If you act for tenants in housing disrepair (HDR) work, you already know that the real graft usually happens before issue:
• multiple complaints,
• a detailed letter of claim,
• expert surveyor,
• negotiations that finally shift a landlord who has sat on repairs for months or years.
The anxiety is always the same:
“Will we actually be paid for all that pre-action work… or are we stuck with small-claims costs or nothing at all?”
Despite changes to the CPR (including the removal of CPR 46.11) and the ever-louder drumbeat of fixed costs, two things still do most of the heavy lifting on HDR pre-action costs:
1. Paragraph 11 of the Pre-Action Protocol for Housing Conditions Claims, and
2. Birmingham City Council v Lee [2008] EWCA Civ 891.
This article looks at how they fit together, how they’re being used in current case law, and what that means for how you run your files in practice. (Gov.uk Justice)
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The Pre-Action Protocol for Housing Conditions Claims (England) applies to residential property in England where tenants and leaseholders bring claims about poor housing conditions or disrepair. (Gov.uk Justice)
Buried towards the end is the bit everyone cares about:
Paragraph 11 (Costs).
Paraphrased, paragraph 11 says that where:
• the tenant’s claim is settled without litigation, and
• the terms of settlement justify bringing the claim,
then the landlord will pay the tenant’s reasonable costs. (Local Government Lawyer)
In other words:
• If you run a genuine HDR claim under the Protocol,
• and it leads to repairs, damages and/or other meaningful relief,
• even if you never issue,
the default position is that the landlord should pay reasonable pre-action costs, assessed on the usual principles of reasonableness and proportionality.
That principle is reflected consistently in commentary and local authority policies built around the Protocol. (Din Solicitors)
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Paragraph 11 sets the tone. Birmingham City Council v Lee is the case that gave it teeth.
In Lee, the tenant instructed solicitors under a CFA to pursue disrepair against a council landlord. A detailed letter of claim was sent under the (then) disrepair protocol. On receipt, the council inspected and carried out the works. Compensation and costs were not agreed, so proceedings were issued, and costs became the battleground. (nearlylegal.co.uk)
The Court of Appeal held, in essence, that:
• A tenant who brings a justifiable disrepair claim in accordance with the Protocol
• ought to recover their reasonable costs,
• even where the landlord promptly carries out the repairs rather than fighting the claim. (New Law Journal)
The court emphasised that the whole purpose of the Protocol is to encourage settlement without litigation, and that costs should reflect the track the case would have fallen into if litigated.
That still-quoted New Law Journal headnote captures it neatly:
A tenant with a justifiable claim for disrepair brought in accordance with the pre-action protocol should recover their costs, even where the landlord promptly undertakes the repair rather than disputing the claim. (New Law Journal)
For claimant HDR solicitors, the key messages are:
• You are not punished just because the landlord finally does what they should have done all along once you get involved.
• If the claim was justified and Protocol-compliant, pre-action work is not automatically “dead time”.
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Some practitioners worried that the removal of CPR 46.11 (which used to deal expressly with pre-allocation costs) might undercut Lee and make it harder to get anything beyond small-claims fixed costs once a matter is allocated.
Recent case law points the other way.
In Carter v Leeds City Council (DJ Hill, Leeds CC, 17 June 2025), the court had to decide whether it still had power to award pre-allocation costs on a fast-track basis in a small-claims HDR matter after the omission of CPR 46.11. (Local Government Lawyer)
• The landlord argued that once the claim was allocated to the small claims track, only CPR 27.14 fixed costs could apply.
• The tenant argued that Birmingham v Lee remained good law, and that CPR 44.2 still gave the court discretion, informed by the policy behind the Protocol.
DJ Hill agreed with the tenant:
• The reasoning in Birmingham v Lee did not depend on CPR 46.11;
• The omission of CPR 46.11 removed the previous “rule and exception” structure, but did not abolish the court’s general discretion to award pre-allocation costs in appropriate HDR cases;
• The court could still, in a suitable case, order pre-allocation costs reflecting the track the case would properly have occupied.
Pre-allocation costs were awarded, subject to proportionality (the court pitched recoverable costs at £6,500 on damages of £600 plus works worth around £1,200). (Local Government Lawyer)
Further commentary and case notes – including analysis of Jalili v Bury Council on pre-issue costs and articles revisiting Birmingham v Lee in allocation appeals – all treat Lee as** still central** when the court considers HDR costs where: (Judge & Priestley)
• There has been significant pre-action work, and
• The matter either settles pre-issue, or
• Repairs are carried out and the only real question is how costs should be fairly assessed.
The theme is consistent: the Protocol + Lee still underpin a discretion-driven, fairness-based approach to pre-action and pre-allocation HDR costs.
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The Protocol and Lee don’t give a blank cheque. To be “justifiable”, a claim needs:
• Real defects or poor housing conditions,
• Evidence that the landlord knew and failed to act, and
• Sensible use of the Protocol steps – letter of claim, disclosure, inspection, and expert evidence where necessary. (Gov.uk Justice)
If the file shows you’ve:
• sent a proper letter of claim,
• chased appropriately,
• instructed a surveyor proportionately, and
• negotiated sensibly,
you are in strong territory to argue that pre-action time and disbursements are recoverable – even if the matter later becomes small claims or settles pre-issue.
