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Government to extend fixed costs to most claims below £100,000

The government will extend the Fixed Recoverable Costs (FRC) regime to cover most fast track claims up to a value of £25,000 and expand the fast track to include most ‘intermediate’ money claims valued between £25,000 and £100,000, the Lord Chancellor Robert Buckland has announced.

The Minister’s statement follows the delayed publication of the results of the MoJ’s 2019 consultation on the FRC - Extending Fixed Recoverable Costs in Civil Cases: Implementing Sir Rupert Jackson’s Proposals - which found support from the judiciary and defendants’ groups for the greater use of fixed costs in civil litigation.

This followed a report by Mr Justice Jackson, commissioned by the senior judiciary, on the civil justice costs regime, published in 2017, which recommended that the FRC be extended.

The FRC already operates in most low value personal injury cases and prescribe the level of costs that can be claimed back from a losing party in civil litigation by reference to a grid of costs based on the value and complexity of the case.

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The Lord Chancellor said: “Currently, the costs of lower value civil claims are too uncertain. Without being able to predict what the costs may be, it is difficult for either side to take an informed decision on the best way forward. We want cases to be resolved as early as possible, including those that proceed to litigation, with costs that are certain, proportionate, and fair to both sides.

“The case for extending FRC remains strong: uncertainty of costs hinders access to justice, whereas certainty of costs set at a proportionate and fair level enhances it.”
However, the Law Society has opposed the move, citing a lack of data on its expected effects and the impact of fixed costs on lower income claimants.

“If the government caps the amount of reasonable costs a claimant can recover then – without safeguards – a deep-pocketed and unscrupulous party could force their opponent to run up legal bills they’ll never recover,” said its president, I. Stephanie Boyce. “This could seriously damage the justice system leaving claimants unable to obtain effective remedy or vindicated defendants out of pocket through no fault of their own.

“Furthermore, we cannot support the proposals because there are not enough data supporting them and the proposed regime is very sketchy about how it would be applied. The data that has been used are both out of date and drawn from too narrow a pool of cases, given changes would apply across almost the entire spectrum of civil litigation.

The changes will require approval from the Civil Procedure Rule Committee. If this is obtained, it is expected that the new regime will apply from later 2022 or early 2023.

A copy of the consultation and the MoJ’s response can be found here:

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