A legal challenge to Scottish legislation that introduced an eviction ban and a cap on rent increases for the private rented sector has been rejected by the Court of Session in Scotland.
The case concerns a judicial review of the Cost of Living (Tenant Protection) (Scotland) Act 2022, which was first introduced by the Scottish government in October last year to help residential tenants with the cost-of-living crisis.
The failed challenge means landlords will continue to be liable for increased damages for unlawful evictions of up to 36 months’ worth of rent. Private landlords will also be subject to a rent increase cap of 6% and will only be able to apply for rent increases beyond that limit to help cover certain increases in costs in a specified time period where evidence can be provided of these costs. These measures are currently set to end on 31 March 2024, having been extended by six months twice since their introduction.
Brian Grierson, litigation expert at Pinsent Masons, said that the court’s decision to refuse the challenge to the Act is “not a surprise” as “the legislation provides landlords are able to apply to avoid the rental cap on a case-by-case basis, and the ban on evictions is temporary in nature”.
“While landlords will also feel the pressure of inflation, interest rate increases and the associated mortgage costs which go with it, the Scottish parliament has elected to put some of the burden of the cost-of-living crisis on landlords over tenants and the court has upheld that challenge,” he said. “It will be interesting to see if success in this temporary legislation emboldens the Scottish government to intervene more regularly to mitigate the impact of ‘emergency’ pressures on households.”
The Scottish Association of Landlords, Propertymark Limited and Scottish Land Estates Limited jointly petitioned for the judicial review, arguing that the temporary measures were not emergency measures and would end up being permanent. They also challenged the legislation on the basis that the Act amounted to a disproportionate interference with landlords’ rights under Article 1 protocol 1 (A1P1) of the European Convention on Human Rights, which protects the peaceful enjoyment of property, and was in breach of Article 14 as it discriminates against landlords of private residential tenancies without any objective or reasonable justification.
The petitioners argued that rent control had repeatedly been found to amount to a disproportionate interference with A1P1, citing cases from Malta, Norway, Croatia and Czechia.
The respondents in the case – the Scottish ministers and the Lord Advocate – contended that both the rent cap and the eviction ban were temporary and neither measure was absolute, as a landlord can apply to be exempted on a single case basis. Their submissions also focused on the fact that the challenge had been raised improperly – in the abstract rather than in the name of an affected individual.
The court refused the challenge and upheld the legislation for several reasons. In the judgment, Lord Harrower said that the challenge to the legislation on the basis that the rental controls were temporary but intended to be permanent was a “bad faith” challenge and the petitioners would have failed to meet the required standard of proof for challenges of that nature.
The court also concluded that the political judgement of the Scottish parliament must be respected by the court “unless it can be shown to be manifestly without reasonable foundation”. As the petitioners “did not seek to argue that [the objectives of the Act] are manifestly without reasonable foundation”, the court saw no reason to accept any attempt to redefine the purpose of the act by the petitioners in the petition.
The court also made clear that the petitioners need to show that there would be a disproportionate impact on the rights of all landlords, and not just some landlords. For the petitioners to succeed they would need to show that the measures would give rise to an unjustified interference with Convention rights “in all or almost all cases”.