Extension of Fixed Recoverable Costs – 10 Headlines for Litigators

The extension of Fixed Recoverable Costs (FRC) has been in the background for all litigation practitioners for the last 18 months after the Ministry of Justice, in September 2021, set out the intention to bring the 2017 recommendations of Sir Rupert Jackson to life.

Initially set for October 2022, the implementation date was firstly pushed back to April 2023 and then again to October 2023. Absent of draft revisions to the CPR, scepticism was growing as to whether the October 2023 date would remain.

On 20 April 2023 the Civil procedure Rules Committee brought FRC to the foreground, publishing the draft revisions to the CPR along with a note on the reasoning for and implementation of the new rules. The accompanying note confirms the Occupational Disease and Illness and Employer’s and Public Liability Pre-Action Protocols are still to be amended, leaving a level of uncertainty. However, the changes to the CPR are significant and the impact on practitioners will be seismic.

Noting the new rules are only in draft form at this stage, subject to approval from the Ministry of Justice, and that the rules may face later revision before implementation, below we consider the 10 Headlines for litigation practitioners.

1. The What

• FRC extended to almost all fast-track claims and claims on the new intermediate-track valued up to £100,000.00
• Updated tables of FRC recoverable dependent on claim type, complexity, stage of determination of the proceedings and value

2. The When 

• Non personal injury Civil claims - Applicable to cases issued on or after 1 October 2023
• Personal Injury claims – Applicable where cause of action accrues on or after 1 October 2023
• Disease claims – Applicable where the letter of claim has not been sent by 1 October 2023

3. The Where – Significant changes to the CPR

• Part 26 – Preliminary Case Management – track allocation and assignment
• Part 28 – Fast-track and intermediate-track – directions and costs
• Part 36 – Offers to settle – application of updated FRC
• Part 45 – Fixed Costs – scope and value of FRC

4. New Intermediate Track

• Will capture ‘less complex multi-track’ claims with a value under £100,000.00
• Claims which are capable of being tried in 3 days or less
• Judges will retain discretion to allocate appropriate intermediate-track claims to the multi-track

5. Introduction of Complexity Bands

• Present in both fast-track and intermediate-track
• Four bands of ascending complexity – parameters of each band detailed in Part 26.15 and 26.16
• Parties will propose appropriate band within Directions Questionnaire
• Claim may be reallocated to a different complexity band where there is an exceptional reason

6. Separate scheme for NIHL

• Alternative FRC figures to those provided for other case types – PD 45 Table 15
• Specific NIHL directions, including listing of preliminary trials on limitation – Part 28.11
• Preliminary issue trials do not exclude a claim from FRC
• Applies even to multi-defendant claims – departure from current position
• EL/PL Claims Portal will be retained for defendants who elect to do so

7. FRC to be subject to future revision

• Current values based on January 2023 Services Producer Price Index (SPPI)
• FRC to be revisited in 3 years’ time with proposed increase for inflation in line with SPPI

8. Defendants will be subject to FRC

• Part 45.6
• ‘Value for damages’ for purpose of FRC calculation will be amount on claim form
• This will be subject to application of QOCS and updated Part 44 in personal injury claims

9. Court retains power to award sum greater than FRC

• Part 45.9
• Court may award a sum greater than FRC where there are ‘exceptional circumstances’
• These additional costs will be subject to summary or detailed assessment

10. Exceptions

• Housing claims – implementation delayed for two years
• Claims which should be allocated to the multi-track
  • Mesothelioma and asbestos lung diseases
  • Clinical negligence claims
  • Others – claims tried by jury, claims against police involving reckless or intentional tort, claims in relation to harm, abuse or negligence of a child or vulnerable party

The extension of FRC unquestionably represents a significant change for litigation practitioners and the changes made are substantial. Practitioners are well advised to make themselves familiar with the proposed changes well in advance of implementation in October 2023.

CMS will be providing a more detailed analysis of the following areas shortly:

1. The Intermediate Track and revisions to the Fast Track
2. FRC and NIHL
3. New values of FRC
4. Wider impact of FRC being extended