Housing Disrepair – Settlement figures do not dictate costs Track under CPR 46.13
A recent costs judgment in Smith v Wigan Borough Council confirms an important point in housing disrepair litigation: settlement figures alone do not determine the appropriate costs Track.
The dispute arose after the parties reached a pre-issue settlement of £1,000 alongside agreed remedial works. The Defendant argued that this figure meant the claim should be treated as a Small Claims Track matter for costs purposes under CPR 46.13. The Court disagreed.
CPR 46.13 requires the Court to look back and assess which Track the claim would likely have been allocated to if proceedings had been issued. As Costs Judge Nagalingam emphasised, this is a discretionary and evidence-based exercise. Importantly, the rule does not state that settlement figures are decisive, and the Court confirmed they should not be treated as such.
Instead, the Court focused on the position at the time the settlement was reached. The evidence showed a prolonged period of disrepair affecting a vulnerable tenant living in substandard conditions. On that basis, the Court found the claim would likely have carried a value exceeding £1,000 at the time of assessment, particularly when general damages were properly considered.
That approach is consistent with CPR 26.9(1)(b), which confirms that the Small Claims Track threshold in disrepair cases depends on both repair costs and damages. Even where repair costs may be modest, the level of general damages can take a claim beyond the Small Claims limit.
The Court also noted the practical context of settlement. The Claimant had accepted the offer to resolve a difficult and ongoing situation, and the Defendant had indicated that costs would not later be challenged on a Small Claims basis. The Court considered that allowing a post-settlement change of position would risk undermining confidence in negotiated settlements and could encourage tactical behaviour around settlement figures. That would be contrary to the overriding objective.
Ultimately, the Court found there was no basis to interfere with the provisional assessment. The Claimant’s costs were not limited to Small Claims Track levels, and the Defendant was ordered to pay the costs of the assessment, including the oral review.
Key takeaway
The decision confirms that costs Track under CPR 46.13 is not dictated by settlement figures. The Court will instead focus on the underlying value of the claim, assessed at the relevant time and based on evidence. Attempts to rely on low settlement sums to retrospectively limit costs recovery are unlikely to succeed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]