The Upper Tribunal Provides Guidance on Cost Applications for Unreasonable Behaviour

The Upper Tribunal provides guidance on cost applications for unreasonable behaviour and says that such awards should be rare.

In 3 joined cases  WILLOW COURT MANAGEMENT COMPANY (1985) LIMITED v MRS RATNA ALEXANDER, MS SHELLEY SINCLAIR v 231 SUSSEX GARDENS RIGHT TO MANAGE LIMITED and MR RAYMOND HENRY STONE v 54 HOGARTH ROAD, LONDON SW5 MANAGEMENT LIMITED the Upper Tribunal for the first time considered the exercise of the cost discretion provided for in Rule 13 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 and in particular when costs should be awarded against a party where a party has acted unreasonably in bringing, defending or conducting proceedings.

Applications for costs under Rule 13 should not be routine and not used to discourage applications being made to the Tribunal nor to undermine the intention that the FtT is a no cost forum. Each application must be considered carefully on the facts of the case and the standard of unreasonable behaviour should not be set too high and should reflect the knowledge and expertise of the party so that the conduct of litigants in person will not be judged by the same standards of professional advisors.

The Upper Tribunal specified a 3 stage process for considering such applications.

The first stage requires an assessment of whether there has been unreasonable conduct and that will require a consideration of whether there is a reasonable explanation for the conduct complained off. If the conduct is found to be unreasonable the Tribunal must then consider at the second stage whether to exercise its discretion to make an order for costs under Rule 13 and if it decides to do so, then the third stage requires an assessment of the terms of the proposed order.

Following this decision it will be difficult for a party to claim costs under Rule 13. The Upper Tribunal said "rule 13(1)(a) and (b) should both be reserved for the clearest cases and that in every case it will be for the party claiming costs to satisfy the burden of demonstrating that the other party’s conduct has been unreasonable"

Following this decision applications for costs should not be made lightly. As the outcome of each application will be very sensitive to the specific facts and circumstances of each case, it is very difficult to provide any general guidance, but perhaps the best advice is that provided you approach Tribunal proceedings reasonably, you will be able to identify unreasonable conduct in the opposing party when you come across it.

For further information please contact Mark Oakley on 0208 290 7337 or email moakley@judge-priestley.co.uk