around absence and its effect on tenancy status.”

“The client can also apply for Discretionary Housing Payments.”

claim for HB at the start of the sentence. Some councils will hold onto the claim to 'wait and see' whether a sentenced prisoner's absence exceeds 13 weeks. Advisers should be prepared to argue such a case because many authorities are reluctant to assess such claims in case the HDC is denied3. If there is going to be a shortfall between the amount of Housing Benefit and the rent the client can also apply for Discretionary Housing Payments. This is money provided by the government to local authorities to help people who are claiming HB and struggling to meet their top-up rent payments. If the client is not entitled to HB (e.g. if the Court has passed sentence and the total absence is likely to exceed 13 weeks) there may still be options available to help keep the tenancy. This could include a joint tenant making a claim or finding a 'caretaker' (i.e. someone who can pay the rent in the absence of the tenant). A caretaker would be classed as a lodger rather than a subtenant if there were no liability on the caretaker to pay money to the tenant. Hence a secure council tenant who is in prison can allow a caretaker to live in the property without losing secure tenancy status. It is only subletting of the whole of the premises that automatically turns the secure tenancy into a non-secure tenancy with much fewer rights4. A secure tenant can take in a lodger without needing the consent of the landlord5. An assured tenant can only sublet his or her home with the

consent of the landlord6. Subletting the whole of the property does not automatically mean that the tenant loses assured status but the Court may decide that subletting the whole does have that effect on a case-by-case basis7. An assured tenant will have to seek their landlord's consent to taking in a lodger or caretaker if the tenancy agreement requires it. Whether the caretaker is the tenant's partner, a relative or a friend, their occupation of the property will not reduce the client's security of tenure. If they are not able to meet the rent, due to the landlord of the property out of their own funds, one option is for the caretaker to make a HB claim. A person can make a claim for HB even though they are not contractually liable to pay rent to the landlord of the property on the basis that the council treats the claimant as though they were liable to make payments8. The council must treat the following as liable to make payments: _ The partner of the tenant who is in prison; _ The former partner of the tenant who is in prison, and that person needs to make rent payments to the landlord in order to be able to continue to live in the property, because the tenant is not paying the rent themselves; _ Anyone else who it is reasonable for the council to treat as liable, if that person needs to make payments in order to be able to continue to live in the property because the tenant isn't paying the rent themselves. Any rent payments made by the caretaker to the landlord, whether by way of HB or not, should be stated to be made 'as

agent for and on account of the tenant' and with their prior authority or subsequent approval9. Tenancy status and imprisonment As well as taking pains to avoid any suggestion that the property has been sublet, advisers also need to be aware of the legal rules around absence from the property and its effect on tenancy status. It is a condition of all assured, secure and introductory tenancies that the tenant occupies the property as their only or principal home. Failing to do so will mean the tenancy drops out of the protection given to them by the relevant Housing Act and can only rely on the protection given under s3 Protection from Eviction Act 1977. In short, all the landlord would be required to do to recover possession in such circumstances is serve Notice to Quit and obtain a court order, for which there is no formal defence. The Court must make an outright order for possession in 14-42 days. If the tenancy is a joint tenancy and, whilst one joint tenant is locked up, the other resides in the property, the tenancy retains full statutory protection. However, if a tenant is temporarily absent with an intention to return to the property within a reasonable period, and if there is some outward sign of that intention, the only or principal home condition is still satisfied. Leaving furniture in the property, or having a caretaker, will be evidence of the intention to return. In Amoah v Barking & Dagenham LBC10 a secure tenant had been sentenced to 12 years in prison, creating a presumption that


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“The type of tenancy the client has will determine how easy or difficult it is to evict.�

the dwelling was no longer his only or principal home. But Mr Amoah succeeded. His stepdaughter had acted as caretaker, paid the rent, his belongings remained there and he had nowhere else to go on release. Involuntary residence, in prison or hospital, does not count as 'home' for these purposes. The High Court accepted that Mr Amoah was temporarily absent with an intention to return within a reasonable period of time and that the furniture in the flat, and the presence of his stepdaughter, was some physical manifestation of that intention. It is sometimes the case that a housing officer will have assumed a property has been 'abandoned' if the tenant is in custody and has not been seen for a long time. It is vital that prompt contact is made in writing to explain the client's circumstances and their intention to return in order to avoid an illegal eviction.

Even if a prisoner retains full secure/assured tenancy status the landlord will be able to recover possession under the normal grounds for possession that apply if, for example, there are rent arrears or if there has been anti social behaviour at, or in the locality of, the property.

Advisers should note that the critical stage is at the point where notice is served and where the client has 14 days to request an internal review of the council's decision to seek possession. This is where the tenant has an opportunity to explain how and why they should be allowed to keep their home and what POSSESSION PROCEEDINGS arrangements they are putting in The type of tenancy the client has place to maintain the tenancy in will determine how easy or difficult their absence. it is for the landlord to evict. Secure tenants Introductory tenants A prisoner with a secure tenancy is If the client is an introductory in a much stronger position than tenant, and the landlord wants to an introductory tenant. The recover possession of the property, authority has to prove a ground for the process is very quick and the possession, for example rent tenant has very little opportunity to arrears or anti-social behaviour, but defend the action. Martin Coates's even if that is proven the Court article in this issue of Adviser must go on to consider whether it provides a comprehensive overview is reasonable to make a possession of the options available to order and, if it is, whether it is introductory tenants who want to reasonable to suspend or postpone defend a landlord's claim for that possession order. possession. Ground 1 of the secure grounds for possession refers either to arrears of rent or to a CASE STUDY breach of a term of the tenancy. A client at HMYOI Northallerton had had a tenancy with Wirral Homes Ground 2 refers to anti-social for over 18 months. He was serving a 15 month sentence and so did behaviour committed in, or in the not fall under the 13 weeks Housing Benefit rule. However, there was locality of, the property. This a chance that he would be released early through Home Detention includes using the property for Curfew (HDC) so he decided to risk running up arrears to keep his illegal or immoral purposes (drughome for release. dealing and prostitution) as well as We tried on two occasions to get Wirral Homes to allow a the commission of indictable caretaker to look after the property in his absence but to no avail. offences in or around the property. Eventually, our client was given notice that he would need to attend a The 'locality' is to be decided by court hearing for possession. Unfortunately the hearing was whilst he the Court on the facts of the case was still in prison. but usually means the surrounding We contacted Shelter who in turn referred us to an adviser at the few streets. local Citizens' Advice Bureau. The adviser went to court to represent Ground 2 will not apply to the client and an agreement was made that if the client was released offences committed some distance early he could remain in this property but had to address his arrears. from the client's home. The The client was initially turned down for HDC but was granted it when landlord may seek to argue that Shelter appealed on his behalf. The client was released and was able offences committed, for example, to return to his home. five miles from the property may


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There are limited options to seek an adjournment. The Court has no power to adjourn a Ground 8 claim to allow problems with a HB claim to be resolved11. Advisers should note that the Housing Corporation has issued guidance to Registered Social Landlords (RSLs) that Ground 8 should not be used until all other reasonable alternatives have been tried. Assured shorthold tenants Advisers should see Catherine Clients with an assured shorthold Grannum's article in Adviser 118 tenancy are in the most vulnerable for more detail about the 2006 pre position as a landlord can claim action protocol and to Housing possession under s.21 Housing Act Corporation Regulatory Circular 1988. If the notice is valid the 02/07 on the use of Ground 8 Court must make an outright by RSLs12. order for possession in 14-42 days without the landlord having to Occupiers with basic prove any grounds. protection and excluded Advisers should see Mark occupiers Robinson's article in Adviser 116 Such individuals can be evicted for a comprehensive discussion of from their homes without the s.21 notices. landlord having to prove any breach an express term of the agreement (e.g. clauses that say the landlord can evict for nuisance or criminal activity anywhere in the council's area). Such a claim for possession can be challenged on the basis that the express term in the tenancy is void under the Unfair Terms in Consumer Contracts Regulations.

“Assured shorthold tenants are in the most vulnerable position.�

Assured tenants Like the relationship between secure and introductory tenants, assured tenants are in a much stronger position than assured shorthold tenants. If the landlord uses a discretionary ground for possession they will enjoy the same opportunities to defend their case as their secure counterparts, as assured ground 14 exactly matches ground 2 of the secure grounds. However advisers need to be wary of a landlord using the mandatory assured ground 8 for possession. To prove ground 8 the landlord must show that at the time the notice was served, and at the time of the court hearing, the rent was two months/ 8 weeks or more in arrears. If this is proved then the court must make an outright order for possession.

grounds for possession. For example, even if the prisoner's caretaker can offer the full rent, the landlord may seek and obtain possession on the basis that they do not like what the tenant has done or is alleged to have done. Excluded occupiers' rights can be ended by reasonable notice after the expiry of which the owner of the property can change the locks without a Court Order. PROTECTION OF POSSESSIONS If the tenancy was of council property, and the council does recover possession of the property, the council only becomes legal owner of any goods found in the premises after it has given a notice, usually at least one month's notice in writing, to the owner of those goods which complies with s41

1982 Local Government (Miscellaneous Provisions) Act. Until such notice has been given and has expired the council is a 'bailee' of the prisoner's possessions and has to take reasonable care of them. Prisoners who are evicted from other types of accommodation have similar, but not identical, protection. An RSL/private landlord becomes a 'bailee' of the ex-tenant's possessions and has to take reasonable care of them for a reasonable time. Usually RSLs will issue a notice to the former tenant giving a reasonable amount of time to collect the goods. ENDING THE TENANCY If, after all the options have been explored, the client could still not afford to pay the rent, it could be that ending the tenancy may be the best option to stop any further arrears from accruing. If a client chose to keep a tenancy without any means of paying the rent then s/he would run the risk of being evicted, which could affect future chances of being rehoused, for instance, by being excluded from the housing register. If the client ends the tenancy it is possible that the council will make an intentional homelessness decision on release. SHELTER'S YORKSHIRE AND HUMBERSIDE PRISON HOUSING ADVICE SERVICE (PHAS) Since it was established in June 2004, the service has grown to cover ten prison sites in the region. There are 12 full time advisers, including three senior advisers, a service manager and administrator


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“The aim of the service is to reduce re-offending by improving the housing prospects of prisoners.�

and operational development officer. The overall aim of the service is to reduce re-offending by improving the housing prospects of prisoners, thereby giving them a better chance of community integration. Last year the service: _ Received over 3,500 applications _ Assessed 1,720 prisoners in addition to dealing with housing enquiries and providing second tier support _ Provided information and advice to clients regarding - Accommodation (1,919) - Supported housing (1,003) - Emergency accommodation (622) - Debt counselling (585) - Tenancy protection (355) - Challenging housing decisions (193) _ Preserved 175 tenancies The advisers work closely with resettlement teams and services within prisons and work flexibly to provide a range of housing advice, information and advocacy services

to prisoners to enable them to preserve or secure decent affordable accommodation. In addition to client work, the PHAS team work towards identifying best practice development, accommodation sources, prevention in the community and working at multi-agency level. Each prison site operates slightly differently and the regimes at each prison may vary depending on; _ Category _ Maximum operational capacity _ Whether it is open/closed, private/government, or local/training. As a result methods of service delivery are tailored to meet the individual needs of the prison, whilst still working to the same Quality Standards. The service currently operates in nine prisons across Yorkshire and Humberside. These are: _ HMP Everthorpe _ HMP Hull _ HMP Leeds _ HMP Lindholme

_ HMP Moorland Closed _ HMP Moorland Open _ HMP New Hall _ HMPYOI Northallerton _ HMP Wealstun _ HMP Wolds FOOTNOTES 1. HM Prison Service monthly statistical bulletin at http://tinyurl.com/2zj6so 2. Reg 7(16)[c](i) HB Regs & HB(SPC) Regs 3. Reg 7(13) HB Regs & HB(SPC) Regs. 4. S 93(2) 1985 Housing Act 5. s 93(1)(a) 1985 Housing Act 6. s 15(1) 1988 Housing Act 7. See Ujima HA v Ansah (1997) 30 HLR 831 8. Reg 8 HB Regs 2006 9. Bessa Plus v Lancaster (1997) EWCA 1260 10. (2001) JHL D46, Ch.D., 11. North British HA v Matthews (2004) EWCA Civ 1736 12. Tenancy Management and Evictions, April 2007, Housing Corporation, replacing Circ 07/04.

Barry Vernon is an adviser and Alexandra Mullet is the Operational Development Officer with Shelter's Prisons Housing Advice Service in Yorkshire and Humberside.

