The issues raised by the parties
The issues raised by the parties
The parties helpfully agreed a list of the substantive issues raised by the claims which we reproduce below. We identify the claimants pursuing each issue:
Aims: what are the aims of the three measures in the LFRA 2024 under challenge (ARC, C&G, Abacus, Wallace, John Lyon’s and Portal).
Marriage value (generally): Whether the exclusion of ‘marriage value’ from enfranchisement premiums, by s.37 and Sch. 4, para.17(3) of the LFRA 2024, is incompatible with A1P1 (ARC, C&G, Abacus, Wallace, John Lyon’s Charity and Portal).
Marriage value as regards charities: Whether the exclusion of ‘marriage value’ from enfranchisement premiums, by s.37 and Sch. 4, para.17(3) of the LFRA 2024, is incompatible with A1P1 insofar as it contains no exception(s) for charities (John Lyon’s Charity and Portal).
Cap on ground rents: Whether the introduction of a cap on existing ground rents in enfranchisement calculations at 0.1% of the FVPV, by s.37 and Sch. 4, para.26(4) of the LFRA 2024, is incompatible with A1P1 (ARC, C&G, Abacus, Wallace and Portal).
Recovery by landlords of non-litigation-costs: Whether the abolition of the statutory right for freeholders and any intermediate superior landlords to recover from tenants the reasonable non-litigation costs that the freeholders and superior landlords incur on enfranchisement and lease extension claims (subject to specified exceptions), by ss.38 and 39 of the LFRA 2024, is incompatible with A1P1 (ARC, Abacus and Portal).
Cumulative effects: whether the measures at (2), (4) and/or (5) above, as impugned by each claim, are jointly incompatible with A1P1 (ARC, C&G, Abacus, Wallace and Portal). In determining issues (2), (4), (5) and/or (6), as impugned by each claim, the claimants say that these issues must be judged in the light of the cumulative changes to the nature and scope of the leaseholders who may benefit from enfranchisement rights, and on what terms, as effected by successive Acts post the LRA 1967 up to and including ss. 29 and 32 of the LFRA 2024.
Exceptions: Whether each of the measures at (2) and (4) above is incompatible with A1PI and/or Art 14 taken together with A1P1 insofar as they contain no exception(s) (a) for charities or (b) to exclude from the new valuation regime arrangements of the kind that Portal has with SHA where the lessee is not a homeowner or consumer but holds their interest for business purposes (Portal).
Standing: Whether the Portal Trust has standing to bring its claim.
By the time of the hearing before us, the defendant was no longer raising an issue as to Portal’s standing to bring its claim and so the court need not consider that matter.
We attach to this judgment as Annex 2 the drafts of the DoIs sought by the claimants reflecting the issues set out above.
Abacus also challenged para.17(2) of sched.4 to the LFRA 2024 which deals with intermediate leases. In response, the Government has agreed that there is a loophole which needs to be corrected by primary legislation. On 16 June 2025 the court made a consent order staying that part of the claim brought by Abacus.
The statutory framework
- Heading
- Lord Justice Holgate and Mr Justice Foxton This judgment is set out under the following headings
- The parties
- The issues raised by the parties
- The legislative history
- The LFRA 2024
- Article 1 of the First Protocol – the legal principles The approach of UK courts to the jurisprudence of the European Court of Human Rights
- The structure of A1P1
- James v United Kingdom
- Strasbourg jurisprudence after James
- Are the effects of the wasting asset problem priced into the premia for residential leaseholds?
- Proportionality in domestic law – general principles
- Assessing the aims of a measure and its justification
- The width of the margin of appreciation
- General rules or bright lines
- Less intrusive measures
- The ab ante principle
- Indirect discrimination
- The requirement for compensation to be reasonably related to the value of the property taken
- The concept of market value
- The evolution of the measures under challenge
- The Law Commission embarks on a further leasehold reform project
- Contributions from Government and Parliament
- The Law Commission Consultation Paper No.238
- Further Government and Parliamentary activity
- The Law Commission Valuation Report (No.387)
- CMA involvement
- The Law Commission Enfranchisement Report (No.392)
- The Government moves towards legislation
- The Impact Assessment
- The Bill
- The ECHR Memorandum
- Engagement by the claimants in the reform process
- After the LFRA 2024 was enacted
- Estimates of the impact of the measures The material before the court
- The challenge to the IA and Addendum IA
- The aims of the measures The rival cases as to the objects of the LFRA 2024
- The legislation
- Hansard
- The statutory interventions prior to the LFRA 2024
- The material from 2016 to the enactment of the LFRA 2024
- Conclusions as to objects
- Are the measures rationally connected with the identified objects?
- The Ground Rent Cap
- The background
- Whether the objects which the Ground Rent Cap was intended to achieve could have been achieved by a less intrusive measure
- The “fair balance” assessment
- Conclusion
- The Marriage Value Reform
- Marriage value and the problem of the tenant’s lease as a wasting asset
- Consideration of marriage value in documents leading to the LFRA 2024
- Aims
- The claimants’ arguments on the justification for the Marriage Value Reform
- Whether the objects which the Marriage Value Reform was intended to achieve could have been achieved by a less intrusive measure
- The “fair balance” assessment
- The submissions of John Lyon’s Charity on the Marriage Value Reform
- Conclusion
- The Costs Recovery Reform
- Aims and justification
- Fair balance assessment
- Conclusion
- The cumulative effect of the measures
- Whether the non-exclusion of charities from the measures violates A1P1? Introduction
- Consideration of the effect of enfranchisement reform on charities prior to the enactment of the LFRA 2024
- The effect on landlords with charitable status
- The case for the Portal Trust Introduction
- The pre-legislative and legislative process
- The objects of the LFRA 2024
- Conclusions
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