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England

Court and legal costs in possession cases

Costs in possession claims can be fixed by the Civil Procedure Rules, claimed on a contractual basis, or decided by the court.

This content applies to England

Costs in a housing possession case

All court proceedings have a fee to start the claim. The parties to court proceedings might also incur costs paying for legal advice and representation. The court can order one party to pay the costs of the other.

Costs that can be recovered from the defendant in a housing possession case can be made up of the:

  • court fee to issue the claim

  • fixed costs on commencement of the claim

  • fixed costs for entry of the judgment

They can also include legal costs and expenses of the claimant and defendant.

Fixed amounts

The court fee and fixed costs are set out in the Civil Procedure Rules. The amount can depend on whether the claim is:

  • issued manually or online

  • to be served against more than one defendant

  • served by the court or by the claimant

Legal costs and expenses

The legal costs can be variable. They can be made up of solicitors' and barristers' fees and other costs and expenses. The amount depends on the time spent on the case, which is linked to the complexity of the case and whether it is contested.

Costs orders

The court has discretion on whether to make an order about costs. If the court does not make an order for costs, each party normally pays their own costs.

The most likely order is for the losing party to pay the costs of the winning party. If the winning party incurred disproportionate or unnecessary costs, or behaved unreasonably, the court could reduce the amount of costs they can claim back.

Costs orders in favour of the defendant

A defendant who successfully defends a possession claim can ask the court for a costs order against the claimant. This is important if they have paid to make an application in the proceedings.

Defendants who have paid for legal advice should ask their solicitor about claiming the costs back if their defence is successful.

Fixed costs in possession proceedings

Rules about fixed costs apply to claims for the recovery of land. This includes rent and mortgage possession claims.

Rules 45.20 and 45.21 Civil Procedure Rules sets out the amount of fixed costs in possession cases.

When the fixed costs rules apply

The claimant is limited to fixed costs from the defendant if the defendant gives up possession and pays the amount claimed.[1]

Fixed costs apply to possession orders made in rent and mortgage arrears claims where the court set a fixed date for the hearing when it issued the claim and the defendant:[2]

  • has not filed a defence or counterclaim

  • has filed a defence that only contains an offer to pay arrears and does not contest the amount

The fixed costs regime applies whether the possession claim includes a money claim or not.

General and accelerated procedure

The fixed costs regime applies to claims that include rent arrears on the general procedure and claims on the accelerated procedure.

Fixed costs do not apply to claims under section 21 Housing Act 1988 against assured shorthold tenants if the claim is not under the accelerated procedure. The defendant could argue that the same rate should be applied in these cases.

When the claimant can ask for higher costs

The court has the discretion to allow higher costs claims in cases where the fixed costs rules do not apply, for example if the claim is defended, or if the written tenancy or mortgage agreement allows it.[3]

Contractual costs claims

Some tenancy agreements and most mortgages allow the landlord or lender to claim costs, charges, and expenses reasonably incurred in legal action. These are sometimes called indemnity costs, as the agreement normally states the tenant or borrower will indemnify the landlord or lender for losses incurred in legal action.

The indemnity clause must be included in the written agreement. It can override rules about fixed costs.

The defendant can ask the court to carry out a summary or detailed assessment procedure to decide whether the costs are unreasonable.

Costs unreasonably incurred or unreasonable in amount

The court could prevent a claimant from recovering indemnity costs that are unreasonably incurred or unreasonable in amount.[4]

Mortgage possession claims

Mortgage lenders do not usually ask the court for additional costs in the court order because they can recover it from the borrower when the property is sold. This is set out in the mortgage contract under the indemnity clause.

The borrower could complain about the lender's costs to the Financial Ombudsman Service. The Financial Ombudsman deals with complaints about legal costs as long as the court has not already considered that issue.

Find out how to complain about a bank or lender on Shelter Legal.

Defended claims and counterclaims

The court normally makes an order for costs when it gives judgment in a defended claim. The most likely order is for the losing party to pay the costs of the winning party.

