Fast Track vs Small Claims: Allocation of Housing Disrepair claims

A couple of persuasive authorities have emerged in the last few months that have really placed this topic in the limelight. As the inaugural post on my new blog site, it felt right to focus on this topical issue.

Bottom line up front

The combined effect of the authorities is that if specific performance remains a live issue at the date of allocation, even if that relates to just one item of disrepair, then if the value of the claim exceeds £1,000, the Court’s starting point is to allocate the matter to the fast track. The Court is not obliged to do this and retains discretion to allocate to the small claims track. However, this is generally an uphill battle for Defendants. That said, a Defendant can seek certain recitals, which may assist in making cost-related arguments easier at trial.

Background

Following major reforms to the low-value personal injury market in 2021, housing disrepair claims have risen significantly. Estimates vary slightly, but one source suggests a 350% increase in cases between 2018 to 2019 and 2023 to 2024. The reasons for this include:

  • Section 9A of the Landlord and Tenant Act 1985 came into force for some tenancies on 20 March 2019, and for all secure or assured tenancies (well, for those complying with the requirements of section 9B LTA 1985) on 20 March 2020. This created an additional cause of action in these claims.
  • Due to COVID-19, repairs were either severely delayed or completed hastily and to a poor standard, leaving many tenants frustrated.
  • The low-value personal injury market has become less profitable, prompting some claimant solicitors operating on a no-win, no-fee basis to look elsewhere.
  • Although housing disrepair claims appear within complexity band 3 of the fast track assignment table at CPR r.26.15, they are not subject to fixed costs if allocated to the fast track (CPR r.45.1(4)(b)).
  • The Court of Appeal’s decision in Birmingham City Council v Lee [2008] EWCA Civ 891 confirms that standard basis costs may still be awarded from the date of the letter of claim up until completion of the works or allocation to the small claims track. This means that such claims can still be profitable for claimant firms, even if they are allocated to the small claims track. I wrote about Birmingham v Lee a couple of years ago in this article, though the position has arguably evolved in light of recent authorities.

I have tried to adopt a balanced view as to why we have seen such a spike in disrepair claims. In short, Defendants often see these claims as volume-driven work brought by high street firms on CFAs to turn a quick profit. Claimants, on the other hand, maintain that they are helping tenants secure safe, habitable homes. They note that if the property was not in disrepair, there would not be a claim.

Ultimately, the motives do not matter. At allocation, Claimants want fast-track allocation to maximise profit. Defendants want small claims allocation to minimise exposure. Allocation hearings are pivotal for both sides in a disrepair claim.

Authorities

The starting point is of course the Civil Procedure Rules. The starting point is to ask whether specific performance is a live issue at allocation. If it is, then:

CPR r.26.9(1)(b) – any claim which includes a claim by a tenant of residential premises against a landlord where—

(i)the tenant is seeking an order requiring the landlord to carry out repairs or other work to the premises (whether or not the tenant is also seeking some other remedy);

(ii)the cost of the repairs or other work to the premises is estimated to be not more than £1,000; and

(iii)the value of any other claim for damages is not more than £1,000

If there is no claim for specific performance, the question is whether the value of the claim is more than £10,000, as per:

CPR r.26.9(4) – Subject to paragraph (1), the small claims track is the normal track for any claim which has a value of not more than £10,000.

There are three authorities that, in my opinion, are most useful at allocation. The first is binding and the latter two are persuasive. Representatives should make this clear to avoid misleading the Court. These are:

  • Birmingham City Council v Lee [2008] EWCA Civ 891
  • Stojalowski v Bristol City Council (11.12.24, HHJ Blohm KC, Bristol County Court)
  • Matthews v Nottingham City Council (30.04.25, HHJ Owen, Nottingham County Court).

Below is a short overview of their relevance at allocation.

Birmingham City Council v Lee [2008] EWCA Civ 891

A staple in disrepair litigation. Paragraphs 7 and 8 are key for allocation purposes:

[7] The effect of that is: providing there is a claim for specific performance, 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 £1000.

If, on the other hand, there is no specific performance claim, the ordinary rule in CPR 26.6(3) applies and the claim will only be a fast track claim if its overall value exceeds £5000.

[8] Because there is a significant number of these cases in which the cost of repairs or the consequential damages claim falls somewhere in the bracket between £1000 and £5000, the presence or absence of a specific performance claim will often make the critical difference between the case being allocated to the fast track and it being allocated to the small claims track.

Of course, the limit has increased from £5,000 to £10,000.

I will cover this case more fully in a future post, especially in light of October 2023 costs rule changes. For now, it is worth noting that Claimants may seek the following if appropriate:

‘The Claimant shall have their costs in the cause on the standard basis up to [the date the repairs were completed].’

As the Court of Appeal explained, this means that if the Claimant wins, they will have standard costs of making the claim up until that date. If the Claimant fails, they will have nothing. It is not the case that the Claimant should be awarded their costs up until the date the repairs were completed in any event, unless of course liability was admitted.