Citizens Advice Specialist Support Supporting advisers through training and consultancy Further details of courses can be found at www.citizensadvice.org.uk/advisertraining Bookings made three months in advance qualify for a 10% discount. Employment 20/11/07 04/12/07 06/12/07 13/12/07 15/01/08 17/01/08 22/01/08 24/01/08 29/01/08

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I shall be released It is an often-quoted statistic that prisoners released without accommodation are 2½ times more likely to re-offend, yet one in three prisoners lose their accommodation whilst in custody1. Lianne Lawrence reviews the options available and considers the many obstacles that prisoners face in trying to secure alternative accommodation on their release from prison.

The law in this article applies to England only.

Wherever possible, the advisers at Shelter's Prison Housing Advice Service (PHAS) will endeavour to keep a prisoner's original tenancy or home (see Barry Vernon's article in this issue of Adviser). However it is often the case that this is just not possible.

and have it considered2. An outright refusal to take an application is therefore unlawful and should be challenged initially by asking the Council to reconsider the application and then by Judicial Review injunction proceedings. It is a common practice for authorities to decide that a client is not eligible for an allocation of accommodation on the grounds HOUSING REGISTER that they are guilty of It is important to try to register 'unacceptable behaviour, serious clients on the relevant housing enough to make them unsuitable register/choice based lettings to be a tenant of the local scheme for both local authority authority'. The 1996 Housing Act and housing association properties. defines unacceptable behaviour as Often the sooner this is done the behaviour by the applicant or a better as in some areas waiting member of their household which time can be crucial in securing would, if the applicant were a accommodation, especially in secure tenant of that authority, choice based lettings schemes. entitle the authority to a possession order under Part 1 of Local authorities Schedule 2 of the Housing Act Local authorities commonly create 19853. an obstacle by refusing to register A decision that a client is not a client until they are released. eligible means that they cannot Advisers should be clear that under join the list/choice based lettings the terms of Part VI Housing Act scheme. The Council can only 1996 anyone, including those in reach such a decision if: custody, has the right to make an _ it is satisfied that the behaviour in application to the relevant scheme question fits the definition of

unacceptable behaviour, and _ it is satisfied that had the Court made an order for possession that order would not have been suspended by the Court4; and _ it is satisfied that the applicant is still unsuitable as a result of that behaviour. The Council has to be 'satisfied' on all three issues. If there is any uncertainty the applicant should be given the benefit of the doubt. Authorities must not apply blanket policies and must inform the applicant of the reasons for their decision in writing along with notification of their right to request a review5. Authorities are also able to remove 'reasonable preference' for an allocation because of unacceptable behaviour. Again the authority must notify the applicant of the reasons for this decision in writing and inform them of their right to request a review6. The same test is applied as for those who are deemed ineligible for an allocation. Reasons given for such decisions often relate to being convicted for certain offences, such


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“Presenting as homeless is an option to ensure for securing accommodation upon release.�

as violence or supplying drugs, as well as conduct in previous tenancies including anti-social behaviour and previous rent arrears. However the Council should not take into account offences that were committed some distance away from the client's home, as the relevant ground for possession against secure tenants7 relates only to antisocial behaviour in or in the locality of the property. A problem that many clients face is that they had accommodation before going into prison but were evicted on the grounds of rent arrears because of Housing Benefit not being paid once sentenced. In such cases their landlord often obtains outright possession orders, which then form the basis for decisions that they are ineligible for an allocation. There have been several occasions when we have challenged such decisions made under Section 160 or 167 of the 1996 Housing Act. The critical test to overcome is usually whether the client is still unsuitable to be a tenant, at the point their application is being considered, because of their past behaviour. For example, it could be that previous anti-social behaviour was caused by drug or alcohol problems that are being tackled by a rehabilitation programme, or through association with people who are no longer known to them. Decisions are usually taken by a panel and must be relayed in writing. Although there is no right to appeal to the county court, as is the case for homelessness review decisions, the client can seek a Judicial Review in the High Court.

Registered Social Landlords Many prisoners often have problems in applying to Registered Social Landlords for housing. The legal framework is different from that applying to Council allocations. However the Housing Corporation has issued Regulatory Guidance8 which states that: _ Previous tenancy enforcement action for anti social behaviour should not be taken into account if it occurred two or more years prior to the date of application and the tenant's household has conducted a tenancy satisfactorily in the intervening period _ A previous conviction is not an automatic barrier to access, especially for low-risk offenders. Eligibility should only be in question if there is reason to suppose that the ex-offender is likely to pose a risk to their household, neighbours and/or the wider community. Associations should be able to justify the exclusion of exoffenders, with an accountable policy and procedures for considering cases _ The meaning and purpose of a suspension period, during which an application for housing is held inactive, should be clearly defined and should last no longer than two years. HOMELESSNESS APPLICATION Presenting to the local authority as homeless under Part VII of the Housing Act 1996, as amended by the Homelessness Act 2002, is another option to ensure the best chance of securing accommodation upon release. For the full homelessness duty

to be owed the applicant must be: _ eligible on nationality/immigration law grounds _ homeless _ in priority need, and CASE STUDY 1 A client referred himself to PHAS. He had mental health problems and was receiving medication whilst in prison. Prior to being in custody he had been advised by the Police, in writing, that he should not return to the Local Authority with which he had a local connection for his own protection. The adviser discussed with the client where he felt that he could go and rang the neighbouring Local Authority to make a homeless application. After explaining the situation, the Council agreed to interview the client over the telephone and took a homeless application. It subsequently accepted a duty to the client and the adviser arranged for a referral to a tenancy support service that could assist him with his specific needs and increase his chances of integration in to the community. As a result of the work of PHAS, telephone assessments are now frequent practice amongst some local authorities. However PHAS would like to this to be more common and continues to work with councils to encourage them to adopt this approach which is consistent with the duty to make inquiries under s184 Housing Act 1996 and the caselaw around prison accommodation.


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“Time spent in custody does not create a local connection.”

“It is rare for a local authority to make a decision prior to the client's release.”

Priority need? Someone may be classed as being in priority need by virtue of being 'vulnerable' because of some special reason. Consideration must Interim accommodation be given to those who may be If an authority has reason to vulnerable as a result of being in believe that the client may be prison12. The important element of homeless or threatened with this test is that just having been in homelessness within 28 days then prison is not enough. The the authority must take and vulnerability must arise as a HOMELESS? process the application and issue a consequence of being in prison. It can be difficult to get an written decision under s.184 of the The critical test of vulnerability is authority to take an application Housing Act 1996. If the Council still the 'Pereira Test' which says prior to release and especially has 'reason to believe' that an that the Council must be satisfied prior to the statutory point of applicant is eligible, and in priority that, because of a particular threatened homelessness need as well, it must also provide reason, the applicant 'when (i.e. homeless within 28 days). suitable interim accommodation homeless, will be less able to fend This is usually because the whilst carrying out enquiries10. for himself than an ordinary authority will argue that the Reason to believe is a 'low homeless person so that injury or prisoner is not homeless as they threshold'11. detriment to him will result when a have accommodation that is Despite this clear duty it is often less vulnerable person would be available for them to occupy necessary to push for this able to cope without harmful whilst in prison. accommodation to be provided effect'13. The test is based on risk However the High Court has upon release. It is very rare for a of harm when street homeless, not ruled that a prison cell cannot be local authority to be able to the risk of re-offending. taken into account as conclude their full enquiries and Former prisoners who assert accommodation by a homeless make a decision prior to the vulnerability will often be able to authority. Therefore prisoners are client's release. identify a number of combined homeless within the legal meaning issues. For example, the amount of time spent in prison, drug or CASE STUDY 2 alcohol problems, age, a disability A prisoner at HMP Everthorpe referred himself to Shelter's Yorkshire or ill health. and Humberside PHAS as he wished to go on the waiting list for The Pereira Test forms the basis housing and bid for a property in order to secure accommodation of para 10.13 of the 2006 Code of for release. Guidance. Additional guidance However the council in question had a policy of placing particularly relevant to people who applications from prisoners in a band that ensured no active have served a custodial sentence is consideration was effectively given to their bids, regardless of their given at para 10.24 to 10.27. circumstances. These sections explain that This blanket policy was challenged at a meeting between two authorities should take account of PHAS and the council. This resulted in a change of policy which meant any information and assessments that prisoners, including this particular client, were able to bid for carried out by criminal justice staff properties whilst still in prison thereby increasing their chances of including, for example, probation securing accommodation upon release. Furthermore the council has officers and youth offending introduced a fast track form which increases prisoner's chances of a teams. There is no minimum successful bid by providing additional weighting on the basis that length of time in custody that can unless accommodation is secured they would be homeless within make a person vulnerable. 28 days. Successful cases often involve _ unintentionally homeless. An authority may then decide under the local connection provisions whether the duty to secure accommodation falls with them or with another authority. Advisers should note that time spent in custody does not create a local connection to the area where the client has been in prison.

of the word at all times whilst in prison and can therefore make a homeless application at any time whilst in custody9.


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“Prisoners are often found intentionally homeless if they have lost their tenancy due to rent arrears caused by loss of HB.�

them as unintentionally homeless. Housing Benefit would cease to be payable16. Whether the client Prisoners are often found intentionally homeless if they have thought they would be caught is lost or given up their tenancy due not relevant. to rent arrears which were in turn However the client's mental caused by loss of Housing Benefit state at the time the offence was once sentenced. They may also be committed is relevant as acts deemed intentionally homeless if committed under duress, or as a evicted for anti-social behaviour result of limited mental capacity, Intentionality (e.g. for committing an offence are not 'deliberate' for the A finding that a former prisoner is in/in the locality of their home). purposes of an intentional intentionally homeless is a distinct The council can decide that the homelessness decision. Neither are possibility if accommodation is lost offence caused homelessness if it is acts which were temporary as a result of criminal conduct. satisfied that a reasonable person, aberrations caused by mental Even if an intentional decision at the time the offence was illness, mental frailty or an assessed looks likely, it is still in the client's committed, would have thought substance abuse problem17. interest to pursue the homeless that a likely consequence of application. Firstly the client will get committing the offence might be Decisions and duties interim accommodation whilst the being locked up for so long that The authority must issue a written Council investigates, if there is reason to believe the client may be CASE STUDY 3 priority need, and secondly the A client with a history of violent sex offences had hearing difficulties client will get accommodation for and had been classified as having special needs while at school. In the a short period, often several weeks, after an intentional decision 21 years since he turned 18 the longest period he had spent outside of prison was approximately six weeks. He could not return to the has been made14. local authority area where he had a local connection because of the In order to make a finding of nature of his offences. intentionality an authority must be The adviser submitted a homeless application a month before his satisfied that the applicant release date. On following this up the adviser was told that the deliberately did, or failed to do, application was on file and they would look into if the client turned anything in consequence of which up on the day he was released. The adviser pointed out that they had they ceased to occupy a duty to start investigating immediately but was told that this was accommodation that was available the manager's decision. for his or her occupation and it The adviser made an official complaint, pointing out that the would have been reasonable for council had a duty to start investigations under section 184. The them to continue to occupy the Complaints Officer upheld the complaint and an investigation was accommodation. However, an immediately started. The council accepted a full duty two days later. applicant cannot be intentionally The week before release the client received an offer for an RSL flat. homeless if an act or omission The adviser arranged for the client to view the flat the day after was made in good faith by release, accompanied by a local floating support service. The council someone who was unaware of was to provide temporary accommodation until he could move in. 15 any relevant fact . However, on the day before release the RSL cancelled the viewing Being 'satisfied' involves a high on the basis that they had made the offer 'without fully taking standard of proof. If there is account of the client's circumstances'. Despite this setback, the client uncertainty on any one of the left prison with temporary accommodation provided and in the elements of the intentional knowledge that the council were still obliged to secure a permanent homeless definition the Council address. The floating support service will continue to support the should give the applicant the client in the community. benefit of that doubt and accept looking at institutionalisation or self-harm whilst in custody. Advisers should be careful to check the circumstances of a client against all of the other 'categories' of priority need as there may be a passport to priority need through one that is easier to evidence.


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“There are a number of local projects across the country that cater specifically for ex-offenders.�

decision as to what duty is owed. Where there is a negative decision (e.g. not priority need or intentionally homeless) they must also give full reasons for the decision. The decision letter must also inform the applicant of their right to seek a review within 21 days18. If the decision is that the authority accepts a full homelessness duty under section 193 and does not make a local connection referral, the authority must secure suitable temporary accommodation for the client. The council will often discharge a full homelessness duty by making one suitable offer through its housing register/choice based lettings scheme - provided of course that the applicant is not ineligible (see 'Housing register' above). The Code of Guidance advises that in considering the suitability of accommodation offered the Council should, where possible, secure accommodation in a location that allows applicants to retain links with 'key services and support essential to the well-being of the household'. This could include Probation, and other services as relevant19. If the client refuses this 'final' offer, and the authority deems it suitable, no further offers will be made and the authority would no longer be under a duty to secure accommodation for the client (although they can request a review of such decisions). Advisers should always be prepared to advise clients of the option to accept the offer and then request a review as to the suitability of the accommodation20.

