Friday, 28 August 2009

A hero's welcome

Scotland’s First Minister says Abdelbaset Ali Al-Megrahi’s release ‘was the right thing to do in terms of the Scottish justice system’. But Scotland’s justice system did not release Mr Al-Megrahi, nor did it send him back to Tripoli.

While our law makes provision for the release of prisoners on compassionate grounds it’s a political decision whether to do so. Professor Alan Miller is right to call for an impartial tribunal to ensure that such decisions are no longer political.

I’m no expert on the Lockerbie case but I know one thing. Despite the claims that Kenny MacAskill was exercising a ‘quasi-judicial’ function, the decision to release Mr Al-Megrahi was not made in judicial language. If it had been it may have been difficult to fault.

After all, section 3 of Prisoners and Criminal Proceedings (Scotland) Act 1993 gives the Scottish Ministers power to release a prisoner on licence if they believe there are ‘compassionate grounds’. But Mr MacAskill’s language went far beyond section 3.

He used this case to make a political speech to the world.

A speech about the ‘Government of Scotland’ and its independence; a speech which picked a fight with the UK Government on a premature application for prisoner transfer; a speech which conflated the legal test of ‘compassionate grounds’ with nationalist propaganda asserting compassion as a defining characteristic of Scots and Scotland.

This episode shows us why politics and judicial decision-making are dangerous bed fellows.

Some media commentators have suggested Mr MacAskill’s religious reference was a play to a US audience. Whatever it was, it was a serious lack of judgment to talk about a ‘sentence imposed by a higher power’ in the context of a terminal illness. What does this say to people dying from cancer?

For me the most contradictory part of Mr MacAskill’s speech was his rejection of the prison transfer request from the Libyan Government while authorising Mr Al-Megrahi to return to Libya.

Leaving aside the fact there was an outstanding Crown Office appeal standing in the way of that transfer application, our Justice Minister found that the American relatives of those killed in the Lockerbie bombing, and the US Government, ‘had an expectation or were led to believe’ any sentence would be served in Scotland. For that reason, he rejected the prisoner transfer request.

So why did he permit Mr Al-Megrahi to return to Libya?

A prisoner released under section 3 of the 1993 Act is still under sentence. He is only released on licence, subject to conditions, and liable to be recalled to prison if those conditions are broken.

In other words, upon release Mr Al-Megrahi continued to be subject to a sentence imposed by a Scottish court. According to our Justice Minister’s reasoning it would have been a disservice to the American families of the victims, and the US Government, to permit him to return to Libya.

So why did he authorise his return to Libya?

Why didn’t he require Mr Al-Megrahi to reside in Scotland, under licence, and in keeping with the international promise which he valued?

Remarkably, this option was dismissed with no explanation save one brief sentence: ‘Clear advice from senior police officers is that the security implications of such a move would be severe’.

How severe? Would it have been impossible?

Was consideration given to a move to another part of the UK? If not, why?

These questions require substantial answers.

Release on compassionate grounds did not mean allowing Mr Al-Megrahi to return to Libya.

The political naivety of our Justice Minister was available for the world to see when Mr Al-Megrahi was given a hero’s welcome on his return to Tripoli with saltires waving.

As the dust from this decision gathers into a storm, let us be clear about one thing. It wasn’t the people of Scotland or Scotland’s justice system that sent a convicted mass murderer back to a hero’s welcome.

Wednesday, 10 June 2009

Victory for common sense

‘You turn if you want to. The lady’s not for turning’. In 1980 Margaret Thatcher refused to change her economic policies which saw jobs and communites sacrificed for a free market mirage. The 1980 recession hurt a lot of families in Britain and many communities still bear the scars. Three decades on and we have another recession and another lady who was not for turning.

Over the last year the Cabinet Secretary for Health and Wellbeing has consistently denied there was any need for additional legal protection for homeowners in Scotland. When campaigners claimed repossession was all too often a first resort against Scottish households unable to access the Mortgage Rights Act they were ignored or dismissed.

When a pre-action protocol for repossession actions in England and Wales was announced last October not only did Nicola Sturgeon dismiss it, she claimed Scots were already better protected than homeowners in England.

Today, the Cabinet Secretary has announced the Scottish Government’s intention to ‘quickly’ introduce a Scottish pre-action protocol for repossession cases with additional legal safeguards for households facing repossession in Scotland. It’s a victory for common sense that the Scottish Government have accepted some of the recommendations from the Repossession Sub-Group report.

My only regret is that it has taken eight months of denial to get to where we are; and many Scots will have lost homes which could have been saved. But here we are and I am grateful to Cathy Jamieson, Ross Finnie, Patrick Harvie, and Margo McDonald for their cross-party campaigning for urgent change. There is no doubt that without their intervention there would have been no Repossession Sub-Group, and no policy U-turn.
Yet there is much work to do. The Scottish Government must bring forward their law reform as an Emrgency Bill under standing order 9.21. Such a Bill can be progressed extremely quickly and there must be no further delay in protecting households in Scotland from needless homelessness.

While the report of the Repossession Sub-Group is very welcome it would be a mistake to think that requiring repossession cases to call before a sheriff will of itself protect vulnerable homeowners. For example, in the first four months of this year 500 repossession cases were raised at Glasgow Sheriff Court and decrees were granted in absence in 75% of those cases. Whether they call in court or not, people will not engage for a variety of reasons.

Repossession actions are the tip of an ice-berg; beneath them will often lie a complex series of multiple debts, fuelled by unfair default charges, other payment litigation and diligence, family and personal relationships under great strain, mental and physical health problems, and a whole host of other social issues.

What people need is a package of free legal representation and advice, with money advice and care services, tailored to meet their individual circumstances. With section 11 of the Homelessness Act now in force we could offer this service to every household in Scotland threatened with repossession or eviction.

