Fixed Costs

Question 1

What are Fixed Costs

Answer 1

• FRC are the set amounts of legal costs that a winning party in civil litigation can recover from the losing party. The intention is to ensure that legal costs remain certain and proportionate.

Question 2

When do Fixed Costs Apply

Answer 2

• Previously – FRC applied where claims valued up to £25K
• From 01/10/23 – FRC extended - £100,000
• PI claims - applies where the cause of action accrues on or after 01/10/23
• RTA low value up to £100k – issued on/after 01/10/23
• Disease claims – LOC sent after 01/10/23
• Holiday Illness Claims since May 2018
• Applies to Pre-Action Costs

Question 3

Exceptions to when Fixed Costs Apply

Answer 3

• Exceptions:-
  Multi-Track claims (Part 8 claims always multi-track)
  If a Protected Party
  Residential Housing Claims (delayed)
  Meso
  Clin Neg (but review currently underway)
  Human Rights Act claims against Police
  Abuse of Children/Vulnerable Adults
  Trial by Jury

Question 4

What’s New/The Tracks (Note: allocated to Tracks after issue & service of statements of case)

Answer 4

• Small Claims Track – up to £10k
• Fast Track (includes low value claim RTA) – up to £25k
• Intermediate Track (NEW) - £25-£100k (Note: 1) Covers Clin Neg
  where breach of duty and causation admitted. 2) Very complex
  claims less than £100k can be allocated to the Multi-Track instead)
• Multi-Track – >£100k - not currently under FRC

Other Requirements
* Fast Track – FH expected up to 1 day and 1 expert per party
* Intermediate Track – FH expected up to 3 days and 2 experts per
party
* Multi-Track – FH expected to last over a no. of days

Question 5

Briefly Explain complexity bands

Answer 5

• CPR 26.14-17 - On Allocation to Fast & Intermediate Tracks, Court must assign claims to complexity bands 1-4 (1 least and 4 most complex), that impact FRC levels.
• Parties May Agree Band – but;
• CPR 26.13(1) – Factors - Court will have regard to these factors and may direct otherwise. Includes the financial value; the nature of the remedy sought; and the likely complexity of the facts, law or evidence.
• Not defined – likely to be subject to satellite litigation

Question 6

Explain where find amounts of fixed costs and any factors impacting amounts payable

Answer 6

• Tables in Part 45 – contains levels of FRCs
  E.G. Table 10 re RTA, Table 11 re EL/PL, Table 12 re Fast Track, Table 14 Intermediate Track
• Costs greater than FRC can be applied for where vulnerable parties or witnesses have resulted in additional work leading to costs 20% above FRC: r. 45.10.
• Part 36 offers – Claimant will be entitled to additional costs (being 35% of the difference between the fixed costs for the stage applicable when the relevant period expires and the stage applicable at the date of judgment). Only the Claimant.
• Mixed Claims - the exercises are combined (see CPR 45.50(2)(iii)).
• Conduct - Where a party has behaved unreasonably, the Court has the power to order that the costs awarded be reduced/increased by an amount equivalent to 50% of the FRC which would otherwise be payable.

Question 7

Disbursements - note: they are not fixed

Answer 7

• CPR 45.19-45.29I – limited list of recoverable disbursements
  Interpreters
  Specialists Legal Advice (new – not defined)
  Med and Expert reports, Court fees, Counsel advice to value claim etc as allowed for by relevant protocol
• Potential to recover disbursements under intermediate track, as long as reasonable - controversial
• FRC updated April 2024 – brief fees for cases settled at door of court will now be recoverable based on a % on how close settled to trial

Question 8

When can you escape from fixed costs

Answer 8

• Part 111A of CPR 45 - From 31/07/13 new FRC claims started under 2013 RTA protocol, but then exit. Table 14 re intermediate track.
• CPR 45.29J – Claimants may apply for and order for costs escaping FRC. Must recover >20% above FRC. If fails to beat 20%, will be liable for Defendant’s costs of the application. Would also only recover lower of assessed costs and FRC.
• The Court may consider costs exceeding FRC where a party or witness is vulnerable or there are “exceptional circumstances”. Currently there is no guidance as to what constitutes “exceptional circumstances”.
• As of 6 April 2024, parties can agree to disapply the FRC as part of a settlement.

Question 9

Remember
* The court retains discretion as to the costs order to be made including whether an order for costs relates only to a distinct part of the proceedings: CPR 44.2.

Answer 9

Remember
* The court retains discretion as to the costs order to be made including whether an order for costs relates only to a distinct part of the proceedings: CPR 44.2.