SUPPORTED HOUSING PROJECTS There are a number of local projects across the country that cater specifically for ex-offenders. These are mainly in shared houses although there are some single tenancies. Clients will generally have a key worker and they will work to a support plan throughout their stay and put 'move on' plans into place. The majority of our clients do not really want to share with other people on release but this may often be the only available option if the client is not owed a homelessness duty. It does not tend to matter how far in advance referrals are made as agencies are often unable to tell what vacancies are available until a week or so before release. It is worth checking the homelessness strategies of any authorities that the prisoner is considering returning to in order to establish whether any specific provisions have been identified or established in that area. PRIVATE RENTED ACCOMMODATION This is often very difficult to secure prior to release. Usually the best we can do is to find out information on any local rent deposit schemes and try to refer a client to a scheme prior to release, although many landlords are unwilling to take either people who have been in prison, or people who are claiming Housing Benefit. Tenancies will be assured shortholds which give minimal security of tenure. Housing Benefit may not pay the full contractual rent because of rent restrictions

and Discretionary Housing Payment, which can cover the shortfall created by rent restriction decisions, is cash limited and, as the name suggests, is totally discretionary. PHAS provide clients with details of local sources of advice and assistance that they can access once they are released from prison. The service will not be able to assist in challenging decisions, such as suitability, that are likely to be made sometime after release. FOOTNOTES 1. 2. 3. 4.

Social Exclusion Report Housing Act 1996 s.166(3) Housing Act 1996 s.160A(1) November 2002 Allocations Code of Guidance, ODPM, para 4.22(ii) 5. HA 1996 s.160A (9), (10) 6. Housing Act 1996 s.167 7. ground 2, Schedule 2 1985 Housing Act 8. Regulatory Circular 02/07, April 2007. 9. R (on the application of B) v Southwark LBC [2003] EWHC 1678 (Admin) 10. HA 1996 s.188 11. Mohammed v Manek & Kensington and Chelsea LBC (1995) ECWC Civ 12. HA 1996 s.189 and Homelessness (Priority need for accommodation) (England) Order 2002 13. R. v Camden LBC Ex p Pereira (1998) 30 HLR 317 14. s190 1996 Housing Act 15. HA 1996 s.191 16. R v Hounslow LBC ex parte R (1997) 29 HLR 939, CA. 17. Code of Guidance 11.17 18. HA 1996 s.184 19. CoG 17.41 20. HA 1996 s.202

Lianne Lawrence is an adviser with Shelter's Prison Housing Advice Service in Yorkshire and Humberside.


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Unfair allocation With social housing in short supply, potential tenants have to compete for housing provided by local authorities or housing associations. Inevitably, many who are not offered suitable housing feel the local authority has not assessed their needs correctly, unfairly excluded them from being considered for housing, or failed to give them enough priority to be offered a property. Tracey Sanderson explains the role of the Local Government Ombudsman in dealing with complaints about housing allocation.

The Local Government Ombudsman (LGO) offers a free, independent and impartial service that can examine complaints and, as appropriate, suggest remedies when things have gone wrong. Our aim is to put the complainant back in the position that they would have been had the mistake not been made. In 2005/2006 about 4,600 (just under a quarter) of the complaints received by the LGO in England were about housing and of these 451 were about housing allocations.

authority, or contracted out to a third party, usually an arms-length management organisation (ALMO). The Ombudsman can consider complaints about the way a local authority, ALMO or housing trust has dealt with housing allocations. This includes complaints where a housing association is carrying out statutory functions on behalf of a local authority, such as decisions on homelessness, or housing register applications. Each housing authority must publish an allocation scheme containing a statement about its policy on offering a choice of accommodation, or the ALLOCATION opportunity for an applicant to Housing allocation occurs when a express preferences about their housing authority selects someone accommodation. to be a secure or introductory Problems can arise when a local tenant of a property that it owns, authority is changing from one or one owned by another landlord type of allocation scheme to (eg a housing association), or another or transferring stock to a where it nominates someone to be housing association. an assured tenant of a property Complaints can arise when the owned by a registered social allocation scheme is not clear, or landlord (RSL). Transfers to another has potentially disadvantaged a local authority property also count. particular group unreasonably, Allocations may be done by the such as those who have learning

difficulties, or whose first language is not English. In such cases, the LGO would check whether the scheme follows government guidance or whether the authority has made arrangements to provide assistance to people who are likely to have difficulty in making an application. Before complaining to the LGO a complainant should normally have gone through the authority's own review or appeal process. However, the LGO sometimes finds that applicants have not been told about their appeal rights and would consider this to be maladministration. The Ombudsman may suggest that a new appeal is held, a person is reinstated for allocation, or other measures are taken (see Case Study 1). INELIGIBILITY For someone to be considered for accommodation, they have to be a 'qualifying person'. Most people subject to immigration control who do not have refugee status, or who do not usually live in the UK, Channel Islands, Isle of Man and


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CASE STUDY 1 Appeal rights and removal of priority points Mr M, a priority applicant, was offered a property, but rejected it on the grounds that it was not suitable. The council made a decision that he had rejected a suitable offer, and then withdrew his priority points, which meant that he was not likely to be offered another property in the foreseeable future. If a council's allocation scheme states clearly that someone who rejects a suitable offer would have their priority points deducted, this is not, on the face of it, maladministration. However, the Ombudsman would investigate an allegation that the housing authority had not told Mr M about his right to challenge the suitability of the offer. If this was the case, a suitable remedy might be to hold a review or appeal and, if this reversed the council's original decision, that the priority points should be re-instated, and perhaps compensation paid. Republic of Ireland, are ineligible. There will be no opportunity to challenge such a decision unless the authority has mistakenly deemed someone to be ineligible. The Homelessness Act 2002 created another class of people ineligible for housing allocation: by reason of unacceptable behaviour. This includes behaviour of the “The person concerned, or a member of Homelessness Act their household, that would allow 1996 requires a the authority to obtain a local authority possession order under s84 of the to publish its Housing Act 1985. Grounds for priority scheme� possession include serious rent

CASE STUDY 2 Determination that applicant was ineligible for housing Ms J complained that the council was refusing to nominate her for properties owned by her local Housing Association on the grounds of unacceptable behaviour because of previous rent arrears. The key issue was whether her rent arrears amounted to unacceptable behaviour. If the arrears had accrued because of delay in HB payments following a change of circumstances, they would be outside the applicant's control. Under the terms of the Code of Guidance (CoG) issued by the Department for Communities and Local Government0, such arrears should not be considered serious enough to make the person unsuitable to be a tenant. The Ombudsman would therefore consider the council had been unreasonable in deciding not to nominate Ms J for properties. However, whether Ms J would have suffered injustice as a result of this decision would depend on whether the council's failure to nominate her meant that she missed out on being allocated a property while she was barred. If all the accommodation that had become available in that period went to applicants with higher priority, she would not have been offered accommodation any earlier, and there would have been no injustice. Any remedy that the Ombudsman recommended would reflect this. The council could be asked to review its decision that she was not eligible for nomination on grounds of unacceptable behaviour, and that it also considered whether other applicants with arrears had also been excluded unreasonably, and to take appropriate action. If she would have been offered a property earlier, the council could also be asked to give her higher priority for the next available property, and pay compensation at a given rate per month until she was offered suitable accommodation. arrears, racial harassment, drug dealing or intimidation. The Ombudsman investigates complaints where it is alleged that a council has decided unreasonably that someone is ineligible for housing, increasingly on grounds of unacceptable behaviour. Case Study 2 shows a case where although there were serious rent arrears, these were not of the complainant's making. PRIORITY AND PREFERENCE The Homelessness Act 1996 requires a local authority to publish its scheme to determine the

priority it will give to certain categories of people asking to be housed. Certain groups must be given 'reasonable preference' under an allocation scheme, but a council can decide to give higher priority to any particular group within these categories. Those who must be given reasonable preference include those to whom the council has accepted a duty as homeless; are intentionally homeless but in priority need or threatened with unintentional homelessness and in priority need; and those living in overcrowded or unsanitary conditions, or who have


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“The housing authority must have a robust method for distinguishing priority within a band.�

medical or welfare needs. A council can decide to grant additional preference to subcategories of people who qualify under reasonable preference, for example victims of domestic violence or racial harassment. A council can also consider giving lower priority to those who can afford to rent privately, and those whose behaviour suggests they are less suitable as tenants than others -e.g., those with minor rent arrears. Additionally, a council can prioritise on the grounds of a local connection between the applicant and the housing authority's area. There must also be a means of determining priority between two applicants with similar levels of need, for example, based on time spent waiting at that level of need. Different housing authorities give different weight to each of these criteria, depending on local circumstances. The Ombudsman considers complaints that the priority given to particular groups by a council has unfairly disadvantaged other groups in similar need, or that a council has not properly considered all factors before allocating an applicant to a particular category of priority. The Ombudsman would find maladministration if a council did not have a robust method for determining priority, or if its scheme unreasonably disadvantaged some groups. Case Study 3 shows an example where local conditions changed after a council drew up its policy, with unforeseen results. PRIORITY The Ombudsman receives many complaints where the complainant

alleges the council has not given them the correct number of priority points, or not placed them in the correct priority band. Points schemes operate a fixed scale of points, which are weighted and applied according to assessed housing needs. These could include overcrowding, medical factors, dependent children, the length of time someone has spent on the register etc. A higher number of points increase priority and thus the likelihood that the applicant will be offered the next suitable accommodation. In banding (or category) schemes, applicants are placed in a particular category - eg medical or social need, overcrowded, homeless, etc that is ranked in priority order. Some applicants can fall into more than one category. Vacancies are offered first to those in the category that the local authority has decided has the highest priority. Vacancies not taken up are offered to those in next highest category. The housing authority must also have a robust method for distinguishing priority within a band. Often this is on the basis of the length of time the applicant has remained on the housing register at that level. If the Ombudsman finds fault in the way the local authority has calculated points or banding, a suitable remedy might be to reassess the applicant and determine whether or not they would have been considered for accommodation allocated to others with lower points totals or banding in the period when their priority was incorrect. When a complainant has missed out on

CASE STUDY 3 Priority for allocation Miss N complained that her local authority's policy on prioritising a particular group for housing meant that even though she also had high need, as she was homeless and in priority need, she had little or no chance of being housed. The local authority had a preference policy in which the highest priority was given to home owners who had compulsory purchase orders (CPOs) on their properties because the area was undergoing extensive regeneration. However, because of the regeneration, fewer houses were available for let than at the time the council's policy was drawn up, and the number of people presenting as homeless had risen dramatically. This meant that homeless candidates with priority need did not have a reasonable chance of being allocated a property, as all available properties were being allocated to those with CPOs. The Ombudsman considered the council had not taken sufficient care to ensure it fulfilled its duties under the homelessness legislation. There was, however, no injustice to Miss N because she would not have been allocated a property before she eventually was, even if there had been no bias towards those with CPOs. The Ombudsman therefore recommended that she was offered an apology, and that the council reconsider its policy on priority for allocation. (LGO report 04/C/09984)


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CASE STUDY 4 Incorrect calculation of priority points Ms B complained that she had not been given priority points for racial harassment by neighbours, which had been reported. This meant she was not offered alternative accommodation, even though the council accepted that she was in priority need. The Ombudsman asked for a breakdown of Ms B's points, and the council accepted that priority points had not been added to her total. Ms B's points were corrected and she was offered accommodation within two weeks. The Ombudsman concluded that as a result of the council's failure to include these points, the complainant remained in unsatisfactory accommodation for up to five months longer than she needed to. The council was asked to pay Ms B compensation for each month that she was in unsuitable accommodation. “Where an applicant has missed out on suitable accommodation, compensation may be appropriate.”

suitable accommodation, compensation, or perhaps enhanced priority for future allocation, may be appropriate. CHOICE-BASED LETTING SCHEMES By 2010, the government expects all housing authorities to operate a choice - based letting scheme (CBLS). In such schemes, the housing authority publicises details of available accommodation, and applicants bid for particular properties within a given period. A banding or points-based system is used to distinguish priority between applicants, and those in

the highest categories may be given priority, boosting their chances of success for a limited period. Because the CoG recommends that the authority provides feedback on the level of points or banding of the successful applicant, other bidders can get a more realistic view of the likelihood of being offered a property of a particular type, size or location, and tailor their bidding accordingly. However, because the process is more dependent on action by the applicant, the local authority must frame very carefully its policy on how bids can be made, to avoid disadvantaging particular groups unreasonably. The way properties are advertised and bids can be made, are of particular concern. For example, the Ombudsman would not consider it reasonable for a council to advertise vacant properties solely on its website, as some people seeking accommodation will not have internet access, and will be effectively excluded from making bids. SUMMARY The LGO service: _ is free; _ covers complaints about most aspects of housing; _ is available to those who believe that they have suffered injustice as a result of administrative fault by a local authority, ALMO or housing trust; _ covers both housing register schemes and choice-based lettings; _ can provide remedies to rectify injustice to complainants.

