[2023] UKUT 129 (LC)

I do not accept Mr Bates’ submission that the FTT failed to understand or give appropriate weight to the Council’s Policy.

In Sutton, at [13]-[14] the Court of Appeal endorsed guidance given by this Tribunal (Judge Cooke) in Marshall v Waltham Forest LBC [2020] 1 WLR 3187, at [54] and [62], which explained that the FTT should start from the policy of the local housing authority and consider whether the objects of the policy will be met if it is not followed, but that if, having afforded the policy considerable weight, the FTT disagreed with the authority’s conclusions it is entitled to vary the penalty indicated by the policy.

The misunderstanding suggested by Mr Bates concerned the distinction between harm to an individual tenant and harm to occupiers of HMOs in general if the Council’s supervision and enforcement functions were undermined by a failure to licence HMOs. The FTT had that distinction well in mind and specifically disagreed with the Council that the risks of harm which were the consequence of licensing avoidance were as serious as the risks to individuals of category 1 hazards liable to cause death or serious injury (see the decision at [118]). It also considered whether the objects of the policy (punishment, deterrence and the removal of financial gains) could be achieved if the penalty was set at a significantly lower level and concluded that they could (see [118]-[120]). Having reached those conclusions the FTT was entitled to impose a different penalty from the one produced by an unamended application of the policy.

I would add that the Council’s policy appears to conflate distinct considerations, namely, the seriousness of the offence and the harm caused by its commission. The policy requires officers to follow a series of eight steps in arriving at a penalty, the first two of which are to determine the level of harm caused by the offence and the culpability of the offender. Step three is then to identify a default penalty by cross referencing harm and culpability on a grid or matrix; in that way the default penalty is arrived at without separate consideration of the seriousness of the offence. The default penalty may then be adjusted by up to £2,500 to reflect aggravating or mitigating considerations.

The approach adopted by the policy is in contrast to the Guidance on Civil Penalties published by the Ministry of Housing, Communities and Local Government in April 2018, which identifies the severity of the offence, the culpability and track record of the offender and the harm caused to the tenant as distinct considerations. The conflation of harm and seriousness may be dictated by a desire to fit the relevant considerations into a grid with two axes. The attraction of a grid to aid decision makers is understandable, but in this Policy it may have resulted in insufficient consideration being given to the seriousness of the offence. As a result, offences with strikingly different consequences to which one would expect different degrees of seriousness and penalties should attach, have been deemed worthy of the same penalty. That was the approach which the FTT found difficult to accept, and I share its concern.

It is for each local housing authority to adopt its own policy, and it is not the function of this Tribunal provide a model. But in principle it would seem to me that a better approach would be for the seriousness of each relevant housing offence to be reflected in either a starting level or in a maximum (and possibly a minimum) penalty. Around that starting point or within that range the actual or potential harm to tenants, the culpability of the offender and any mitigation could then be taken into account to determine the appropriate penalty for the particular offence being considered. That might require a different grid to be devised to reflect different offences, but it might avoid some of the difficulties identified in this case.