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Tuesday, November 23, 2010

Tips On Tenancy Deposit Disputes 21: Costs

Tip 21: Costs
This week’s tip is just one to help you avoid disappointment. It won’t prejudice your claim if you ignore it.
If you use the court service to determine your dispute, you might expect some kind of ruling on costs, usually to the effect that that the unsuccessful party has to pay a proportion of the the costs incurred by the successful party in bringing or defending the action. This reflects the fact that court action is expensive, and the system is designed to make people think twice before embarking on litigation.
In deposit protection disputes, however, the winning party cannot usually recover costs. Although deposit disputes are free or very cheap to participate in, the awards tend to be of a low value, so permitting claims for costs could be punitive and would be capable of distorting the result. For example, imagine a dispute over a damaged carpet for which the landlord wishes to claim £200. If the landlord had obtained legal advice, say from his local solicitor at a cost of £500, and was permitted to claim it back, the tenant could potentially forfeit the entire deposit over relatively small amount of damage. Results like this would attract publicity as they appear unjust, and could potentially lead to the collapse of the system as landlords and tenants opted to use the court system instead.
The DPS and My Deposits state in their terms and conditions that parties must bear their own costs of participation and regularly reject claims for statutory declaration fees, postage and other overheads. Understandably, landlords can be disappointed not to recover legitimate expenses and, although the sums involved are usually very small, the non-recovery of costs is a regular source of complaints and bad feeling.
Tom Derrett is the Principal of Deposit Claim, an ex-adjudicator and an expert on the Deposit Protection Schemes.

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