CASE STUDY 5 Time taken to verify priority Miss P's family were considered to be vulnerable and were housed in overcrowded temporary accommodation. She was assessed as in priority need but was not included on a shortlist to view an advertised property because the council had not verified her details in time. Consequently, the property was allocated to a lower priority bidder. As the lease on her temporary accommodation had expired, she had to move to an alternative property for two months before permanent accommodation became available. The Ombudsman found that the council's procedures penalised Miss P and recommended that the council pay £500 compensation for the expense and stress of two moves within a short space of time. The council also changed its procedure to ensure that high priority bidders were not 'passed over' in favour of lower priority bidders. FURTHER INFORMATION For advice on whether a case can be considered by the LGO, call their advice line: 0845 602 1983, or visit www.lgo.org.uk For further complaint summaries, see a Guide for Advisers and an Annual Digest of Cases. FOOTNOTE 1. Code of Guidance on the Allocation of Accommodation: DCLG 2002 (revised 2006)

Tracey Sanderson is an Investigator for the Local Government Ombudsman.


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Introductory tenancies and rent arrears Brought in by the Housing Act 1996, introductory tenancies are the 'trial period' tenancies now used by most local authorities. Martin Coates examines the options available to help prevent introductory tenants in rent arrears from losing their homes and how advisers can help.

The law in this article applies to England and Wales only.

Introductory tenancies were designed primarily to control and 'weed out tenants guilty of anti-social behaviour' allowing a landlord to bring quickly to an end 'the tenancies of the minority of tenants who do not behave responsibly.'1 However, despite the initial focus on anti-social behaviour, introductory tenants with rent arrears frequently find themselves at serious risk of losing their home. An introductory tenancy can only be granted by a local authority or Housing Action Trust. Landlords that opt to offer introductory tenancies must grant all of their new tenants an introductory tenancy, certain exceptions aside. The introductory period runs for one year from the start of the tenancy, although since June 2005 that period can be extended for an additional six months if the landlord decides that there are valid reasons to do so2. Common exceptions that advisers should look out for are

people who are provided with temporary accommodation within local authority housing stock, under s.193 of the Housing Act 1996, as they will be non-secure tenants. Also advisers should check what the previous tenancy status of an introductory tenant was, because those that held a secure or RSL assured tenancy immediately before the new tenancy was granted cannot be introductory tenants. For example, a tenant may have taken up the offer of a new tenancy as a result of a transfer application and was previously a secure tenant. Within the trial period an introductory tenant does not benefit from all of the statutory rights enjoyed by secure tenants, such as the right to Mutual Exchange, and does not enjoy the same level of security of tenure. Whilst the landlord is still required to obtain a court order and bailiff's warrant for eviction, the process for doing so is much quicker and simpler than for secure tenancies. The court has a very limited role to play in simply checking that the

landlord has complied with the process. RECOVERING POSSESSION If a tenant has breached their tenancy agreement, for instance by falling into rent arrears, then the landlord can take action to end the tenancy. The procedure is set out in the Housing Act 1996. The procedure The landlord must serve a 'notice to terminate' (NTT) the introductory tenancy under Section 128 of the Housing Act 1996. The notice has to give a detailed account of the reasons for seeking possession of the property. The tenant has 14 days from the date of service of the notice to request a review of the decision to seek possession, which would usually be an oral hearing in front of an officer or a panel of officers not involved in making the original decision. After representations from both sides, the review officer or panel will decide whether the termination of the tenancy, and subsequent possession/eviction,


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should proceed. The tenant will be informed of the decision by letter. If a decision is taken to proceed with the action to end the tenancy then it is a simple matter of the local authority applying to the court for possession As long as the District Judge is satisfied that the paperwork is in order, and the correct procedure has been followed, an outright possession order will be made. After the review hearing, the tenant's options for challenging a decision to take court action are largely restricted to an application for judicial review, which must be based on a point of law - for example where the local authority has failed to follow the correct procedure. If no such challenge is possible the tenant is likely to become homeless. It is therefore crucial, if the tenancy is to be saved, that the client acts quickly to rectify the problem at the earliest opportunity.

notice must state the following to be valid _ It must state that the court will be asked to make an order for possession. _ It must give the reasons for the decision to apply for the order (these must be detailed enough to allow the tenant to possibly counter them). _ It must identify the earliest date after which proceedings may be begun (which cannot be earlier than the date on which the tenancy could have been brought to an end by a notice to quit). This means that the landlord must give at least four weeks notice to expire on the first/last day of a tenancy period (usually Monday/Sunday). _ It must inform the tenant of the right to request a review of the decision by serving notice on the landlord within 14 days after service of the notice. _ It must inform the tenant that they can obtain help from a Citizen's Advice Bureau, Housing Aid Centre or solicitor.

reasons for non-compliance - see Adviser 118. The pre-action protocol was introduced in October 2006. Under its terms, the landlord should make reasonable efforts to discuss the matter with the tenant and make suitable arrangements for the client to pay off arrears, and assist with any Housing Benefit (HB) problems, before proceeding with possession action. This protocol applies even after a NTT has been served.

Statutory guidance The ministerial circular No 2/97 is the relevant guidance that landlords should refer to. Section 20 states that 'suspended possession orders, commonly used for secure tenants as a means of recovering rent arrears, are not appropriate for introductory tenancies. Applications to the court must lead to eviction. Landlords may, therefore, wish to devise their own procedures (such as the collection DEFENCES of rent plus arrears by instalment) Depending on the stage at for introductory tenants to replace which action to recover possession the use of suspended possession is at, there may be a number of Payment arrangement orders.' options that could be considered On receipt of a NTT it is not too Whilst the majority of landlords when advising an introductory late to contact the landlord to try welcome the opportunity to tenant. to arrange repayment of the negotiate a payment arrangement, arrears, usually by instalments. Stage 1 referring to the pre-action protocol If the tenant is getting help - Service of Notice and circular 2/97 could prove to be from a Citizen's Advice Bureau or At the stage of serving notice, a useful strategy for advisers Housing Aid Centre then they advisers should first check whether should contact the landlord attempting to negotiate payment the notice is valid and secondly arrangements with intransigent straight away and explain the seek a negotiated agreement with client's circumstances and try to set landlords. the landlord to not pursue the The tenant, on making an up an affordable arrangement. action any further. arrangement to pay off arrears and, where appropriate, sorting The Pre-action Protocol Is the Notice valid? out any HB problems, should Under Part 54 of the CPR 1998, Advisers should consider whether always request and get the pre-action protocol must be the notice meets the requirements confirmation from the landlord complied with before the court is of s.128 Housing Act 1996. The that they will withdraw the NTT. involved unless there are good


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Extending the trial period If the landlord is reluctant to withdraw the NTT, then it may be worth suggesting that they could withdraw the NTT and take the less severe measure of serving a notice to extend the trial period for six months under Section 125A of the Housing Act 1996 to see how the matter progresses. To extend the introductory period, the landlord will have to issue a notice of extension. This must be served at least eight weeks before the original expiry date of the introductory period. The tenant has a right to request a review of the decision to extend the trial period. Although this is not ideal, an extension may be preferable to facing the uncertainty of a review hearing and possible eventual eviction. Stage 2 - Review Hearing If the landlord refuses to withdraw the NTT, then, so long as the tenant meets the 14-day deadline to request a review under Section 129 of HA 1996, a review hearing will be convened. The review hearing is the critical stage for presenting a case in order to try to save the tenancy. Once a case gets beyond this stage there is often very little that can be done as the court's hands are very much tied by the statutory process. The Introductory Tenants (Review) Regulations 1997 give details as to the specific procedure that must be followed on review. These include the following: * there can be no oral hearing unless the tenant has requested one within 14 days of service of the notice of proceedings for possession;

_ if a tenant has requested an oral hearing in time, then the landlord must notify the tenant as to the date, time and place of the hearing, and the tenant must be allowed to state her/his case during the hearing, which can include calling witnesses and questioning those giving evidence; _ if the tenant has not requested an oral hearing in time, then s/he can provide written representations; and _ the review must be carried out by someone who was not involved in the original decision to seek possession. Advisers should note that the landlord can present and rely on new evidence not included in the notice at any review hearing but the panel must give the tenant opportunity to address this evidence3. A review decision is a completely fresh decision based on all of the facts as they stand at the date of the review hearing4. An oral hearing will clearly give the tenant the opportunity to fully present their defence to the possession action. The tenant's chances of success in getting the review panel to agree to not pursue possession through the court will depend on their circumstances and the merits of their case. Likely factors that will be given consideration are: _ The level of arrears - if the arrears are very high, the panel will be concerned by the tenant accumulating large arrears so early in the tenancy. _ The tenant's payment record - if the tenant has not paid any rent at all, or very sporadically, the panel is unlikely to be impressed

unless there are very good reasons to qualify this. _ The personal circumstances in which the tenant came to fall into arrears - if there are HB problems, has the tenant tried to resolve them? Does the tenant have other debts that have been affecting her/his ability to pay and are those problems being addressed? The tenant's chances will be strengthened if they can clearly explain the reasons for the arrears and convince the panel that they are now able to remedy the problem(s) and pay off the arrears. The tenant must be notified of the outcome of the review before the date on which the s.128 notice expires5. If the review panel decides that the notice to terminate still stands, then the tenant is in a precarious position. It is a straightforward process for the landlord to proceed to court for a possession order. The landlord can, if it wishes to do so, still hold back on starting possession proceedings at court after the decision to terminate the tenancy is upheld at the review hearing. This is likely if the tenant is able to demonstrate that the rent arrears issue will be resolved, or that they can keep to a repayment arrangement. However, the landlord can proceed with possession action at court if the tenant further defaults, without the need to issue a new notice. See Case 1. Stage 3 - County Court If the landlord decides to proceed with possession, proceedings must be issued by the court before the 12-month introductory tenancy period (or 18-months, if extended)


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CASE 1 Cardiff CC v Stone, 29th January 2002, Court of Appeal The defendant (S) had an introductory tenancy with Cardiff CC and fell into arrears with the rent. CCC issued a notice to terminate the tenancy and S requested a review. The panel decided that the tenancy should be terminated; but that the action to seek possession at court would be suspended on condition that S paid the weekly rent plus ÂŁ3 per week to the arrears. S defaulted on this arrangement and CCC issued a claim for possession in the county court. S defended the claim on the basis that the council should have issued a new notice before commencing possession action at court. The case eventually went to the Court of Appeal, where the appeal was dismissed. There was no need for a further notice as long as the reasons for possession are essentially the same as in the initial notice. In this case, the reason for possession was the same as the notice stated - rent arrears.

