End game level up?

My party (lvl 10) is about to finish off Iymrith and seem like they want to go talk to Klauth to follow up on his request to come to his real. after the stuff with the giants is taken care of. Klauth wants to tie up loose ends and to him the party is a loose end, and will attack as soon as he sees the balloon. Should the party get a level up between the fights should it be more than 1. Before the party gets decimated my surprise red dragon attack.