The Scottish Government is not proposing that; nor is it proposing to address the problems with civil legal aid in repossession cases, the ability of lenders to off-load unrestricted legal costs onto debtors’ mortgages, and the fact that the Mortgage to Rent Scheme has been rendered unworkable from rules introduced by them in March 2009.

Scotland has an opportunity to get this right; the prize would be the best prevention of homelessness service in the World.

Monday, 18 May 2009

Parly expenses

When Scots receive legal aid to prevent the repossession of their homes, the legal aid board expect them to pay all of that money back if they have made a notional capital gain in saving their home.

When I met Housing Minister Alex Neil recently, I argued that this was unfair as financially poor households were being told to pay back hundreds of pounds in legal aid when they were living on breadline benefits.

Mr Neil disagreed. He told me that it was morally right that those who had made a notional profit with the help of public funds should pay that money back.

Accordingly, will he and the other 27 MSPs who have made a notional profit from the Scottish Parliament's second homes allowance repay the public money they have received? The Herald (18 May) reports they have made an overall profit of £1.7m, with Mr Neil personally benefiting from a potential £95,505 profit.

I welcome Patrick Harvie's call for MSPs to relinquish any capital gains for the sake of the reputation of the Parliament, but would argue that the Scottish Parliament needs to change the rules to make it a legal requirement for MSPs to repay all second home allowance payments from capital gains.

A simple solution would be for the Scottish Parliament to secure an all sums due standard security on MSPs properties, so that when the property was sold the taxpayer would receive a full refund of mortgage interest relief payments. This would prevent capital gains being hidden, for example, by equity being taken out of the property by way of an increased first or second mortgage.

It is ridiculous for the First Minister to dismiss Scotland's expenses scandal as a 'legacy issue'. Firstly, there is nothing historic about 28 MSPs standing to trouser £1.7m thanks to the taxpayer, and secondly these MSPs will continue to get free mortgage payments until 2011.

Until this issue is resolved, the Scottish Parliament's nose is in the same trough as Westminster.

Wednesday, 6 May 2009

Named & shamed?

From the descriptions given, none of the 16 people named, shamed and banned from the UK are folk you would want to meet.

While denying someone entry to the UK on opinion alone would be manifestly unjust, the Home Secretary has relied on evidence from intelligence agencies. Assuming that evidence is robust, the UK public interest has been well served.

But we need to exercise caution. We all remember the flawed evidence that "justified" a pre-emptive strike on Iraq. Whenever we conflate intelligence with high-profile media coverage and politics, people get killed or hurt.

The exercise of power requires due process of law, not YouTube or dossiers. How many of those excluded were actually going to visit the UK?

Some of those named are in foreign prisons, so are we being told of imminent threats or possible ones that might or might not happen sometime in the future?

Legally, there is a logic in revealing some of the evidence that exclusions are based upon, but announcing who has been banned does appear to represent a further extension of our vacuous, voyeuristic, celebrity-culture obsession.

The business of government and the exercise of legal power must always be based on cold, hard facts, and not how things might look in the media.

Thankfully our legal system provides checks and balances on political power. It would be possible to judicially review a decision to exclude someone banned from entry to the UK if that decision was irrational or unreasonable.

Today there are reports that the vile US shock-jock Michael Savage – who is on the 16 least wanted list – is planning to sue the UK Home Secretary for defamation. He objects to being named on a list along with neo-Nazi convicted murderers.

I believe naming and shaming is a slippery slope. Do we start to name and shame those accused of things that we don't like within the UK? And if so, whose interest does that serve?

Wednesday, 29 April 2009

Rip-off charges

This afternoon, Glasgow MP Mohammad Sarwar will launch his Prevention of Excessive Charges Bill in the House of Commons. The Bill has full cross-party support. Govan Law Centre has been working closely with Mr Sarwar to campaign for stronger legal protection for UK citizens against unfair default charges.

The culture of charging in consumer contracts has become an insidious and unethical business in recent years. A form of mass exploitation whereby our banks and other UK businesses rip-off customers at weak points in their life.

Charges are akin to a debilitating disease in our society. They crush the ability of ordinary people to make ends meet in very difficult times. They push people into unnecessary financial hardship and expose countless households to eviction and repossession.

In my experience, default charges and fees are generally imposed when a person is down on his or her luck - ill, unemployed, going through a relationship breakdown or other life crisis. Moreover, they lead or contribute to a cycle of debt, poverty and homelessness.

From a legal perspective, the common law in Scotland and England has always pre-supposed that a contract is entered into freely by parties who have the choice to reach consensus on the terms of the contract.

The Unfair Terms in Consumer Contract Regulations were originally introduced in the UK in 1995 to reflect the reality that there was seldom any equality of arms in contracts between a consumer and a business. Most businesses employ standard 'take it or leave it' terms and conditions of contract.

Consider the most infamous of contractual charges: unauthorised bank overdraft charges. The average bank charge back in 1998 was £12. Eight years later that charge had increased by 558% to £67 - £39 for a letter, £28 for a monthly unauthorised fee and 30% APR unauthorised interest.

Clearly, there is now an urgent need for law reform to tackle excessive charging in consumer contracts. Existing protection is reactive and requires the customer to opt-in and traverse all of the difficulties associated with accessing civil justice and raising a court action.

The fact that the OFT's test case challenging the fairness of UK bank charges has been running now for almost two years without any resolution – and is likely to run for a lot longer with an impending House of Lords appeal - confirms the weakness in the present system.

There is a cogent case for amending current consumer law protection to require the imposition of any charge or fee to be proportionate to the cost of the missed payment, default or overdrawn sum as a matter of fairness.

Mohammad Sarwar’s Bill suggests that no charge or fee in a consumer contract should exceed 2.5% of the value of the transaction where there is a default or failure, or attempt to exceed an agreed overdraft.