CASE 2 Salford CC v Garner, 27th February 2004, Court of Appeal On November 9th 2001, the defendant (G) signed an introductory tenancy agreement with a commencement date of 11th November 2001, which stated that he would become a secure tenant on the 12th November 2002.' The Housing officer gave him the keys and said that he could move in immediately. G moved in the next day, the 10th November 2001. G fell into significant rent arrears and possession action proceeded to court. The council filed a claim form for possession at court on the 9th November 2002 and the court issued proceedings on the 11th November, two days later. G defended the claim on the basis that he had become a secure tenant on the 9th November 2002, one year after he had signed the tenancy agreement and been handed the keys. The matter reached the Court of Appeal, where G's appeal was successful. The Court held that possession proceedings are brought when the court issues the claim form. In this case, that date was the 11th November 2002. The court also held that the commencement date of the tenancy was varied to 9th November 2001, from the intended 12th November, by the action of the council officer handing over the keys and allowing the tenancy to begin immediately. Therefore, the introductory tenancy ran from the 9th November 2001 to the 8th November 2002. It automatically became a secure tenancy on the 9th November 2002. Possession action to end the introductory tenancy was no longer relevant.

correct procedure has been followed, it must make an outright order for possession within 14 to 42 days. The tenancy comes to an end on the date for possession specified in the possession order6. Once the proceedings have reached the court stage, there may still be avenues that can be has expired, otherwise the tenant explored to prevent the tenant will automatically become a secure from losing their home, but they tenant and will have a defence to are likely to rely on the need for the proceedings. specialist advice. If an application The start of possession to the High Court for judicial proceedings is determined by the review is required the input of a date that the court issues the claim solicitor is necessary. form, not the date that the A challenge at this stage of the landlord issues the notice or process must be on a point of law, delivers the possession claim form such as deficiencies in the reasons at the court. See Case 2. given in the notice or review If the court is satisfied that the decision, or the process employed

by the landlord in reaching a decision to seek possession. Judicial review The County Court has the power to adjourn a hearing to allow the tenant to seek judicial review if it believes the case is sufficiently strong to justify it. If the court grants an adjournment, the tenant would have to make an application to the High Court. If the review panel have made a decision to proceed with possession, the client can also seek judicial review before the matter gets into court. An application can only be made on a point of law and in seeking an adjournment of the possession claim the tenant only


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SUMMARY OF DEFENCES _ It is not an introductory tenancy at all. _ It was an introductory tenancy but the trial period has expired before proceedings for possession are issued. _ It is an introductory tenancy but the notice is not valid. _ It is an introductory tenancy, the notice is valid but by exercising the right to review the tenant makes the Council reconsider the whole case and it decides not to proceed with possession. _ The proceedings should be adjourned to give the tenant the chance to make a written application for permission to judicially review the Council's decision to proceed with possession. _ Breach of pre-action protocol (only remedy seems to be in terms of costs though). _ Breach of internal rent recovery procedures (may amount to oppression)12 _ Disability Discrimination issues

Some reasons for seeking judicial review could be that the authority had: _ ignored relevant factors _ taken into account irrelevant factors _ failed to direct itself properly in law (for example - the authority failed to follow the statute or the case law that has interpreted how the law should be applied, including Breach of Article 6 of the Human Rights Act) _ reversed the burden of proof or imposed too high a burden of proof on the applicant _ failed to make findings of fact _ failed to give adequate reasons for its decision _ reached a decision totally at variance with the facts, or for which there is no factual basis for the decision _ failed to act in accordance with the objects and principles of the Act in question _ fettered its discretion (often referred to as operating blanket policies) or delegated decisionmaking to an unauthorised body _ acted dishonestly or in bad faith (this is normally very difficult to prove) _ come to a decision which was so unreasonable that no reasonable authority could have reached it (this is know as 'Wednesbury unreasonable' and can be difficult to prove).

has to show that their written application for permission for judicial review has a reasonable prospect of success7. A range of orders can be made. However, advisers should be aware that even if the High Court orders the landlord, for instance, to rectify a deficient review process, the landlord's decision at the end may very well still be the same, i.e. that ss10 to 15 makes reference to the it will seek possession. fact that 'landlords should ensure Vulnerable tenants that introductory tenancies should Advisers should also consider not be used as a weapon against whether the tenant could be vulnerable individuals'. It goes on classed as vulnerable. Circular 2/97 to define vulnerability as including

old age, mental illness, physical disability and other special reasons, which includes tenants who do not speak English as their first language. The pre-action protocol also deals directly with vulnerable tenants. There have been a number of high profile cases in recent years8 where the court has considered whether it has been reasonable to make a possession order based on the defence that eviction would amount to unlawful discrimination under the Disability Discrimination Act 1995 (see Mark Robinson's article in Adviser 119). Following the decision of the Court of Appeal in Courtney Malcolm v Lewisham LBC (2007)9, tenants can raise the Disability Discrimination Act 1995 s22 (3)(c) defence in proceedings brought on mandatory grounds or those where the landlord does not need to prove grounds for possession at all in the strict sense of the word, including introductory tenancies. A recent case (see Case 3) which concerned an application to set aside a possession order granted against an introductory tenant, was based on such a challenge. The case was resolved by a consent order, but it provides a useful illustration for advisers to demonstrate what can still be done at the point a tenant is due to be evicted, as well as how a defence using the Disability Discrimination Act 1995 can be mounted. FOOTNOTES 1. Government White paper ' Our future homes' 2. Housing Act 1996 Ss 125 and 125(A)


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CASE 3 Bristol CC v Carpenter (Shelter HLU, Issue 28, pages 8 & 9) In this case, the tenant (C) had learning difficulties, was illiterate, suffered from mental health problems, and had physical impairments that restricted his mobility. As a result he was not able to maintain his rent account or successfully claim Housing Benefit. He fell into rent arrears and the council served a NTT. A review request was not made by C (he did not understand the implication of the notice), an outright order for possession was made in due course and a date for eviction was set. C sought advice and an offer to the council was made on his behalf to withdraw the eviction on the basis that action would be taken to resolve the Housing Benefit problem, refer C to specialist tenancy support and make arrangements to pay the remaining arrears. The council refused the offer. On the morning of the scheduled eviction, C's advisers submitted an application to set aside the possession order on the basis that the authority was being discriminatory in its action and was therefore in breach of section 22(3)(c) of the Disability Discrimination Act 1995, which makes it unlawful for a person managing premises to discriminate against a disabled person occupying those premises, by evicting that person or subjecting him/her to any other detriment. Initially the court suspended the eviction, pending a full hearing of C's application. However, following negotiation and reinstatement of Housing Benefit and a referral for tenancy support, a consent order was drawn up between the two parties and approved by the court to set aside the possession order and strike out the claim. HUMAN RIGHTS ACT 1998 (HRA) Caselaw has confirmed that the s.129 review procedure is compliant with the Human Rights Act10. However, a recent appeal to the ECHR involving a claimant's appeal to a Housing Benefit Review Board has indicated that the combination of internal review and supervision by the court under its public law jurisdiction is not HRA compliant where the reviewer is conducting a 'simple fact-finding exercise'11. There may be some scope to apply this ruling to Introductory Tenancy Review Panels, as they may not be applying 'specialist knowledge and expertise' which is the basis of allowing the High Court to have full jurisdiction in judicial review proceedings. 3. R (on the application of Laporte) v Newham LBC 2004 4. R (McDonagh v Salisbury DC 2001 EWHC Admin Court 5 July 2001 5. S.129(6) Housing Act 1996 6. s 127(3) 1996 Housing Act 7. Manchester City Council v Cochrane (1999) 31 HLR 810 8. See in particular North Devon

Homes v Brazier 2003, Manchester City Council v Romano and Samari 2004 and Liverpool City Council v Slavin 2005. 9. [2007] EWCA Civ 763 10. Runa Begum v LB Tower Hamlets (2003) UKHL 5. 11. Tsfayo v The United Kingdom - App 60860/00 (2006) ECHR 981

12. see Southwark v Augustus Lambeth County Court Legal Action, Feb 2007, p.29

Martin Coates is works for Citizens Advice Specialist Support Housing Team.


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basis that even though LLBC were unaware of M’s disability at the time the notice was served, they were aware by the possession claim reached the court. The court held that LLBC’s Lewisham LBC v Malcolm and possession action was unlawful Disability Rights Commission under DDA s.22(3) even though the court has no discretion in such Court of Appeal, 25 July 2007 possession claims. The court held M was granted a secure tenancy that M was disabled under DDA s3 by LLBC in January 2002. A and that his disability was related condition of a secure tenancy, to the subletting of the property. under Section 93 of the Housing LLBC were refused permission to Act 1985, is that the tenant should appeal. not sublet the property without the consent of the landlord. COMMENT: This is a major In March 2002, M made an decision. The court can dismiss a application to buy the flat. The possession claim brought on conveyance was delayed and never mandatory grounds if it is found to completed. M had suffered from be unlawful under the DDA 1995. schizophrenia for many years but It applies to any possession action controlled it when taking brought by local authority, medication. In April 2004, M’s registered social landlord and doctor’s discovered that he had not private rented landlords. been taking his medication since late 2003. In June 2004, M sublet HOMELESSNESS the flat without LLBC consent. As a Council referring to result of this action, he lost his previous homeless security of tenure under Section 93 application of HA 1985. Decision reached following In June 2004, LLBC discovered full inquiries that M had sublet the flat and Eren v Haringey LBC took possession action in December 2004. M defended the Court of Appeal, 24 April 2007. action under the Disability Ms E left joint-tenancy in private Discrimination Act (DDA) 1995, rented accommodation after her stating that he was disabled; the marriage broke down in March possession claim related to his 2004. She applied to Enfield LBC disability and therefore was not as homeless under Part VII of justified. Housing Act 1996. Enfield made a On 6 March 2006, Bromley decision that she was not County Court made an order for homeless as she had possession. M appealed. accommodation that it was POSSESSION Successful defence of mandatory possession action on disability discrimination grounds.

HELD: Appeal allowed. The Court of Appeal found by majority that the service of notice to quit was unlawful discrimination, on the

reasonable for her to return to. Enfield advised her to return and that if she did not, then she might be found intentionally homeless if she applied as homeless again.

E did not return to the accommodation and the tenancy was surrendered in May 2004, although it was not clear by whom. E made further homeless application in July 2004 to Enfield. She was found intentionally homeless and she did not request a review of that decision. In May 2005, E made another homeless application but this time to Haringey LBC. She did not reveal that she had made two previous unsuccessful homeless applications. Haringey’s inquiries led to the discovery of the two previous homeless applications and they obtained copies of E’s homeless files with Enfield. Haringey’s decision was that she was intentionally homeless, based on the evidence available to them. E appealed to the county court on the grounds that Haringey had merely reviewed Enfield’s decision. E’s appeal was allowed and Haringey appealed to the Court of appeal. HELD: Appeal allowed. The court recognised that Haringey were duty bound to conduct a full and independent inquiry and not to just consider and repeat the conclusions of the previous inquiries by Enfield. The court found that Haringey had conducted a full and fair inquiry and had based their decision on all of the relevant information, which included information that they had taken from the homeless files for E’s previous applications. SOURCE: Transcript (2007) ECWA Civ 409.


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there are significant differences between occupation of the family home and rented accommodation, a child may have no enforceable right to remain or return to the Denton v Southwark LBC family home, can be excluded on a whim and cannot choose the Court of Appeal, 4 July 2007 terms of occupation. It is not, Mr Denton (D) was aged 20 and however, unreasonable to expect lived in the parental home. After that people living together show repeated warnings about his bad behaviour, his mother asked him to each other respect and not cause leave because of his rudeness and nuisance to each other or others. After consideration of the facts the his use of drugs in her home. He then went to live with his sister but council had been entitled to find she too asked him to leave. On his that the cause of D’s homelessness was his own bad behaviour. His homelessness application the council found that he had become mother’s ‘house rules’ had not homeless intentionally, finding that been unreasonable and, accordingly, it would have been after speaking to his mother he reasonable for him to continue to could have returned home if only live at home and to expect that he he would agree to behave. complied with the rules. D exercised his right under s202 of the HA 1996, arguing among SOURCE: EWCA Civ 623 other things that it was not reasonable to continue living with (4 July 2007) his mother because as he was 21 and was expected to stay at home Council taking applicant’s obeying her ‘house rules’. signed statement at face The review, by an officer of value with no obligation Southwark, upheld the original to invite further decision of intentionality. D representations. appealed to the County Court. The Rowley v Rugby BC appeal was allowed. The judge found the review decision Court of Appeal, 25 April 2007 wednesbury unreasonable in that it Miss Rowley (R) and partner (T) had failed to take into account the were in private rented situation as a whole between D accommodation. In February 2006, and his mother and that it was the they left the property and made a opinion of others that had been homeless application to Rugby instrumental in him ceasing to Council (RC). occupy his accommodation, not They made separate applications just his behaviour - an issue about and stated that the landlord had which Southwark had failed to asked them to leave as he wished make adequate enquiries. The to sell, but the landlord gave no review decision was quashed. written notice. They wished to Southwark appealed. move back to Rugby as R was pregnant and wanted family HELD: Appeal allowed. The court support. of appeal concluded that, although RC made inquires to the ‘House Rules’ a finding of intentionality due to unreasonable behaviour in the family home

landlord that revealed that he had verbally stated that he might want the property back in the future. RC asked the applicants to sign a letter in March 2006 that stated that the landlord had not given them any notice and that they wished to move to Rugby for the family reasons. If they wished for the council to consider further information, or they disputed the facts of the letter, they should contact the council within seven days. R and T signed the letter confirming their agreement to the facts within it. R and T were found intentionally homeless and they requested a review of the decision under Section 202. On review, RC again wrote to R and T asking if they had any further relevant information that they wished to submit but received no reply. RC did not invite the applicants to a meeting or oral hearing and R or T did not request such a hearing. The decision was upheld on review. R appealed to the court but the appeal was dismissed. R appealed to the Court of Appeal on the basis that the council should have invited oral or written representations under reg 8(2) of the Allocation of Housing and Homelessness regulations 1999 because the original decision letter was ‘deficient’ in that it failed to explain fully the reason for the finding of intentionality. R also argued that she believed that she had to leave the property when the landlord verbally requested it. HELD: Appeal dismissed. The court agreed with the county judge, in that R and T had never mentioned in their statements, or in response


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to the council’s letter, that they had felt obliged to leave. Therefore the council were entitled to find that the reason for the move to Rugby was for family reasons. The court found that the reviewer was entitled to reach the conclusion that the original decision was not deficient and did not give rise to reg 8(2), and that he gave a more detailed reason for the decision on the upheld decision. R had been given ample opportunity to submit further evidence, which they did not take, and the council was entitled to take at face value the evidence provided, which R and T had accepted in the letter from March 2006.

that she was a tolerated trespasser and the right to buy application was treated as withdrawn. HG applied at court to set aside the order. This was heard in July 2003, by which time the arrears were cleared and the court revived the tenancy. HG fell into arrears again in 2005, the council started possession action. HG counterclaimed and as part of her defence sought an injunction ordering Islington to convey the property to her under the 2000 application. In April 2006, the court granted the injunction upon discharge of the arrears of rent by HG. Islington appealed to the High Court.

