Disrepair Claims Fixed Costs Exemption Extended

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The Government has indirectly confirmed that the exemption for Fixed Recoverable Costs (FRC) for housing disrepair claims will continue until at least October 2028, a decision that has significant consequences for tenants, landlords and the wider Housing sector.

There has not been a direct public announcement yet, however, the head of immigration and housing legal aid policy at the Ministry of Justice has written to members of the Housing Law Practitioners Association (HLPA) to confirm that:

“The Government will extend the exemption of housing cases from the Fixed Recoverable Costs FRC regime until October 2028, when we will review the exemption. This is due to the ongoing developments underway in the housing sector, including changes resulting from the Renters’ Rights Bill and Awaab’s Law. We will continue to monitor these developments and share further updates as more information becomes available."

What is the fixed costs exemption?

'Fixed Recoverable Costs' are designed to limit the amount of legal costs that can be recovered in certain civil claims.

The aim is to promote proportionality, predictability and early resolution.

However, when the extended fixed costs regime was introduced following Sir Rupert Jackson’s civil justice and costs reforms in 2013, housing disrepair claims were deliberately excluded.

The exemption recognises that disrepair cases are often:

• Factually complex
• Dependent on expert evidence
• Brought by vulnerable residents
• Linked to health, safety and safeguarding concerns

As a result, disrepair claims have remained outside the fixed costs framework, allowing solicitors to recover costs based on the work required, rather than a capped tariff.

Why was the exemption introduced in the first place?

The original rationale was rooted in access to justice.

Policymakers accepted that imposing fixed costs too early could:

• Discourage solicitors from taking on legitimate but complex cases
• Limit tenants’ ability to enforce their rights
• Undermine efforts to raise housing standards

At the time, the priority was to ensure residents living in unsafe conditions could still obtain legal representation, even where claims were low in value, but high in impact.

What impact has the exemption had?

Over time, the exemption has had mixed consequences.

On the positive side:

• Tenants with serious disrepair issues have been able to access legal help
• Landlords have faced pressure to address long-standing repair failures
• Disrepair has remained firmly on the regulatory and public agenda

However, on the negative side, there has been:

• A sharp rise in high-volume disrepair claims
• Increased involvement of claims management companies
• Concerns about weak evidence, poor inspections, and inflated costs
• Greater strain on landlords’ finances, which diverts money from repairs to legal spend

These issues have prompted growing scrutiny from the Courts, the Solicitors Regulation Authority (SRA), and the Government itself.

Why extend the exemption to 2028?

The decision to extend the exemption reflects the Government’s view that the system is not yet ready for fixed costs to apply to disrepair claims.

At the same time, the extension should not be read as an endorsement of current practices.

The exemption ensures that solicitors can continue to recover their full, non-fixed costs in successful housing disrepair cases for the time being, which is expected to allow current claim volumes to continue.

A review of the exemption is expected to take place before October 2028.

Why does this matter?

For now, disrepair claims will continue to operate outside fixed costs, with the associated financial impact on landlords.

However, the direction of travel is clear and in due course:

• Better evidence will be expected
• Early engagement and resolution will matter more than it ever has
• Poor quality or speculative claims will face challenge

We will provide further news and insights in relation to the FRC exemption in due course.

How can DISREPAIR AWARE help?

Many rented homes are not inspected regularly or maintained properly - we want to help improve housing conditions for everyone.

We help tenants and leaseholders understand their rights and get support and help registered providers, private landlords and managing agents to understand their obligations and get compliant.