To take a typical example. A worker’s wages drop to statutory sick pay due to illness. That week four direct debits are unpaid. The worker’s bank will impose £184 in charges, while her creditors will levy unpaid direct debit fees of £25 per item. She will face £284 of charges that week – the equivalent of one month’s statutory sick pay. Under the proposed Bill those charges could not exceed £20 in total.

Politicians cannot stand by and watch hardworking individuals and families in the UK suffer any longer. It’s time to put an end to rip-off Britain.

Wednesday, 22 April 2009

Preventing repossession

The announcement yesterday (21 April) that the UK Government's Mortgage Support Scheme is now in force with most lenders co-operating, and sub-primes coming on board, is the best news we've heard in a long time during this dark economic period.

The ability to defer up to 70% of a mortgage for two years will provide a vital respite which could save thousands of Scottish homes from being repossessed during the recession. Sadly, most Scots won't be able to enjoy this new scheme as repossession cases do not call in court and, unless you are proactive and instruct a solicitor, decree will pass against you automatically.

You will face homelessness long before you can sort out all of the paperwork. Community law centres and others have been warning the Scottish Government of the weaknesses in our system for the past 15 months, yet, incredibly, protection for homeowners has become weaker, not stronger.

For example, last month the Scottish Government restricted its Homeowner Support Scheme to homeowners in the cheapest of dwellings. Also excluded are those entitled to benefits for housing costs.

With all of these restrictions, I would be surprised if 15% of Scottish homeowners were eligible for any help under the Scottish Government's scheme. Yet the new UK Government scheme will cover 80% of UK homeowners.

However, help is hypothetical as legal representation is required to secure sufficient time to put solutions in place. Households in England and Wales are entitled to free court representation, so they can access the new UK scheme and other solutions. They also have more time to negotiate with their pre-action court protocol.

In Scotland, there is no free representation and even people on breadline benefits are expected to fund their own legal aid bills. There is no pre-action protocol either. The result is that Scottish homes are being needlessly repossessed. The Scottish Government has provided homeowners with a couple of fig leaves for protection against repossession. This has to change. When will we get the same protection that homeowners south of the border enjoy?

Tuesday, 14 April 2009

Monkey business

Science tells us that if you give a million chimpanzees a million typewriters they will eventually reproduce the entire works of William Shakespeare. Until they do so, they will definitely thrash out more workable housing policies than the Scottish Government.

In one fell swoop the Scottish Government has closed off access to its Home Owners' Support Fund for homeowners facing repossession in Scotland. In real terms over 1 million Scottish households have just been excluded from applying for help under the Mortgage to Rent or Shared Equity schemes.

In a bizarre twist of irony, Cabinet Secretary Nicola Sturgeon claimed on telly last week that the Scottish Government was 'far ahead of the game compared to south of the border' when it came to preventing needless repossessions.

She pointed to the £35m to be invested over the next couple of years in the flagship ‘Home Owners Support Fund’ – money which underpins the national Mortgage to Rent and Shared Equity schemes. But her safety-net claims have been exposed as a Lilliputian fig leaf.

Previously, almost anyone in serious mortgage trouble was entitled to apply to the Mortgage to Rent scheme for help so long as their home was not above the average price of properties in their locality. Locality was a flexible, undefined concept. But from last month the Scottish Government has introduced ‘local’ maximum property prices which are so ridiculous they exclude 75% of all owner-occupiers in Scotland.

For example, if you're a family facing homelessness in a three bedroom flat in Glasgow, East Renfrewshire or East Dunbartonshire you are now excluded from Scottish Government help unless your home is worth less than £105,000. The current average property prices in those local authority areas are £135,000, £199,000 and £206,000 respectively. And these rules apply to help under both the Mortgage to Rent Scheme and the new Shared Equity Scheme.

Govan Law Centre has a client in Pollok facing repossession who lives in a modest three bedroom house worth £150,000. The Home Owners' Support Fund is her only hope - a couple of weeks ago she would have got help under the Mortgage to Rent Scheme, but now she is excluded.

Most of our clients in Greater Govan and Greater Pollok are excluded under these incompetent rules and Nicola Sturgeon might want to explain to her constituents how they are now going to avoid homelessness during the recession?

The Cabinet Secretary has broken a lifeline for Scottish homeowners. I’m calling on the First Minister to remove these restrictions urgently so that no Scottish household will become homeless because of this incompetent policy change.

Tuesday, 7 April 2009

Law for the people

At the recent Law Awards in Edinburgh, Lord Paddy Ashdown made a telling observation that reckless bankers and Al-Qaeda have flourished because they operated at a global level which circumvents the nation state; a global environment where the rule of law is all too often absent.

Protecting the financial security of Scottish citizens will require the type of new international legal solutions as advocated by Prime Minister Gordon Brown. And I would argue that our financial meltdown is proof beyond doubt that a consumerist approach to vital services is no longer sustainable. The proposed Alternative Business Structure for our legal profession represents a consumerist approach which offers nothing for vulnerable citizens.

How then can Scotland’s legal profession and laws better reach those in need? This month’s changes to the civil legal aid system, while welcome, do almost nothing for the poorest members of our society. The lower income threshold has risen by a mere £199 per annum, so those on certain benefits or low incomes still have to pay contributions which they cannot afford whilst they are repaying rent arrears and other liabilities.

An obvious solution would be to raise the lower eligibility limit for civil legal aid, and for that matter shift all of the bands upwards. This would enable private practitioners to provide more access to civil justice. But more resources should be targeted to provide at least one community law centre in each local authority area. Not an organisation to compete with private practice, but rather a free professional legal resource that could target unmet legal need locally.

We need to start challenging the fact that too many of our laws and legal remedies are inaccessible, while too many of our public and private bodies ignore the law as a matter of course – and if most citizens have no real legal remedy, is it any wonder? We have too many ‘paper rights’ and not enough real ones in Scotland.

