The extension of the fixed costs regime has taken another step forward. After holding five public seminars, a number of meetings with stakeholder groups and gathering evidence from many organisations, today Lord Justice Jackson has published his long awaited review of fixed recoverable costs ("FRC"). The focus of the review was to develop FRC for lower value cases in order to promote access to justice.
Jackson's proposals mark a significant step back from his initial proposal that FRC could be applied to all claims up to the value of £250,000, albeit he acknowledged this is due to improvements over the last 18 months in costs management.
Jackson made the following main recommendations:
- A grid of FRC for all fast track cases and examples of the FRC, which includes ring-fencing fees for counsel (including trial advocacy fees) in more complex fast track and intermediate cases.
The current FRC regime for fast track cases is set out in CPR 45 and identifies the main categories of personal injury claims as RTA, EL and PL cases. Jackson LJ recommendations aim to expand FRC across all fast track cases. He proposes all fast track cases will be split into the following four bands of complexity with Band 1 being the least complex and Band 4 being the most:
Band 1: RTA non-personal injury, defended debt cases
Band 2: RTA personal injury (within Protocol), holiday sickness claims
Band 3: EL / PL accident claims
Band 4: EL (non-NIHL) and the most complex fast track claims
- New 'intermediate' track
Similar to fast track cases, the intermediate track would be split into four bands of complexity and would exclude mesothelioma and other asbestos related lung diseases as these claims are managed in accordance with the Mesothelioma Practice Direction.
Jackson LJ's proposed criteria for the intermediate track includes:
- the claim is for a debt, damages or other monetary relief no higher than £100,000;
- the trial will not last longer than three days;
- there will be no more than two expert witnesses giving oral evidence for each party; and
- there are no wider factors, such as reputation or public importance, which will make the claim inappropriate for the intermediate track.
Furthermore the new track will not include Part 8 claims.
- Clinical negligence claims
Jackson LJ believes these claims are unsuited to either the fast track or the proposed intermediate track therefore the Department of Health and the Civil Justice Council should set up a working party with both claimant and defendant solicitors to develop a bespoke process for handling clinical negligence claims up to £25,000. That bespoke process should have a grid of FRC attached.
- FRC to apply to holiday illness claims
Jackson LJ supports the Government's recent proposal to introduce FRC for holiday sickness claims, but that it should be implemented as part of a comprehensive FRC regime. Jackson LJ suggests individual holiday illness claims should be subject to FRC and should be the same as for RTA personal injury cases. However multi-party claims should continue to proceed in the multi-track.
- Voluntary pilot of a 'capped costs' regime for business and property cases up to £250,000 with streamlined procedures and capped recoverable costs up to £80,000.
When and how the recommendations will be implemented into the civil justice system remains to be seen, as they will need to be integrated with the key ongoing initiatives – the Civil Liabilities Bill, online court system and increasing the small claims track through changes to the CPR.
A move to fixed costs should be welcomed by insurers, as it will provide certainty and further limit claimant solicitors’ attempts to incur disproportionate legal costs. Although inflating the value of pleaded claims may be seen, in a bid to bring them outside of the FRC regime.