Law Commission consultation on business tenancies: modernising security of tenure

The forum in which almost all lease renewal disputes are currently decided is the county court. We invite the views of consultees as to which of the following options they prefer.

1. Option 1 – greater use of the High Court: all disputes (both unopposed and opposed renewals) would continue to be decided by the courts, but greater use would be made of the High Court for higher value and/or more complex claims. 
2. Option 2 – move lease renewals to the Tribunal: all disputes (both unopposed and opposed renewals) would be decided by the Tribunal. 
3. Option 3 – split jurisdiction: opposed renewals would continue to be decided by the courts; however, unopposed renewals would be decided by the Tribunal. 
4. Option 4 – other change: change is needed to the current law, but in a different way to any of the reforms proposed in Options 1 to 3. 
5. Option 5 – no change to the current law: disputes would continue to be decided primarily by the county courts.

Please explain why.

If Option 2 or 3 were implemented, we invite the views of consultees as to what powers to award costs the Tribunal should be given.

If Option 3 were implemented, it could be combined with Option 1, so that: 

1. all unopposed lease renewals would be decided by the Tribunal; 
2. most opposed renewals would be decided by the county court; but 
3. the highest value and/or the most complex opposed renewals would be decided by the High Court. 

We invite the views of consultees as to whether, if Option 3 were implemented, it should be combined with Option 1.

We invite the views of consultees as to whether a bespoke pre-action protocol should be created for lease renewals and if so:

1. whether separate protocols should be created for opposed and unopposed renewals; and
2. what the protocol(s) should include.

We invite the views of consultees as to whether standard case management directions should be created for unopposed renewals, opposed renewals or both.

We invite consultees to tell us about any particular matters they consider should be included in such standard directions.

We invite the views of consultees as to whether the approach in CPR Part 36 (which, broadly, sets out prescribed costs sanctions which apply in the event that a party fails to accept a settlement offer, which they do not go on to better at trial) should be adapted to create a similar regime for lease renewals and, if so:

1. what types of disputes it should apply to – in particular, whether it should apply only to unopposed renewals (or specific categories of unopposed renewals, such as rent-only disputes); and
2. how such a scheme would work.

We invite the views of consultees as to whether each party to a lease renewal dispute should be given the right to refer the dispute to non-determinative ADR, such as early neutral evaluation or mediation. Under such a scheme, if one party exercised the right, the other party could not object.

If such a right were introduced, we invite the views of consultees as to: 

1. whether the right should apply to unopposed renewals, opposed renewals or both; 
2. when, during the lease renewal process, the right should be capable of being exercised;
3. what, if any, form of non-determinative ADR such a scheme should prescribe; and
4. otherwise, how such a scheme should work.

We invite the views of consultees as to whether the 1954 Act should be amended to include provisions which promote and/or incentivise the use of ADR within lease renewal disputes (in a similar way to the approach taken in the Electronic Communications Code). For example, provisions could be introduced into the 1954 Act (or any related secondary legislation) which: 

1. require section 25 and 26 notices to include prescribed wording, explaining the possibility of resolving lease renewal disputes using ADR and any costs consequences of unreasonably failing to engage with ADR; 
2. require landlords and tenants to consider using ADR before issuing proceedings; 
3. enable landlords and tenants to serve notices on one another, setting out the serving party’s wish to undertake ADR (but not mandating the other party to take part); and/or 
4. state that the court (or Tribunal, if some or all lease renewals were transferred to the Tribunal under Option 2 or Option 3 set out in Consultation Question 47 above) must take into account any unreasonable refusal to engage in ADR when any costs award is considered after trial.

We invite consultees to tell us their views about any other ways they consider ADR should be promoted or incentivised in lease renewal disputes.

We invite the views of consultees as to whether there are any specific problems with the way in which Applicability Disputes (by which we mean disputes about whether a tenancy benefits from protection under the 1954 Act) are resolved currently.

We invite the views of consultees as to whether, if the law is changed so that all unopposed and opposed renewals are decided by the Tribunal (Option 2 in Consultation Question 47), Applicability Disputes should also be decided by the Tribunal rather than the court.

We invite the views of consultees as to whether, if the law is changed so that unopposed renewals are decided by the Tribunal but opposed renewals continue to be decided by the courts (Option 3 in Consultation Question 47), Applicability Disputes should be decided by the Tribunal or the court.