The Tribunal’s discretion as to costs in claims for compensation is long established, as prescribed in both Section 29 of the Tribunals, Courts and Enforcement Act 2007, as well as the Tribunal’s Practice Direction.
Notwithstanding this wide discretion, in practice, the Tribunal awarding costs on an indemnity basis remains noteworthy, with indemnity costs only generally being awarded where there is something “exceptional” to warrant it (Purfleet Farms Ltd v Secretar of State for Transport, Local Government and the Regions [2002] EWCA Civ 1430).
The recent case of Harnek Singh Samra and Karnail Singh Samra v Sandwell Metropolitan Borough Council [LC-2024-709] gives a timely example of one of those “exceptional” instances.
Facts
The claimants made an offer to settle the compensation claim on 21 October 2025, in the amount of £425,000 (and £100,000 plus value-added tax (VAT) in respect of costs). The acquiring authority made a counteroffer on 31 October 2025, in the sum of £250,000 plus £21,242 for costs. The claimants were ultimately awarded compensation of £547,039 by the Tribunal in February 2026, and therefore “beat” their October 2025 offer.
The acquiring authority accepted liability for costs in principle but rejected the claimants’ argument that costs should be assessed on an indemnity basis.
Arguments raised
The claimants’ primary position hinged upon the principle of equivalence, meaning that claimants should be put as closely as possible in the same position as if their land had not been taken.
The claimants raised a further argument that the acquiring authority had been unreasonably obstructive in their approach to the claim, which was not ultimately addressed by the Tribunal.
The acquiring authority did not specifically raise a defence to the claims that it had been obstructive, but instead relied on the position that, in this case, the compulsory purchase had been made on public interests grounds because the claimants had failed to adequately maintain their land. The acquiring authority also highlighted that there is a clear absence, within the Tribunal Practice Direction, of confirmation that the principle of equivalence is to apply to costs comprised within a disturbance claim.
Decision
The claimants were therefore awarded their costs, assessed on an indemnity basis, in line with the principle of equivalence. While the Tribunal acknowledged the acquiring authority’s position in respect of the Tribunal Practice Direction, this was ultimately not enough to dissuade the Tribunal from exercising the wide powers of discretion afforded to it.
In reaching its decision, the Tribunal referred earlier decisions, including Mann & Ors v Transport for London [2018] EWCA Civ 1520 and Purfleet Farms Ltd v Secretar of State for Transport, Local Government and the Regions [2002] EWCA Civ 1430, which acknowledge that costs can be awarded on an indemnity basis where there is something exceptional to warrant it and, where the claimant has been awarded compensation in excess of the amount offered to it and has accordingly incurred costs in order to determine the correct compensation payable, all costs should be paid to the claimant unless it can be found that the expenses were unnecessary and unreasonable.
What does this mean in practice?
In reality, nothing has changed as a result of this decision. While the decision in this case operates as a reminder that the principle of equivalence can apply to cost claims, this gift has always been the Tribunal’s to give, in line with its wide discretion.
However, unless and until the Tribunal Practice Directions are amended to explicitly provide for the same, this decision will not be binding and therefore isn’t likely to impact advice that is given to claimants in respect of cost risk. Instead, the emphasis remains on the parties to seek to engage collaboratively, notwithstanding any history between the parties, and to carefully consider sensible and early settlement offers.
