Nottingham City Council needs extend the engagement of three current locum disrepair solicitors for an additional 12 months and engage a fourth locum solicitor for the same period.
The total value of this decision is £411,543.60, which will be charged to the Housing Revenue Account (HRA).
The decision comes in response to a significant increase in disrepair case numbers over a short period of time, a trend that is expected to continue due to the area being the focus of “volume” litigation from law firms nationally.
A Nottingham City Council spokesperson said: “We’re aware that so-called ‘claims farmers’ are operating on estates across the city, often fraudulently claiming to be working on our behalf, and making substantial profits from our tenants.
“We have processes in place that allow tenants to easily report repairs online or over the phone. There’s therefore no need for tenants to engage with companies that encourage them to make claims against us.
“We want to spend the money our tenants pay us in rents on repairs themselves, not on boosting the profits of these companies.
“We would advise anyone who is approached by claims farmers knocking on their door claiming to be from the council to ask to see ID, and if they’re still not sure, to call us on 0115 915 2222.”
The lack of a fixed costs regime for legal costs in these claims has exacerbated the situation.
Although fixed costs may be introduced in the future as part of the judicial process, they have been postponed for at least another two years, meaning that case volumes are not likely to reduce until then.
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The council has considered other options, such as the use of external law firms to deliver this work. However, this option was discounted due to the much higher cost per case and the unpredictability of case values and numbers.
Increasing permanent staffing was also considered, but it was deemed inappropriate as fixed costs may be introduced in two years, potentially reducing the number of claims.
The decision has been signed and dated by Jay Hayes, Portfolio Holder for Housing, and Sajeeda Rose, Corporate Director of Growth & City Development, on 13th July 2023. The decision is subject to call-in until 20th July 2023.
The council believes that this decision will mitigate the legal risks faced by the Council linked to potential claims based on housing disrepair.
The use of a compliant framework to engage the locums will ensure a compliant route to market in accordance with the relevant legal requirements and the Council’s constitution.
