A TOUGH NEGOTIATION
Updated 9 July 2018
The Initial Dispute
In the 1960s there was pressure to build more public sector housing in Britain, and pressure to build it more cheaply. Different building materials and building techniques were used. As some of the techniques were completely new, it took time to see if they were good or bad.
In one London Borough the Director of Housing just refused to build high rise flats because he believed they would be social disaster areas. Generally speaking, he was right.
In Bradford several estates built in the 1960s were disclosing faults by the time I started at Bradford Law Centre in 1981. One large estate of houses had concrete walls that had developed holes you could see through. A different estate had developed serious condensation problems, One street on a third estate had a design fault that meant that the kitchen in one flat in each small block had no ventilation.
One block of flats developed a different problem. It rains in England quite often, and whenever it rained water collected on the walkways and seeped into the flats spoiling the carpets.
The Council’s view was that the Council was not responsible for the problem because there was no building or design defect.
The people living in these flats were generally in work, and so they were not eligible for legal aid because their incomes were too high. They were not able to afford lawyers. They could tell there was something wrong and they believed the Council was fobbing them off.
So they occupied the local Council Housing Office, maintaining an occupation 24/7. This got the Council’s attention.
The police were reluctant to become involved, because they had recently been criticised for alleged racist behaviour on that estate and they knew they had little support in that locality.
Technically the Council could go to court to obtain a court order requiring the occupiers to leave the property. They knew the people were angry with the Council, and would defy any court order. The Council could enforce the order with bailiffs and police, generating a riot. These were not hooligans – these were respectable middle aged and elderly low-income people.
Bradford Law Centre had plenty of work on, and although we were aware of the occupation we had not gone rushing to get involved. They came to us.
Our funding situation was a bit peculiar, but the effect was that we had some money we had earned by acting against bad landlords and violent husbands. We were not entirely dependent on Legal Aid.
We could afford to commission a report by a buildings expert from London.
We agreed to pay for a report, the Council agreed to take no action against the tenants involved in the occupation, and the tenants called off the occupation.
The Report Comes
The independent buildings expert came to Bradford, inspected the building, and reported.
This had been an innovative building technique. On each floor grooves were carved into the concrete. Walls were placed in the grooves, and a rubber type solution was poured into the grooves to make a weather-tight seal.
Over time water had worn away the rubber, so when it rained water forced its way under the walls and into the flats.
The Council accepted the report and accepted liability. We closed our file.
The tenants association negotiated compensation figures with the Council direct.
Called In Again!
The negotiations reached an impasse, and we were asked to go to a meeting to beef up the Tenants Association representatives who felt the Council lawyers were being “tough” and “disruptive”.
The “disruptive” element was that the Council said that the compensation for carpets should be based on the floor area of the flats involved, not on the historic cost of the carpets damaged. So some people were being offered much more than their carpets had been worth, and some much less.
The Council lawyers also argued that there was a “betterment” argument, because everyone was getting new carpets! Some deduction had to be made as otherwise people would be gaining. Compensation should be reduced to avoid betterment.
Technically the Council were right about “betterment”. I was able to persuade the Council lawyers that it was inequitable to pay everyone the same, when some carpets had been worth more than others.
The parties were still 25% apart between the tenants’ self-valuations and what the Council felt was reasonable.
I knew there was a cheap carpet shop within 100 yards of the block of flats. I asked the Tenants Association representatives if the carpet shop owner would give a 10% discount if everyone went to him. They said, knowing him, that for that much business he would give a 10% discount.
I then suggested to the Council that as the Council was registered for VAT (a British sales tax called Value Added Tax) then running at 15%, the Council could reclaim VAT if the Council bought the carpets. The Council agreed this was possible.
So, I continued, if the owners negotiated the 10% discount and the Council paid for the carpets direct to the shop owner, our 25% difference was resolved.
It was not possible to repair the rubber solution at an economic cost, so within a year or so the Council had to demolish the block of flats.