The order was dated 5 November 1991 although the judge’s name did not appear on the order and it was not sealed by the court. In 1994 A applied for a warrant for possession. There followed a series of inconclusive applications, including another warrant issued in 2002. In none of these applications M did not dispute the existence or validity of the order (dated from 1991) but took issue with the amount of arrears. There were further proceedings in the following years until M brought an appeal in 2005, disputing the validity of the original 1991 possession order for the reasons that it did not contain the name of the judge who made it and was not sealed by the court. The judge SOURCE: Transcript (2007) HELD: Appeal allowed. HG’s secure dismissed the appeal on the basis that it was out of time. EWCA Civ 483 tenancy had ended in October M appealed. 2002 and though she had PUBLIC SECTOR successfully revived it in her 2003 Right to buy application HELD: Appeal dismissed. The Court application, thereby reviving the expires when tenant covenants of the tenancy including of Appeal agreed with the County becomes ‘tolerated Court that it was far too late for the right to buy, the 2000 trespasser’ the validity of the order to be application under Section 118 of Islington LBC v Honeygan-Green challenged. Both parties had the Housing Act 1985 did not previously acted as though the survive the possession order and High Court, 25 May 2007 order was valid and M had put in the loss of tenancy status that HG was secure tenant of Islington resulted from the breach. defences on the basis that there LBC and in May 2000 made an was a valid order in existence. To application under the Right to Buy SOURCE: EWCA (2007) 1270 QB find the order invalid would be an scheme. The application was abuse of process. allowed but delayed because of HOME OWNERSHIP problems with a collapsed wall at Application to challenge SOURCE: Transcript (2007) the property and a boundary validity of possession EWCA Civ 138 dispute with a neighbour. In the order out of time INSOLVENCY meantime, HG fell into rent arrears Abbey National PLC v Miller Intentions of parties and Islington started possession action. Court of Appeal, 8 February 2007 considered after trustee applies for joint tenancy In October 2002, the possession M fell into arrears on a mortgage order was suspended on condition taken out with Abbey National PLC severance to be set aside that HG paid current rent plus £50 (A). In 1991 the county court Singla (trustee in bankruptcy for Brown) per week to the arrears. HG v Brown and Malden-Brown made an order for possession, breached the order and in March suspended on payment of arrears 2003 was informed by Islington by instalments of £175 per month. Chancery Division, 1 March 2007


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Mrs Malden-Browne (M) had been a secure tenant since 1981. In the early 1990s she started a relationship with Mr Brown (B). In May 1998, B moved into the property with M. In September 1998 M bought the property. M paid the deposit of £6,000 and other expenses of £3,000. M paid all the outgoings on the property, including the mortgage, as B was unable to work. The property was initially put in both names, as beneficial joint tenants. M was not properly advised by her solicitors of the implications of this arrangement. Following further advice, M had the joint tenancy severed and the property was transferred to a tenancy in common arrangement, held by M and B in unequal shares (M to

hold 99% shares and B to hold 1% share). This restored M and B’s original intention when purchasing the property. The documents were signed severing the joint tenancy. B fell into debt and was declared bankrupt. B’s trustee in bankruptcy, Surjit Singla (S), applied for the severance of the beneficial joint tenancy to be set aside under s.339 of the Insolvency Act 1986 – that he had entered into a transaction at an undervalue prior to bankruptcy. M’s solicitors argued that it had always been the intention that B would only have nominal interest in the property, the original joint tenancy was a mistake and the subsequent severance was rectification of that intention.

Printer - please insert “07.10.16Article for CitA (1).doc”

HELD: Application dismissed. The court recognised that the transaction for severance did fall within s.339 but exercised its discretion based on the initial intentions of M and B. It was clear that B had not contributed anything to the capital cost of the property or the outgoings. M alone had the right to acquire the property at a discount, because of her previous secure tenancy. The severance of the beneficial joint tenancy took place two months after the purchase, indicating that it really was a mistake. SOURCE: Transcript (2007) EWHC 405


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Casual workers - looking beyond the label The modern workplace has a large number of individuals who are as 'casuals' and advisers may come across clients who have been informed by their employers that as 'casuals' they have no employment rights. Suzanne Henderson argues that their employment rights will only be able to be determined by an analysis and establishment of their true employment status.

This article is necessarily limited in its scope. It is not intended, nor is it possible here, to discuss the vast range of employment status issues that may arise. Its aim is to focus more specifically on the issue of 'casuals' and the question of demonstrating 'continuity of service', particularly in the light of recent cases such as Prater1 and Vernon2.

Recently the Employment Appeals Tribunal has signalled that a straightforward and robust approach should be adopted when applying the statutory continuity provisions contained in the Employment Rights Act 1996. This is especially relevant for so called 'casuals' who may be assisted by the provisions to demonstrate sufficient continuity of service to be able to access the full spectrum of employment rights. 'Casual' is a label that has no legal meaning in terms of employment legislation, in so far as access to employment rights is concerned, 'casuals' will need to demonstrate that their 'real' status is that of 'employee' or 'worker'. (It is important nonetheless to remember that complaints of discrimination will not require the individual to establish their status as an employee or a worker.) The familiar definitions relating to 'employees' and 'workers' are

to be found at S.230 Employment Rights Act 1996 (ERA): (1) 'In this Act 'employee' means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment. (2) In this Act 'contract of employment' means a contract of service or apprenticeship, whether express or implied, and, (if it is express) whether oral or in writing.' (3) In this Act 'worker' (except in the phrases 'shop worker' and 'betting worker') means an individual who has entered into or works under (or, where the employment has ceased, worked under)(a)a contract of employment, or (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;

and any reference to a worker's contract shall be construed accordingly.' True 'casuals' are individuals who work on an occasional and/or irregular basis. They are usually regarded as independent contractors or self employed. As an independent contractor they are under no obligation to work and nor is there a reciprocal obligation for them to be provided with work and paid for the work that they do. This lack of obligation is the determining factor as to their status. If there is no mutuality of obligation between the worker and the person for whom the work is provided there can be no contract of employment. Without a contract of employment they cannot be classed as an employee and as such they will not be able to access the full range of protection offered by the legislation. Nonetheless, many so called 'casuals' often fall into a regular pattern of working, for instance over particular holiday periods or a regular weekend cover. It is often the case that this regular pattern


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“Many so called 'casuals' often fall into a regular pattern of working.”

“‘Global’ contracts are those where it can be shown that the mutual obligations exist to keep the contract of employment alive”

of working will continue over extended periods. In many situations, such as disputes concerning unpaid wages, it will be sufficient for the 'casual' to show that they are a 'worker'. Nonetheless, it is when 'casuals' are told that they are no longer required they may consider that they should be able to claim unfair dismissal. In order to ascertain whether this is possible, advisers will need to try to establish the 'true' employment status of the 'casual' worker. A 'casual' who wishes to access the full range of employment rights (that is, to have the option of claiming that they have been unfairly dismissed or perhaps claiming a redundancy payment) will therefore have to demonstrate three things: (i)that there is mutuality of obligation between themselves and their employer; (ii)that they are under the control of their employer; and (iii)that they have sufficient continuous service in order to qualify to bring a claim of unfair dismissal3. Satisfying points (i) and (ii) above will mean that the individual is able to demonstrate their 'employee' status by showing that they worked under a contract of employment. More problematical for most casual workers will be to satisfy point (iii) simply because it is the very nature of casual work that there will be gaps between the periods when the work is performed. There are two ways to establish continuity: (i)By proving that there is a 'global' contract that continues to exist even during the periods where

the employee is not actually working and that lasts in total for a year or more, or: (ii)By proving a series of individual contracts of employment that can be linked together to last at least a year in total, by utilising the continuity provisions of s.212 ERA 1996. 'Global' contracts are those where it can be shown that the mutual obligations exist to keep the contract of employment alive during periods where the individual is not actually working. A significant case that considers the idea of 'global' contracts of employment is that of Carmichael v National Power4. In this case, Mrs Carmichael and Mrs Leese were taken on to act as guides at Blyth power station. Both were trained and offered and accepted work when required and available to do so. The positions were part time but by 1995 they were working up to 25 hours a week. The claimants were regarded as 'casuals'. The case raised a number of very interesting points, including whether a Tribunal was permitted to look beyond the contractual documentation at the surrounding circumstances and therefore the whole picture of the working relationship in order to ascertain whether the claimants were in reality 'employees'. The guidance provided by the House of Lords is useful as it emphasises the point that Tribunals must assess: 'whether the parties intended the documents to be the exclusive record of the terms of their agreement.' f not, then it is permissible to look at the surrounding conduct and oral exchanges between the parties as evidence as to the

relationship between them and therefore by extension ascertain the status of the individual worker. As to whether there was a 'global' contract, the House of Lords concluded that there was not: 'There was no intention to create an employment relationship which subsisted when the applicants were not working… The tribunal correctly concluded that the applicants' case 'founders on the rock of absence of mutuality'.' In Clark v Oxfordshire Health Authority5the court decided that, in order to establish the presence of a 'global' contract, some action (such as the payment of a retainer) must be present to maintain the element of mutual obligation. Ms Clark belonged to a 'bank' of nurses who worked for Oxfordshire Health Authority. She was only paid for the hours that she actually worked and did not have any entitlement to sick pay or holiday pay. When she was informed that she would no longer be required, Ms Clark claimed unfair dismissal. At the tribunal the Health Authority denied liability on the basis that Ms Clark had insufficient continuous service to make such a claim. Ms Clarke won on appeal at the EAT arguing that she had been continuously employed under a 'global' or 'umbrella' contract. This 'global' contract subsisted even during the periods where she was not actually working. The Court of Appeal did not agree. In considering the Health Authority's appeal the Court pointed out the need for some mutuality of obligation to exist during the periods when Ms Clark


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“Mutuality of obligation and control on the part of the employer are the minimum for a contract of employment.�

was not working in order to establish the existence of a 'global' contract. They considered that mutuality of obligation may not always consist of the obligation to provide and perform work, it may be sufficient for one party to pay a retainer to the other for periods where work was not offered. On the facts of Ms Clark's case the Court therefore concluded that there was no 'global' contract in place. Alternatively, and arguably a significantly easier approach than demonstrating the existence of a 'global' contract, is for the 'casual' to show that the gaps in service are capable of being explained by using the provisions on continuity contained in the Employment Rights Act 1996. It may well be that an individual is able to demonstrate that whilst they are working they fulfil the criteria to show they are an employee, however, during the breaks in between periods of work it will be harder to demonstrate that mutuality of obligation is still present in the relationship. In order to satisfy the definition of an employee (s.230 ERA6), the 'casual' will have to show that all the essential elements for a contract of employment to exist were present in the relationship. These being: (i)mutuality of obligation; and (ii) the element of control. As Elias J emphasised at the EAT in 20037: 'The significance of mutuality is that it determines whether there is a contract in existence at all. The significance of control is that it determines whether, if there is a contract in place, it can properly be classed as a contract of service,

rather than some other kind of contract.' In making these comments in his judgment Elias J referred back to the words of Longmore LJJ at the Court of Appeal in the agency worker case of Montgomery v Johnson Underwood Ltd & Another8. Longmore LJJ having observed in that case: 'Whatever other developments this branch of the law may have seen over the years, mutuality of obligation and the requirement of control on the part of the potential employer are the irreducible minimum for the existence of a contract of employment, see Nethermere (St Neots) Ltd v Gardiner [1984] ICR 612, 623 per Stephenson LJ approved in Carmichael v National Power Plc [1999] 1 WLR 2042, 2047 per Lord Irvine of Lairg LC.' In order to establish the presence of these crucial elements an adviser will have to study the entire employment relationship in some detail. In practical terms, the documents will need close scrutiny but it is still important to look outside of any documentation and analysing the actual conduct of the working relationship between the parties, as discussed earlier with reference to Carmichael. Continuing his judgement in Stephenson, Elias J went on to discuss in some detail the very unique characteristic of 'casual workers' saying: '12. The issue of whether there is a contract at all arises most frequently in situations where a person works for an employer, but only on a casual basis from time to time. It is often necessary then to show that the contract continues to exist in the gaps between the

periods of employment. Cases frequently have had to decide whether there is an over-arching contract or what is sometimes called an 'umbrella contract' which remains in existence even when the individual concerned is not working. It is in that context in particular that courts have emphasised the need to demonstrate some mutuality of obligation between the parties but, as I have indicated, all that is being done is to say that there must be something from which a contract can properly be inferred. Without some mutuality, amounting to what is sometimes called the 'irreducible minimum of obligation', no contract exists. 13. The question of mutuality of obligation, however, poses no difficulties during the period where the individual is actually working. For the period of such employment a contract must, in our view, clearly exist. For that duration the individual clearly undertakes to work and the employer in turn undertakes to pay for the work done. This is so, even if the contract is terminable on either side at will. Unless and until the power to terminate is exercised, these mutual obligations (to work on the one hand and to be paid on the other) will continue to exist and will provide the fundamental mutual obligations. 14. The issue whether the employed person is required to accept work if offered, or whether the employer is obliged to offer work if available is irrelevant to the question whether a contract exists at all during the period when the work is actually being performed. The only question then is whether there is sufficient control to give