For example, most social tenants cannot force their public landlords to carry out major repairs; most homeowners facing repossession don’t have the money to pay the Scottish Legal Aid Board to hire a lawyer; and our law on disability rights looks great on paper but how much difference has it made to people with significant impairments in real life?

Sometimes we can get so caught up in the process of law, we forget that the process is only there to deliver a solution for human beings. Whether that be resolving conflict or disputes fairly, or righting the wrongs of companies, bodies or individuals. We need to do much more to develop accessible remedies and solutions. And we need to introduce proportionality of cost with the value of the dispute wherever possible.

I also believe we should be challenging the burgeoning and aggrandising of our Scottish Legal Aid Board. The Board has doubled in staff size and operational costs while its budget hasn’t moved much over the last decade. It is wrong in principle for the paymaster of legal services to become a key provider of those services. Increasingly, we are seeing this both in the criminal defence and civil law side of our profession.

This growth does not represent best value for clients in need, nor does it encourage innovation. For example, a sizeable chunk of the £3m going to the Board to help prevent homeowner repossession will be used by the Board to employ another team of its own solicitors. These solicitors will be subject to the same means testing rules which prevents homeowners being able to access legal representation. In England, money has been put into schemes were free representation is provided at the county court by solicitors.

So let’s redirect some of the Board’s self-funding or operational costs to the frontline – let’s use this public money to create at an independent community law centre in every local authority area across Scotland. A centre that doesn’t have to means test, and a centre that can target the unmet legal needs of the most vulnerable of our citizens at a local level.

Wednesday, 1 April 2009

Dismantle GHA

The wrangling over the GHA's repair contract is but another chapter in the life of the UK's most dysfunctional social landlord.

I can give you another one. The Scottish Government has rightly put £35m into the Mortgage to Rent Scheme so that homeowners facing homelessness can become a secure tenant with a housing association. Yet the GHA won't participate in this scheme. It uses obfuscation to explain why it can't participate, why it cannot proceed to second stage transfer, why it cannot build the number of new homes it said it would.

Never-ending excuses from an organisation with never-ending public subsidy. These failures prejudice ordinary citizens. We have a client in Govan who may become homeless because other housing associations are unable to purchase her home due to GHA communal repair issues - but if the GHA worked with the Scottish Government's Mortgage to Rent Scheme they could become her landlord.

It's heartening to see the Scottish Government and Glasgow City Council now at one on the need to dismantle the GHA. However, calls for the Housing Regulator to investigate the GHA are misplaced. Regulator civil servants have been complicit in the cover up of GHA failures and bad practice. If the Scottish Government does not take urgent steps now I believe the GHA could become Scotland's mini-Enron.

Those steps must surely include the appointment of an independent inspection team, including forensic accountants and well respected housing association directors. The task would be to examine the GHA's management failures, identify financial waste, and report on a strategy to dismantle the GHA and deliver on community ownership. The Scottish Ministers have power under section 69 of the 2001 Housing (Scotland) Act to do this. And after any independent inspection they could appoint a manager to deliver on the agreed strategy.

Glasgow cannot afford to get this wrong.

Tuesday, 31 March 2009

Paper rights

There is a worldwide phenomenon of ‘paper rights’. By that I mean people are given a right or entitlement as a matter of law but in practice those rights are ignored by public bodies or are rarely accessible in practice. To give a couple of examples.

I’ve acted for vulnerable female refugees with young kids who were placed in grotty bed and breakfast accommodation populated by single, violent, male, alcoholics. The law says they should spend no more than 14 days in such accommodation but they were there for many weeks until they fled in fear. These were victims of unspeakable war crimes trying to regain their dignity and life.

The law says if a homeless person has no priority need or is intentionally homeless they are still entitled to a reasonable period in temporary accommodation. In Glasgow, we know that single men and women who present as homeless are lucky to get a sleeping bag to sleep rough on the street, or at best they might be allowed to sleep on a chair for one night.

It’s awful. And this phenomenon is not restricted to Scotland or the UK. The fact good laws exist on the statute book is only half the battle, we need implementation of those laws in practice – and when they are not being respected, we need practical remedies for citizens to ensure that they are.

In the context of Scottish housing, there is a major inequality between social rented tenants and private sector tenants. Too many tenants in the social and private rented sectors live in properties which are not reasonably fit for human habitation – damp, cold, smelly homes with mould growth and dangerously high populations of the house dust mite – which excretes a potent allergen giving rise to asthma and other illnesses.

Our law of repairs prohibits such living conditions, and we are able to secure paltry sums of damages – maybe a £1,000 per a year for living in extremely substandard housing. What is missing is a remedy to speedily enforce the carrying out of major repairs. But our law of specific implement is hopelessly outdated, and I have tried to use the 1990 Environmental Protection Act but we lost on a 2-1 decision in the Inner House – so we have been unable to use the EPA in condensation dampness cases – unlike in England and Wales.

The Scottish Government introduced the 2006 Housing (Scotland) Act which provides a Private Rented Housing Committee system to enable tenants to get repairs done without legal expense. However, this remedy only applies for private sector tenancies. Why?

I suspect because of the strength of the housing lobby and moreover the fact the Scottish Government realised that if this scheme were extended to housing association or council tenants, ultimately the financial implications of undertaking major repairs would find its way back to the Scottish Government.

So over a quarter of all households in Scotland have no remedy to force their landlord to undertake major repairs. It’s incredible. And there is a conspiracy of silence. I am sure you can think of examples from you own professional experience where vulnerable citizens have a solution on paper but in real life you know that they will never access it.

Yet a strong and independent Scottish legal profession can and does speak up for real rights for real people. Will your Tesco lawyers do that? Answers on a postcard to John Swinney and Kenny MacAskill – oh and you might want to ask Nicola Sturgeon how on earth an expanded dodgy private landlord sector will help vulnerable people?

