Disputes Quick Read – developments in the fixed costs regime

Quick read

On 21 April, the Civil Rules Committee published in draft the new rules for implementation of the extended fixed recoverable costs (sometimes abbreviated to FRC) regime. The final amendments will be published in May and it is expected that they will come into force on 1 October 2023.

What are fixed recoverable costs?

The fixed recoverable costs rules prescribe the amount of costs that can be claimed back from a losing party in civil litigation. The aim of the rules is to give both parties certainty as to the maximum amount they may have to pay if unsuccessful. At present, the regime applies to low cost personal injury claims.

How is the regime being extended?

The regime is being extended so that more claims will fall under the fixed recoverable costs rules. The new rules provide that the regime will apply (with some exceptions) to:

All civil claims in the fast track. These are claims up to a value of £25,000 where the trial is likely to last for no longer than one day and oral expert evidence is limited to one expert per party and to two expert fields.
Claims in a new 'intermediate track'. These are less complex multi-track cases under £100,000 damages where cases can be tried in three days or less, with no more than two expert witnesses giving oral evidence for each party. The judges will retain a discretion to allocate more complex cases valued under the £100,000 limit to the multi-track.

In both tracks there will be four complexity bands with associated grids of costs for the stages of a claim. These tables of costs will be reviewed in three years' time.

Is the extension a development to be welcomed?

The aim of the fixed costs regime is to help to ensure that the costs of litigating are kept in proportion to the sum in issue. The extension of the regime reflects the desire to try and achieve that objective in a broader range of cases and to provide more litigants with greater certainty about costs. If the new rules can achieve those goals, without fettering the ability of parties to take the necessary steps to pursue or defend litigation, they should of course be welcomed. Only time will tell however how the new rules affect the approach to litigation in the new range of cases covered. This is also unlikely to be the end of changes to the rules on costs in the near future. The Civil Justice Council is continuing to looking at costs recovery more broadly including the current cost budgeting regime. We can expect therefore further recommendations in these areas and possibly a further extension of the fixed costs regime beyond the less complex cases as currently identified. A report on all different aspects of costs in litigation is due to be published later this year.