How much of your costs can you expect to recover when your tenant eviction claim is successful?
Firstly, legal fees are not generally recoverable unless there is a tenant eviction solicitor on the court record. Certain disbursements however may be recoverable even in the absence of an eviction solicitor, for example, the court’s issue fees or reasonable travel expenses.
The court has a wide discretion in tenant eviction matters as to the method it will use to decide who pays what to whom for costs. Costs orders in tenant eviciction claims can be either fixed costs, assessed costs or contractual costs.
Fixed costs are laid down in the Civil Procedure Rules. The Civil Procedure Rules provide for fixed costs in relation to claims to evict tenants, at paragraph 45.1(2). The rules indicate, among other things, that fixed costs are for totally uncontested claims.
In reality, fixed costs are the default position for the majority of district judges hearing claims to evict tenants; even where there is a strong argument that a different basis of calculation is appropriate. It can be difficult to persuade some judges to deviate from simple fixed costs no matter how your tenant eviction claim unfolded and how vigorously it was defended.
The rates for standard tenant eviction claims amount to £69.50 to issue the claim and, generally, £57.25 when judgment is entered. In addition, the court’s issue fee of £280 (soon to be £350) and reasonable expenses should also be recoverable.
No one suggests that these costs are intended to accurately reflect the actual costs of bringing a possession claim to evict a tenant. Initially taking a landlord’s instructions regarding a problem tenant and advising how best to evict the tenant can knock a big hole in an hour. Remember that there are a number of different types of tenant eviction notice, three types of tenant eviction proceedings, and two types tenant eviction enforcement. Further, we seldom see a tenant eviction matter that does not have an additional problem or two. Common examples of additional problems, are a lack of a written tenancy agreement, tenancy deposit problems, disrepair issues, questions about who is the appropriate person to bring the claim, the list is endless.
Having established all the facts, provided appropriate advice regarding the issues and charted a course through the tenant eviction options, it is then necessary to serve the appropriate notices, draft the claim in the best way to suit the tenant eviction circumstances, file the eviction claim, deal with any defence and or evidence, and attend the hearing. Just attending the hearing, including travel and hanging around at court (there is a lot of hanging around at court) will likely take the best part of half a day. This is true of all courts, be they in London, Cardiff, Manchester, Newport, Sheffield or Swansea. Fixed costs are nowhere near the true cost of tenant eviction proceedings.
The fixed rates have not been altered for many years, (court fees will, when the new increases come into effect, have increased by more than 350% (yes, more than 350%) since fixed costs were last reviewed for tenant eviction cases.
Fixed costs in tenant eviction claims are a mere token contribution and many might see them as a further insult to the landlord who has already lost a great deal of money because his tenant is stealing the housing benefit and / or trashing the property. The landlord has then been forced to further lose many hundreds or even thousands of pounds just waiting for the system creak to it’s leisurely conclusion. It commonly takes five or six weeks (sometimes more) for a tenant eviction claim to come before a judge. Currently, the courts in London seem generally to be the slowest for tenant eviction claims, but no courts are particularly speedy. Eviction notices of up to three months will have gone before the eviction claim was even issued in the court and even then, the court will usually give the tenant at least two weeks (sometimes more) to vacate the property. Further, if the tenant simply ignores the order, it will take another few weeks to actually get possession with the help of the bailiffs who will actually evict the tenants.
For all these reasons, it is important to try and get a more just and realistic order for costs in tenant eviction matters where appropriate.
If you are not acting through a solicitor (non-solicitor “eviction specialists” don’t count) or you are attempting the d.i.y. route, you are not going to be entitled to costs at all, save for the court issue fee and reasonable expenses such as travel to court.
If your tenancy agreement is silent about costs and no defence was filed, the fixed costs are the appropriate order and the landlord is lumbered with them.
In any other circumstances, it will be appropriate to seek a different costs order in your tenant eviction matter.
Assessed cost would be appropriate where for example, a defence has been filed but the claim has succeeded. A court should undertake a summary (rough and ready) account of the work done, the conduct of the parties and any other factors relevant and make an order settling the liability and amount of costs.
The key point here is that you will need to refer the judge to the appropriate passage in the Civil Procedure Rules paragraph 45(1) 2 to support your submission that fixed costs are not appropriate in a defended tenant eviction claim. The landlord should also have prepared (the landlord’s solicitor will do this) a schedule of costs. The difficulty will be that many district judges default to fixed costs no matter what the circumstances. They have an over busy eviction list and are concerned to not get behind. The judge is likely to be extremely reluctant to spend time dealing with costs.
