Fixed recoverable costs will be introduced for most civil cases worth up to £25,000 in the fast track, the government confirmed yesterday, ending four years of speculation. The government will also expand the fast track to include ‘intermediate’ cases valued between £25,000 and £100,000 in damages - effectively extending fixed costs to so-called 'simpler' valued up to £100,000.
In a long-awaited announcement, the Ministry of Justice said it would largely take on the recommendations of Sir Rupert Jackson from back in 2017 in a bid to reduce the cost of litigation and create more certainty about what losing parties have to pay.
All fast track cases will be allocated to one of four bands of complexity, as set out in rules already applying to some personal injury cases.
The new rules include a greater emphasis on penalising delays in the resolution of cases: the government will implement an uplift of 35% of FRC where Part 36 offers are beaten, while there will also be a 50% uplift on fixed costs where one party has engaged in ‘unreasonable behaviour’.
Justice minister Lord Wolfson of Tredegar QC said litigation costs needed reform, particularly those that a losing party has to pay to the winner. This was especially true in lower value claims where businesses are involved and where relatively low damages are at stake.
He added: ‘The case for extending fixed recoverable costs remains strong: uncertainty of costs hinders access to justice, while certainty of costs set at a proportionate and fair level enhances it.’
A government response to Jackson’s proposals was long-awaited, with the public consultation having finished back in June 2019. The MoJ asked for views on extending fixed costs to all civil cases other than clinical negligence (which is subject to a separate review), a new process and fixed costs for noise-induced hearing loss claims, expanding the fast track to include simpler ‘intermediate’ cases up to £100,000, and the introduction of costs budgeting in ‘heavy’ judicial reviews.
The MoJ considered the issue of ring-fencing counsel’s fees but opted against this for all but the most complex cases, with ministers agreeing with Jackson that it is for solicitor to decide whether to do items of pre-trial work themselves or instruct counsel.
On unreasonable behaviour, the response that this could include an unsuccessful challenge to the allocation of cases to different bands without sufficient basis. But otherwise the government does not propose to define further what amounts to unreasonable behaviour, relying instead on case law for direction on how to handle the issue.
The government will now submit draft rules for consideration by the Civil Procedure Rules Committee, and advises that a number of issues require further thought before details can be finalised.
In his 2017 report, Sir Rupert Jackson recommended:
- Extension of FRC to all civil claims across the fast track.
- A new, intermediate track and FRC for less complex claims from £25,000 to £100,000.
His proposal for recoverable costs was as follows:
|Pre-issue £1,001-£5,000||£104 + 20% of damages||£988 + 17.5% of damages||£2,250 + 15% of damages + £440 per extra defendant|
|Pre-issue £5,001 - £10,000||£1,144 + 15% of damages over £5,000||£1,929 + 12.5% of damages over £5,000|
|Pre-issue £10,001 - £25,000||£500||£2,007 + 10% of damages over £10,000||£2,600 + 10% of damages over £10,000|
|Post-issue, pre-allocation||£1,850||£1,206 + 20% of damages||£2,735 + 20% of damages||£2,575 + 40% of damages + £660 per extra defendant|
|Post-allocation, pre-listing||£2,200||£1,955 + 20% of damages||£3,484 + 25% of damages||£5,525 + 40% of damages + £660 per extra defendant|
|Post-listing, pre-trial||£3,250||£2,761 + 20% of damages||£4,451 + 30% of damages||£6,800 + 40% of damages + £660 per extra defendant|
|Trial advocacy fee||
d. £1, 705
Final figures will be adjusted for inflation
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