How do you stop a tenant using no win no fee lawyer for Deposit violations?

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    How do you stop a tenant using no win no fee lawyer for Deposit violations?

    This is a question that has been bugging me for ages, this is not happening to me or anyone I know but there seems to be something that is open to exploit?

    Hypothetically If you have not put deposit in to a scheme on time (or at all), tenant would have right to 3 times the deposit, which is perfectly fine.

    But how would you stop a tenant from engaging in a no win no fee lawyer potentially pushing the cost even higher?

    e.g. If tenant has deposit of 1000GBP, which you failed to protect.

    Tenant engage in no win no fee lawyer which with letter offering to settle for some ridiculous amount, say 5000GBP, (most of that will go to the lawyer obviously)

    At this point you could offer 3000GBP which is the legal maximum penalty.

    But what if the lawyer then reject this offer and pushes this to trial in court? Since LL is definitely at fault I would imagine there is no way LL can win in court, thus court could then award a reasonable 2000GBP to tenant, but then tag on a 5000GBP of legal fees for the lawyer for all the supposed time the lawyer used in dealing with this case.

    Is there anything a LL could do to stop this from happening once the ball starts rolling?

    #2
    If the LL offered £3,000, and it was rejected, I would expect the court to refuse costs. I would expect the parasite to depart quickly in front of such an offer.

    Comment


      #3
      You can't stop someone from engaging the service of a lawyer. They are perfectly entitled to choose to do so, just like you would be. Whether it's under a no win no fee agreement or standard client pay then recover cost from losing side makes no difference.

      You can limit cost by making an offer that beat what the other side eventually win. Google "Part 36 offer" and "Calderbank offer".

      You can challenge whether the other side cost is reasonable if and when it gets to that stage in court. The court don't just award whatever a side claim.

      You are probably under a misapprehension about how much a typical no win no fee firm would want to take a case to court. The business model are typically maximise volume, minimise risk, and certainly minimise work that requires fully qualified solicitors. So if they can get a settlement through a few letters, they will go for that than all the work involved taking a case all the way through court where they may not win or win but don't beat a settlement offer from the other side.

      And of course the best way to not have to worry about it are to make sure you're in compliance with the law in the first place.
      I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

      I do not answer questions through private messages which should be posted publicly on the forum.

      Comment


        #4
        KTC of course, anyone frequent these forums would know the importance of not getting in to hot water in the first place.

        I googled Calderbank offer, so that essentially means that if the amount awarded is less than your offer, you can limit your legal cost as the other side has dragged out the legal procedure. Which makes sense, thank you.

        What about the cases where you only offer say 2000GBP for settlement? would that mean if the cases go to court, the legal cost would be limited to 3000GBP?

        I have engaged in solicitor services before for purchases and the costs for writing a simple letter or filling in a form is eye watering, it is not hard to see the costs going above the amount to be awarded.

        @leaseholder64
        Of course, these guys are leeches, however for 3rd rate a lawyer that potentially is sitting around doing nothing, taking on a case where you are 100% guaranteed to win on a no win no fee basis is an easy decision to make.
        If I was one of these guys I would be looking to drag the process out as long as possible since I would be able to bill every second of it if I win the case, I would even perhaps make it clear to the tenant that I am not taking a penny of the money awarded to you if you don't take settlement before trial.

        Which brings me back, in cases where something is so black and white, such as that you have failed to use deposit protection, can you make the argument that a lawyer is not required? i.e. along the lines of "ok I admit fault and will pay you, I don't think you need a lawyer for this, can we just go to court and ask for judge for the right amount to be awarded to you."

        Comment


          #5
          Originally posted by spiritdreams View Post
          KTC Which brings me back, in cases where something is so black and white, such as that you have failed to use deposit protection, can you make the argument that a lawyer is not required? .....
          The argument is a landlord should comply with laws, laws over 11 years in operation, passed by Parliament twice. It's hardly something new or not having had publicity.

          Is this thread anything to do with
          https://forums.landlordzone.co.uk/fo...d-of-surrender

          Yes, of course I've made mistakes as a landlord: More painful, more expensive, more long-drawn-out than what I assume is your case - but may just be some student's research for a test. Then I decided to get educated. Still learning: Still making mistakes!
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

          Comment


            #6
            Originally posted by spiritdreams View Post
            What about the cases where you only offer say 2000GBP for settlement? would that mean if the cases go to court, the legal cost would be limited to 3000GBP?
            A defendant offer need to match or beat what's awarded by the court. The defendant would still have to pay claimant's cost up to a certain date, but then it reverses after that date since cost incurred after that date shouldn't have happened.

