Fixed Costs Delayed

Personal injury lawyers have been given an extra six months’ reprieve on the implementation of the fixed costs regime for civil litigation.

The new regime, under which fixed costs were to be extended to cases valued up to £100,000, was due to start in April. It will now not begin until October 2023 in order to give the legal sector more time to prepare.

Justice minister Lord Bellamy KC made the announcement at the Civil Justice Council national forum last week.

The extension, first recommended by Sir Rupert Jackson’s civil costs review, was proposed by the Ministry of Justice in 2021. However, personal injury lawyers and groups have expressed concerns about the financial viability of running more complex cases through the new regime.

Jack Ridgway, chair of the Association of Costs Lawyers, said the delay was ‘eminently sensible… But the reality is that the eventual rules will still cause a significant amount of satellite litigation.

‘As costs specialists, we are preparing to move from arguing about numbers to arguing about words and particularly which track and band a claim should be allocated to’.

Matthew Currie, chief legal officer at Minster Law, said: ‘We warmly welcome this delay, if the net effect is a more considered and sensible approach to fixed costs going forward, including a regular review mechanism to ensure costs reflect inflation.

‘After a period of turmoil in the sector, driven by reform and external macro factors, we need a period of stability and certainty, so that we can plan effectively to manage the needs of our clients in the post reform world.’

Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations (ACSO), said: ‘Existing FRC [fixed recoverable costs] have been subject to inflationary pressures for a number of years, eating away at margins and heightening the risk that firms exit the market altogether.

‘ACSO has called for a root-and-branch review of all FRC to standardise uplifts for inflation, including regular review. In civil litigation, costs, rates, fees, damages guidelines, claims tracks and discount rates all interplay with one another, but at the moment they are reviewed and adjusted in silos, at different intervals and often adjusted using different metrics—or simply not at all. This is no way to manage the justice system.’

This article first appeared in the New Law Journal on 21 November 2022.

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01 Dec 2022

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