Nevertheless, the application for assessed costs should be pressed. The landlord has waited a very long time and paid an exorbitant fee to the court for his or her five minutes in front of the judge. The landlord should not be made to suffer more injustice by being deprived of their rightful costs because the court hasn’t got time to deal with them.
Whilst it is accepted that the court has discretion it is suggested that there should be a reason to exercise that discretion in such a way as to deprive a landlord of their appropriate costs. If on the other hand, the court derogates from the landlord’s entitlement for reason, for example, poor behaviour in the conduct of the claim that would be a different matter. The decision may still be challenged depending on the circumstances, however, the decision to revert to fixed costs (or lesser or no costs at all) is on a sound footing.
Contractual costs are payable when the tenancy agreement says that the landlord is entitled to his costs of enforcing breaches of the agreement.
If the tenancy agreement makes no reference to eviction costs, then fixed costs would normally be the default costs position in an undefended claim.
The court has a discretion regarding the allocation and amount of costs.
All simple enough at first glance, however, on slightly closer scrutiny, like anything connected with evicting tenants, it can be a lot more difficult than it looks. Consequently, this note will look at a situation where the landlord succeeds in a straightforward standard possession claim. The key point here is that your solicitor will need to refer the judge to the appropriate passage in the Civil Procedure Rules paragraph 45(1) 2 to support your submission that fixed costs are not appropriate in the circumstances.
Where the contract provides for the tenant to pay the landlords legal costs, it is submitted that costs that are reasonably incurred and reasonable in amount should be ordered in favour of the successful landlord.
The Civil Procedure Rules 48.3 and PD 48 s. 50 confirm the position in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] CH 171 that where the tenant eviction costs are payable by contract they are presumed to be reasonable. Church Commissioners for England v Ibrahim [1997] 1 EGLER 13 confirms that this approach to costs applies to landlord and tenant possession claims.
Occasionally, tenant’s representatives will raise a defence to the effect that contractual costs are a breach of the Unfair Terms in Consumer Contracts Regulations 1999. This is wrong. Not only is there ample authority for the position that contractual costs are perfectly reasonable in themselves, (see the previous paragraph) but the Office of Fair Trading has published specific guidance on unfair terms and conditions in tenancy agreements in Sept 2005 (Now Published by the Competition and Markets Authority).
The guidance as far as is relevant to this particular issue is as follows:
Paragraph 3.47 objects to legal costs on an “indemnity basis,” because of the potential to claim “unreasonable legal costs” However, it is suggested that this position misunderstands the principle of indemnity costs as a court is not obliged to order any costs that are unreasonable or exceed what has actually been expended. There is no objection in the guidance to claiming costs on a contractual basis if entitled to do so by the tenancy agreement as long as those costs are reasonable. The guidance makes clear that the objection is to Landlords claiming more than it has actually cost them. In other words, if the costs are reasonably incurred, reasonable in amount and reflect the genuine cost to the landlord, there is no objection.
Paragraph 3.5 of the guidance states that “Landlords are entitled to recover the reasonable costs they incur in obtaining outstanding rent or other amounts due to them, but should not impose arbitrary charges….”
Paragraph 3.55 indicates that costs shouldn’t be regardless of outcome. Paragraph 3.55 of the guidance is controversial in that contractual costs would not be payable in any event (win or lose) if the guidance were followed. This differs from the position in mortgage arrears cases, and the authority in Church Commissioners for England v Ibrahim [1997] is clear that mortgage arrears and landlord and tenant arrears cases are to be treated in the same way as far as contractual costs are concerned. However, it would seem open to argument that if the claim was lost, the costs might be unreasonable anyway.
The contract should be reasonably clear and understandable.
So, if there is a provision for contractual costs in the agreement, the landlord is successful in his or her eviction claim, and the court has a schedule of costs, then it is submitted that the costs of the eviction should be awarded on the contractual basis as long as those costs are not unreasonably incurred or unreasonable in amount. The argument that a contractual costs term in the agreement automatically breaches the Unfair Terms in Consumer Contracts Regulations 1999 is without basis and contrary to all authority including the Office of Fair Trading’s own guidance. It is for the tenant to show that the particular term is unfair for a particular reason.
The court ought therefore to grant contractual costs to the successful landlord who has the benefit of a contractual costs in the tenancy agreement.