Wednesday, 25 March 2009

Mother Glasgow

Although born and brought up in Dundee I’ve always felt at home in Glasgow. I’ve now spent more of my life – 21 years - in Glasgow than my home toon. The people, the spirit, the history.

Glasgow’s a fantastic place to live, work and raise a family. Indeed my late Mother loved her trips to Glasgow so much so no further evidence is needed in my book.

In many ways Dundee and Glasgow are very similar: a network of tough working class communities with a sharp sense of humour and a no nonsense approach to life. My gravitation to Govan and Red Clydeside was fate. Where else could someone like me fit in?

Govanites have a tremendous sense of history. Many will tell you the worst thing that ever happened was when we allowed Glasgow to join Govan in 1912! In the heady days of shipbuilding Clyde-built ships were a world class sight to behold – they still are. The independent burgh of Govan was Scotland’s economic powerhouse then.

But times change and new challenges present. But the heart of the people, the communities, remains as strong. Which makes me all the more determined to root out those who would undermine and destroy that spirit.

Over in Govanhill a small number of organised criminals from Eastern Europe – and I am sad to say – a small number of unscrupulous local property owners – are conspiring to exploit vulnerable migrant workers who have come to Glasgow to make a decent life. In the past Glasgow has embraced many immigrant communities: Irish, Jewish, and Asian.

My colleagues at Govanhill Law Centre are already uncovering and challenging some shocking frauds. From the regular theft of workers wages to scams where a con-artist breaks into a vacant flat and falsely lets it out to a Slovakian family for cash up front – only for that poor family to be booted out by the real owner.

And then there are the living conditions – substandard slum housing, health hazards, no water, no heating, overcrowding, rat and coach roach infestations. Yet slum landlords are charging £600 per month for these hell holes. Such exploitation has knock-on effects for neighbours and undermines the wellbeing of the community.

Govanhill Law Centre has now obtained an excellent opinion from Roy Martin Q.C. on the use of Compulsory Purchase Order powers to alleviate substandard private housing in Govanhill. Working closely with Govanhill Housing Association and the local community we are hopeful that some of the problems facing Govanhill can be overcome.

We have the privilege of providing independent assistance to the Leader of Glasgow City Council, Cllr Steven Purcell, on this issue. Cllr Purcell has made a personal commitment to work with the local community to tackle these problems and Glasgow City Council is already putting an extra £3m into private sector housing in Govanhill from next month.

Ultimately, we need the Scottish Government to put up some cash too – but there is great hope, and much to fight for.

Wednesday, 18 March 2009

Hands off our ha’penny

It’s time for UK lenders to keep their hand on their ha’penny and get their mitts off ours. Scots law gives lenders a blank cheque to hit customers with almost limitless fees, costs and legal expenses if they miss a payment.

And I reckon this creates a perverse financial and strategic incentive on lenders and their advisors to take homeowners to court for repossession often unnecessarily. An incentive which is not as apparent furth of Scotland.

The costs of being taken to court for repossession are typically £2,000 to £3,000 – which is the last thing a household struggling to pay their mortgage and prevent homelessness needs. And conveniently this ‘debt’ is slapped onto their mortgage and secured on their home. Nice.

Yet in other civil court cases a creditor’s expenses are fixed by the statutory instrument which regulates what solicitors can be paid for in civil proceedings. However, these normal protections – set out in the Act of Sederunt (Fees of Solicitors in the Sheriff Court) statutory instrument - do not apply for mortgage repossession cases in Scotland in practice.

This is because standard condition 12 of schedule 3 to the Conveyancing & Fedual Reform (Scotland) Act 1970, imports into every Scottish mortgage contract the requirement for a debtor to meet all of the banks reasonable costs on default.

Yet customers have no real control or protection over these costs. And this part of the 1970 Act has never been updated to take on board the existence of the Mortgage Rights (Scotland) Act 2001.

If a homeowner uses the 2001 Mortgage Rights Act to prevent their repossession and gets a case dismissed they would ordinarily only be liable for undefended scale costs of £252 + vat and outlays, or if they had a legal aid certificate the sheriff could modify expenses to nil.

But even if expenses are awarded by the court at that modest sum or are modified to nil under the 1986 Legal Aid (Scotland) Act, lenders in Scotland can still add on all costs and fees – as they see fit – from the 1970 Act provision.

This is a devolved issue and Govan Law Centre is calling on the Scottish Government to act urgently to remove this lacuna in the law, and provide Scottish homeowners with the same protection against potentially limitless or unfair legal expenses that other civil litigants enjoy.

I believe there are reasonable prospects to attract a majority in the Scottish Parliament to come behind this issue in order to create consistency and fairness in our system of civil legal expenses. Change - whether that be introducing a fixed fee and subjecting standard condition 12 to s.18 of the 1986 Act and the court’s discretion - would also ensure that our sheriffs who exercise their discretion on expenses with fairness and consideration were not usurped by an unjust, blanket rule.

Thursday, 12 March 2009

Greed is bad

The work-life balance can be difficult at the best of times but the last few days have been tricky.
Managing a full caseload and an organisation is always a challenge but try being the only bloke at ante-natal classes (I can now master the pelvic-floor exercise though). Then there’s a very long list of drafting projects and campaigns to deliver on time. So the blog has fallen behind and I might as well talk about what I’ve been up to.

Have you ever tried to park at a hospital recently? It was impossible to park anywhere close to Glasgow’s Yorkhill today and with a heavily pregnant lady, let just say we got a ticket. This experience has given me extra impetus in drafting Paul Martin’s NHS Parking (Scotland) Bill.

The Scottish Government have made good progress but they haven’t actually abolished hospital parking charges and it’s clear there needs to be a statutory duty on health boards to make adequate provision for managed car parking. You cannot access the health service unless you can get to a NHS facility. So I see parking as essential to accessing health services: it’s an important part of the NHS.

