Government to introduce fixed costs for most money cases worth up to £100k

The government is to press ahead with implementing Sir Rupert Jackson’s (pictured) recommendations for fixed recoverable costs (FRC) across the fast-track and in most money cases worth up to £100,000.

In a written statement to the House of Commons this week, Lord Chancellor Robert Buckland said that, as part of the continued modernisation of the courts, adverse costs were in need of further reform.

“This is especially true in lower-value civil claims which people and businesses are most likely to face, either as claimants or defendants. Currently, the costs of these cases 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.”

He confirmed that the Ministry of Justice (MoJ) proposed to extend FRC to all cases in the fast-track and implement a new regime for ‘intermediate’ cases (simpler cases between £25,000 and £100,000).

“We will work with the Civil Procedure Rule Committee to ensure the smooth delivery of these reforms, to be implemented over the coming year.”

Sir Rupert issued his report in July 2017 and the MoJ consulted on virtually all of it in March 2019. Mr Buckland said the delay in taking the proposals forward was mainly due to the pandemic and, in fact, the MoJ has made precious few changes to the detail consulted on.

It has accepted the different bands of fast-track and intermediate cases, the criteria for the latter, and the actual figures proposed by the Jackson report, which were based on data provided by defendant firm Taylor Rose MW.

The reforms will also see costs management introduced for “heavy” judicial review cases – defined as whether the costs of a party are likely to exceed £100,000. The consultation said there were fewer than two dozen of these a year.

Work on FRC for low-value clinical negligence claims and immigration cases is already underway separately, while the announcement confirmed that a Civil Justice Council scheme for FRC in noise-induced hearing loss cases will be implemented too.

ACL chair Claire Green questioned the data on which the FRC will be based: “The question of fixed costs ultimately comes down to the figures,” she said.

“Do they provide genuine access to justice and allow a party to conduct litigation effectively, or do they only work for the privileged few who can afford to pay for litigation irrespective of what they recover from an opponent?

“The proposed figures for the fixed costs adopted by the Ministry of Justice were based on just one law firm’s sample of cases, where it acted for the defendants. The government needs a much more rigorous statistical base if it is to widen the use of fixed costs, and also needs to commit to regularly reviewing and updating them.

“Aside from uprating them to start with, this is absent from the response, and indeed history shows that it does not happen, to the detriment of clients, their lawyers and access to justice.”

Law Society president I Stephanie Boyce similarly criticised the data, which she said was “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”.

Ms Boyce urged the government to rethink the move, saying it would hit the vulnerable and the less well-off, who “would too often be unable to seek redress if fixed recoverable costs were extended to cover cases valued up to £100,000”.

She added: “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.

“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.”

Neil McKinley, president of the Association of Personal Injury Lawyers, said the approach adopted by the government ignored the fact “that most personal injury cases really are complex and cannot simply be shoe-horned into a simpler system with which they are just not compatible”.

He continued: “Employers’ liability disease claims, for example, can be incredibly complex, as can product liability claims, yet both categories of claim are to be included in this new system.

“The Ministry of Justice has also provided little detail about how this will work, leaving it to ‘the parties and judges’ to work that out. That will take time.”

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Costs News
Published date
09 Sep 2021

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