Tenancy deposit protection claims are a recurring feature of landlord and tenant litigation. While the underlying dispute is usually straightforward, the correct procedure for issuing these claims is often misunderstood.

CPR 56 and Practice Direction 56 provide the rules and guidelines for dealing with landlord and tenant disputes, including tenancy deposit claims.

The rules determine not only how proceedings are issued, but also how they are allocated and the costs consequences that follow. For solicitors acting for tenants, a proper grasp of these rules is essential to ensure claims are valid, efficiently handled, and costs are recoverable.

CPR 56: Landlord and Tenant Disputes

CPR 56 applies to a claim arising out of the tenancy or lease of land, meaning that tenancy deposit protection disputes fall within its remit. The rule is not limited to Housing Act cases; it also governs claims involving the Landlord and Tenant Act 1954, such as disputes over the termination of a tenancy or the grant of a new tenancy.

For example, a tenancy under Section 24 of the 1954 Act continues automatically unless brought to an end in accordance with the Act. A landlord may serve notice leading to a claim for the termination of the tenancy, while a tenant may issue proceedings in circumstances where the grant of a new tenancy under Section 29 is sought. These provisions illustrate how CPR 56 governs a wide range of landlord and tenant matters.

Although tenancy deposit disputes are usually less complex than 1954 Act proceedings, they must nevertheless be issued under CPR 56 to comply with the procedural framework.

CPR 56 and Part 8 Procedure

Practice Direction 56 makes it clear that a claimant must use the Part 8 procedure when issuing proceedings under CPR 56. This reflects the nature of tenancy deposit protection cases, which typically turn on statutory compliance rather than contested factual issues.

The below procedure and following rules apply:

• The claim form must set out the statutory basis of the claim and the relief sought.
• Evidence is filed and served with the claim form.
• The defendant has the opportunity to file an acknowledgement of service, indicating whether the claim is an unopposed one or whether the matter will be contested.

Where it is not opposed, the claim may be determined swiftly on the papers or at a short hearing. Where opposed, more extensive evidence may be required, and the court will list the matter for a fuller hearing.

Multi-Track Allocation

Under CPR 8, claims issued via Part 8 are generally allocated to the multi track, unless the court orders otherwise. This has important implications for costs:

• The multi-track regime means standard costs principles apply, rather than fixed recoverable costs.
• Solicitors are expected to prepare detailed Precedent H Costs Budgets.
• Costs will be scrutinised for proportionality under CPR 44.

Thus, even though tenancy deposit claims may involve relatively modest sums, the procedural rules elevate them into the same costs rules as more complex landlord and tenant disputes, such as those under the 1954 Act in circumstances where the grant of a new tenancy is contested.

Legal Costs Considerations

As tenancy deposit claims under CPR 56 proceed via Part 8 and are allocated to the multi-track, costs management is crucial. Key issues include:

• Budgeting: Preparing Precedent H costs budgets, ensuring solicitor time, counsel’s fees, and any expert costs are fully captured.
• Proportionality: Courts will examine whether costs are proportionate to the sums in dispute.
• Detailed assessment: Accurate time records and comprehensive Bills of Costs are essential for maximising recovery.
• Funding: Tenants may pursue claims with staged retainers, conditional fee agreements, or after-the-event insurance.

Even in cases where the claim is an unopposed one, costs must be carefully managed to ensure compliance with the multi-track regime.

How ARC Costs Can Help

At ARC Costs, we are an experienced and independent team of specialised Costs Draftsmen and Costs Lawyers. As independent experts, we can assist either Paying or Receiving parties in resolving costs disputes.

We provide expert support for solicitors handling tenancy deposit claims under CPR 56. Our services include:

• Drafting and negotiating Precedent H costs budgets;
• Preparing Bills of Costs for detailed assessment;
• Advising on proportionality challenges;
• Representing solicitors at costs management hearings and assessments.

We also provide specialist assistance in wider landlord and tenant disputes, including claims for the termination of a tenancy or proceedings concerning the grant of a new tenancy under the 1954 Act.

With our expertise, solicitors can ensure compliance with CPR 56, avoid procedural pitfalls, and maximise costs recovery.

If you would like more information on any of our services or wish to speak to a member of our expert costs team about your legal costs, then please do not hesitate to contact us. Please call one of our independent experts at 01204 397302, or email one of our costs experts direct on info@arccosts.co.uk.

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