            Originally posted by spiritdreams View Post
            I would even perhaps make it clear to the tenant that I am not taking a penny of the money awarded to you if you don't take settlement before trial.
            I suspect a lawyer doing that will end up before the Solicitors Disciplinary Tribunal very quickly....

            Originally posted by spiritdreams View Post
            Which brings me back, in cases where something is so black and white, such as that you have failed to use deposit protection, can you make the argument that a lawyer is not required?
            Tell parliament to make it a claim to be dealt with under the small claims track rather than Part 8 if you think recoverable cost should be highly limited.
            I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

            I do not answer questions through private messages which should be posted publicly on the forum.

            Comment


              #7
              If a debt of less than £10k ends up in court it tends to go to the small claims track in which your opponent's legal costs are unlikely to be awarded. If you stood in front of a judge and said you'd made a mistake in forgetting, then registered the deposit, and your opponent would have suffered no cost, then I can't see a judge awarding you legal costs. And the reverse is true - why would a tenant take you to court if they had suffered no financial loss?!?

              Comment


                #8
                That's not how a deposit protection penalty claim or cost award works......

                A deposit protection claim (when using the correct procedure) is a landlord & tenant claim under Part 8, not money claim under Part 7. Unless the court explicitly assign it to small claims track, it's either unassigned or default to multi track where more than fixed cost is recoverable.
                I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

                I do not answer questions through private messages which should be posted publicly on the forum.

                Comment


                  #9
                  Originally posted by theartfullodger View Post
                  The argument is a landlord should comply with laws, laws over 11 years in operation, passed by Parliament twice. It's hardly something new or not having had publicity.
                  Yup I think we can all agree that in this case landlord is totally at fault, and is liable for penalty up to 3x, this is not a post about what is happening to me or anyone I know, but curiously I have surrounding law in this area.

                  What I am wondering in cases like this is about how to stop a no win no fee lawyer come and take advantage of a situation by incurring unnessary legal cost, and since tenant is not paying legal fees, the lawyer can pretty much charge on the higher end of the scale.

                  Surely enough if the landlord is already offering compensation and admitted liabilty there are no reason for a lawyer. and cases like these are so cut and dry that they could go through a process like accelerated possession or small claims.

                  Comment


                    #10
                    Originally posted by KTC View Post

                    A defendant offer need to match or beat what's awarded by the court. The defendant would still have to pay claimant's cost up to a certain date, but then it reverses after that date since cost incurred after that date shouldn't have happened.
                    Thanks very much for the reply.

                    So I guess that means even if you offer up 3x of the original deposit.

                    You could still be liable to be hit with a big bill from the solicitors, e.g. if the tenant somehow spent 50 hours sitting in a room with solictor drinking coffee pondering the meaning of life, or had to arrange 20-30 seperate meetings with solicitors due to somehow missing fields in some form?

                    Not to mention some sort of PI hired to track down the landlord? (if landlord no longer lives at the address many years after the tenancy)

                    The no win no fee ambulance chaser types are hardly attracts those who are upstanding in legal field.

                    Comment


                      #11
                      I was sued by a firm in the City Of London who I had previously thought of as quite blue chippy who were running a no win no fee contested probate case for a relative of the deceased of whose Estate I was an executor. This was quite a large estate running into seven figures.They dragged out the grant of probate for four years. Their case was we thought weak but Counsel wasn't so sure and in the end we gave them 4% or so of the estate to go away.

                      Comment


                        #12
                        The underlying risk is that when someone takes on a case on a "contingency" basis and wins, they can claim a success fee of up to 100% of their "costs".

                        There are meant to be limits on this (the 100% is meant to be a maximum, not the norm), but in this kind of case it's quite a downside for the landord being chased.

                        If they don't settle and the matter goes to court, they're likely to lose more than they were originally "threatened" with.

                        More to the point, Part 8 cases are not particularly user-friendly (there's none of the small claims court flexibility) and there's a risk that you'd end up paying a solicitor to represent you, simply to avoid losing on a technicality.

                        So, yes, a sensible counter offer may help, but the landlord's case is usually weak.
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment

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