Recession related litigation

As economic conditions remain challenging we expect to see an upsurge in the typical types of litigation which arise in a recessionary environment. In particular, non-payment of rent/service charge, insolvency related disputes and disputes over break options and dilapidations.

The withdrawal of COVID protections together with energy costs and inflationary pressures has already led to levels of insolvency not seen since the global financial crash. If that trend continues then insolvency related litigation, including challenges to CVAs, Restructuring Plans and pre-pack administrations are likely to follow.

Building Safety Act claims

Claims related to fire safety defects in residential buildings have already been a major area of litigation over the last couple of years. With the introduction of the Building Safety Act 2022 and associated regulations, we expect this to grow further.

The Building Safety Act creates new routes for leaseholders to recover the costs of cladding remediation from landlords, original developers and other parties. The First Tier Tribunal made its first Remediation Contribution Order in January, requiring the landlord to repay tenants for the cost of remedial works, and we are aware that a claim worth in excess of £20m is already working its way through the Tribunal system.

The Building Safety Act also extends to 30 years the limitation period for claims against contractors and developers under the Defective Premises Act 1972, meaning that many potential claims which would previously have been time-barred can now be pursued.

There are numerous ongoing government consultations, which suggest the law in this area will continue to evolve throughout this year.

ESG related claims

As predicted last year, we are starting to see disputes emerging in the ESG arena. To date, this has primary been in the context of lease renewals under the Landlord and Tenant Act 1954 where landlords and tenants have locked horns over the extent to which leases should be modernised to include ESG related clauses.

However, we expect to see further disputes in the context of the April 2023 MEES deadline. From April 2023 it will become unlawful for landlords to continue to let properties with a sub-standard EPC rating. Many landlords are not prepared for this and disputes with the tenants as to who is responsible for the cost of works to bring properties up to standard seem inevitable.

Compliance/regulatory disputes

Much of the UK’s existing regulatory framework has its foundations in EU law. If the government presses ahead with its plans to repeal remaining EU law this is very likely to result in gaps/ambiguities in the regulatory arena, giving greater scope for disputes to arise.

Areas such as procurement and GDPR remain very much under focus and the issue of global sanctions will also remain a key one as the Ukraine war continues.

Nuisance claims

The law of nuisance has already been broadened this year, with the recent Supreme Court decision in Fearn v Tate extending it to include overlooking, and the Court Appeal’s decision in Davies v Bridgend County Borough Council confirming that allowing Japanese knotweed to encroach onto neighbouring land can also constitute nuisance.

The Supreme Court is due to hear two cases imminently on whether ongoing emissions of pollution and sewage amount to nuisance.

These developments will lead to more nuisance claims between neighbours, as they push at the limits of the law.

Next steps

We will continue to keep you updated on all these areas as they develop, along with any new entries into our top 5, throughout the year. In the meantime, if you would like to discuss any of these areas please do get in touch with us.