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Property Litigation Costs: Recovery and Negotiation

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Property Litigation Costs arise from civil litigation which relates to a property dispute. They can include disputes between landlords and tenants and disputes regarding ownership of property, whether it be residential, commercial or industrial. Property disputes can also include applications to have a leasehold extended and service charge disputes. As it can be seen below, the facts of the case and the conduct of the parties will largely impact the level of property litigation costs and the type of costs order which can be made by the Courts.

 

Property Litigation Costs

Legal costs of property litigation will usually include Court fees, expert fees (such as Surveyor fees) and Solicitor’s legal fees, usually charged at an hourly rate. The Solicitor’s hourly rate will depend on the Solicitor’s location, qualifications, and experience.

The way in which costs are assessed, or the type of costs order made, depends upon where the property case is being heard.

If Court proceedings have been issued in a Civil Court, the Property Litigation Costs will be governed by the Civil Procedure Rules. The general rule of thumb here is that the loser pays the winner’s costs. Thus, the unsuccessful party will be required to pay the costs of the litigation and their opponent’s costs. When such a costs order is made for detailed assessment, a Bill of Costs will be drafted by the successful party and served with a Notice of Commencement, so that the parties can negotiate on the level of costs which are reasonable to be paid in relation to the litigation. The Bill of Costs will usually include an hourly rate fee for all the time taken to deal with the litigation. If there are disputes between the parties in property litigation costs, which relate to the Civil Procedure Rules, the matter will go through detailed assessment proceedings, and the costs will be assessed by the Court, should no agreement be reached between the successful and unsuccessful party.

Property Litigation Costs – First Tier Tribunal

Most property litigation is done so in the First-Tier Tribunal (Property Chamber). The general rule for Property Litigation Costs where the litigation is within the First-Tier Tribunal is that each party will bear their own costs. There are some exceptions to this rule whereby different costs orders can be made by the First Tier Tribunal where the following legal provisions apply:

  • If there is a written contract between the parties allowing costs to be claimed from one party to another.

For example, it may be that within the lease agreement, it states that the tenant is liable to pay the legal costs of the landlord should a legal dispute arise. If this clause is within your tenancy agreement or lease, it will have to be proven at the Tribunal that this clause was explained to you, the tenant, expressly prior to signing the contract.

  •  Where an Act of Parliament allows for costs to be recovered inter partes.

An example of an Act of Parliament which allows for inter partes costs is the Leasehold Reform Act 1967 whereby the tenant has to pay the landlord’s legal costs should they wish to extend their leasehold. You should seek advice from a property solicitor (details below) in order to determine whether an Act of Parliament applies to your situation specifically.

  •  Where a legal representative or a party has acted unreasonably in bringing or defending the proceedings which has resulted in increased costs being incurred.

Unreasonable behaviour is covered by Rule 13 of the Tribunal Procedure Rules 2013. It falls for the Tribunal to decide whether a party has acted unreasonably. 

  •  Where a party has unreasonably increased their costs, this can give rise to a wasted costs order.

A wasted costs order can be made when a party’s conduct increases costs and are usually made against legal representatives themselves for their conduct of the case.  Once costs are agreed, these are generally payable within 14 days.

Alternative Dispute Resolution

If you have a property dispute and are worried about the property litigation costs which may be incurred by bringing your dispute to the Court, you may wish to try and settle the dispute through alternative dispute resolution. Alternatively, you can seek legal advice from a Solicitor who has a registered office in England and Wales and is authorised and regulated by the Solicitors Regulation Authority (SRA). Regulated Solicitors will have an SRA number assigned to the firm and will be able to advise you on the best method to solve your dispute. You can find a Solicitor of an equivalent standing and qualifications through a different regulatory body known as CILEX.

 

How Can ARC Costs Assist?

ARC Costs are a team of Costs Draftsmen and Costs Lawyers dealing specifically with the issue of costs within a number of legal areas such as property litigation costs.

If you have been ordered costs in your favour, to be paid to you by your opponent, we can assist in preparing a detailed Bill of Costs for the costs which you have incurred. We will assist in serving this Bill of Costs legally to your opponent and can negotiate on your behalf in order to ensure maximum recovery of your costs.

If a costs order has been made against you and you are required to pay costs in a property litigation dispute, once you have been served with a Bill of Costs, we can assist in raising Points of Disputes to any costs which are unreasonable and excessive within the Bill of Costs. As well as drafting compliant Points of Dispute on your behalf, we can negotiate with the receiving party to ensure you are not paying for any unreasonable costs.

As Costs lawyers, we can also represent you at detailed assessment proceedings irrespective of whether you are the paying party or the receiving party. This will include assisting you in preparing for a hearing where costs will be assessed as well as representing you at that hearing should you wish us to do so.

If you wish to discuss your costs query further, please contact us on 01204 397302 or info@arccosts.co.uk. You are welcome to also complete our online query form, and we will contact you to discuss your costs query further.

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