Disputed Liability Order Hearings
In a previous article, Greenhalgh Kerr’s Richard Kerr offered guidance on how to deal with disputed applications for Liability Orders arising from unpaid NNDR.
To summarise, the article discussed adjournment out of the bulk list, a review of the documentation and the obtaining of appropriate directions for trial. For those who haven’t seen the article, it is well worth a read by way of prequel.
Following on from Richard’s article, in this piece I will highlight key points in the process to take advice and conduct analysis. I’ll also review the likely costs consequences in the event of some common outcomes following such advice being taken.
Offering the chance
In an era of cards on the table litigation, where the days of the surprise witness or left field legal submission by way of a rabbit from the hat are behind us, the expectation is that parties identify their position early.
Practically, in the case of an NNDR summons, that means before the Court is even asked to give directions. A billing authority should be not only willing, but keen to write to a ratepayer explaining why the basis upon which they have been made liable (whether as owner or occupier) and as applicable why any other alleged owner or occupier has been disregarded, or any relief applied for refused.
Further to showing its own hand, the correspondence should invite the ratepayer to do the same. Specifically requesting details of why the ratepayers alleges they are not liable is the starting point. The correspondence can then go on to seek the voluntary provision of documentation at this early stage. This can be specific documentation relating to the billing decision outlined, as well as a more general invitation. Above all, the correspondence should make clear that upon receipt of the statement of the ratepayer’s position and associated documentation the council will perform a fresh billing decision process with the express aim of avoiding litigation.
The benefits of this are numerous. Firstly, if a genuine error has been made, it can be rectified before significant investment has been made in the legal process and without exposure to adverse costs. Alternatively, if the view is taken that the billing decision remains correct, the council can proceed to litigate with increased confidence and an understanding of the case against it. Finally, the more subtle effect of such correspondence is to offer costs protection in the event of a later change in billing or if unsuccessful at trial; a ratepayer who is asked to provide evidence early, fails to do so and then when producing it later seeks costs will struggle to argue the billing authority was unreasonable in not accepting the ratepayer’s case earlier.
The course of typical directions
Once the decision to litigate is taken, the process discussed by Richard kicks in. Typically, this will see directions given as follows;
a. The ratepayer provides a statement of why it is not liable.
b. The billing authority provides a statement in response.
c. The billing authority provides evidence to discharge its initial burden (bill, reminder, summons, hereditament in the list and debt unpaid) together with anything supporting its own statement of case or contradicting the ratepayer’s. This is often served with the billing authority’s statement.
d. The ratepayer’s evidence.
e. The billing authority’s further evidence, limited to that in reply to the ratepayer’s.
f. General directions for a bundle, skeleton arguments and trial arrangements.
For a billing authority, the key opportunities follow (a) and (d) above.
On receipt of the ratepayer’s statement, the billing authority will (if not already known due to a failure of the ratepayer to engage in pre-action correspondence) know what will be said against it. It will also know what evidence and/or legal argument(s) it can deploy to counter. It is therefore a fantastic opportunity to take legal advice, whether internally or externally, on the prospects of success.
If the advice is of good prospects, the natural consequence would be to proceed.
Conversely, if the prospects look poor, it will usually be because another person ought to be made liable on the balance of probabilities. It is often advisable to withdraw the summons at that point in those circumstances. This avoids the council incurring the cost of preparing its own statement of case and evidence but more importantly, where it is the first juncture at which the ratepayer has set out its position clearly, ordinarily preserves the billing authority’s public function costs protection following (citation Bradford v Booth). The logic is simple; the billing decision was made based on what the council knew but when a credible alternative was set out, the decision was changed and that is an entirely reasonable process.
A similar opportunity arises on receipt of the ratepayer’s evidence. Although the legal advice taken here will tend to be on the weight of the evidence rather than the more technical analysis of the parties’ positions, it is nonetheless another key juncture at which the reasonable thing to do may be to change the billing decision in the face of credible and compelling evidence from a ratepayer. Again, this not only avoids the cost of trial for the Council but keeps open the argument for public function costs protection.
The takeaway ought to be that simply because a billing authority embarks on litigation does not mean that it must see it through. Remaining well advised and open-minded offers far better outcomes than blindly pressing on.
From there, a case with good prospects will head to trial which comes with its own nuances, but that is probably one for a future edition.