Company Secretary Snapshot - October 2023

Welcome to our snapshot of key changes and current affairs for Company Secretaries working in social housing.

This month we’re looking at updates to the tenant’s rights and complaints handling processes for registered providers (RPs) across the sector as the Housing Ombudsman updates its Complaint Handling Code and its Scheme; the Department for Levelling Up, Housing and Communities launches a consultation on complaints handling policies; and the Regulator of Social Housing aims to carry out a national survey of tenants – and more!

Complaint Handling Code consultation

The Housing Ombudsman (the HO) has launched its consultation on the Complaint Handling Code. The Code, which was introduced just over three years ago, aims to promote a fair, positive complaint handling culture for tenants in the housing sector. The Code sets out requirements for member RPs to allow them to respond to complaints effectively and fairly. The purpose of the Code is therefore to enable RPs to resolve complaints raised by their tenants quickly and to use the data and learning from complaints to drive service improvements.

The newly enacted Social Housing (Regulation) Act 2023 has made the Code a statutory requirement. The HO is also now required to monitor compliance with the Code.

The consultation will seek views about:

• the Code and whether any further improvements can be made to the Code
• the outline proposals for monitoring compliance and whether these are transparent, proportionate and fair. And what else the HO might need to consider in fulfilling its new duty effectively and efficiently.

The HO has also partnered with the Local Government and Social Care Ombudsman to extend the Code across all local government functions. For councils who are RPs, this will end the two-tier system with housing management and corporate complaints.

This is an opportunity for organisations and tenants to provide feedback about the operation of the Code and to influence development of the regime for monitoring compliance with it. If you’d like to participate, please respond online. The consultation closes on 23 November 2023.

Housing Ombudsman publishes revised Scheme

The HO has published a revision to the Housing Ombudsman Scheme to extend fairness to all tenants beyond individual complaints. The Act requires RPs to be members of an approved scheme. Most RPs are members of the HO Scheme.

The new HO Scheme became effective on 1 October 2023. Under the HO Scheme, the HO is now able to order an RP to evaluate a particular policy or practice to prevent service failure being repeated. Under the previous scheme, the HO was only able to make recommendations on this basis, which RPs were not obligated to follow.

The extended authority gives the HO the power to require RPs to go beyond the scope of individual complaints and seek to address any wider issues. The HO can also be more specific about what it expects RPs to include in any policy review and who should be involved in the review. This will allow the HO to monitor compliance with its orders.

The HO has also published updated remedies guidance outlining these changes.

If you spot any service failures in your organisation or if you have recently been investigated by the HO, now might be a good time to review any policies that were relevant to the process.

Financial Reporting Council (FRC) publishes its annual review of corporate governance reporting

The FRC’s annual review of corporate reporting for 2022/2023 was published on 5 October 2023. In this report, the FRC has set out the following disclosure expectations for the coming reporting season:

• Ensure disclosures about uncertainty are sufficient to meet the relevant requirements and for users to understand the positions taken in the financial statements.
• Give a clear description in the strategic report of risks facing the business, their impact on strategy, business model, going concern and viability, cross-referenced to relevant detail in the reports and accounts.
• Provide transparent disclosure of the nature and extent of material risks arising from financial instruments, including changes in investing, financing and hedging arrangements.
• Provide a clear statement of consistency with the Task Force on Climate-Related Financial Disclosures (TCFD) which explains, unambiguously, whether management considers they have given sufficient information to comply with the framework in the current year. Companies must comply with the new mandatory requirements for disclosure of certain TCFD-aligned information, where applicable.
• Perform sufficient critical review of the annual report and accounts. This includes: taking a step back to consider whether the report as a whole is clear, concise and understandable, omits immaterial information and whether additional information, beyond specific standards requirements, is required to understand particular transactions, events or circumstances; and a robust pre-issuance review to consider issues commonly challenged, including internal consistency, whether accounting policies address all significant transactions, and presentational matters, such as cash flow and current/non-current classification.

