Jim Cotter of the Property Litigation Department of commercial lawyers Nabarro Nathanson looks at the problems facing retailers regarding squatters and how the new Criminal Justice Act makes squatting a criminal offence.

Commercial squatters clearly consider that they have little to fear from civil law remedies for trespass. Shortly however, commercial squatting will be a criminal offence. How will "the Christmas paper and novelties brigade" react?

Christmas present for lawyers

While I am no Nostradamus, if there is one prediction I have been able to make with confidence in past years, it is that I will receive instructions from at least one angry, frustrated and dispossessed landowner, shortly before Christmas. Commercial squatting does of course happen at other times of the year but, for obvious reasons, the month or two before Christmas are the most active for the nomadic vendors of Christmas paper and novelties.

Target premises

The premises in question will usually be a shop. Even in prime town centre locations there are sometimes a few empty shops for one reason or another. Perhaps new shop fitting works are about to be carried out, or perhaps the shop has become surplus to operational requirements and the retailer is attempting to dispose of the lease. Whatever the reason, it always comes as a nasty shock when the true owner discovers that, without having obtained any permission, unknown persons are trading from the premises.

Can the Police help?

The first reaction of many landowners who have not experienced this problem before is to contact the Police. "The premises were left securely locked; the squatters must have broken in," they say; "surely a criminal offence has therefore been committed and the squatters should be arrested?"

While the Police are always sympathetic, they are usually unable to help. The commercial squatters will often claim that they were given the keys by an untraceable "Mr Smith" or "Mr Brown" who (it is claimed) granted the squatters a tenancy for a number of weeks at a rent alleged to have been paid in advance.

If most squatters are to be believed, more business deals are struck in pubs than on golf courses. Furthermore, it appears that there are many traders frequenting pubs who, for the price of a light ale and a key, can be persuaded to part with several thousand pounds in cash, without of course requiring any receipt!

Implausible though these tales may be, the Police are often forced to conclude that the facts are insufficiently clear to justify any arrest and the true landowner is left to pursue his remedies under civil, as opposed to criminal law.

Self-help remedies

Many landowners are then tempted to contemplate "self-help" remedies, such as throwing the squatters and their wares into the street.

This temptation, though sometimes great, should be resisted. It is a criminal offence to use or threaten violence (to persons or property) for the purpose of securing entry to any premises, if there is anyone on the premises at the time who is opposed to the entry.
Commercial squatters take particular advantage of this provision. They are often well organised and well informed as to their legal rights. They will have no hesitation in calling the Police if any attempt to evict them is made other than via the Court. Often they will leave one of their number to sleep at the premises so as to ensure that, at all times, there is someone who can oppose and object to any attempted re-entry by the landowner, thus leaving the landowner at risk of criminal prosecution if he proceeds.

Civil remedies

In many cases the landowner's only option is to sue for possession. Fortunately there is a summary procedure available in both the High Court and the County Court. This procedure can be used even if the identities of the squatters are unknown. It is often therefore possible to obtain an Order for Possession, enforceable against anyone at the premises, within 4 days of issuing proceedings.

Enforcement of Possession Orders and Costs

There are two main problems with the existing law and practice however. The first is that the Order for Possession can only be enforced via the Sheriff's Officer in the High Court, or the Court Bailiff in County Court cases. With the best will in the world, these officials may be unable to execute an Order for Possession immediately.

The second problem is that the legal costs and Sheriff's/Bailiff's charges incurred in obtaining and executing an Order for Possession are not insignificant and are almost always irrecoverable.

The law and practice will soon be changed by some of the less controversial provisions of the Criminal Justice and Public Order Act 1994. When those provisions are in force, it should be possible to obtain an "Interim Possession Order" from the Court immediately and without giving any prior notice to the squatters.

Furthermore (and more radically) if the squatters fail to vacate within 24 hours of service of a copy of the Order, they will be guilty of a criminal offence and liable to imprisonment for up to 6 months or a fine or both.

Effects

Enforcement of Interim Possession Orders will effectively be a matter for the Police therefore. This should speed up the process of recovering possession and hopefully result in savings on Sheriff's/Bailiff's charges.

The new law and practice may also act as a deterrent if the prospect of shorter trading periods, before eviction or even arrest, makes commercial squatting a less viable proposition.

Timing

The Lord Chancellor's Department (which is responsible for producing the new rules of Court required) is unable to give any firm indication at present as to when the relevant provisions of the 1994 Act will come into force.

Nostradamus might have predicted however, that for one litigator at least, Christmas will never be quite the same again!

Detailed specialist advice should be obtained before taking or refraining from any action as a result of the comments made in this article which are only intended as a brief introduction to the particular subject. Nabarro Nathanson is regulated in the conduct of investment business by the Law Society.

For additional information contact Kevin Wheeler, Nabarro Nathanson, tel 071 491 6982.