CPR reform: how Jackson will affect lease renewal proceedings

The Jackson Reforms herald a new era in the management of, and procedure for, civil litigation. To a great extent, though, we have no real idea of what this new era may bring, particularly in the area of 1954 Act lease renewals. However, on the face of it, there is a possibility of substantial impact. This briefing highlights three key areas that are likely to affect how lease renewals are conducted.

The new emphasis on proportionality of costs to the value of actions may create difficulties in low rental value renewals. That costs are reasonable and/or reasonably incurred will not necessarily mean they are regarded as proportionate and therefore recoverable. However, the Courts will look at a number of issues, including the sums in issue, the value of non-monetary relief, complexity of the claim and conduct of the paying party. Parties to the renewal claim must therefore look beyond rental value; for example, tenants must illustrate the commercial, economic and social value of their business at the premises.

The new rules on costs budgeting for claims issued on or after 1 April 2013 raise more practical issues. Prior to the first CMC in proceedings, parties will be required to prepare costs budgets setting out the estimated legal costs, including all disbursements, to trial. These budgets will be subject to Court approval, if they cannot be agreed between the parties, and failure to file may result in a party being unable to recover any costs above Court fees…

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