Assessing damages in unlawful eviction cases: a ruling from the Supreme Court

If a landlord unlawfully evicts one its tenants, the displaced tenant has several remedies including seeking damages. Damages claims may be brought on the basis that that the landlord is in breach of contract and in tort. There is another basis on which damages can be claimed and that is under sections 27 and 28 of the Housing Act 1988. One of the principle goals of Part I of the Housing Act 1988 was to deregulate the private rented sector. The grant of tenancies protected by the Rent Act 1977 is being phased out. Since its commencement (in January 1989) almost all new private sector tenancies are either assured or assured shorthold tenancies. One key difference between an assured and a protected tenancy is that the landlord can charge a market rent for the letting. In contrast fair rents are set for protected tenancies. Following an amendment made by the Housing Act 1996, the position now is that all new tenancies granted by private landlords are automatically assured shorthold tenancies where tenants has only limited security and must pay a market rent. All private sector tenancies that were protected when the 1988 Act came into force, remain, in principle unchanged: they retain security of tenure, the right to have a fair rent registered and important succession rights. Fears that unscrupulous private landlords would evict protected tenancies to take advantage of letting at a market rent led parliament to tighten up the existing protections against harassment and illegal eviction. The criminal sanctions (in the Protection From Eviction Act 1977) were increased and a new statutory damages remedy was enacted in section 27 of the 1988 Act. Under this provision tenants may claim damages if illegally evicted and the measure of damages is potentially huge. Section 28 of the 1988 Act provides that damages may be awarded representing the difference in value of the tenant’s property with his occupancy and with vacant possession. While these provisions apply to all landlords, there is little doubt that the primary motivation was to discourage private landlords from illegal eviction, or harassment. However, in London Borough of  Lambeth v Loveridge [2014] UKSC the Supreme Court has considered the scope of damages awards in a case involving a social landlord.  The landlord, mistakenly, thought that Mr Loveridge, one of its secure tenants, had given up possession when in fact he was on an extended visit to Ghana. After recovering possession the landlord relet the property. After his return to the country, Mr Loveridge sued for damages claiming both common law damages and damages under the 1988 Act. In the county court he was awarded some £90,000 for his claim under the Act. On appeal the Court of Appeal set his statutory damages at nil on the basis that the valuation should be assessed by reference to a sale by the landlord that would in reality be to a private landlord or investor who would not offer less for the property as the tenant would on the sale become an assured tenant paying a market rent. Allowing Mr Loveridge’s appeal the Supreme Court has held unanimously that this approach was incorrect. Damages should be assessed on the basis that he lost his secure tenancy. The Court suggested that parliament should revisit the application of sections 27 and 28 of the 1988 Act to cases involving social landlords. Although the case concerns a social landlord it is a timely reminder that one the sanctions that a private landlord faces if it illegally evicts is a large claim for damages. Professor James Driscoll is a solicitor and a writer