Lords debate costs in First-tier Tribunal

In the debate, on January 13, Baroness Gardner of Parkes said: “These charges, under the previous system, were limited to a maximum of £500 and the only abuse was when the other side charged it back to all the leaseholders in the block, even if only one had brought the case. Now, it is a different matter. You have to put up the £500 even to take your case to the tribunal and you have to pay further costs all the way.

“Can we at least be assured that if it is not possible to limit it in some cases, the costs will not be charged to all the tenants, as is now the case, instead of just to the one person who brought the case? Will the court, or the First-tier Tribunal as it is now called, have the power to determine where these costs are actually justified?”

Fellow Conservative, Lord Ahmad of Wimbledon said he would respond to Baroness Gardner’s questions in writing on behalf of the Government. Baroness Gardner also asked Lord Ahmad to confirm that “people will not be charged management costs unless their lease specifies that they must be and that they will not be obliged to pay - win or lose - the head lessee’s or freeholder’s slice of the action”.

Lord Ahmad responded: “I understand there have been calls for the Government to consider the feasibility of creating a provision to prevent the recovery of administration charges… we need to look at this very carefully and consult quite widely before deciding on any action that can be taken in this regard.”