Section 11 of the Homelessness Act comes into force next month and I’ve been drafting the advice packs to be sent to homeowners and tenants by councils when folk are being taken to court for eviction or repossession. Section 11 should help to prevent needless homelessness and writing something in accessible (sorry that should be ‘easy’) language is a lot harder than I’d thought.

Of course there is a lot more we need to be doing to prevent homelessness and you may have noticed I’ve been banging on about this. While the former Housing Minister wouldn’t give me the steam off his stovies I was delighted to get a call from the new Housing Minister, Alex Neil MSP asking to meet to see what more could be done to help people facing repossession in Scotland.

It’s a breath of fresh air to have a Minister prepared to listen and I am grateful to Alex Neil for that opportunity. We had a constructive meeting this week and I’ll be meeting with him again in a few weeks along with the Community Safety Minister, Fergus Ewing MSP. We’ll see what happens but there’s no doubt we all need to work together to make sure vulnerable households in Scotland get through the recession in one piece.

And that means the pendulum needs to swing a little closer to the citizen and a little further from lenders and their legal teams. I have a few ideas on how we can do that.
I drafted a ten-minute rule bill for Mohammad Sarwar MP which will be debated in the Commons next month. It proposes a statutory maximum on all default or administrative fees imposed in consumer contracts. That would cover insidious bank charges and mortgage arrears fees. Basically, money for old rope.

The banks recently lost their appeal in the OFT bank charges test case and to their great shame are trying to appeal to the House of Lords, even although the Court of Appeal told them not to bother. Big business can be dirty business. Next week the top bananas of the Royal Bank of Scotland and Lloyds will give evidence before the Scottish Affairs Committee.
I wonder if the chairman, Mohammad Sarwar and his parliamentary colleagues will manage to squeeze an apology from RBS?

I reckon it’s time to change company law. UK company law can be summarised by a line from the movie, Wall Street. Greed is good. To be fair, the law perpetuates this. Companies owe a legal duty soley to their shareholders. It’s time to temper that duty.

It’s time to reform company law so that banks owe a legal duty to their shareholders subject to doing nothing which harms the public interest. If we did this we could give our multinationals not only a conscience but a heart too.

Monday, 2 March 2009

Russell in the wind

It's difficult to take the SNP's new culture minister, Mike Russell, seriously. I'm told when he travels he has to book an extra seat for his pomposity. A few years ago he wrote a book on Scottish culture which trashed the residents of most of our towns and cities. Scotland’s former European City of Culture, Glasgow, was described by Mr. Russell as 'closes smelling of urine and rubbish, cluttered with dirt'.

Scotland's cultural attaché cautioned visitors to Glasgow to be careful they don't trip over comatose bodies 'with or without a needle by its side'. Not even Dame Edna's alter ego, Sir Les Paterson with drunken drool coated expletives could have painted a more damaging and inaccurate picture.

My first encounter with Mr. Russell in the early days of the Scottish Parliament witnessed a similarly ill-judged and ill-mannered attack. At the stage 1 debate on the free school meals bill he gave a closing speech for his party grudgingly supporting the bill but lambasting it for being ‘seriously flawed’. I remember sitting in the gallery as the draftsperson and thinking eh?

His evidence was we hadn't defined the word 'pupil'. But the bill only sought to amend section 53 of the Education (Scotland) Act 1980 and the Act itself defined pupil. It quickly dawned on me I was listening to the rantings of someone who had prepared his speech while his lips were moving. This guy had more wind than Windy Miller from Camberwick Green.

I subsequently pointed out Mr. Russell's unfair errors in the letter pages of The Herald, and in his reply both he and his pomposity could not bring it upon themselves to admit they had got anything wrong. Nor could they say sorry. With that in my mind, I wondered if they would now apologise for slagging off half of Scotland particularly as Mr. Russell was now Scotland’s Minister for Culture?

Of course not. There was no apology from the Minister, no humility, no contrition. Instead his spokeswomen insisted this was a story which 'scrapped the bottom of the barrel' when 'the rest of the world were focused on combating the economic downturn'.
Really? Perhaps the Scottish Government’s spokeswomen could explain why Mr. Russell's attention is now focused on demands for a free parliamentary vote on an independence referendum? Precisely how will this help the people of Scotland combat the economic downturn?

What would have happened to Scotland’s financial sector if both HBOS and RBS had went under in an independent Scotland? It doesn’t bear thinking about.

Quite frankly, the only folk interested in an independence referendum during these tough times is a few politicians, pollsters and journalists. Everyone else is worried about their homes and jobs.

Wednesday, 25 February 2009

More homes for Scotland

Tough economic times presents a golden opportunity to build more houses for affordable rent in Scotland. While there may be political argument over where the money will come from, it strikes me there is an immediate source in Glasgow.

The Glasgow Housing Association (GHA) made a profit of more than £50m last year and is still receiving Scottish Government grants of around £50m per annum. In these difficult economic times Communities Minister Alex Neil could consider redirecting some of these taxpayer funds into house building for social rent in Glasgow.

It would provide a much needed fiscal stimulus to the west coast of Scotland, and help address the rising demand for good-quality, affordable social housing.

Before anyone says it's not as simple as that, the Communities Minister could use his powers under the Housing (Scotland) Act 2001 to take over the GHA's board. Tough times need tough solutions. Statutory appointees could direct the GHA to use its wealth and borrowing powers to kick off the largest social house-building programme Scotland has seen in years. It's a matter of will.
And now that the Council of Mortgage Lenders supports a pre-action protocol in Scottish mortgage repossession cases, will the Scottish Government maintain that protocols as set out in England are 'rubbish', the precise words of Nicola Sturgeon MSP?
What law centres and many others have been calling for is a Scottish protocol that ensures repossession is a genuine last resort and, if not, the right for the court to dismiss non-compliant actions. Instead of arguing what England has or has not, the Scottish Parliament has the power to introduce its own mechanism that could be life-changing for many hard-pressed households up and down the country.
Again, it's all about the will to tackle weaknesses in the system and things that are grossly unfair, such as the fact poor people facing repossession in Scotland might have to pay not only the bank's legal expenses for needless court actions but also their own Legal Aid bill. That is just plain wrong, but because the Scottish Government takes this as a criticism of itself - which it is not - it has pulled up the drawbridge on all of these important issues and is refusing to listen.
Why can't we have a consensus for the good of the nation?