Court's discretion to decide costs in defended claims

The court can use its discretion when it decides whether to award costs.[5] The court considers all the circumstances of the case. It considers:

  • whether the parties have complied with the relevant pre-action protocol

  • the reasonableness of the allegations or issues

  • how the parties pursued or defended the action

  • whether the successful party exaggerated the value of their claim

  • whether a party was partially or completely successful

  • whether there has been an offer to settle the case

The defendant can reduce the risk of increasing costs by complying with directions and deadlines set by the court.

Rules for claiming costs

A claimant or defendant who asks the court for an order to allow them to recover their legal expenses must supply a schedule of their costs. The schedule must be:[6]

  • in a prescribed form

  • signed by a partner in the solicitors' firm

  • filed at court and served on the other parties not less than 24 hours before the hearing

CPR practice direction 44 contains the rules about what should be included in a schedule of costs and the prescribed form.

Procedure for deciding costs

The court can make either a summary assessment of the costs or a detailed assessment. Most housing possession cases are dealt with under the summary procedure, meaning the costs are decided on the day of the hearing.

The court can do a summary or detailed assessment of costs that are claimed under the contract on an indemnity basis, or on the standard basis.

Read more about the summary and detailed costs assessment procedures on Shelter Legal.

Amount of the costs

The amount of the costs varies according to the time spent on the case. This can depend on the:

  • track the claim was allocated to

  • complexity of the litigation

  • number of court hearings

  • need for expert witnesses or reports

How a defendant can challenge costs claims

The defendant could ask the court for a summary assessment of costs. Requesting a summary judgment on costs means there is no risk the defendant could incur more costs as a result.

The other option for the defendant is to ask the court for a detailed assessment. The court might need to undertake a detailed assessment if they cannot decide the costs on a summary assessment. The defendant is likely to have to pay the claimant's costs of detailed assessment, especially if the bill is not reduced by a significant sum.

Grounds to challenge the costs

The defendant could challenge the amount of the costs if they can persuade the court that the claim was dealt with by someone too senior, meaning the costs were higher. This is more likely if the claim was straightforward but it was billed by a senior solicitor.

Gov.uk has guidelines for hourly rates for solicitors in England and Wales based on the level of their experience. The defendant can ask the court to reduce the claimant's costs if they exceed the guideline amounts.

The court can reduce the costs if too many hours were billed by the claimant's solicitor.

Enforcement of court orders to pay costs

The court order for costs can be enforced in the same way as a money judgment. That means the party that has had their costs awarded can take enforcement action for non-payment.

The court order specifies how the amount is to be paid. For example, it could set terms for the losing party to pay the amount in instalments over a longer period.

The party that has had their costs awarded can only take enforcement action if the other party does not comply with repayment terms set out in the court order.

Read more about how a creditor can enforce a judgment on Shelter Legal.

Suspended possession orders that include costs

A suspended possession order that contains payment terms for the arrears plus costs is only satisfied when the full amount is paid. That means the claimant can enforce the possession order if the defendant does not pay the arrears and costs in full.

Possession claims in the High Court

Almost all possession claims are started in the County Court. The High Court can hear possession claims in exceptional circumstances. A claimant can only start a claim in the High Court if:[7]

  • there are complicated disputes of fact

  • important points of law need to be decided

  • the claim is against trespassers

If there are no exceptional circumstances, the High Court either strikes out the claim or transfers it to the County Court. The claimant is not entitled to recover the costs of issuing the claim in the High Court or the costs of the transfer from the defendant.

A landlord claimant cannot recover the costs of a High Court claim against a protected tenant, an assured tenant, or a secure tenant.[8]

Last updated: 5 May 2023

Footnotes

  • [1]

    r.45.1(c) Civil Procedure Rules.

  • [2]

    r.45.1(d) Civil Procedure Rules.

  • [3]

    r.45.1(1) Civil Procedure Rules.

  • [4]

    r.44.5(1) Civil Procedure Rules; Gomba Holdings (UK) Ltd v Minories Finance Ltd (No.2) [1993] Ch. 171; Co-operative Bank v Phillips [2014] EWHC 2862 (Ch).

  • [5]

    r.44.3(1) Civil Procedure Rules.

  • [6]

    para 9.5 practice direction 44 Civil Procedure Rules.

  • [7]

    practice direction 55.3 Civil Procedure Rules.

  • [8]

    S.141 Rent Act 1977, s.110 Housing Act 1985, s.40 Housing Act 1988.