Town Hall spent over £4.6m on legal costs of disrepair in past year

Deputy mayor and cabinet member for housing and regeneration, Cllr Guy Nicholson. Photograph: Hackney Council

Hackney Council has revealed it has spent around £4.6m in the last year on legal costs and compensation for housing disrepair.

Facing questions at Monday’s cabinet meeting, the Town Hall’s housing chief Cllr Guy Nicholson confirmed it had paid out roughly £1m to legal disrepair claimants over the past 12 months.

This came with an added “sting in the tail” from shelling out £3.6m on legal fees to those third parties fighting the cases, he said.

“It is absolutely true that, as a social landlord, we have seen, increasingly, legal disrepair cases,” Nicholson said.

“It must be stressed that the borough is not alone here. The social housing sector as a whole is experiencing much the same.”

Hackney Council received 508 legal disrepair claims during this period.

Twenty-six of these were rejected, while “a record” 454 were closed, with 237 claimants receiving compensation.

“This totalled to an average of just over £4,500 per case,” Nicholson said.

He added that “ageing buildings and under-resourcing” were the common factor driving up legal disrepair claims for social landlords more widely.

The figures come in the weeks after the social housing watchdog came to the Town Hall to address councillors following his report into Hackney’s housing performance.

Ombudsman Richard Blakeway judged the borough to be an “outlier” when it came to serious failures on maintenance and repairs.

Independent Socialist councillor Penny Wrout, who had asked for the data ahead of the meeting, pressed Nicholson on the Town Hall’s approach to legal claims.

“Is the council properly considering if a case is winnable on just terms, rather than wasting money fighting weak cases?” she said.

The housing chief said the council always tried to resolve issues or reach settlements out of court, and pointed to its ‘alternative dispute resolution’ (ADR) process.

“You’re absolutely right,” he said, “that legal action is wasting a lot of money, as it always does for one party or another.

“If it can be avoided at all costs, that must be the priority.”

In his May report, the housing ombudsman said there was a lack of clarity around the ADR scheme.

Blakeway said he was “concerned” by the council seeking more staff and investment for the programme, “given there is already an alternative dispute resolution scheme in place for issues with repairs: the complaints system”.

In 2024/25, Hackney Council’s housing revenue account (HRA) overspent on legal disrepair by £5.6m, as more cases progressed through the courts due to the local authority having more resources at hand to clear its backlog.

The total HRA shortfall currently stands at £17m.