The government has today set the wheels in motion for fixed recoverable costs to be applied to most civil cases worth up to £100,000.
The Ministry of Justice will consult on expanding the fast track and prescribing the costs that can be clawed back from the losing party, with reference to a pre-determined grid.
Clinical negligence cases and claims in the business and property courts are excluded from the new proposals, but all other civil claims in the fast track are intended to come into scope.
The proposals take forward recommendations made almost two years ago by Lord Justice Jackson, who advocated a fixed grid of fixed recoverable costs for all fast-track cases and a new ‘intermediate track’ for certain claims valued up to £100,000. Originally the former Court of Appeal judge had suggested fixed costs for all claims up to £250,000, but this idea was scaled back.
Ministers say the time is right to consider the extension of fixed costs beyond their current application in most low-value personal injury cases, and they are prepared largely to back Jackson’s recommendations.
‘One of the major concerns about embarking on litigation is the fear of adverse costs: the requirement by a losing party to pay the other side’s costs,’ said justice secretary David Gauke. ‘It is important that these costs are proportionate to the sums in issue. In order to ensure that ordinary people can engage in civil litigation without fear of incurring ruinous costs, where possible we must control legal costs in advance. This provides certainty and transparency for all involved.’
The new proposals differ from Jackson in that they do not bring forward a new intermediate track, but rather assign cases to an extended fast-track.
Otherwise the proposed figures for the costs themselves are the same as those devised by Jackson.
The government will implement fixed costs, as recommended in 2017 by the Civil Justice Council, for noise-induced hearing loss claims.
Costs budgeting will come into force for judicial reviews where the costs of a party are likely to exceed £100,000.
The MoJ proposes an uplift of 35% on the fixed costs for the purposes of Part 36 (where an offer to settle is made by one side but not beaten by the other at trial). The consultation further asks whether there should be an uplift in costs where one party has acted unreasonably. A ‘London weighting’ of 12.5% uplift, for parties living in the capital or instructing London lawyers, is included in the proposals.
Following Jackson’s report, the government commissioned a report from the Civil Justice Council for fixed costs in clinical negligence cases up to £25,000 (hence their exclusion from this consultation), and similarly began a two-year capped costs pilot in business and property cases starting earlier this year.
Consultation will close on 6 June.