Rule committee minutes reveal it rejected government proposals for fixed costs assessments

ACL calls on Ministry of Justice to pause work and offers to find other ways to address issue

The ACL has urged the Ministry of Justice (MoJ) to pause the work on costs disputes arising out of the extended fixed recoverable costs (FRC) regime after learning that the Civil Procedure Rule Committee rejected the proposals.

Committee chair Lord Justice Birss, deputy head of civil justice, was said to be unconvinced of the need for new rules.

The MoJ announced last week that it would move ahead with FRC for costs assessments and for part 8 costs-only proceedings arising out of the regime.

However, it emerged in the minutes of the rule committee’s December 2023 meeting, published on Wednesday, that it was opposed to this.

They said: “It was explained that the aim of the proposed new procedure was to produce a specific process for fixed costs determination where there is a need for something to be done. The drafting has been formed from the concept that there is agreement on all issues other than costs, but there is also a need to cover circumstances when the court cannot make a summary determination at the end of proceedings.  

“Essentially, the reform amounted to a bespoke carve out, from the existing and well-established current procedure, for determining fixed costs in future. Some elements were devised following representations from users (the Forum of Insurance Lawyers).

“The chair was unconvinced of the need, in practice, for a lengthy new process involving rule and PD amendments, in addition to a proposed new costs precedent form. If there is a gap to be addressed within the rules, the solution should be efficient and simple.

“Other members raised concern that all cases could end up going into the proposed new process, which is not the intention. The prospect of further unintended consequences were also raised. Overall, there was unease with adopting the proposal in its current form, if at all.”

The committee ended up deciding not to adopt the proposed reforms in relation to fixed costs determinations. The minutes said: “The committee was mindful of the potential impact on the courts, the existing duty to deal with cases in the context of the overriding objective and that, ultimately, judges have inherent case management powers to deal with matters appropriately in the interest of justice. An additional and lengthy new procedure was not merited at this time.”

It also did not adopt fixing costs of costs-only part 8 claims, while noting that “further revised drafting may return in due course”.

ACL chair Jack Ridgway said: “We are deeply concerned to learn that the Ministry of Justice is pressing ahead with the proposals on fixed costs in costs matters despite the rule committee rejecting them. It is unusual to see the committee push back on policy in this way and officials should be listening, not barreling on.

“The very brief summary contained in last week’s consultation response on the FRC changes failed to reflect the rule committee’s view, which is another worry. We urge the Ministry of Justice to pause this ill-judged reform and speak to the experts about how best to deal with the issue they are trying to address. The ACL stands ready to assist.”

An MoJ spokesman said: “Our reforms on fixed recoverable costs give all parties certainty upfront and ensure no one is locked out of justice for fear of how high their legal costs might be if they lose. We will continue to monitor their implementation.”

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12 Feb 2024

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