[2025] EWHC 2751 (Admin)

The Costs Recovery Reform

Mr Jourdan led on the challenge to the reform in the LFRA 2024 removing the entitlement of a landlord to payment of his non-litigation costs. The other claimants adopted his submissions.

In this context, litigation costs are the costs relating to a dispute about an enfranchisement claim incurred in proceedings before a court or tribunal. A landlord’s non-litigation costs relate to such matters as investigating whether a tenant is entitled to make a claim to enfranchise, preparing information relevant to the assessment of the compensation payable and obtaining a valuer’s report, negotiations with the tenant’s representatives and conveyancing costs. Under the pre-existing code a person making an enfranchisement claim has been obliged to pay his landlord’s non-litigation costs, whether the claim related to a house or a flat, the acquisition of the freehold or a lease extension (see e.g. s.9(4) of the LRA 1967 and ss.33 and 60 of the LRHUDA 1993).

Section 38 of the LFRA 2024 inserts into the LRA 1967 a new code for non-litigation costs relating to claims under that Act. Section 39 of the LFRA 2024 inserts into the LRHUDA 1993 a new non-litigation costs code for claims under that Act. The general principle is that a claimant tenant is no longer liable to pay his landlord’s non-litigation costs. The new provisions lay down three exceptions to that principle summarised in [76] above.