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“The Court of Appeal have here made it clear that a straightforward approach using the legislation is all that is required to link a series of individual contracts ”

rise to a conclusion that the contractual relationship which does exist is one of a contract of service or not.' In the light of the difficulties inherent in establishing the existence of a 'global' contract of employment (in that, it is extremely difficult to show the required levels of mutuality of obligation between the parties during the periods where no work is performed) it may be beneficial to the 'casual' to try to demonstrate continuity by means of the specific continuity calculation provisions contained within s.212 Employment Rights Act 1996. The provisions of s.212 are as follows:(1) Any week during the whole or part of which an employee's relations with his employer are governed by a contract of employment counts in computing the employee's period of employment. (2) … (3) Subject to subsection (4), any week (not within subsection (1)) during the whole or part of which an employee is (a) incapable of work in consequence of sickness or injury, (b) absent from work on account of a temporary cessation of work, [or] (c) absent from work in circumstances such that, by arrangement or custom, he is regarded as continuing in the employment of his employer for any purpose,… (d) …counts in computing the employee's period of employment. (4) Not more than twenty-six weeks count under subsection (3)(a)…between any periods falling under subsection (1).

There are understandably a large and ever increasing number of cases on the subject of casual workers. In Cornwall County Council v Prater9 it was held that a teacher who accepted a succession of term time teaching assignments (all be they for home tuition) over the course of many years was to have been regarded as having been continuously employed by virtue of s.212 Employment Rights Act 1996. Section 212 Employment Rights Act 1996 (outlined above) makes specific provisions as how weeks counting towards continuous employment may be computed. On the particular facts of the Prater case, any gaps in work being performed could be disregarded because Mrs Prater was only absent on account of a 'temporary cessation of work'10. The lack of mutuality of obligation before and after the completion of assignments did not prevent the assignments from amounting to contracts of employment. The case progressed to the Court of Appeal and in 2006 Mummery LJ made some extremely useful observations as to the contractual relationship between Mrs Prater and the Council. In these observations he highlights the legal position between the parties, noting: (i) That Mrs Prater's first task was to establish that when she was working, she was working under a contract of employment and not a contract for services. (ii) That the lack of mutuality of obligation between the Council and Mrs Prater at the end of each teaching assignment/contract of employment did not prevent the consecutive nature of the contracts

creating continuity of service if: (iii) The gaps between the term time teaching assignments were attributable solely to a 'temporary cessation of work' and were therefore entirely capable of being covered by the provisions of s.212(3)(b) ERA. The Court of Appeal have here made it clear that a straightforward approach using the legislation is all that is required to link a series of individual contracts once it has been established that the contracts concerned are of employment. Not only does the section allow for periods such as school holidays, where clearly teaching work is not going to be available, but it also makes it very clear that any work done by an individual during the course of a week allows that week to count towards the calculation for continuous service. This is especially significant for 'casuals' as the amount of time spent at work may vary considerably from one week to the next. What is important is that there is no minimum requirement in terms of hours worked each week. This potentially opens up a whole set of rights for those who may only work a couple of hours each week. It is also important to note that the legislation permits the presumption of continuity unless the contrary can be shown11. July 2007 saw the latest judgement in relation to 'casuals' handed down from the Employment Appeals Tribunal in the case of Vernon v Event Management Catering Limited12. Mr Vernon had worked for a couple of days every week over the period 2003 to 2006 as a 'casual' worker undertaking general


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“The statutory provisions must be applied.”

“It is open for ‘casuals’ to argue that breaks in service due to demand constitute a temporary cessation of work”

catering duties and later, bar work for the Respondent, a specialist catering company. The Tribunal found that Mr Vernon had worked every week except for two weeks holiday that he took in 2005. The tribunal held that the Claimant, was able to demonstrate that he was an employee during the periods he was working but did not have an 'global' contract that would provide him with employee status for the periods when he was not at work. The Tribunal also found that Section 212(1) ERA did not convert the relationship between the Claimant and Respondent into a contract of employment as this would change the 'essence' of the relationship. The issue for the EAT to decide was whether the Claimant could in fact achieve continuity of service through the provisions of Section 212 Employment Rights Act 1996. In the judgement from Employment Appeals Tribunal Elias J takes an unequivocal approach, noting simply that the statutory provisions must be applied, stating in paragraph 19 of the judgement: 'We agree with the Claimant. As the Tribunal recognised, there are two ways in which the employee involved in casual work may acquire continuity. One is if there is a global contract in which case there are no gaps in the period of employment. The other is if there are intermittent contracts but the gaps can be bridged by the legal rules on continuity. It is true that both may lead to the same result, but that is not a reason for failing to apply the statutory continuity provisions as Parliament enacted them. It is also the case that the facts in Prater were different in the nature of the actual

engagements presented a very different pattern from that in this case, but with respect to the Tribunal, that is not material at all when looking at the operation of S.212(1). It seems to us that in every week where the Claimant worked as an employee, for however long, that week must count under S.212(1). His relationship is then governed by a contract of employment. The subsection could not be clearer.' This decision will prove to be invaluable in that the guidance it provides is very clear. For advisers it will undoubtedly be of assistance as showing the route and the order in which to establish a client's continuity of service. A 'casual' who can demonstrate that they are an employee for the periods during which they work (no mean feat in itself) should then apply the statutory continuity provisions to their particular pattern of work. If the gaps in service are capable of being covered by the provisions in S.21213 then the fact that they cannot show that there is an 'global' contract' in place is immaterial. There will undoubtedly be disputes as to what, for instance under S.212(3)(b), constitutes a 'temporary cessation of work'. From the decisions in Prater and, arguably more importantly, in Vernon it is surely then open for 'casuals' who have breaks in their service as a result of demand in the sector to argue that these breaks constitute a 'temporary cessation of work' for the purposes of achieving continuity. It is important to highlight the differences in circumstances in Prater and those in Vernon. Whilst

they are both covered by the provisions of S.212 they had very different working patterns. This is significant as it demonstrates that the statutory provisions on continuity can be applied to a broad range of 'casual' worker scenarios. Given the obvious difficulties inherent in establishing evidence of a 'global' contract existing between the parties to the employment relationship, applying the statutory provisions should provide a refreshingly simple and effective approach to establishing continuity of service for those workers who have been labelled 'casuals' and as such are assumed to have minimal employment rights. FOOTNOTES 1. Cornwall County Council v Prater [2006] IRLR 362 CA 2. Vernon v Event Management Catering Limited UKEAT/0161/07 3. Section 108 Employment Rights Act 1996 4. Carmichael v National Power Plc [2000] IRLR 43 HL 5. Clarke v Oxfordshire Health Authority [1998] IRLR 125 6. Section 230 Employment Rights Act 1996 7. Stephenson v Delphi Diesel Systems Limited [2003] ICR 471 EAT 8. Montgomery v Johnson Underwood Limited & Another [2001] EWCA Civil 318 [2001] ICR 819 9. Cornwall County Council v Prater [2006] IRLR 362 CA 10. Section 212(3)(b) Employment Rights Act 1996 11. Section 210(5) Employment Rights Act 1996 12. Vernon v Event Management Catering Limited UKEAT/0161/07 13. Section 212 Employment rights Act 1996

Suzanne Henderson is a Specialist Support Officer with Citizens Advice Equality & Employment Team.


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Dispute Resolution round-up Following on from our last issue, David Jones takes a further look at the operation of the statutory dismissal, disciplinary and grievance procedures and examines some more interesting cases.

“Advisers need to be clear that an amendment will only be allowed where the GPs have been complied with.�

GRIEVANCE Certain claims to the employment tribunal must first be raised as a grievance with the employer and 28 days must have also passed from the raising of the grievance before the tribunal will accept the claim. Tribunals receiving ET1 complaint forms containing claims where compliance with the grievance procedures (GPs) has not been met, because the complainant has not waited for 28 days, will normally return the forms or exclude those claims which are subject to the GPs. Since the inception of the new procedures under the Dispute Resolution Regulations, tribunals have been faced with the problem of what to do with claims where a grievance has been entered into but the complainant has presented the ET1 too early and not waited for 28 days to elapse. Some tribunals addressed this issue by simply staying such claims until the 28 days had elapsed and then listing the case for hearing. In London Borough of Hounslow v Miller1, the EAT (Elias J, President)

has ruled that this is not permissible. Although expressing a good deal of sympathy for the tribunal approach to a common problem, Elias J held that the statutory language was clear and unambiguous and that if the employee fails to comply strictly with the grievance procedures, including the 28-day 'waiting period', then the tribunal simply does not have jurisdiction to hear the claim. The complainant will have no alternative but to submit a fresh claim after the 28 days have elapsed, something which, according to Elias J, Parliament must have intended. Although the staying of claims to get around the 28-day rule is prohibited, what about allowing amendments to the original ET1 to include a claim or claims after the 28-day waiting period has elapsed? According to the EAT2 (Sarota HHJ), and following London Borough of Hounslow v Miller, this is permissible where the ET1 contains claims that are not subject to the GPs (e.g. an unfair dismissal claim). Where an

ET1 has been admitted to the tribunal it is possible to seek a later amendment. In other words, where an ET1 is presented with claims that are solely subject to the dismissal and disciplinary procedures (the DDPs) but the employee has actually entered into grievance with regard to a claim that requires compliance with the GPs (in the present case, a claim for holiday pay), but has somehow managed to omit it from the ET1, they can apply to amend the ET1 after 28 days have elapsed to include that claim. This is because the EAT held that there is nothing in the Dispute Resolution Regulations that prevents such an amendment. Whilst this case is a useful case for advisers to bear in mind, advisers need to be clear that an amendment will only be allowed where the GPs have been complied with and the ET1 has both omitted the particular claim(s) and been presented prematurely. Where the claim has not been raised as a grievance with the employer, an amendment will not be permitted because this would


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“The EAT has traditionally been wary of laying down boundaries.�

circumvent the statutory grievance procedures. Where there is any doubt as to whether an employee has entered into grievance over a particular claim, advisers should err on the side of caution by entering a fresh grievance within the normal time limit and waiting a further 28 days before presenting that claim. If this means having to enter two separate ET1s, because the claims that are only subject to the DDPs are in danger of drifting out of time, this is the preferable course of action rather than applying for a potentially risky amendment that may be refused after a time limit has expired. If an employee raises a grievance before the effective date of termination, can they still benefit from the automatic extension of the normal time limit by a further three months? The answer is 'yes they can' following the decision of the EAT in HM Prison Service v Barula3 (Underhill J.). Although the employers argument was technically correct in that the time limit extension only applies where the grievance is raised 'within the normal time limit', the EAT rejected this argument on the grounds that the consequences would be absurd. Where a grievance is raised before the EDT the automatic extension of the time limits still applies. What happens where the employee is insufficiently literate to put his Step 1 grievance in writing but instead the employer makes a written note of the grievance? Did the employee 'set out the grievance in writing and send...a copy of it to the employer'? Again holding that to find otherwise would be absurd, the EAT (Cox J.)

dismissed the over-legalistic, technical approach to the language of the regulation and held that the employee had complied with the GPs and could bring his discrimination claims4. DISCIPLINE AND DISMISSAL The Dispute Resolution Regulations are three years old this October. Perhaps the one issue where we might have expected some guidance from the EAT concerns the levying of the 10-50% uplift in compensation for employers who fail to comply with the DDPs. Rather surprisingly, this appears to be one of the issues where the EAT are reluctant to lay down guidelines. Presumably the reason for this apparent reluctance is because the EAT has traditionally been wary of laying down too rigid boundaries to the ET's broad discretion to award what they feel is just and equitable in any given case. But whatever the reason, the upshot is that there are concerns that the tribunals are taking widely differing approaches to when the minimum or maximum penalty should be awarded. In Cex Ltd v Lewis5 Justice Burke expressly stated that the appellate courts should be reluctant to interfere with the tribunals exercise of their discretion when considering what percentage penalty should be awarded. In this case, the employer's ignorance of the law was to their advantage in that the ET thought that they should only be penalised at the minimum 10% end of the scale. The EAT refused to interfere with this ruling. As Daniel Barnett commented in his Employment Law Bulletin on this case,

ignorance of the law has been precisely the justification for other tribunals to make awards at the higher end of the scale. In Metrobus Ltd v Cook6 the ET awarded a 40% uplift because the employers 'blatantly failed to comply' with the sending of the Step 1 letter under the DDP. The EAT refused to intervene holding that there was no perversity in the ET's reasoning. One case where the EAT (Hon Lady Smith) has intervened is Aptuit Ltd v Kennedy7. In a case concerning a redundancy dismissal, the ET awarded a 40% uplift because the employer was large, there was 'no consultation whatever' and a long-standing employee had been treated in a 'shoddy' manner. Perhaps controversially the EAT held: 'These matters should not have influenced the decision on uplift at all since they did not relate to any failure to complete the statutory procedure'. Why a tribunal is not allowed to take into consideration these factors when assessing an appropriate penalty is not entirely clear. For this, and other reasons, the case was remitted. FOOTNOTES 1. UKEAT/0645/06 2. Mackay v Blakes Newsagents, UKEAT/0181/07 3. BAILII: [2006] UKEAT 0387_06_1511 4. Kennedy Scott Ltd v Francis, BAILII: [2007] UKEAT 0204_07_0305 5. BAILII: [2007] UKEAT 0013_07_1008 6. EAT/0490/06/ 7. UKEATS/0057/06

David Jones is a freelance employment specialist and Adviser employment editor.