DLUHC Launches consultation on Awaab’s Law

The Department for Levelling Up, Housing and Communities (DLUHC) has launched a consultation on a part of Awaab’s Law.

This consultation is looking at the part of Awaab’s Law that introduces requirements around RPs providing tenants with information related to their rights, relevant regulatory requirements, and how they can make complaints to their RP.

The consultation explained that while RPs will have flexibility in determining the most appropriate way to communicate complains-handling information to their tenants, the aim is to ensure that all tenants are able to access information about complaints in a way that they understand, without barriers to comprehension.

To participate in this consultation RPs should complete the online survey. The consultation will end on 22 November 2023.

FAQs: Legal professional privilege: protecting your internal and external advice

Welcome to our regular FAQ section where we spotlight some of the more common topics that you have been asking us to advise on.

What is “legal professional privilege”?

Privilege is the right to withhold a document or oral evidence from the court or third parties. The protection extends beyond litigation, and protects against being required to disclose to, for example, the police, the RSH, or HMRC, unless there is a clear statutory exception. However, in order to be privileged, material must also be confidential – privilege is lost if a document is made public. 

Why is it important?

Privilege allows a client to:

• Preserve confidentiality in documents
• Withhold material from being disclosed as evidence in court proceedings

Types of privilege

Two main types of privilege (others can also be available):

• Legal advice privilege: Attaches to confidential communications between a client and their lawyer, for the dominant purpose of giving or receiving legal advice. It applies to advice from in house and external lawyers, but must be given to an individual or group authorised by the organisation to seek and receive that advice – not, usually, the whole organisation. “Legal advice” is not just telling a client what the law says – it can include advice on what to do – but it won’t extend to purely commercial or reputational advice.
• Litigation privilege: Attaches to confidential communication between client/lawyer, lawyer/third party or client/third party, where it is for the sole or dominant purpose of adversarial litigation – already commenced, pending or in reasonable contemplation. “Litigation” includes obvious categories (High Court, County Court, Employment Tribunals), but is also likely to include regulatory investigations. It is “pending or in reasonable contemplation” when it becomes a “real likelihood” (rather than “mere possibility”).

Tips for preserving privilege

• Identify the client: create a project-specific team, authorised to seek and receive advice
• Label advice as privileged
• Preserve and record the dominant purpose
• Distinguish between commercial and legal advice
• Identify when Litigation Privilege is relied on – record when litigation is contemplated.

Limits on privilege

• Statutory “override”: under certain investigatory powers, and where a legal services regulator is involved
• Waiver: deliberate disclosure and reliance, or inadvertent disclosure (unless the error was obvious
• Criminal or fraudulent purpose: If a document is created for a criminal or fraudulent purpose then it is not privileged

Recent cases

• CAA v Jet2: an email to a group was not privileged just because one recipient was a lawyer (although the lawyer’s reply is privileged)
• Sports Direct v FRC: A regulator’s statutory powers to access documents did not override privilege.

If you would find it helpful, we offer further training.

Regulatory Grades

The RSH continues to find that the current economic uncertainty in relation to inflation and interest rates means that many RPs have now less financial headroom and reduced capacity to respond to adverse events. Our review of regulatory upgrades/downgrades/regrades in the sector has highlighted the following themes:

• Breach of the Rent Standard resulting from:
• Inaccurately categorising housing units as specialised supported housing.
• Errors made in relation to rent setting for fair rent tenancies resulting in an overcharge to tenants.

AOB

Social Housing (Regulation) Act 2023

The new Social Housing (Regulation) Act will commence in April 2024 and will cover four consumer standards: 

• The Safety and Quality Standard
• The Transparency, Influence and Accountability Standard
• The Neighbourhood and Community Standard
• The Tenancy Standard

We have created a series of five short video digests, each providing an outline of how these standards will impact RPs and provide greater understanding on the Act.

Forthcoming events

We provide a range of online and in-person events, which are free to attend including:

23 November, 12:30 – 1:30 pm Hoarding Disorder: a panel discussion on practical and legal steps

View our full events list