Tom Julian of 8PP has secured an unusual costs outcome in a housing conditions claim at the County Court at Leeds, after successfully applying to revoke an allocation order made seven months earlier.
The application arose after the defendant produced evidence showing repair costs significantly higher than the figures it had relied upon when the claim was originally allocated.
District Judge Shepherd revoked the earlier allocation order under CPR r.3.1(7), finding that the defendant had provided no explanation for the discrepancy in its figures.
The claim was re-allocated to the small claims track with effect from 11 August 2026 because by this point the works had been completed. Importantly, the claimants were awarded their standard basis Fast Track costs up to that date, together with the costs of the application, summarily assessed at £1,223.
The background
The housing conditions claim was brought by tenants against their landlord, seeking damages and specific performance.
It was dealt with on paper and allocated to the small claims track in January 2026. A trial listed for May was subsequently adjourned for lack of time.
Both sides had obtained expert evidence. The defendant relied upon a report and Scott Schedule putting the cost of the works at between £355.84 and £846.39. The claimants’ expert put the works at £1,064.49 – just above the £1,000 threshold.
Where a tenant’s claim includes an order requiring works, and either the cost of those works or the damages claim exceeds £1,000, the Fast Track is ordinarily the normal track: CPR r.26.9 and Birmingham City Council v Lee [2008] EWCA Civ 891 at [7].
On the defendant’s figures, the claim fell well below that threshold. On the claimants’ figures, it fell just above it.
However, in late April 2026, the defendant served an updated works history document putting the cost of the same works at more than £1,300. A later statement exhibited an amended works order at more than £1,700.
The claimants applied to revoke the allocation order in May 2026, 15 days after the discrepancy emerged and five days before trial.
Reopening the allocation decision
Once a claim is allocated to the small claims track, CPR r.27.14 sharply restricts the costs the court can award.
The claimants therefore targeted the allocation order itself under CPR r.3.1(7), which allows the court to vary or revoke an order it has previously made.
The leading authority is Tibbles v SIG plc [2012] EWCA Civ 518. At [39], Rix LJ set out guidance indicating that the discretion will normally be exercised where there has been a material change of circumstances, or where the facts upon which the original decision was made were misstated. Reopening an order will ordinarily require something out of the ordinary, with promptness also central.
The claimants’ case was that the circumstances fell squarely within the second limb.
The allocating judge had been presented with figures that later evidence showed to be wrong, and the claimants had no means of testing those figures at the time. A disagreement between experts is an ordinary feature of litigation and, in itself, gave them no reason to suspect that the defendant’s figures were unreliable.
The defendant resisted the application, maintaining that the works properly in issue remained only £355.84.
Crucially, however, it did not explain why its figures had changed.
District Judge Shepherd considered the information that had been before the allocating judge in January 2026, together with the overriding objective. She found that the defendant had provided no reason for the change in figures and that, had the correct information been available, the claim should have been allocated to the Fast Track.
That justified reopening the allocation order.
What about the costs?
Revoking the allocation order was only the first stage. The court then had to determine what costs order, if any, should follow.
The defendant advanced three arguments against making a pre-allocation costs order.
First, it argued that the actionable works remained below £1,000.
This depended upon the defendant’s characterisation of which items were actionable. The claimants argued that the works were arguably disrepair and, in any event, engaged s.9A of the Landlord and Tenant Act 1985.
They relied upon Other Creative Ltd v Mother Family Ltd [2021] EWHC 3172 (Ch), submitting that the relevant question for allocation was whether there was a realistic prospect of showing that the applicable threshold would be exceeded, rather than whether the claimant would ultimately succeed on each individual item.
Secondly, the defendant argued that any costs provision should take the form of a recital.
The court accepted that a recital is not an order and has no legal effect. Without an order, CPR r.27.14 would apply, limiting the claimants to fixed costs.
Thirdly, the defendant argued that costs should be reserved to the trial judge.
The claimants relied upon Birmingham City Council v Lee, where reserving pre-allocation costs to the trial judge was itself the order overturned by the Court of Appeal.
The outcome
The January 2026 allocation was revoked under CPR r.3.1(7), with the claim re-allocated to the small claims track from the date of the hearing.
District Judge Shepherd also made a pre-allocation costs order in the form approved in Birmingham City Council v Lee. This means that, if the claimants succeed in their claim, they will recover their Fast Track costs up to the date of the application hearing.
The claimants were also awarded the costs of the application, summarily assessed at £1,223.
Tom’s view
Tom Julian said:
“This case is unusual, but it provides some useful reminders. Perhaps the most important is that misleading the Court (innocently or not) is a serious business. Secondly, if it looks like the Court has been misled and no explanation is offered, the Court is likely to draw an adverse inference. .
“It also demonstrates that an incorrect allocation decision – or another interim order – does not necessarily have to be challenged by way of an appeal or an application under CPR r.3.3(5).”
“The costs arguments are particularly interesting. Birmingham City Council v Lee is often misunderstood, and a number of the arguments commonly raised against this type of costs order were advanced here. There are effective answers to them, many of which can be found in Lee itself. It’s really important to make sure the Court is provided with a copy of Lee before any housing conditions allocation hearing.”
Tom Julian is a Legal Drafter at 8PP Barristers & Associates.
If you would like to discuss this decision, a housing conditions claim or any related costs and allocation issues, contact the 8PP clerking team via clerks@8pp.co.uk or 0151 245 9292 to discuss how our specialist counsel and legal drafters can assist.
