The CPRC and Civil Costs Reform
All Change !!
Labour’s election campaign and its manifesto revolved around ‘Change.’ Now, having formed the new Government, it’s reasonable to assume that Labour’s political ethos will continue to implement change where it is needed.
‘Change’ means to do something different. But what does that mean for the future of civil costs reform? To understand what such change might look like, we must first look at where civil costs reform was left pre-election.
The CPRC’s May and June 2024 Meeting Minutes
With the almost simultaneous July release of the minutes from the Civil Procedure Rule Committee (CPRC) meetings in May and June 2024, we would usually be able to build a picture of what was coming down the track insofar as it relates to pending civil costs reform. But with the CPRC’s May meeting taking place 12 days before the General Election was even called (we all remember the day Rishi Sunak forgot his umbrella !!) and the June meeting taking place after it was called but before the result was known, a change of Government does now seem to raise more questions than it answers. But, doing the best we can by pulling the May and June 2024 CPRC minutes together, we can identify three areas of costs reform that was under construction at that time. These were the:
- Low value clinical negligence fixed recoverable costs scheme;
- Fixed costs determination scheme (FCD);
- Costs budgeting light scheme;
The clinical negligence fixed recoverable costs scheme
Costs reform, insofar as it concerned clinical negligence claims, related only to ‘low value clinical negligence’ claims (LVCN) which is to say those claims with a value of between £1,501 and £25,000. The CPRC, in the May 2024 minutes, also said the scheme “…does not extend into the post-issue phase, or apply to higher value claims, and there is no intention to extend the scheme in these ways.”
The (Conservative) Government’s response to the Fixed recoverable costs in lower value clinical negligence claims consultation and its response to the Fixed recoverable costs in lower damages clinical negligence claims – a supplementary consultation on disbursements set out its intentions. However, the CPRC, in their attempt to implement rules to meet that Government’s intentions, identified issues which resulted in the May 2024 minutes concluding that the clinical negligence draft pre-action protocol (PAP) was “not fit for publication.” As at May 2024, the CPRC identified that work continued on:
- The new draft Pre-Action Protocol (PAP) for the Resolution of (Low Value) Clinical Disputes;
- The Pre-Action Conduct and Protocols practice direction (PD);
- The PAP for Resolution of Clinical Disputes;
- PD 16 – Statements of Case;
- CPR.r.26 – Case Management – Preliminary Stage;
- CRR.r.36 – Offers to Settle,
- CPR.r.45 -Fixed Recoverable Costs
So, as at May 2024, there was still lots to be done.
However, interestingly those May minutes noted that that remaining work created a “…potential risk of missing the deadlines for an October 2024 in-force. This would arise if the amendments cannot be finalised and agreed at the June 2024 meeting. In which case, the next mainstream CPR Update cycle is for April 2025 in-force;”
When one considers the CPRC’s June 2024 meeting minutes, there is no mention whatsoever of the clinical negligence fixed recoverable costs scheme let alone any attempt to ‘finalise any amendments.’ Accordingly, it would seem that any clinical negligence FRC scheme will not, even on the CPRC’s own barometer of progress, be implemented until at least April 2025. But we must also ask the question, what effect will the fact of a new Labour government have? More on that later.
Fixed costs determination (FCD)
FCD is the label given to the new scheme that will outline how parties can seek judicial input into fixed recoverable costs disputes. The May 2024 minutes told us that the procedure was agreed at the February 2024 CPRC meeting (subject to final drafting). Whilst it was expected the scheme would involve a simplified “bill of costs” together with a provision for points of dispute, replies and an ‘on-the-papers’ judicial determination, the actual details of the process have not yet been made available. It is also expected that the successful party’s costs of engaging in the FCD procedure will themselves be fixed. Sir Rupert Jackson rolled as dice and came up with a figure of £500 plus VAT…but who knows what costs will ultimately apply? What we do know is that the lower the sum, the greater the incentive for parties to fight almost every dispute (because…what do they have to lose other than a few pennies in adverse costs?!).
But what of an implementation date of FCD as at June 2024? Well, the minutes tell us:
“The new Fixed Costs Determination (FCD) procedure is intended for inclusion in the next Update cycle. A related Fees Order amendment was also envisaged. However, [the related Fees Order amendment] is likely to be delayed due to the new Parliamentary timetable. The steer from the Committee is that the FCD provisions should not have to wait for the Fees Order. This will be further discussed at official level out-of-committee.”
Accordingly, whilst the FCD provisions “should” not have to wait, whether they will or not is yet to be seen.
Costs budgeting light
The Civil Justice Council’s (CJC) May 2023 Report on Costs considered revisions to costs management and budgeting proposing a ‘light’ scheme. The June 2024 minutes tell us that the intention of ‘costs budgeting light’ is to create a “more flexible approach to costs budgeting.”
Costs budgeting light will, in the first instance, be a pilot scheme that will apply to:
- Business & Property Courts (BPC) claims with a value of £1m or more;
- BPC claims with a value of less than £1m;
- Qualified One-Way Costs (QOCS) claims;
- Non-QOCS claims; and
- Certain other non-BPC claims
We are also told a new Precedent budgeting form (in place of a Precedent H) will be developed and that the new draft Practice Direction for the Pilot will provide for claims with a value of over £10 million with the judicial discretion to ‘opt out’ as opposed to the current regime which excludes claims of over £10 million but allows the costs management and budgeting scheme to be ‘opted into.’ Litigants in person and children will, it is expected, continue to be exempt from costs budgeting light.
Implementation of costs reform
Despite some indication in the minutes of what was supposed to happen regarding implementation, the fact of a new Labour government does raise questions which are yet to be answered. Most of the costs reforms that have taken place over the last decade have been driven by Conservative government policy. But the government has changed. So, does this mean that Labour’s policy on these reforms and indeed civil costs reform more broadly, both retrospective and prospective, may change?
Labour’s 2024 manifesto was replete with language indicating reform to the criminal justice system. Labour has, however, been virtually silent on its intentions as to the civil justice system. This could mean it may not have formed a view at all on whether the direction of travel of Conservative policy will continue along the same trajectory under a Labour government…or it could mean the direction of travel on policy will change…or it could mean all reforms not yet implemented should be put on hold until such time as the new government can take stock and form a view. Time will tell.
But what we can reasonably conclude is that Labour’s silence on its intentions as to the civil justice system to date means it is not currently a priority. Labour’s election campaign, manifesto and other policy reform are predicated on a tagline of ‘Change.’ Continuing with the Conservative agenda on civil justice reform would hardly be Change now would it? So, if Labour are intending to be true to their word, whilst it may take time, is it reasonable for us all to assume the civil justice system will, in due course, also be the target of change? One would think so. But what that change might look like at this early stage is anyone’s guess.
Labour’s policy on criminal justice reform is to “put the needs of victims first.” One would like to think that any civil justice reform under a Labour government will also put the needs of victims first. Such an approach could, if done strictly with victims at its heart, reverse much of what has been done over the last decade.
Now…that truly would be Change.
