Following a recommendation in the Report of the Costs Review Group to the Senior President of the Tribunal in December 2011, costs in the First Tier Tribunal (Property Chamber) can now be awarded in the following circumstances:
- Where wasted costs have been incurred; or
- Where costs have been incurred by one party where a person has acted unreasonably in bringing, defending, or conducting proceedings; or
- In a land registration case.
Jurisdiction is conferred on the Tribunal pursuant section 29(4) of the Tribunal Courts and Enforcement Act 2007 which reads:
Costs or expenses
(1) The costs of and incidental to—
(a) all proceedings in the First-tier Tribunal, and
(b) all proceedings in the Upper Tribunal,
shall be in the discretion of the Tribunal in which the proceedings take place.
(2)The relevant Tribunal shall have full power to determine by whom and to what extent the costs are to be paid.
(3) Subsections (1) and (2) have effect subject to Tribunal Procedure Rules.
(4) In any proceedings mentioned in subsection (1), the relevant Tribunal may—
(a) disallow, or
(b) (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with Tribunal Procedure Rules.
(5) In subsection (4) “wasted costs” means any costs incurred by a party—
(a) as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative or any employee of such a representative, or
(b) which, in the light of any such act or omission occurring after they were incurred, the relevant Tribunal considers it is unreasonable to expect that party to pay.
(6) In this section “legal or other representative”, in relation to a party to proceedings, means any person exercising a right of audience or right to conduct the proceedings on his behalf.
(7) In the application of this section in relation to Scotland, any reference in this section to costs is to be read as a reference to expenses.”
Pursuant to this provision, Rule 13 of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 now applies to unreasonable conduct arguments in proceedings in agricultural land and drainage cases, residential property cases, and leasehold cases.
If awarded to a party, costs can be summarily assessed by the Tribunal, awarded in an agreed sum, or made subject to detailed assessment.
Applicants and Respondents in the Tribunal should therefore ensure compliance with Orders and Directions, and avoid last minute applications, or risk defending a costs application on the basis of unreasonable conduct.