David & Goliath

Cheeky bankers at the Royal Bank of Scotland did a volte-face this week in plans to award themselves £1bn in bonuses. I say cheeky because senior executives would have largely been on the dole if the UK Government hadn’t taken a 70% stake in their company. A total of £175m will now be paid out in bonuses.
Don’t get me wrong I’m sympathetic to the front-line workers who rely on these payments to top-up their £17,000 per annum salaries. Those bonuses are really workers’ wages. But it could never have been right to award millions of pounds to executives who had brought the bank to its knees. It’s the moral equivalent of suggesting jail birds be given a pino colada and sent on a Caribbean cruise.

Up in Oban the RBS are under fire from Ian Hamilton Q.C. His small claims action alleges the bank were negligent in selling him shares last April by representing themselves as solvent when they were in fact insolvent. What say the RBS? Err, never mind that question we want to remit this to the ordinary cause roll please. Why? Because there are complex documents to examine? Is this a Machiavellian tactic?

If a claim turns on complex issues of fact why can’t a sheriff sitting in the small claims court examine that evidence? I accept if there are substantial preliminary debate points then small claims procedure is not perfect – and the same might be said for summary applications - however, it is still possible to fix a hearing which can proceed as a ‘debate’ if the court and parties are happy.
Examining ‘complex evidence’ is what a sheriff does day in day out whether sitting in the small claims, summary or ordinary court. From Ian Hamilton’s stance if his claim is remitted to the ordinary court his protection against an unlimited award of expenses flies-off and pursuing a claim worth £1,282 becomes an absurdity. Why would anyone pursue such a relatively small sum when they could be faced with a legal bill for many thousands of pounds in the event of failure?

In the context of unfair bank charges litigation across the UK I’ve seen the banks employ and deploy all sorts of tactics over the years against party litigants – picking them off and upping the ante because they have the economic muscle to do so. All of which means Mr Hamilton’s case raises a very important principle about access to justice. If he is picked-off then justice will have been denied.
Mr Hamilton’s claim illustrates a weakness in the Scottish legal system. Scotland does not have a class action procedure. It is interesting to note that a couple of weeks ago a class action was filed in the Southern District of New York against RBS, essentially along the same lines as Ian Hamilton’s case. The reality is a class action can allow lots of people with similar small claims to come together, pool their resources, so that they have an equality of arms against a economically powerful opponent.

The Scottish Law Commission set out model rules for such a procedure 16 years ago in a draft Act of Sederunt. So why has there been no real progress? The Scottish Government could easily introduce a procedure for class actions in Scotland speedily. After all this would have no impact whatsoever upon the substantive law of the law – and the Scottish Parliament can consent to Acts of Sederunts in a 40 day turn-around.
So come on let give David a box to stand on when he tackles Goliath.

Tuesday, 24 February 2009

The X Factor

Ask anyone who has ever lived in a tenement about property factors and you'd better make sure you have a flask of tea and chocolate hobnobs at hand. You'll be in for a woeful story of poor service, dodgy repairs, and rip-off charges. Can anyone think of an industry that is as unregulated as Scotland's property factor market?

An industry where the good, the bad, and ugly roam free on the prairie. Clint Eastwood would have a hard time with some of these cowboys. You can sack your property manager if they don't have the X factor but it can be difficult or impossible in practice. My colleagues at Govan Law Centre acted for a close of homeowners who unanimously sacked their factor five years ago and are still receiving bills. The company refused to accept it was sacked! And the legal aid board wouldn't grant civil legal aid for a declarator and interdict.

Many homeowners complain their factor does no actual management work and simply sends out bills for unearned fees. If you don't pay they will slap on charges and interest and turn their customers into debtors. There are too many factors who seem to spend all their time running a manufactured debt collection business. One factor in Glasgow operates a scam that is so outrageous it would bring a tear to the glass eye of a loan shark.

Here's how it works. You don't pay a £15 monthly bill on time so they send out a reminder letter every week and charge £17.62 for the privilege. They also apply monthly compound interest. I've seen clients with a bill of couple of hundred pounds metamorphisise into a bill of thousands of pounds. And we then get actions for payment, legal costs and ultimately petitions for sequestration. It's a scandal.

Visit the debtors court in Glasgow and you'll discover it is dominated by property factors. As the draftsperson of the Abolition of Poindings and Warrant Sales Act I and many others in Scotland found it morally repugnant to see vulnerable people have their few household possessions poinded or sold off for pennies. The replacement to warrant sales was the exceptional attachment order and guess who uses that now? To some factors it's the unexceptional attachment order. There are good and decent factors but equally there are bottom-feeders who make Dick Turpin look like a cuddly ted.

Back in 2007 I drafted a consultation paper for a proposed Property Factors (Scotland) Bill for Gordon Jackson QC. That project has now been championed by Glasgow MSP Patricia Ferguson. The proposal would see the creation of a Scottish Property Factors Register to ensure that only 'fit and proper persons' could be factors, as well as setting out minimum statutory standards. We also suggested an extention to the jurisdiction of the Private Rented Housing Committee to handle homeowner complaints. In early 2008, Govan Law Centre worked closely with the Evening Times on a campaign exposing sharp practice and calling for statutory regulation of property factors.

