Extending Fixed Recoverable Costs (“FRC”) for civil disputes below £100K
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Legal Development 27 July 2023 27 July 2023
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Casualty claims
We reported in April that, from 1 October 2023, depending on the nature of a dispute [1], fixed recoverable costs (“FRC”) shall be extended (a) across the fast track (where claims are valued up to £25,000) and (b) to a new intermediate track (for claims valued up to £100,000).
Whilst these disputes will continue to be allocated to the fast track (“FT”) or a new intermediate track (“IT”), they will also now be assigned to one of four complexity bands.
The complexity bands into which FT disputes will be assigned are found within a new CPR, r. 26:15, at Table 1 [2], reproduced below:
| [FT] complexity band 1 | [FT] complexity band 2 | [FT] complexity band 3 | [FT] complexity band 4 |
|---|---|---|---|
| a. Road traffic accident related, non-personal injury claims | a. Road traffic accident related, personal injury claims which are or should hav ebeen started under the RTA Protocol | a. Road traffic accident related, personal injury claims to which the RTA Protocol does not apply | a. Employer's liability disease claims (other than a claim for noise induced hearing loss) |
|
b. Defendent debt claims |
b. Personal injury claims to which the Pre-action Protocol for Resolution of Package Travel Claims apply | b. Employer's liability accident claims and public liability personal injury claims |
b. Complex possession and housing disrepair claims |
| c. Possession claims | c. Property and building disputes | ||
| d. Housing disrepair claims | d. Professional negligence claims | ||
| e. Other money claims | e. Any claims which would normally be allocated to the fast track, but is nonetheless complex |
The complexity bands into which IT disputes will be assigned are found within a new CPR, r. 26:16, at Table 2 [3], again reproduced below:
| [IT] complexity band 1 | [IT] complexity band 2 | [IT] complexity band 3 | [IT] complexity band 4 |
|---|---|---|---|
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Any claim where: a. Only one issue is in dispute, and b. The trial is not expected to last longer than one day, including: i. Personal injury claims where liability or quantum is in dispute ii. Non-personal injury road traffic claims; and iii. Defended debt claims |
Any less complex claim where more than one issue is in dispute, including personal injury accident claims where liability and quantum are in dispute |
Any more complex claim where more than one issue is in dispute, but which is unsuitable for assignment to complexity band 2, including noise induced hearing loss and other employer’s liability disease claims | Any claim which would normally be allocated to the intermediate track, but which is unsuitable for assignment to complexity bands 1 – 3, including any personal injury claims where there are serious issues of fact or law |
It is apparent that the level of fixed recoverable costs payable will generally be determined by reference to a combination of (a) the track (b) the complexity band (c) the stage of the litigation when the proceedings settle or are otherwise disposed of, and (d) the level of damages agreed or awarded. The difference in levels of costs recovery between a claim allocated to band 2 v band 4 is significant and we can, therefore, expect initial case management conferences to be fiercely contested, with satellite litigation to follow.
However, whilst many of the draft amendments to the Civil Procedure Rules have already been made available we recently learned, via a further consultation from the Ministry of Justice, that the precise figures – which were uprated to January 2023 using the quarterly Services Producer Price Index (“SPPI”) – are to be increased in April 2024 to account for additional inflation.
Accordingly, the figures within the revised Practice Direction (PD) to CPR, Part 45 will be subject to change six months after implementation, although Table 12 will continue to prescribe the levels of costs recoverable in the fast track with Table 14 applicable for intermediate track claims.
Two additional amendments warrant discussion.
The first relates to circumstances in which a claimant obtains judgment at trial that is at least as advantageous as their CPR, Part 36 offer.
In those circumstances, r. 36.24(5) will provide for costs not to be awarded (as is currently the case) on the indemnity basis under r. 36.17(4). Instead, claimants will be entitled to an additional 35% of the difference between the fixed costs payable when the offer’s “relevant period” expired and those payable at trial.
The second concerns the costs consequences of an FT or IT dispute being (a) reallocated from one track to another or (b) reassigned from one complexity band to another. In those circumstances, r. 45.14 provides that the costs which may be recovered are those applicable to the track or band into which the claim is subsequently designated. The new rule operates retrospectively, which unlike the default rules currently regulating reallocation [r. 46.13], provide only for costs after reallocation to be determined by reference to the track into which the claim is subsequently allocated.
Please do not hesitate to contact a member of our market leading casualty practice should you wish to explore any issues arising.
[1] Whilst FRC will apply to civil proceedings issued on or after 1 October 2023, they will only apply to personal injury claims where the index accident occurs on or after 1 October, and to disease claims where a letter of claim is sent on or after 1 October.
[2] See Schedule 1 of The Civil Procedure (Amendment No. 2) Rules 2023
[3] ibid
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