Long-awaited Fixed Recoverable Costs extended – Ministry of Justice
The Ministry of Justice (MOJ) has confirmed that it will extend fixed recoverable costs, following a two-year consultation.
The announcement largely follows recommendations made by Sir Rupert Jackson back in 2017 in a bid to reduce the cost of litigation and create more certainty around the costs the losing party must pay.
It comes as the Government aims to ‘build back a better justice system’, where reforms have been made on costs for legal fees which are liable to the losing party. Currently, there is no certainty as to what costs that can be recovered or paid. Lord Wolfson adds: “Without being able to predict what the costs may be, it is difficult for either side to take an informed decisions on the appropriate way forward. If cases are to be litigated, then we want them to be resolved as early as possible, with costs as proportionate and as fair to both sides as possible.”
The move to fix recoverable costs will mainly benefit lower value claims, which are most likely to be faced by people and businesses. Fixed Recoverable Costs (FRC) was first introduced for road traffic accidents for cases up to £10,000 in damages in 2010, but now the move aims to cover a spectrum of legal disputes that seeks to broaden access to justice and hopes to set a fair cost that is proportionate to the complexity and value of a case.
Sir Rupert Jackson also recommends a new intermediate track and FRC for less complex claims with a value from £25,000 to £100,000 which he recommends are allocated to the Fast Track. The expansion of FRC from the Small-claims track to the Fast track will mean simpler cases that typically involve Employers’ Liability Accidents and Personal Injury may also be subject to the FRC regime.
Jackson’s proposal for recoverable costs:
| Complexity Band | ||||
| Stage: | 1 | 2 | 3 | 4 |
| 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 | |
| Trial advocacy fee |
a. £500 b. £710 c.£1,070 d.£1,705 |
a. £500 b. £710 c. £1,070 d. £1,705 |
a. £500 b. £710 c. £1,070 d. £1, 705 |
a. £1,380 b. £1,380 c. £1,800 d. £2,500 |
Source: The Law Society Gazette
Now the MoJ has provided its response to the recommendations, the government will now submit draft rules to be considered by the Civil Procedure Rules Committee. The MoJ however advise that there are still a number of issues that require further thought.
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