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Fast Track Costs Preserved in Housing Disrepair Claim Despite Small Claims Allocation

Fast Track Costs Preserved in Housing Disrepair Claim Despite Small Claims Allocation

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Court v Beyond Housing Ltd (Teesside Appeals Centre, 12 February 2026)

In Court v Beyond Housing Limited (12 February 2026), HHJ Robinson BEM allowed an appeal against a district judge’s refusal to preserve fast track costs in a housing disrepair claim for the period prior to completion of repairs. The decision provides important clarification on allocation methodology under CPR Part 26 and the continuing relevance of Birmingham City Council v Lee [2008] EWCA Civ 891 in cases where repairs are completed before allocation.

For practitioners conducting housing condition claims, the judgment offers both substantive guidance and practical lessons on how and when to raise pre-allocation costs arguments.

Background

The claimant, Gemma Court, issued proceedings in May 2024 against her social landlord, Beyond Housing Limited, alleging disrepair to her rented home. The claim sought:

  • Specific performance (an order requiring repairs),
  • Damages in excess of £5,000,
  • Repair costs estimated at over £1,000.

The claimant relied on a CPR 35-compliant surveyor’s report estimating repair costs above £1,000 (exclusive of damages). The defendant’s surveyor, relying on National Housing Federation schedule rates, assessed works at under £250.

By the time of the allocation hearing in November 2024, the landlord had completed the repairs. The parties agreed the claim should be allocated to the small claims track going forward.

However, the claimant sought a direction preserving her entitlement to fast track costs incurred prior to completion of the repairs. District Judge Richards refused to make such an order. Permission to appeal was eventually granted, and the appeal came before His Honour Judge Robinson BEM.

The Issues on Appeal

Three grounds were advanced:

  1. Misconstruction of CPR 26.9 (normal track analysis);
  2. Misunderstanding of the court’s discretion under s.51 Senior Courts Act 1981 and CPR 44.2;
  3. Failure properly to apply Birmingham City Council v Lee.

The appeal was allowed on Grounds 1 and 3, but dismissed on Ground 2.

Allocation: The Structured Approach Reaffirmed

The central error identified by HHJ Robinson was the district judge’s characterisation of the claim as “and always having been” a small claim.

The judgment emphasises that allocation requires a structured two-stage approach:

Stage 1: Identify the “normal track”

Under CPR 26.9 and PD 7A, the court must determine whether the claim falls within the small claims track by reference to estimated repair costs and damages. PD 7A provides that if either the repair costs or the damages exceed £1,000, the small claims track is not the normal track.

On the pleaded case at issue:

  • Repair costs were estimated above £1,000.
  • Damages were pleaded above £1,000.
  • Specific performance was sought.

Accordingly, the small claims track was not the normal track. The fast track was.

The appeal judge rejected the suggestion that VAT should be excluded from the repair estimate. A tenant forced to commission works on the open market would pay VAT. It was therefore appropriate to include it in valuation. He preferred the claimant’s open-market valuation over the defendant’s internal housing association rates.

The judge also accepted that likely general damages for disrepair over several years would exceed £1,000, referencing guidance from Wallace v Manchester City Council as to quantum in disrepair cases.

Stage 2: Consider CPR 26.13 factors

Nothing in the complexity, evidence, parties, or other factors justified departure from the normal track. Before repairs were completed, this was properly a fast track claim.

The key point: allocation must be analysed as at the time the claim was issued and progressed — not retrospectively characterised simply because repairs were later completed.

The Continuing Force Birmingham v Lee

The substantive question was whether the claimant’s pre-completion costs should be preserved on a fast track basis.

In Birmingham City Council v Lee, the Court of Appeal recognised a structural problem in housing disrepair litigation. Where a landlord carries out repairs after receipt of a protocol letter but before allocation, the specific performance claim falls away. The case then often drops into the small claims track, drastically limiting recoverable costs.

Hughes LJ warned that without a protective order:

  • Landlords could delay repairs until protocol notice is received;
  • Tenants would lose recovery of reasonably incurred legal costs;
  • The Pre-Action Protocol would be undermined.

The Court of Appeal therefore endorsed an order preserving fast track costs incurred prior to completion of repairs.

Although CPR 44.9(2) (which underpinned the original decision) has since been revoked, HHJ Robinson held that the principle remains intact. CPR 44.2 provides a broad discretion. CPR PD 46 and wider allocation principles are consistent with preserving costs incurred while the claim properly belonged on a higher track.

The judgment makes clear that procedural amendments have not displaced the underlying policy logic of Lee.

Protocol Compliance and Fairness

The court carefully reviewed the steps taken pre-completion:

  • Letter of claim served;
  • Surveyor instructed;
  • Claim issued;
  • Particulars drafted;
  • Witness evidence prepared.

These steps required professional skill and expense. The Pre-Action Protocol for Housing Conditions Claims provides that where a claim is settled on terms justifying its bringing, the landlord will pay reasonable costs.

The appeal judge considered it inconsistent with the overriding objective to deny any mechanism for recovery of those costs.

Importantly, the order made is neutral:

  • If the claimant succeeds, fast track basis costs up to completion may be recovered (subject to assessment).
  • If the claimant fails, she recovers nothing.
  • Post-completion costs remain governed by the small claims regime.

The order does not guarantee recovery — it preserves the entitlement for determination at the end of the case.

Practical Lessons for Practitioners

This judgment contains several practical takeaways:

1. Raise Pre-Completion Costs Early

The appeal judge identified that the claimant could have alerted the court sooner that a Birmingham v Lee order would be sought. Accordingly, practitioners should:

  • Flag the issue in the Directions Questionnaire;
  • Address it expressly in any allocation case summary;
  • Confirm repair completion dates;
  • Identify compliance with the Protocol.

2. Prepare Evidence on Valuation

Allocation disputes may require light-touch analysis of expert reports. Ensure:

  • CPR 35 compliance is clear;
  • VAT inclusion is justified;
  • Open-market valuation is distinguished from internal schedule rates.

3. Understand the “Normal Track” Analysis

Courts must begin with the PD 7A threshold question. If either repair costs or damages exceed £1,000, small claims is not the normal track. Only then does the court consider whether discretionary factors justify departure.

Mischaracterisation at Stage 1 may infect subsequent costs reasoning.

4. Preserve Settlement Leverage

As noted in Birmingham v Lee, certainty about preserved pre-completion costs can encourage settlement and avoid perverse incentives to litigate purely on costs.

Conclusion

Court v Beyond Housing Ltd reaffirms the structured approach to allocation and confirms the continuing vitality of Birmingham City Council v Lee.

For housing practitioners, the message is clear:

  • The normal track analysis matters.
  • Repairs completed before allocation do not retrospectively convert a fast track claim into a small claim.
  • Courts retain and should exercise discretion to preserve pre-completion fast track costs where appropriate.

The appeal was allowed in part. The allocation to the small claims track remained, but the order was varied to provide that the claimant shall have her costs in the case on the fast track basis for costs incurred prior to completion of the repairs.

In an era of increased scrutiny of proportionality and cost control, this decision is a timely reminder that procedural structure must not defeat substantive fairness — particularly in housing condition litigation where access to justice and protocol compliance depend upon recoverable legal costs.