The new Fixed Recoverable Costs (‘FRC’) rules will come into force on 1 October 2023, subject to transitional provisions.
All claims issued on or after 1 October 2023 and allocated to the fast or newly created ‘intermediate’ tracks will be subject to the new FRC regime subject to a few exceptions set out below.
The new rules provide that a party may only recover fixed sums from their opponent regardless of the level of costs actually incurred. The amount of the fixed sums varies depending on at what stage the case settled or was determined by the court.
The following types of case are excluded from the FRC regime and must be allocated to the multi-track;
- Mesothelioma and asbestos-related lung disease claims
- Clinical negligence claims unless both breach of duty and causation have been admitted and the claim is suitable for the intermediate track
- Child or vulnerable-adult abuse claims
- Claims which could be resolved by jury trial (specifically cases that the court could order to be tried by jury if satisfied there is in issue a matter set out in section 66(3) of the County Courts Act 1984 or section 69(1) of the Senior Courts Act 1981) (for example, false imprisonment, malicious prosecution or fraud)
- A claim against the police involving an intentional or reckless tort, or relief or relief or remedy in relation to the Human Rights Act 1998. This exclusion does not apply to a road accident claim arising from negligent police driving, an employer’s liability claim, or any claim for an accidental fall on police premises.
The FRC will only apply to personal injury claims where the cause of action accrues on or after 1 October 2023.
Housing disrepair and possession claims are also excluded from the regime. It was intended that these be subject to FRC, but implementation has been delayed until at least October 2025 due to developments in the housing sector. These cases will be allocated to the appropriate track (generally the fast track), as now, but will not be subject to FRC for the duration of the delay.
Each case subject to this regime will be allocated a complexity band. In the fast track, there will be four complexity bands (1 to 4 in ascending order of complexity) with associated grids of costs for the stages of a claim.
There will be a separate new intermediate track for less complex multi-track cases with a value of under £100,000. In this new track, there will be four complexity bands (1 to 4 in ascending order of complexity) with associated grids of costs for the stages of a claim. The aim of these bands is to provide greater clarity and better reflect the stages of cases, particularly because the costs for each stage include costs for earlier stages. The tables for all costs can be found in CPR Part 45.
It is intended that these FRC will then be reviewed every three years.
Do watch this space for potential issues arising from the new rules as we expect there to be satellite litigation over complexity banding and, potential inflation of claims to get them outside of the FRC regime.
If you would like further information, please contact Mark Foxcroft.