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Costs and the Disrepair Pre-Action Protocol

In a recent case the Court of Appeal considered the issue of legal costs on a claim using the Disrepair Pre-Action Protocol.
In Birmingham City Council v Lee the Council was initially given notice of disrepair in Mrs Lee’s property by solicitors in a letter which made mention of the protocol. The Council repaired the property during the course of the following month and negotiations then took place with regard to payment for damages and Mrs Lee’s legal costs.  These apparently broke down and a claim was issued in the for damages of between £1000-5000.  As the repairs were complete there was no claim for specific performance and as the amount claimed fell below £5000 the matter was properly allocated to the small claims track.  However, Mrs Lee sought damages on the fast track scale for, at the minimum, the time between notification and completion of the repairs.  It seems fairly likely from thr papers that the action was largely begun in an effort to obtain legal costs.

At first instance the Deputy District Judge refused costs.  On the tenant’s appeal the Circuit Judge made a costs order allowing costs prior to allocation to be reserved for consideration by the trial judge at the conclusion of the matter.  The Council appealed this decision to the Court of Appeal.

In a unanimous verdict the Court (led by Hughes LJ) declined the appeal in its main points, largely because it left too much to be decided later.  They substituted an order awarding Mrs Lee costs up until completion of the repairs.

While both sides made much in argument about the nature of litigation funding the Court set this aside and took the view that it should decide whether an award of pre-allocation costs was necessary in order to make the protocol operate as intended.

Ultimately the Court decided that this was necessary otherwise landlords would have the option of refusing to repair until a pre-action letter was issued then completing all repairs pre-allocation, having the matter allocated to the small claims track, and thereby having no liability for the tenant’s reasonably incurred legal costs in forcing the landlord to carry out works in the first place.

This decision will prove a boon to a number of public assistance firms as it will increase their ability to recover legal costs where they have assisted tenants under the protocol, even where the landlord immediatley does the works required.  From a landlord’s point of view it reinforces the need to get works done early as once a pre-action protocol letter arrives the legal costs meter will start ticking.

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