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Avoiding adverse costs orders

Housing illustration Converted 146x219How can local authorities avoid adverse costs orders in the First-tier Tribunal? Robin Stewart sets out the lessons from a case where a council failed to revoke an emergency prohibition order over a property.

Last year I acted for landlord in an appeal against an emergency prohibition order. An emergency prohibition order ("EPO") is a powerful tool for a local authority to address imminent hazards as the order takes effect immediately and unless the EPO is appealed anyone who fails to comply commits a criminal offence.

In this case, the local authority considered that the property was not safe for a particular vulnerable occupier (one of two people living at the property) and they served an emergency prohibition order preventing the use of the property by more than one occupier. However, by the time the EPO was made that occupier had already moved out - meaning that even if the council were right about the property being unsafe, there was no need for the EPO at that point.

The Landlord started an appeal against the EPO, initially without instructing solicitors. When the council gave further details of its reasons for opposing the appeal, it emerged that the reason for making the EPO was in fact that the council's Private Sector Housing team wished to 'engineer' the homeless status of the occupant so that another department of the council would be forced to rehouse him.

The Tribunal made a decision on the papers without a hearing at our request.

The EPO was quashed on the grounds that (1) there was no imminent risk at the time the EPO was made, (2) the council had failed to give notice of its inspection, (3) the EPO did not include an adequate specification of remedial works, and (4) it was undoubtedly unlawful to use an EPO as a device to 'engineer' homeless status. The Tribunal made clear that any one of these reasons alone would have been sufficient for the EPO to be quashed.

Following this result the landlord applied for the local authority to pay his costs on the basis that the local authority had acted unreasonably in defending or conducting the proceedings. In the First-tier Tribunal costs orders are made comparatively rarely because in most cases they are only available where one party has acted unreasonably. Being unsuccessful in the appeal does not mean that a party has acted unreasonably.

In making a decision on the costs application the Tribunal stated that the decision to make the EPO (and whether that decision was reasonable) was irrelevant - they were concerned only with what happened during the appeal and the parties conduct at that point.

The Tribunal applied the "acid test" from Ridehalgh v Horsefield & Anor [1994] EWCA Civ 40 in considering whether there had been unreasonable conduct: that is, to ask whether a reasonable person would have acted in the manner complained of. In considering the local authority's actions, the tribunal found that a reasonable person in that context is an officer who is competent and has a good working knowledge of the relevant statutory provisions.

The Tribunal considered that the council ought to have revoked the EPO on receipt of the landlord’s notice of appeal because it was clear that there had been a failure to give proper notice under section 239 of the Housing Act 2004 - and that the position taken by the council = (that the exemption at section 239(6) applied meaning no notice of the inspection was required to be given to the landlord) was not just a matter of mistaken belief but was the product of incompetence. Defending the appeal on that basis was unreasonable.

Further, as soon as the local authority was aware that the tenant whose presence in the property was used to justify the order had left, it was incumbent on them to revoke the EPO. The failure to do was unreasonable, the Tribunal found, because a reasonable officer would have withdrawn the EPO and would not have persisted in defending it during the appeal.

However, the Tribunal considered that the inadequacy of the description of works in the EPO was a less clear cut issue, and on this point the council's failure to recognise this flaw did not cross the threshold into unreasonable conduct.

The award made was for the full costs requested by the landlord.

Costs in the First-tier Tribunal generally

There is a striking similarity between the approach taken by the Property Chamber in the above case and instructions given to judges in the Immigration and Asylum Chamber in a guidance note issued by the President of that Chamber.

The Immigration and Asylum Chamber ("IAC") reviews decisions of the Home Office rather than local authorities, but the procedure is very similar, and the costs rules are the same are those used in the Property Chamber.

The IAC guidance was given following a test case Awuah and Others (Wasted Costs Orders) [2017] UKFtT 555 (IAC) in which a panel of the presidents of the First-Tier and Upper Tribunals (Immigration and Asylum Chamber) considered the situations in which costs orders should be made. It is clear from the President's guidance and the decision in Awuah that the immigration judges see themselves as applying essentially the same costs principle as those judges working in the Property Chamber: the decision in Awuah makes approving reference to important Property Chamber costs case Willow Court.

That immigration appeal guidance refers to an objective standard to be applied to decisions and actions made by employees of the Home Office: the "hypothetical reasonably competent civil servant". It is against that standard that Home Office Presenting Officers are assessed in an immigration context. In the Property Chamber the equivalent standard might be that of the "hypothetical reasonably competent environmental health officer".

The immigration judges consider that there is a clear duty on the Home Office to proactively consider the merits of appeals, and to not oppose appeals which have clear merit, and to assess the merits of appeals within a reasonable time frame:

Duty upon the SSHD to conduct an ‘initial assessment’ of the viability of defending an appeal:

The duties imposed upon the Secretary of State when an appeal comes into existence invite some elaboration. We consider first the initial duty. It is not contested that there is a duty on the Secretary of State to assess the viability of defending an appeal following notification. There is, of course, a corresponding duty on an appellant and his representatives to review the feasibility of pursuing an existing appeal from time to time. Both duties are rooted in the overriding objective and the specific obligations to help the tribunal to further the overriding objective and to co-operate with the tribunal generally: see Rule 2 of the Tribunal Procedure (First-tier Tribunal) (Immigration and Asylum Chambers) Rules 2014 (the “2014 Rules”). (Awuah (2), unreported, [16])

That assessment to be conducted within six weeks of being notified that the appeal was lodged:

… We are also mindful of Rules 23 and 24 of the 2014 Rules which stipulate that in every appeal against a refusal of entry clearance or a refusal to grant an EEA family permit and in all other appeals, the Secretary of State must provide the FtT with specified documents within 28 days of receipt of the notice of appeal. We can think of no good reason, practical or otherwise, why the Secretary of State’s duty of initial assessment of the viability of defending an appeal should not, as a general rule, be measured by reference to these time periods.

There is no authority to say that the IAC's approach also applies in the Property Chamber, but since both chambers apply the same rules there is every reason to think that the Awuah approach should be adopted. The decision made in the EPO case described above suggests that at least some Property Chamber judges agree.

What local authorities need to do to avoid costs orders

The perception from immigration practitioners was that the decision in Awuah and Others and subsequent guidance had, in theory at least, opened the doors for a more significant number of awards to be made against the Home Office. If the principles of that case are applied in the Property Chamber there can be little doubt that local authorities will be ordered to pay costs more often.

The Awuah approach does not create a general rule that the loser must reimburse the winner's legal costs, but it does place a requirement on respondents to consider the merits of an appeal and to act accordingly.

Local authorities will need to make sure that the merits of any appeals are considered carefully. That does not need to mean instructing lawyers to give an early opinion. The tribunal would be assessing whether the decision to contest an appeal was reasonable against the standard of the hypothetical reasonably competent environmental health officer (or similar).

However, unless adequate training is provided for officers and time allocated to consider the merit of appeals, it will be inevitable that sometimes that standard will not be met.

Robin Stewart is a Senior Associate at Anthony Gold Solicitors. He can be contacted on 020 7940 4000 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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