A lot of HDR solicitors worry that if a case ends up in the small claims track, that’s the end of meaningful costs recovery.
The post-reform picture is more nuanced:
• Pre-issue settlements still engage paragraph 11 directly – if the terms “justify bringing the claim”, the landlord should pay reasonable costs. (Local Government Lawyer)
• Pre-allocation costs can still, in the right case, be assessed as if the claim were on the fast track, even if it later lives in small claims. Carter v Leeds shows the court is prepared to do this. (Local Government Lawyer)
The real battleground is reasonableness and proportionality, not whether you are automatically confined to fixed small-claims costs.
Courts are increasingly willing to sanction both landlords and tenants for serious Protocol breaches, including by tweaking costs orders. (Gov.uk Justice)
For claimant firms, that means:
• Make sure your letters of claim actually set out defects, history and impact.
• Don’t bypass ADR or reasonable complaint procedures where they might resolve the issue.
• Keep a clear paper trail showing you gave the landlord a fair opportunity to put things right.
Strong Protocol compliance is what allows you to say, with a straight face on assessment, that every key item of pre-action work was necessary to get the result.
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If you want to rely on paragraph 11 and Birmingham v Lee when you get into a scrap with the paying party, your file needs to look like it was run with those principles in mind from day one.
Structure your time codes around the Protocol steps:
• Early instructions & triage – screening the case, checking limitation and LL knowledge.
• Protocol letter & schedule – drafting the formal letter of claim and collecting evidence.
• Disclosure & inspection – chasing records, liaising over access, attending surveyor visits.
• Expert evidence – instructions to expert, clarifications, discussions about scope of works.
• Negotiation & settlement – considering landlord responses, offers, Part 36 and settlement terms.
That way, when you later say “our pre-action work was justified and Protocol-driven”, the timesheet tells the same story.
Where you settle pre-issue, the words “inclusive of costs” can undo a lot of good work.
Wherever you can, push for wording along the lines of:
“The Defendant shall pay the Claimant’s reasonable pre-action costs, to be assessed if not agreed.”
That aligns with paragraph 11 and keeps the door open for CPR 46.14 costs-only proceedings if the landlord won’t pay a sensible figure. (dmdcosts.co.uk)
Remember, paragraph 11 only kicks in where the settlement justifies bringing the claim. So make sure the file can show:
• a clear scope of completed works,
• any damages or rent rebates, and
• where relevant, interim measures or decants that were obtained because of your involvement.
If you ever need to argue the point in front of a DJ, a concise note or chronology explaining how the claim forced movement can make all the difference.
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At DMD Costs, we’re dealing with this pattern constantly:
• long pre-action HDR work,
• modestish damages,
• a landlord wanting to pay “a contribution” that ignores the Protocol and Lee.
Here’s what we do for HDR firms:
• Bill drafting focused on Protocol steps – we build the narrative around paragraph 11 so the bill itself reads like a Lee-compliant story.
• Strategic negotiation – when defendants say “small claims = no costs”, we respond with a structured Lee argument and recent authorities like Carter v Leeds to push them back towards realistic figures. (Local Government Lawyer)
• Pre-allocation advice – where proceedings are issued, we help you argue for the right track and for pre-allocation costs that reflect the real work done.
• AI-assisted file review – we use AI tools to scan time records and correspondence for:
o missing Protocol steps,
o weak or duplicated entries, and
o leverage points (complaint history, vulnerability, expert evidence) that will matter at assessment.
That means we’re not just firefighting on a single file; we’re helping you run the whole department in a way that consistently turns Protocol compliance into recovered profit.
If you’d like a sense check on a live HDR case, you can send us a redacted file or bill and we’ll:
• map your pre-action work against paragraph 11 and Lee, and
• give you an honest view of what you should be recovering – and how to get there.
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Yes. Recent commentary and decisions confirm that Lee’s reasoning is rooted in the Protocol and the court’s general costs discretion, not in CPR 46.11 itself. Courts are still prepared to award pre-allocation costs in appropriate HDR cases. (Local Government Lawyer)
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Yes – paragraph 11 is designed for cases that settle without litigation, provided the terms “justify bringing the claim”. The usual route, where costs can’t be agreed, is a CPR 46.14 costs-only claim. (Local Government Lawyer)
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Not necessarily. Allocation to the small claims track brings CPR 27.14 into play, but Carter v Leeds suggests that in suitable cases the court retains discretion to award pre-allocation costs that reflect the proper track of the claim, especially where substantial pre-action work has been done under the Protocol. (Local Government Lawyer)
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Run every file as if you will one day have to prove to a DJ that you followed the Protocol sensibly:
• strong letter of claim,
• clear time recording by Protocol step,
• sensible expert use,
• fair opportunity for the landlord to put things right,
• and settlement terms that leave costs open for assessment if needed.