Extending Fixed Recoverable Costs: A comprehensive overview

The Ministry of Justice (MoJ) has announced an extension of the Fixed Recoverable Costs (FRC) scheme. The move, set to take effect from 1st October 2023, will see FRC extended to simpler cases valued up to £100,000 damages.

What are Fixed Recoverable Costs?

FRC is a set of predetermined legal costs that the losing party is ordered to pay the winning party in litigation proceedings.

The FRC regime is intended to control legal costs, provide certainty, and ensure proportionality in civil litigation.

The new intermediate track

The MoJ has introduced a separate intermediate track for less complex multi-track cases under £100,000 damages.

This track will have four complexity bands (one to four in ascending order of complexity) with associated grids of costs for the stages of a claim.

Exceptions from FRC

The FRC will apply to all cases in the fast track and the new intermediate track, with a few exceptions. These exceptions include housing claims, which will be delayed for two years from October 2023, and certain types of cases that will be allocated to the multi-track rather than the new intermediate track, thereby being excluded from FRC.

These include mesothelioma or asbestos lung disease claims, claims for clinical negligence, and claims for damages in relation to harm, abuse or neglect of children or vulnerable adults, among others.

Future review and inflation

The MoJ plans to review the tables of costs and the extended FRC regime in three years. The figures of FRC costs in the 2017 Jackson report have been uprated for inflation using the January 2023 Services Producer Price Index (SPPI).

The extension of the FRC scheme represents a significant change in the landscape of civil litigation. It aims to provide greater certainty and control over legal costs, making the legal process more accessible and predictable for all parties involved.

How does this affect claimants?

These reforms aim to ensure litigation costs align with the amounts being claimed, providing a greater sense of cost certainty for those involved in the litigation process.

If you are concerned that this upcoming change may affect your litigation plans or upcoming disputes you should seek legal advice at the earliest opportunity.