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Advising victims of gun culture There has been much political debate about how the UK can effectively tackle urban gun culture in the past year. It is easy to think that advice agencies have nothing to contribute to this debate, but the experience of Wolverhampton CAB service suggests otherwise. Jeremy Vanes outlines the practical steps advice agencies need to take to give effective advice.

On 26 June 2006, various gang rivals accidentally met in Wolverhampton city centre during a normal Monday afternoon; shots were fired and the spat concluded with one gang member beaten and stabbed, amidst terrified shoppers and pedestrians. Around the same time Wolverhampton CAB began to assist a client affected by gun crime problems in another city. The complexity of this work forced the CAB to adopt new procedures, and we found no existing knowledge base which we could use. This article draws on our experience over 15 months.

challenges, tenancy disputes or employer pressures). If any of the armed crime groups use our services it will be fleetingly and we are likely to remain unaware of their gang activity. Secondly, there is little in the way of formal or civil opposition to armed crime perpetrators that will manifest itself into individual enquiries arriving at an advice agency. People are unlikely to be taking small claims against armed criminals, or disputing drugs debts in court, or serving writs on a rival turf gang. What are likely to arrive in bureaux caseloads are a number of secondary matters generated from the distortions that gun crime causes to individual community lives. Often these will be extra twists within already familiar case types for the CAB service. WHAT CLIENTS For example, ex partners of gun MAY PRESENT? crime perpetrators may feel the Firstly, it is unlikely that active need to physically distance armed crime perpetrators will seek themselves as their former CAB assistance, as their lifestyles partner’s lifestyle spirals into mean they are unlikely to have increased danger or menace. typical CAB enquiries (for example, Families are similarly affected, for regulated debt issues, benefit claim example parents or siblings of the

perpetrator. A former partner or close relative of a perpetrator will inevitably possess considerable incriminating information that the perpetrator will not want disclosed. There is often a complex psychological analysis (of solidarity versus betrayal) fixed in the mind of a perpetrator, especially towards former associates or partners. Consequently these extra risks make ordinarily fraught changes (like tenancy moves, relationship separation, childcare disputes or witness evidence demands) not only adversarial but absolutely traumatising. Typically these matters affect young women (former partners of the perpetrator men) or the siblings and mothers of the men. In some aspects these matters are not dissimilar to domestic violence cases that advice agencies have worked through for several decades, and some of the tactics and methodologies developed by this casework legacy are relevant and transferable skills. Examples we have become aware of include a distressed young woman alleging a gun


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barrel was pushed into her mouth (whilst a child watched), bullets posted through letterboxes, and petrified witnesses who cooperated with prosecutors but were then publicly named, exposing them to devastating reprisal risks. Once you see beyond the horror of these stories, you realise that the issues in this casework are somewhat similar to those affecting victims of domestic violence, although the wider gang dimension does render personally served injunctions and court orders less reliable and effective than in a conventional domestic violence case.

each know the client by a different identity; for example, having to produce a financial statement with several different names on the top. Similarly the use of changed national insurance numbers causes hurdles with benefits claims. Registering with a new GP when you are moving between hideouts and/or fear external contacts is also tricky, and can impede some benefit claims such as disability living allowance and incapacity benefit.

first interviews for a number of reasons: _ we can better control the environment and risk assess the client properly, _ we have access to wider resources on hand; and _ we do not wish to “distort ourselves” as a result of the perpetrators’ behaviours. This has not been easy because of the busy area in which the main CAB office is located and these clients are genuinely reluctant to venture into rooms where HOW DO ADVICE strangers may be already present. AGENCIES COPE? As a compromise we have paid for There are wider matters arising taxi journeys for such clients to and from these client cases for advice from the bureau, and used the WHAT SORT OF agencies. Clients facing protracted rear car park on “closed” days as PROBLEMS PRESENT? levels of threat are frequently an alternative entrance. We also In essence these clients need traumatised, need high levels of sent stamped self-addressed instant secure social support, reassurance, are uneasy about envelopes, pens and notepaper to irrespective of whether separate entering crowded waiting rooms one client in hiding, who could not criminal defence work is being run and they frequently request home afford a telephone and could not for them. Sometimes a lack of visits as a preferred choice. This travel to our offices, so that she corroboration of their testimony raises matters of staff training, could write to us. can expose them to suspicions of duty of care for advice agency Another unusual side enquiry being “intentionally homeless” and trustees, operational efficiency can be requests to initiate housing authorities can stonewall. and (occasionally) some criminal complaints against the police or Beyond the presenting matter evidence matters drift into the Crown Prosecution Service by (such as the need to be rehoused case notes. clients who have been caught up to a secure location) these cases Again, is this new? It has struck in trials of accused gun criminals. can often involve relatively me that there is a perennial niche We have directed such clients to conventional but especially client group, perhaps best an established solicitor firm distorted facets. described as the “gangster’s ex specialising in actions against the These clients may have been partner” who faces an police, or suggested use of the frequently moved, abroad or extraordinarily complex dilemma of Independent Police Complaints around the UK, either by their personal safety in going honest. Commission (IPCC) as a preliminary criminal partners (for protection or Lawyers have been assisting such (“free”) investigation service to control), or by the police persons for years, as have witness check potential claim merit. (protecting them from criminal ex- protection agencies. The local partners), and in both instances strategic partnership (LSP) may be HOW DO ADVISERS COPE? aliases can have been used and a good source of knowledge in We have Googled the former debts will have accrued. Whilst the this respect. names of some of the young sums can be modest, and clients In Wolverhampton CAB we clients affected by gun crime trials, will be assisted by CAB staff under have sought to insist that all clients and the only mentions of them are the normal legal aid contract, it is affected by gun crime attend the as accomplices, witnesses or difficult to deal with creditors who normal bureau offices initially for victims in tragic crimes. How are


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KEY LEARNING POINTS What then are the key learning points, if any, to date from the limited casework experience within CABx touched by gun crime? The following list is simply a starting point, which I hope will stimulate those in other advice agencies and within advice networks: Client issues _ Clients are anxious and concerned for personal safety. Consequently they may miss appointments, insist on home visits, or prefer visits to bureaux on quieter days or by discreet methods. _ Staff handling these cases should have a rudimentary awareness of typical issues affecting victims of gun culture. These include the use of aliases, missing documents, “debts” to unregulated persons, NINO changes, trepidation in naming partners and address changes. _ Bureaux must accept that such clients may have been intimidated by, or witness to, or even participated in, threats and actions, mixing feelings of suffering, self doubt and even remorse. _ Some clients may have lived powerful and profitable lifestyles and can view benefit claim rates or the slow procedures of housing schemes as infuriating and may criticise staff for not gaining “more” for them. Funder issues _ The cumulative effect of these issues will obviously mean this casework does not run swiftly and easily. _ Funders need to respect and allow for experienced staff to spend time tackling elusive strands of casework. _ Outcomes may be diffuse and hard to classify.

Employer issues _ Advisers are not immune to press stories and fear of actual crime. They may be concerned about assisting such clients. Suitable methods in general, and case by case risk assessments by managers, must be adopted. For example, Wolverhampton CAB now publicises an “initial contact” number with a code staff name to ask for. This means we can instantly recognise such a caller, and no real staff name is offered or recorded on paperwork, until we have built up a clearer risk assessment of the situation. _ Training on case studies, procedures and awareness is useful, for example witness protection issues _ Improving the bureau referral directories on criminal law firms, solicitors who are willing to take actions against the police and the regional IPCC staff is sensible, as are prior discussions with such agencies regarding how they would assist in handling cases for clients in hiding.

Policy issues _ Advice networks need to think about information sharing protocols, in a way similar to Child Protection _ Advice networks might also encourage good practice discussions (similar to the way the NHS is using certain hospitals to specialise in bullet wound surgery) _ The CAB service locally and nationally should have some prepared policy statements about urban gun crime, so that when incidents occur we make sensible comments that avoid stereotypes, reassure affected clients and support communities _ There has been much hype over recent years that UK urban gun crime is a “Black issue” but evidence points to a sub culture that has existed for centuries, and we must avoid contributing to such unhelpfully speculative debates _ We can support community efforts to tackle gun culture (like the Street Pastors, “gang exit” schemes and peer liaison leaders) which are emerging in our most affected communities.


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these clients to reclaim and rebuild their lives when hiding, far from friends, home and family, with everything about their past so despoiled? What new partner will they find with baggage like savage reprisals stalking them? Even the deepest of kin and support networks are tested by these compound distortions. Cases like this dwell in the minds of CAB staff who have worked on them, and a new form of supportive management is needed, because we simply do not currently have the pastoral services in place within our movement to handle disclosures this harrowing. Again we can learn support tactics for our staff from domestic violence, person centred counselling or witness protection agencies. A manager sitting in on an interview can reassure both the client and the adviser that this work is being taken seriously and valued. It also minimises later time in staff feedback, because of the shared working. We have also found that legal aid caseworkers can then concentrate on the actual casework involved (rehousing, debts, new benefit claims, rent arrears) whilst the accompanying manager can undertake the spinoff case elements, for example referrals to solicitors for actions against the police, letters of support, locating a new GP, and keeping up long term communication with a client in hiding who may periodically need another contact, but not necessarily with the same specialist caseworker they met before. The Local Strategic Partnerships in several areas have initiated Joint Information Protocols between

pillar agencies in their partnerships. This is to rapidly co-ordinate crime or evidence intelligence in several topics (drugs, fraud, robbery), but gun crime is an especial example1. For instance, hospitals can receive gunshot wounded victims who are reluctant to or will not speak or bear testimony regarding how they were wounded. From a crime investigation position it is simply impossible to have ended up with bullets inside you unless several serious criminal acts have occurred, and of course the clothing, wound trajectory and forensic analysis of the extracted bullets are vital to the prospects of proving a case. The ethical oaths of surgeons to patients are longstanding, but, under these extreme pressures, it does not assist communities in the long run to unwittingly officially suppress regular evidence of serious crime by always abiding with the patient’s wishes. Will bureaux be drawn into confidentiality disclosure territory like these protocols? My instincts suggest not, given the secondary nature of most of our involvements in such casework, but we should offer social policy commentary if and when it seems useful in debates or awareness training. FINAL THOUGHTS Advice agencies might risk assess gun crime affected clients as too dangerous or complex or inefficient to support, or wrongly identify these cases as criminal rather than civil. But this would abandon the client, contradict all advice agency ethical tradition and – in the case of civil legal aid supply – be a contractual duty breach, since the client has a right

to access this state aid. The lessons from conflict resolution successes abroad suggest that comprehensive social change is needed to isolate, interdict and discredit perpetrators, and break the ratchet of escalation. Every advice agency in an affected area can and should play a small and relevant part in such a community wide approach. I would rather we did this work well, proudly, and help our communities stay safe, by ensuring clients – in accord with the CAB service principles – “do not suffer through a lack of knowledge of their rights”. FOOTNOTE 1. Wolverhampton Local Strategic Partnership, Joint Information Protocol, 2003/2006

Jeremy Vanes is the Chief Executive of Wolverhampton CAB service.


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