In litigation things are rarely as clear cut as they first seem. The outcome that appears on the court order and the outcome the parties actually walk away with can be very different things. A recent case that our dispute resolution team handled illustrates this well.
Tom Burton Wills of our dispute resolution team, instructing Sam Madge-Wyld of Tanfield Chambers, defended a landlord client against a claim for unlawful eviction and disrepair. On paper, our client lost the case. In practice, however, they stand to recover around £40,000 in legal costs after a judgment that saw the tenant walk away with £837.
In this case study, we show how that outcome came about, and what it tells you about how civil litigation really works.
The Original Claim – Accusation of Unlawful Eviction and Housing Disrepair
The tenant brought proceedings against our client, alleging that they had been unlawfully evicted from their flat and that the property was in disrepair. Between the two claims, the tenant valued the case at around £60,000.
Unlawful eviction claims arise where a landlord, or someone acting for them, puts a tenant out of their home without following the correct court process, or otherwise interferes with the tenant’s right to occupy. Disrepair claims arise where a landlord fails to meet their obligations to keep the property in repair under section 11 of the Landlord and Tenant Act 1985, or under the terms of the tenancy agreement.
Both claims of this nature, wrongful eviction and housing disrepair, can result in significant damages and legal costs, and both can be difficult to defend if not handled carefully from the start.
The Strategy – How We Helped
Two strategic decisions shaped the outcome from an early stage.
A Part 36 offer. Early in the proceedings, our client made a formal settlement offer of £5,000 under Part 36 of the Civil Procedure Rules. Part 36 offers are one of the most useful tools available in civil litigation. They are formal, written settlement offers that carry cost consequences: if the party who receives the offer refuses it and then fails to do better at trial, they can be ordered to pay the other side’s legal costs from the date the offer expired, along with interest and, in some cases, enhanced damages. Part 36 turns settlement from a matter of goodwill into a matter of financial risk management. Refuse a reasonable offer, and you will often be paying for the privilege, whether or not you win the substantive case.
Adding the managing agents. We also brought the managing agents into the proceedings as an additional defendant. The managing agents were responsible for the day-to-day maintenance of the flat, and any damages awarded for disrepair would in reality be their responsibility to meet.
The Outcome – What Actually Happened at Trial
At trial, the tenant was awarded £837. The award related to a single element of the disrepair claim, being a failure to reinstate the hot water supply reasonably promptly after it had failed. The remainder of the claim, including the unlawful eviction allegation and the other disrepair elements together valued at around £60,000, was dismissed.
On the face of the order, our client had lost. A judgment for £837 had been entered against them, and the case had gone to a contested trial. This was, technically, an unsuccessful defence.
The Commercial Reality for Our Client
The commercial position was very different, for two reasons.
The Part 36 offer. The £837 the tenant recovered was significantly less than the £5,000 our client had offered them at an early stage. Under Part 36, the tenant’s failure to beat the offer meant our client became entitled to recover their legal costs of the trial and the earlier phases of the litigation. Those costs came to approximately £40,000, dwarfing the sum awarded to the tenant.
The managing agents. Because the managing agents had been joined as an additional defendant, they were the party required to pay the £837 damages award to the tenant, rather than our client.
The final position, therefore, was that our client:
- Paid £0 in damages
- Recovered approximately £40,000 in costs
- Had the £837 met by the managing agents
The tenant, having brought a claim valued at £60,000, ended up worse off in real terms than if they had accepted the £5,000 offer at the outset.
What this case shows
A few points worth drawing out for landlords, managing agents and anyone contemplating litigation.
Part 36 offers work. They should be considered early and often. Even a modest, well-timed offer can transform the costs position of a case, and can bring a claimant to the table where negotiation is not otherwise progressing.
A “win” and a “loss” are not always what they look like. The judgment order tells one story. The costs order tells another. In many cases the costs consequences are the more important number, and they should be planned for from the outset rather than treated as a footnote.
Getting the right defendants in is critical. Bringing in the managing agents as an additional defendant meant that the party actually responsible for the disrepair bore the liability. That kind of decision is made in the first few weeks of a case, not on the eve of trial.
Advocacy at trial matters. Bringing a £60,000 claim down to £837 required close preparation, careful cross-examination and a clear strategy at trial.
Our thanks to Sam Madge-Wyld of Tanfield Chambers for his strategic advice and advocacy.
Speak To Our Litigation Team
If you are a landlord, tenant, managing agent or property owner facing a possible claim, or considering bringing one, the early decisions in the case will often determine what “winning” looks like at the end of it.
Our dispute resolution team acts for both landlords and tenants across a wide range of property disputes. You can read more about the range of matters we handle on our landlord and tenant page and our dispute resolution service page.
This blog post is not intended to be taken as advice or acted upon. If you are seeking legal advice, please contact our team of solicitors.
