Property disputes can include a dispute between two residents, between the freeholder/management company or between landlord and resident. The recoverability of legal costs in a Property Dispute will depend on whether the matter is being dealt with under the Civil Courts or the Property Chamber of the First Tier Tribunal.

Legal Costs in a Property Dispute: Civil Courts

If the matter is dealt with in the Civil Court, then the Civil Procedure Rules (CPR) will apply. The general rule here is the loser pays the winner’s costs which are reasonable and proportionate to the case. An award of costs is usually at the discretion of the Court. A costs order can award costs on the standard basis or the indemnity basis depending on the circumstances and the conduct of the case.

When the matter is dealt with at the Civil Court, the Claimant will be required to pay the Court fees. Upon conclusion of the case, the losing party is required to pay the costs. A costs order can be made stating the amount of costs to be awarded, in which instance, the paying party will usually have 14 days to make payment.

Alternatively, and depending on the method of settlement, the costs award may be ‘costs to be awarded on the standard basis’. This means that the receiving party will then draw up a Bill of Costs detailing the costs claimed. It will include an hourly rate and details of each piece of work undertaken by the receiving party. The Bill of Costs will also include disbursements which have been incurred, such as Surveyor fees.

Nevertheless, if the paying party disagrees with the amount of costs the receiving party is entitled to recover, they can proceed with the dispute through Detailed Assessment Proceedings.

Legal Costs in a Property Dispute: First Tier Tribunal Property Chamber

Most property disputes now are dealt with under the Property Chamber of the First Tier Tribunal (FTT). Examples of the type of cases which the Property Chamber of the First Tier Tribunal will hear are lease extension claims and service charge disputes. The general rule at the First Tier Tribunal is that each party bears their own costs of the dispute, irrespective of the outcome. The First Tier Tribunal does, however, also permit wasted costs orders to be made where the conduct of the other party allows for this type of costs order to be granted.

The case of Willow Court Management Company (1985) Limited v Mrs Ratna Alexander, and Others which was heard at the Upper Tribunal has set out guidance to be followed when considering whether an order for adverse costs should be awarded in limited circumstances: 

1. The Tribunal has the power to order one party to pay the other party’s costs. An example would be where the paying parties conduct impacted the case or the Court’s ability to progress the matter properly.
2. In making an order for adverse costs, the Upper Tribunal must ask whether there is a reasonable explanation of the conduct which has resulted in costs to be increased or incurred.

As well as having the discretion on whether to make a costs order, the Tribunal also has the discretion to set the amount to be paid.

It is therefore important that you seek legal advice from a specialist solicitor before proceeding with a case in order to ensure you are avoiding legal costs in a Property Dispute. It may also be advised that you attempt to settle your property dispute through alternative dispute resolution in order to avoid an order for costs being granted at either the Civil Court or the Property Chamber of the First Tier Tribunal. 

Legal costs in a Property Dispute can be high and complex, and you may require the assistance of a Costs Lawyer or Costs Draftsman to ensure the best outcome on a legal costs case.

How Can ARC Costs Assist?

ARC Costs are a team of specialist Law Costs Draftsmen and Costs Lawyers who can assist you in a case relating to legal costs in a property dispute, irrespective of whether a costs award has been made at the Civil Court or the Property Chamber of the First Tier Tribunal.

If you are the receiving party, we hold extensive experience in drawing up Bills of Costs which will detail the level of costs you have incurred in running this case, including accurate inclusion of disbursements and court fees.

If you are the paying party and you have been served with a Bill of Costs which you wish to dispute as being unreasonable, we can assist in doing this through legal negotiations with the receiving party. We can also prepare formal Points of Dispute on your behalf to ensure compliant legal arguments are raised disputing the costs which have been served on you.

Whether you are the paying party or the receiving party, we can represent you the costs process and through the Detailed Assessment Proceedings, which relate to costs issues.

We can advise on what costs are likely to be deemed as reasonable by the Court and also those which can be found to be excessive. Therefore, if you have a costs query which you would like to discuss, please contact us on 01204 397302 or info@arccosts.co.uk. Alternatively, you may complete our enquiry form, and an experienced Costs Draftsman will contact you to discuss your query.

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