Stojalowski  Bristol City Council (11.12.24, HHJ Blohm KC, Bristol County Court)

I start by stressing that this is a persuasive authority only. That said, in my experience, it is very persuasive indeed. It was heard by a silk circuit judge so that the senior judge could give guidance to local judges faced with the same issues. The authority is worth a read in full, as it goes over many common issues in detail. It criticises the pleadings on both sides, and it provides an interpretation for the above rules which will be highlighted below. It also covers off some more topical arguments in respect of the Claimant being required to use the Defendant’s internal complaints procedure.

Some of the main points include:

Paragraph 23 – Allocation is a two-stage process. ‘The first stage is to identify the ‘normal’ track for the case working upwards from the small claims track. The second stage is then to consider allocation overall in the light of the matters set out in CPR 26.13. The identification of the normal track for the case is not conclusive, but it gives rise to a presumption that the case will be listed on that track.’

Paragraph 24 – is the Claimant seeking specific performance? ‘But at this stage the court is considering whether that is a remedy that the claimant is seeking. It is plain both from the Particulars of Claim and the claimant’s witness statement that she is seeking that remedy. In order to succeed on this part of the argument the Council would have to show, as indeed it argues, that the claim for specific performance should be struck out. If the work had been done after issue but before allocation, then matters would be different. But here they have not been done, and the problem remains. That is not the position here; the defect continues.’

Paragraph 28 – allocation is a forward-looking process. ‘I agree that as at allocation the court should ordinarily be considering the cost of work yet to be done. Allocation is a forward-looking process. A tenant’s claim for dilapidations, where specific performance is sought, wants the factual disrepair to be remedied. To the extent that it has been remedied that fact is no longer in issue between the parties. The court should consider the dispute as between the parties as it exists at the time of allocation. This may mean that if the landlord has, between issue and allocation, rendered the work the subject of the specific performance claim relatively trivial in cost, para (b)(ii) will not be satisfied.’

Paragraph 29 – minor claims. ‘The purpose behind a requirement of cost is to exclude from the fast track the sort of minor claims that are or should be easily remediable. That in itself is a question-begging formulation. Here, disputes as to broken windows, ill-fitting bath panels or blocked trickle vents would clearly fall into that category. I would not consider that a persistent leak into the main bedroom of a two bedroomed flat would fall into that category unless the cause of the disrepair was evident. The works that appear to be necessary in this case are works to the structure of the building (excavation and the reinstallation of a damp proof course), and to a degree open-ended as there is no agreement or certainty as to the extent of the works needed, or whether the present diagnosis is correct. The cost of the works on the open market is likely to be more than £1,000.’

Paragraphs 30 and 31 – what does ‘cost of the repairs’ mean? For context, up until this decision, Defendants had great success in relying on the persuasive authority of DJ Haisley in Jalili v Bury Council (2021 Manchester County Court) in persuading the Court that the estimate provided by their expert should be used as the onus is on the Defendant to repair the Property and the gift is theirs to do it as cheaply as they can. If their in-house operatives could repair the Property for cheaper than the open market rent, then that would be the cost of repairs. HHJ Blohm KC disagreed – ‘I consider that Jalili was wrongly decided. The purpose of para (b)(ii) is to provide an objective yardstick of cost for the purposes of allocation. It cannot be right that it should vary according to the economies of the particular defendant. ‘Cost’ here must refer to the no doubt local but open market cost of carrying out the works.’

Paragraphs 32 and 33 – what does ‘value of any other claim for damages’ mean? ‘The ‘value’ of the claim is not the court’s assessment of what the claimant may receive at trial; it is the value of that which the claimant claims. Where there is a range of possible recovery, the value of the claim should be taken to be at the upper end of the possible recovery. That is significantly more than £1,000.’

Paragraphs 52 and 53 –  bulk claims. ‘These may be bulk claims for which specialised solicitors can make significant sums of money, but nonetheless, if a claim is suitable for the fast track then it ought to be allocated to the fast track – ‘Allocating the case to the small claims track where the claim is, considered on its own merits, appropriate for allocating to the fast track, would in my view be wrong. If claims such as those should not be subject to the fast track costs regime or not subject to litigation, then that is a matter for Parliament or the Rules Committee to deal with. There is an argument that it is only the availability of legal assistance by such means that confers a timeous remedy on those without means who need it. That is not for me.’

Matthews v Nottingham City Council (30.04.25, HHJ Owen, Nottingham County Court)

This is an appeal from a county court decision. It is clear from the start of the judgment that the two well-known advocates argued their respective cases with a high degree of skill. I will not repeat any of the points that are already set out in the above authorities, but paragraph 52 may be of use. As above, allocation is a two-stage process. The Court may decide that the starting point is the fast-track, but after considering the factors set out at CPR r.26.13, the claim nonetheless ought to be allocated to the small claims track.

