It is often wrongly assumed that the fixed-costs regime applies more
widely than is, in fact, the case. Under the CPR, there are only three
situations where fixed costs apply:
- an accelerated possession claim, where T has neither denied liability,
nor delivered a defence or counter-claim;
- where one of the grounds for possession is arrears of rent, and T has
either (i) not denied liability of delivered a defence, or (ii) has delivered
a defence but that is limited to payment proposals only;
- where T gives up possession and pays the amount claimed, including
the fixed commencement costs.
CPR45.1(1) says that fixed costs are all that can be paid ‘unless the
court orders otherwise’. However, it is worth noting that it may be
possible for L to bypass the fixed-cost regime by adding to the tenancy
agreement a provision entitling L to recover its reasonable legal costs.
This is the approach taken by mortgage lenders and such contractual
provisions have been held to be valid. Moreover, the principle is not
confined to mortgage lenders; in Church Commissioners [1997] the
defendant was an assured shorthold T with a fixed term of two years,
subject to a tenancy agreement giving L the contractual right to a costs
indemnity. However, the trial judge awarded an amount that was
identical to the fixed costs at that time, and L appealed with CA deciding
that L was entitled to his reasonable costs on the indemnity basis.. © Practical Lawyer
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June 2007 |