Colin Campbell

New Fixed Costs Rules: Another Consultation! 

The long-awaited new Fixed Costs Rules (FCR) come into force on 1st October 2023, introducing an intermediate track for most civil cases valued between £25,000 and £100,000 with tariff-based costs to be paid to the winner. Although the amendments, which involve CPR 26, CPR 28, CPR 36 and CPR 45, have been six years in the making (they introduce alterations recommended by Sir Rupert Jackson in his Supplemental Costs Report in July 2017!), the government is already consulting upon changes to be implemented in April 2024.  

In a Consultation Paper published in July, the Ministry of Justice wishes to have views on the following proposals by 8 September. 

  1. Inquest costs. At present, in proceedings under the Fatal Accidents Act [1976], the costs of attending inquests to gather evidence are recoverable in principle – see Fullick v The Commissioner for Police of the Metropolis [2019 Costs LR 1231. For post 1st October 2023 actions allocated to the intermediate track, there is no such allowance and it is the view of the MOJ that if this is not addressed, solicitors will decline to take on cases that could provide compensation of up to £100,000 for bereaved families if they are uneconomic to run. This would deprive such families of legal representation unless they pay for it themselves which few can afford to do. 
  1. Restoration of Companies to the Companies Register. Likewise, there is no provision for costs incurred in restoring a company to the Register in the intermediate track, for example, where there may be an insurance policy covering the tort by an employee of a defunct prospective company defendant. In Noise-Induced Hearing Loss (NIHL) cases in the Fast Track, however, such costs will be recoverable under CPR 45.56 and in respect of the related disbursements at CPR 45.61(2).  It is this inconsistency that the MOJ wishes to address.  
  1. Clinical negligence. There was an understanding (to use a neutral term) that clinical negligence claims in the new FCR, would be dealt with only in the multitrack where fixed costs do not apply. However, new CPR 26.9(1)(b)(i)-(ii) provides that where the case must be allocated to the multi-track unless breach of duty and causation have been admitted, in which event, the action can be allocated to the intermediate track. In view of this, claimant lawyers have suggested that this will enable tortfeasors to delay admissions until immediately before allocation in order to keep such claims within the fixed costs regime. To avoid that, the MOJ proposes that admissions must be made in the Response pack at the latest. If that does not happen, the claim will be allocated to the Multi track. 
  1.  Advocates’ preparation fees and inflation uplifts.  This has been a bugbear of the Bar Council for years. The issue is twofold. First, advocates have suffered through losing fees where they have prepared the case for trial, but the matter has settled at the last minute, so no court appearance is required. Second, rates have not been adjusted to take account of inflation. For example, the lowest rate for the “all-in” advocacy fee of £485 to cover all preparation, travel expenses and trial, have not been uprated since October 2007. It is the MOJ’s view that this will be addressed by increasing the trial advocacy fees in bands 1-3 of the fast track by 4% but that “…we do not consider that there is a case for a more substantial 20% inflationary increase now”. As to late settlement fees, the MOJ considers that “…there may be merit in this suggestion…” but that any extra remuneration should only be available in the intermediate track. Doubtless, the Bar Council will express its opinion on this!  
  1. Fixing costs on assessment. This aspect relates to the costs of assessment where fixed costs apply, but further court involvement is required to address, for example, an application by the parties who wish to argue “unreasonable behaviour” as a reason for adjusting the FRCs upwards or downwards under new CPR 45.13. Sir Rupert’s recommendation was that the costs of doing so should be capped at £500. Six years later, the MOJ is advancing the same figure and has asked for views. 
  1. Part 8 Costs Only claims. The issue here is to address the situation where the parties have settled the claim without the need to issue proceedings, but not the costs. In circumstances such as these, a Part 8 claim can be issued so that the court can determine the costs, with the costs of that assessment being outside the fixed costs regime. The MOJ considers that this provides ground for costs to be “exploited” and that it might be appropriate to cap the assessment costs in the sums recommended by Sir Rupert Jackson, at £300 for a claimant and £150 for a defendant. For the latter, that would represent less than one hour’s time for any fee earner in the country at 2021 Guideline Hourly Expense Rates, save for a grade D working outside London!  

As stated above, responses to the consultation should be provided by 8 September, although as with all these things, the government has probably made up its mind already, and whether or not any submissions will make any difference whatsoever, is highly debatable. 

Simon Browne | 39 Essex Chambers

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