Paragraph 52 addresses this: ‘When one considers the various factors referred to by the learned Deputy District Judge, a number of the points that the learned Deputy District Judge made are correct points. The reality is, this is not a particularly complex claim. There is only a couple of parties to the litigation and it is not of a wider importance and there is only going to be limited oral evidence in the case. The reality is, though, those points would be true whether or not this claim was dealt with under the small claims track or the fast track, and they are not points which really in any precise or cogent way points towards this matter being allocated to the small claims track if the normal track is the fast track.’

And Paragraph 51: ‘… The clear structure of the Protocol and, indeed, the allocation rules in housing disrepair claims is that if the claim is a justifiable claim which ought to be on the fast track, then costs should follow. It seems to me in a case like this where the normal track would be the fast track, if this claim is justifiable, it would be quite unjustifiable, in my view, to allocate the matter to the small claims track and thereby remove the potential for recovery of costs which is contemplated by the Pre-action Protocol.’

Other authorities

White Book 2025 commentary at paragraph 26.9.2 – ‘If there is a claim for both damages and an order for works to be carried out, the case will not be allocated to the small claims track if either the cost of works or the damages claim is more than £1,000. In such circumstances the case will normally be allocated to the fast track, unless the financial value of the claim is more than the value fixed by r.26.9(4)(b). Claims for both damages and an order for works to be carried out will only be allocated to the small claims track if the cost of work is less than £1,000 and the claim for damages is less than £1,000. This interpretation is borne out by Practice Direction 7A para.3.’

Allocation hearings

I hope that it is clear from the above that the authorities largely favour the Claimant’s submissions that a claim in which specific performance is outstanding ought to be allocated to the fast track. I will set out some common points made by both sides with some of my observations:

  • The Defendant avers that specific performance has fallen away as the works have been completed – if the Claimant agrees to this then of course specific performance is no more, and the rules as set out above apply. If there is a factual dispute as to this, the Claimant simply has to submit that an allocation hearing is not a mini-trial and the Court ought not to make any factual findings without first hearing the witnesses be tested by way of cross-examination.
  • The Claimant’s representative submits that if the matter is allocated to the small claims track, then the Claimant will be left without legal representation –  the last time I heard this submission, the Court was not impressed. The Court held that this was an attempt at holding the Court to ransom. I would go further and would invite any solicitor submitting this to consider their professional and ethical obligations.
  • The claim involves property so is ‘chancery-esque’ and ought to be allocated to the fast track – again, the Court is not usually impressed with this submission. These claims are effectively claims for breach of contract.
  • The parties’ representatives produce ‘written submissions’ and then instruct counsel to represent them at a hearing – these documents very rarely go down well with the Court. They are not witness statements, and if a party has instructed counsel, it is their role to make submissions. These are often referred to as ‘bizarre’ documents that do not assist the Court.

What can the Defendant do?

Defendant representatives reading this blog are probably feeling a little disheartened. Nonetheless, there are options:

  • If the starting point is that the claim ought to be allocated to the fast track, make strong submissions that the Court is not bound to do this and that the factors set out at CPR r.26.13 are such that the Court ought to use its discretion to allocate the matter to the small claims track. This is obviously case specific, but factors which are persuasive include:
  • The cost of repairs being just over £1,000.
  • The pleaded claim on notice being quite recent, as in within the last year or two (therefore damages are not likely to be high).
  • Only a few items of actionable disrepair being pleaded such that the claim is simple.
  • The existence of a single joint expert report such that there is not a dispute between two experts, which means the claim is simpler than it otherwise would be.
  • If the Defendant avers that the works are done prior to allocation, get evidence of the same. It may be that the Claimant raises the ‘this is not a mini-trial’ argument, but having something is better than nothing. Documents such as forms signed by the Claimant confirming all works have been completed together with photographs of the completed works are extremely helpful.
  • If the ‘not a mini-trial’ submission is made and the Court allocates the matter on to the fast track on the basis that the Claimant avers that specific performance remains a live issue, the Defendant could ask the Court to record that as a recital on the allocation order. Such a recital may read:

‘The Court has allocated the matter to the fast-track on the basis that the Claimant avers work is outstanding as of the date of allocation’.

What the Defendant is ultimately trying to achieve here is to prove, at trial, that the works were completed prior to the date of allocation and as such, the case should have been allocated to the small claims track and that the costs ought to be adjusted accordingly.

  • Ensure that the matters raised at allocation are pleaded in the Particulars of Claim. Claimants often try to raise new issues at allocation that fall outside of the ambit of the claim.

More generally, Defendants ought to be completing any identified actionable works within a reasonable period of time and ought to be making sensible offers if they assess the case and determine that there is real risk of the Claimant succeeding. As always, the earlier the offer is made, the better.

Jonathan McDonnell is a barrister in the commercial and property teams at PSQB.