A warning for housing lawyers

Stefan Liberadzki discusses the new Intermediate Track and fixed costs.

Sweeping changes to the Civil Procedure Rules, applying to claims issued after 1 October 2023, have ushered in a new regime of fixed recoverable costs, and a new Intermediate Track for case management.

Housing lawyers may have been assured that these changes don’t apply to their practice, but be warned: some types of cases will still be caught by the new rules.

The New Regime

For claims issued after 1 October 2023 (or personal injury claims where the cause of action accrues after that date):

1. There is a new Intermediate Track, governing the less complex or less valuable cases that would previously have been allocated to the Multi-track. In general, this is for claims valued between £25,000 and £100,000, with a trial length of up to 3 days and no more than 2 experts per party giving oral evidence. The detailed allocation rules are in CPR rule 26.9(7).
2. For both the existing Fast Track and the new Intermediate Track, there is a new regime of fixed recoverable costs under a re-drafted Part 45.

Case management on the Intermediate Track is subject to some special rules, set out in an amended Part 28 and the accompanying Practice Direction. For example, a case management conference and pre-trial review are optional (whereas they are generally expected on the Multi-track). There are also limits on page numbers of witness statements and expert reports, unless the Court decides otherwise.

But it is the new fixed costs regime (for both Fast Track and Intermediate Track cases) that has grabbed the legal headlines.

At allocation stage, the Court must assign the case to one of 4 “complexity bands” within the relevant track (and there are tables in Part 26 setting these out).

The definitions of these bands may to lead to satellite litigation: perhaps over what is a “less complex” or “more complex” case; or what counts as “one” or “more than one” issue in dispute.

When the case is settled (including pre-issue), or decided at trial, the amount of costs recoverable by the winning party is fixed according to the complexity band and the “stage” the case has reached (and there are detailed rules in Sections VI and VII of Part 45, and Tables 12 and 14 in the accompanying Practice Direction).

These new rules are supposed to give parties predictability – about their potential costs exposure if they settle at any given stage of the case, or fight to trial.

What do housing lawyers need to know?

You may have heard that “housing cases” are exempt from fixed costs, but that isn’t quite accurate. The wording of the exemption is in CPR rule 45.1(4):

“a claim or counterclaim which relates, in whole or in part, to a residential property or dwelling and which, in respect of that property, includes a claim or counterclaim for—

(a) possession;

(b) disrepair; or

(c) unlawful eviction,

save where the claim or counterclaim in respect of the residential property or dwelling arises from a boundary dispute.”

It is easy to think of “housing” cases that won’t come under this exemption and will therefore be subject to fixed recoverable costs.

For example:

• Standalone claims by tenants for harassment (short of eviction)
• Standalone claims by tenants for breach of the Equality Act 2010
• Claims by landlords for anti-social behaviour and other injunctions, e.g. for access (although these usually don’t include a monetary claim, they should still, if set down for trial, be allocated to the Fast or Intermediate Track if that is in the interests of justice)
• Any other claims for breach of covenant where disrepair, possession or unlawful eviction are not in issue (such as prohibited use of the property)

However, remember that as long as the case includes a claim or counterclaim for disrepair, possession or unlawful eviction, the exemption will apply. So, a claim by a tenant for both harassment and disrepair will be exempt from fixed costs.

Finally, the potential for allocation to the new Intermediate Track does now apply to all cases – including housing.

Most claims are likely to fall below the £25,000 threshold, and be allocated to the familiar Fast Track, but for more valuable cases there will be a somewhat different approach to case management, compared to the Multi-track – even if the fixed costs rules don’t apply.

Looking ahead

The exemption of “bread and butter” housing cases from fixed costs is not meant to be permanent.

The Ministry of Justice had intended to include them from the outset, and possession and disrepair claims are indeed already mentioned in complexity bands 3 and 4 on the Fast Track.

However, in the face of significant concerns within the housing law sector, the MoJ has said it will delay implementation of fixed costs in these cases for a further two years from 1 October 2023.  It remains to be seen what will happen in October 2025.

Stefan Liberadzki is a barrister at 42BR.