For solicitors acting for tenants, tenancy deposit protection claims are a frequent feature of housing litigation. These claims arise where deposits taken under an assured shorthold tenancy or freehold tenancy have not been safeguarded in compliance with the Housing Act 2004. Where a breach has occurred, tenants may be entitled to compensation, sometimes significantly more than the original deposit.

For firms undertaking litigation surrounding tenancy agreements, understanding not only the statutory framework but also the associated costs implications is essential. At Greener Costs, we specialise in supporting solicitors with the preparation, negotiation, and recovery of costs in housing disputes, including deposit-related claims.

Statutory Framework

The Housing Act requires landlords to register deposits within 30 days of receipt in an authorised tenancy deposit scheme and to provide the tenant with the required prescribed information. If a landlord or agent has failed to protect the deposit correctly, the tenant can bring a deposit compensation claim.

Where successful, the court must order repayment of the amount of the deposit, alongside a financial penalty of between one and three times the amount. These awards, coupled with the impact on possession proceedings, make tenancy deposit protection claims a powerful remedy for tenants and a recurring source of litigation.

Litigation in Practice

From a solicitor’s perspective, tenancy deposits often involve procedural issues, questions of evidence, and strict statutory deadlines. Claims are typically issued in the local county court and supported by tenancy documentation, scheme records, and correspondence with the landlord. Where landlords or letting agents have failed in their duties to your landlord or letting agent, the tenant has a strong case for redress.

As per CPR 56, claims must be issued on a Part 8 basis (rather than Part 7) pursuant to Practice Direction 56, Paragraph 2.1.  By default, this makes these claims Multi Track claims, and they attract standard costs, requiring the input of a Costs Draftsman or Costs Lawyer on conclusion.

This means that the involvement of an experienced Costs Draftsman/Lawyer is essential to ensure you maximise the recovery of your costs. The input of costs professionals for input of costs schedules, budgets (if required in complex litigation), and Bills of Costs is essential, as is anticipating arguments around proportionality, given that the underlying damages can vary significantly.

Funding Consideration

Many firms act on a no win no fee basis, making these claims accessible for tenants. For solicitors, this makes costs recovery even more important. Ensuring that profit costs and disbursements are properly accounted for can make the difference between a viable caseload and an unprofitable business. Careful drafting of bills and negotiation with paying parties is, therefore, central to success.

Client Engagement

For solicitors, encouraging tenants to start your claim promptly helps preserve evidence and ensure compliance with pre-action requirements. From a costs perspective, early planning is equally important. Identifying the likely tenancy deposit claims workload, forecasting time commitments, and setting out a realistic budget ensures smoother progression to detailed assessment if required.

How Greener Costs Can Help

At Greener Costs, we provide specialist costs support for solicitors handling tenancy deposit protection claims. Our expertise ensures that the work you carry out is reflected in full, from initial advice through to contested hearings. We prepare accurate costs budgets and statements, advise on proportionality in claims involving relatively modest deposits and represent solicitors at detailed assessment when necessary.

Our role is to ensure that firms acting for tenants recover the true value of their work and maximise the recoverability of their time. Whether you are pursuing a deposit compensation claim against non-compliant landlords or letting agents, or defending costs challenges in the county court, we provide the technical knowledge and practical insight you need.

By partnering with Greener Costs, Solicitors can approach tenancy deposit protection claims with confidence, focusing on achieving justice for clients while knowing that their own costs recovery is in safe hands.