Calculating the cost of repairs in Housing Conditions Cases.
Steve Cornforth
Legal Consultant (Former Solicitor), Housing Law Expert, Entrepreneur and Access to Justice Campaigner at Steve Cornforth Consultancy - promoting Liverpool (the City)
Anyone involved in Housing conditions cases needs to be aware of the recent decision in Jalili v Bury Council, which concerned the basis of calculating the cost of repairs.
CPR 26 provides that a matter will be allocated to the Fast Track if there is a claim for Specific Performance involving repairs the cost of which exceeds ￡1000 or if there is a claim for damages exceeding that amount. In Jalili, District Judge Haisley summarised the effect of this quoting Hughes LJ in the well known case of Birmingham Council v Lee [2008] EWCA Civ 891 -
“The effect of that: providing there is a claim for specific performance” - as there was here - “a tenant’s claim in a disrepair case will be a fast track case if either the cost of repairs or the consequential damages claim exceeds ￡1,000.”
As we all know, Small Claims Allocation = no costs.
This important principle begs an equally important question. How are we to assess the cost of repairs? And so to Jalili v Bury. The Claimant's surveyor estimated the cost of repairs at just under ￡4000. This was based on the cost of works carried out by external contractors. The council's evidence was that the cost of repairs was ￡740. There was disagreement over the required work but the case turned on whether the Part 26 figure of ￡1000 was to be calculated by reference to open market costs or internal costs.
The district judge found in favour of the council i.e. that it was the in-house costs that should prevail.
The case is summarised by Gordon Exall here -
https://www.civillitigationbrief.com/2021/08/30/the-costs-of-repairs-and-the-costs-of-the-action-how-should-the-value-of-repairs-be-assessed-for-the-purpose-of-allocation/
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This is a district judge decision and so does not create a binding precedent. But we can be sure that this will form the basis of allocation arguments going forwards.
It is hard to question the logic of the judgment. The tenant is seeking an order requiring the landlord to do the work. If a local authority complies with their obligations under s11 and/or s9a Landlord and Tenant Act 1985, the work will be done by their maintenance department. If a tenant is seeking to enforce those obligations, why should the cost of the work be assessed on any other basis?
With this in mind, the decision in Jalili is correct.
How should those who advise tenants respond?
Giles Peaker in his Nearly Legal blog asks the important question, why there wasn't a single joint expert in this case? This is anticipated in the Pre-Action Protocol and the template letter of claim. This would have avoided the arguments. This is an important reminder of the significant role of the SJE and the whole point of the protocol which is to encourage openness and co-operation.
https://nearlylegal.co.uk/2021/08/costs-and-costs-of-repairs/
The decision does not mean that the role of the claimant's surveyor will become irrelevant. It cannot be the case that courts will simply rubber stamp repair estimates provided by landlords. Otherwise this would be a green light for many to engineer the repair costs to keep the costs below ￡1000 and avoid costs. There will need to be robust scrutiny of in-house estimates to check that they are realistic. This is likely to be lead to a shift in the emphasis of evidence on quantum. If anything the role of the expert is likely to become even more critical, in testing the figures argued by the landlords.