Akshit Vohra of 8PP examines how Rules 26.9, 26.13 and the overriding objective of the Civil Procedure Rules align in securing appropriate track allocation
In Kathleen Matthews v Nottingham City Council, the Court reaffirmed that, upon a realistic assessment of the value of a claim, the normal track for allocation is the Fast Track rather than the Small Claims Track.
This applies where the cost of repairs exceeds £1,000.00, or – if that threshold is not met – where the justifiable value of damages sought exceeds £1,000.00 and there is a valid claim for specific performance.
The case is a significant step concerning case management in housing disrepair litigation, particularly in ensuring that claims are not forced into the Small Claims Track where the Fast Track route is the default. In reaching such a conclusion, the Court clarified how CPR 26.9, CPR 26.13, and the overriding objective under CPR 1.1 interact at the allocation stage. It further emphasised the continued relevance of the dicta in Birmingham City Council v Lee [2008] EWCA Civ 891, noting that track allocation carries with it significant cost recovery implications.
Background
The tenant/appellant, Ms. Kathleen Matthews (claimant), brought a claim for housing disrepair against her landlord/respondent, Nottingham City Council (defendant) owing to the defendant’s breach of section 11 of the Landlord and Tenant Act 1985, for failure to keep in repair the structure and exterior of her home. The case set up was that the claimant had been facing a leak in her kitchen due to water ingress from the roof, which caused plaster to deteriorate and black mould spots to form over the ceiling and the stand down beam over the rear kitchen window. These issues were reported to the defendant initially in November 2022 and on various other dates subsequently thereafter, yet the defendant failed to remediate the disrepair. Consequently, the claimant brought a claim for specific performance to compel the defendant into carrying out repairs to the Property that were estimated at £1,683.60 and consequential damages in the estimated bracket of £1,000.00 and £3,000.00.
At first instance, the Deputy District Judge passed a case management order that allocated the claim to the Small Claims Track, despite submissions from the claimant that it merited Fast Track status. The claimant appealed that decision.
Key issues before the Circuit Judge
The appeal raised three main issues:
- The scope of a court’s discretion as to track allocation – whether the court can exercise discretion to depart from the purport and intent of CPR 26.9(1)(b)(ii).
- The correct approach in interpreting the Rules – whether the court applied the correct approach in exercising broad discretion and departing from the default under Part 26 of the CPR.
- The relevance of the overriding objective – whether the court misapplied its discretion by allocating the claim to the Small Claims Track and failing to characterise all the relevant factors laid out in CPR 1.1(2).
How the Court reached its decision
On appeal, His Honour Justice Jonathan Owen set aside the order passed by the Deputy District Judge and directed that the case management aspect of the claim be dealt with afresh. His reasoning centred around how the CPR provisions interact with each other in terms of the considerations to be had when determining the appropriate track for allocation of a claim and the consequent cost implications of such allocation.
- The Overriding Objective
The Court reinforced that Part 1 of the CPR requires, so far as practicable, the courts to deal with cases justly and at proportionate costs at all stages and further extends this duty to the parties to the dispute. In doing so, weight is given to the various factors laid out in CPR 1.1(2) and Practice Direction 1A, which include within its ambit a requirement that vulnerable parties are placed on an equal footing at every stage. The Court went on to quote paragraph 16 of Practice Direction 26, which furthers the exercise of discretion by the courts to allocate a claim to another track if it is deemed that the claim cannot be dealt with justly on the Fast Track.
- Interpretation of CPR 26.9 and 26.13
On appeal, the Court found that while the Deputy District Judge considered the implications of CPR 26.13 when settling the question of track allocation, the learned judge failed to consider the structure of the Rules. The Court held that the starting point in determining the normal track is to make an assessment of what a claimant realistically hopes to achieve from the claim, assuming that their evidence is admitted, and once the normal track is determined on such a parameter, it is only thereafter that the court may test this determination against the relevant factors laid out under CPR 26.13.
The Court further held that while a court is not constrained from exercising discretion in determining the normal track for allocation of a claim, testing a claim against the considerations laid out in CPR 26.13 must be done after a determination has been made as to the realistic value of the claim to ascertain whether or not the final outcome at the allocation stage should be relegation of the claim to the normal track.
On facts, it was noted that the realistic value of the repairs was over £1,000.00 as per the claimant’s expert report and therefore, the normal track for allocation of the claim as per CPR 26.9(1)(b) would be the Fast Track. This determination was further supported, in the opinion of the Court, by the defendant’s expert report, which also suggested that the estimated cost of repairs would exceed £1,000.00.
Additionally, the Court accepted the submission of the claimant that it was plausible for the value of awarded damages to exceed £1,000.00 and the realistic value of damages, based on a rent reduction of 10%, should not have been viewed as the upper limit of damages at the allocation stage.
The Court went on to note that though the Deputy District Judge made the correct observations in relation to the factors laid out in CPR 26.13 vis-à-vis the present claim, including that of the present dispute not being a complex claim, these determinations were not of a consequence that would warrant allocation to the Small Claims Track when the normal track was the Fast Track.
Cost implications
At paragraphs 33-39, the Court expanded on the variation in cost recovery depending on the trajectory, allocation and outcome of a claim. The Court reiterated that there is a marked and deliberate distinction in the recovery of costs in a claim allocated to the Small Claims Track as opposed to a claim allocated to the Fast Track and underscored the continued relevance of the dicta in Lee, noting that the case provided binding guidance on settling the question of track allocation and the consequent recovery of costs.
While the amendments to the CPR that came into force on 1 October 2023 omitted CPR 46.11, which formed the basis for the decision in Lee, the decision in Matthews may be viewed as a step in the right direction as it holds that by and large, the Rules on track allocation remain the same even after amendment.
In Lee, the Court of Appeal held that where a claim was justified, it ought to be settled on terms which included payment of the tenant’s reasonable costs in accordance with the track to which the claim would fall to if made by way of litigation. The case emphasised on the importance of a pre-allocation costs order to avoid landlords from deliberately omitting to carry out repairs for which they are liable until being served with a letter of claim and then carrying out repairs without any admission of liability so that the claim is allocated to the Small Claims Track, resulting in the tenant being unable to recover costs on Fast Track terms.
Why this case matters
- Clarifies the scope of judicial discretion
Judges must adopt a structured approach when applying Part 26 CPR to track allocation. If the realistic and justifiable value of repairs or damages (with a valid claim for specific performance) exceeds the CPR 26.9(1)(b) threshold, the normal track is the Fast Track. - Promotes procedural fairness
The ruling confirms that procedural rules should support justice, not limit it, and that courts should weigh the practical impact on parties, especially where disrepair affects a tenant’s wellbeing. - Continued relevance ofBirmingham v Lee
The decision upholds the principles in Lee, ensuring tenants can still recover reasonable costs in line with the appropriate track allocation.
Looking Ahead
Although this is a county court judgment, it adds persuasive weight to a growing body of cases urging the courts to follow a structured approach in settling the question on track allocation. For claimants, and particularly social housing tenants, it strengthens the position that housing disrepair cases should be judged on the realistic value of the claim and not subjected to extrinsic factors that do not warrant exercise of the court’s discretion in departing from allocation of the claim to the normal track.
How 8PP Can Help
8PP are frequently instructed in housing disrepair matters where allocation, proportionality, and access to legal costs are contested. We help ensure that your case is properly presented and allocated, giving you the best chance of securing the relief your client deserves.
For expert advice on housing disrepair litigation and court procedure, get in touch with the 8PP team via clerks@8pp.co.uk or Tel: 0151 245 9292.