Is the First-tier Tribunal flexing its wasted costs muscles?

As the First Tier Tribunal (Property Chamber) approaches its sixth-month anniversary, Clare Brady notes its willingness to use the new wasted costs powers and assesses what this means for property management professionals.

Since July, Brady Solicitors has been involved with a number of cases at the First Tier Tribunal (FTT), acting variously for leaseholders, RMCs and managing agents. As the new system has bedded in and both we and our clients have got to grips with it, we have started to see the FTT embracing the new wasted costs rule and being quite proactive with its powers.

Under the old LVT rules, the maximum costs order was £500, which was arguably little deterrent to the vexatious litigant. On 01 July however the LVT in England became a First Tier Tribunal (Property Chamber), and brought with it a new set of powers – and one of the most significant is the tribunal’s ability to make an unlimited wasted costs order against anyone that it feels ‘has acted unreasonably in bringing, defending or conducting a claim’.

A case in point

In our most recent case, our RMC client had brought a service charge matter to the County Court. The respondent leaseholders then successfully applied to have the case transferred over to the First Tier Tribunal.

Now that the matter is in the FTT, the respondents are seeking to rely on company constitutional arguments, which are arguments that need to be dealt with at the County Court and are not within the FTT’s powers, making a nonsense of the transfer of the case.

At the hearing, the FTT commented that they will seek to transfer the constitutional company arguments back to the County Court. Importantly, the FTT also advised that they would be keen to see our RMC client make a wasted costs application against the leaseholders once the order to transfer is made.

A clear warning

Whilst we await their final determination, this is our most recent example of the FTT showing clear proactivity in the use of its wasted costs powers and should act as a clear warning to anyone seeking to either bring, defend or conduct a claim in an ‘unreasonable’ manner.

In this highlighted case, it may well have been more to do with the leaseholders’ ignorance of the FTT’s powers than a willful or ‘unreasonable’ attempt to delay the process, but the outcome may well be the same: a significant wasted costs order that could have been avoided.

Property management professionals, RMCs and leaseholders alike must be able to demonstrate that a) they understand each court’s powers and how to use them and, that b) they are making their best endeavours to comply.

For help or advice on cases at either the county court or FTT, contact Brady Solicitors by email or on 0115 985 3450.

This article first appeared in News on the Block magazine in December 2013.

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