Many people were delighted when the Office of Fair Trading (OFT) announced its investigation into the Scottish property factors market in June last year. Last month the OFT published its MORI findings which provided robust statistical evidence confirming what everyone suspected. A remarkable two-thirds of those who had complained to their factor remained dissatisfied. The market was and is failing thousands of Scotttish homeowners. Redress in practice remains illusory for the many.

Thursday, 12 February saw the publication of the OFT's final report. Given the shocking findings of the OFT's research any reasonable person might have thought calls for tough regulation was a given. But instead the OFT has told us to trust dodgy businesses to regulate themselves. Quite frankly the OFT's recommendations are a shambles and show that our regulators - who let us down with the banking meltdown - are letting us down again.

There is also double standards in the OFT and Scottish Government's support for voluntary self-regulation - and I'm leaving aside the fact we already have self-regulation and it doesn't work. If you rent out a flat in Scotland you need to be 'a fit and proper person' from Part 8 of the Antisocial Behaviour etc., (Scotland) Act 2004. Yet if you preside over the repair and maintenance of many thousands of homes you can be a con-artist, bankrupt, or fraudster. There is absolutely no protection for the public.

Who believes bad factors are going to start being nice if we ask them nicely? The OFT's conclusions are utterly incompatible with their own findings. Voluntary self-regulation is a nonsense when there is evidence of mass customer dissatisfaction and market failure. I remain committed to working with Patrica Ferguson MSP on her proposed bill to introduce a statutory framework to root out cowboy factors and protect the public. If the Scottish Government and OFT won't act to protect homeowners in Scotland hopefully the Scottish Parliament will.

Lacuna Obligatus

When a lacuna in the law obliges a public authority to do something unjust we can either watch all lemmingesque while citizens fall into that chasm or we can do something about it. Scotland’s legal aid system is failing vulnerable people facing repossession and homelessness. And this at a time when mortgage repossessions have soared by 92%. The diagnosis isn’t good.

You’re a single person or member of a family who has fallen on hard times: ill-health, the death of a loved one, or job lost in the recession. Household income becomes jobseekers’ allowance or income support and multiple debts appear along with mortgage arrears and mental health problems. Not only can this happen to anyone, it is happening to anyone. People from all walks of life are now facing repossession.

Less than 20% of UK households with mortgages have mortgage indemnity insurance and let’s not talk about the mis-selling and inadequacies of many of these policies. When the initial writ for repossession drops through the door protection is available by applying to the court for an order under the Mortgage Rights (Scotland) Act 2001. In most cases that will require a lot of court and legal work, but many people facing repossession are eligible for civil legal aid with a ‘nil’ financial contribution.

A ‘nil’ financial contribution is essential because how can anyone pay for legal aid when they are living on £60 per week, with debts coming out of their ears? Their lender will slap on ‘arrears charges’ equivalent to a whole week’s income just because they are in mortgage arrears each month – charges which I think are unfair and unlawful.
I’ve been working with Glasgow MP, Mohammad Sarwar, who will introduce a Bill in the House of Commons in April to argue that such charges (including bank and administration charges) should be proportionate and that new UK consumer protection is needed: see
Meantime people in Scotland living on or below the breadline and facing repossession are told by the Scottish Legal Aid Board if they manage to avoid homelessness they must pay their own legal aid bill. If not they may be subject to diligence or have their house forcibly sold. Why is this?

Section 17(2B) of the Legal Aid (Scotland) Act 1986 provides that where property is preserved in proceedings the Board’s tab must be paid out of that ‘property’. To be fair the Board believe they have no choice in this. Their opinion is if an assisted person avoids repossession and their house increases in value by 1 or more percent whilst in receipt of legal aid there has been a ‘preservation of property’ and section 17 kicks in.

How does a family with young kids living on less than £120 per week or a single person living on £60 per week pay a legal aid bill of £1,000? Clearly no-one can pay for legal aid when they are living on breadline benefits so the Board is now talking about clients granting a second mortgage in favour of them; with the client being responsible for setting this up.

In any other debt or eviction proceedings dismissed with the help of a solicitor there would be no argument about preservation of property. But because a mortgage debt is secured on a person’s home we get into a hypothetical discussion about fictional equity which is unrealisable. The reality is someone has got legal help because they were poor and in dire need; they have been told they have a nil contribution because they are poor; yet they are then treated as if they are wealthy.

The treatment of such vulnerable citizens is wholly inequitable and if you consider that regulation 33 of the Civil Legal Aid (Scotland) Regulations 2002 (the 2002 Regulations) exempts various categories of money and property from the ‘preservation of property’ rule – for example money payable under an Employment Appeal Tribunal order, actions for aliment, maintenance, or property preserved in divorce proceedings – you have to ask yourself why are people facing homelessness with no income excluded from free legal help?
The only answer I can find is this is a lacuna in the law. It is certainly not an intended policy initiative. Until December 3, 2001 most people in Scotland could not even oppose repossession proceedings. So if truth be told no-one has really thought about this. Well that is not quite true. I’ve been banging on about this publicly since January 2008, and well before then in correspondence.
While calls broadcast via TV and radio waves may have been picked up in the nearby Andromeda galaxy they have yet to attract the attention of Scotland’s Cabinet Secretary for Justice. To be fair Kenny has been busy with his plans to free criminals sentenced to less than 6 months. Tough community sentences require a lot of pizza, beer and Sky telly subscriptions to organise.
However, if Kenny gets a minute maybe he could turn his attention to decent hardworking families who have fallen on hard times and are threatened with homelessness? Could he please consider amending regulation 33 of the 2002 Regulations? It could be done within a matter of weeks and if he’s too busy, I’ve written the amendment just in case:

In regulation 33 of the Civil Legal Aid (Scotland) Regulations 2002 (2002/494) insert the following:

< (bb) in respect of the value of any property recovered or preserved from an application under the Mortgage Rights (Scotland) Act 2001 (asp 11); >