'Covid Protection Did Not Stop Court Action Over Unpaid Rent'

A restaurant owner was shocked to discover he had been taken to court by his landlord despite them still negotiating repayment of unpaid rent.

"I was surprised and a bit cross to find I was issued the county court judgement," David Fox told the BBC.

The government has extended a ban on commercial evictions, brought in to protect firms struggling in the pandemic.

Yet many firms are still being taken to court over rent they have not paid.

County court judgements are issued in England and Wales when people fail to repay money they owe.

The British Retail Consortium reckons around a third of retailers have faced CCJs during the crisis, while many hospitality businesses have ended up in court as well.

"I said it wasn't fair and we then agreed I would pay a certain amount in arrears and the CCJ was dropped a month later," said David Fox, co-founder of Tampopo & East Street restaurants, a pan-Asian chain in Manchester and London.

"But the threat of the CCJ is still hanging over me and I don't want to have to spend money I can't spare on legal fees.

"Any of my landlords have the right to issue CCJs but if that happened across my restaurants I'd go bust," he said.

UK Hospitality said multiple businesses and hundreds of premises have been affected by CCJs.

It said the main impact is on companies' credit rating and long-term credit-worthiness, as the debt cannot be collected or the ruling enforced against.

But it warned CCJs can cost many thousands of pounds to defend.

"We'd encourage both landlords and tenants to negotiate in a positive spirit," a UK Hospitality spokesperson told the BBC.

"CCJs have little real-world impact with protections in place and we'd urge landlords not to pursue them.

"They simply add cost, worry and antagonise the relationship, which adversely affects negotiations."

On Wednesday the Treasury extended the temporary ban on evictions for unpaid commercial rent to 25 March next year.

It had been due to finish at the end of this month.

The government said the ban would help hospitality businesses to recover and that legislation will be introduced to ring-fence outstanding unpaid rent built up during lockdowns.

Landlords will be expected to make allowances for these and "share the financial impact with their tenants".