Lawyers will be limited to £80,000 overall costs if they choose to take part in the fixed fees pilot scheme beginning next week.
The voluntary capped costs pilot runs from Monday for two years for cases valued up to £250,000 in certain business and property courts.
The Gazette revealed last month that the Ministry of Justice had drawn up plans for the scheme. It has now issued a practice direction setting out the rules and limits.
Under the scheme, not more than 21 days after the conclusion of the trial, parties will produce a schedule of costs by reference to various stages of the litigation, which will be assessed summarily by the court.
A cap applies to each stage, together with the overall £80,000 limit, which excludes VAT, court fees, wasted costs and costs of enforcement. Pre-action costs are set at £10,000, disclosure is fixed at £6,000 and trial and judgment are subject to a maximum of £20,000.
The MoJ wants to streamline the procedures of the pilot courts, lower the costs of litigation, increase the certainty of costs exposure and speed up resolution of claims.
Hosted by the London Circuit Commercial Court and the business and property courts in the Manchester District Registry and Leeds District Registry, the pilot is open to any case worth less than £250,000 where the trial lasts no more than two days. Cases will not be eligible if they involve allegations of fraud, are likely to require extensive disclosure or witness evidence, or if they involve numerous issues and parties.
Claimants may start their claim on the capped costs list, or can agree to transfer to the list. Defendants may object at the outset to the case being part of the pilot.
Statements of case will be limited in length and must be accompanied by the relevant documents, with no costs management processes envisaged. Witness statements will also be limited and parties will be expected to call on no more than two expert witnesses. The trial must be held no more than eight months after the case management conference.
The MoJ has confirmed the pilot will be evaluated by Paul McMahon, assistant professor at LSE, with Mr Justice Waksman (London), HHJ Jonathan Klein (Leeds) and HHJ Richard Pearce (Manchester) the lead judges.