Extension of Fixed Recoverable Costs

In 2019 the Government consulted on Lord Justice Jackson’s proposals on extending fixed recoverable costs (FRC) in civil litigation cases in England and Wales.  The consultation took place from 28 March to 6 June 2019.  Last month, the Ministry of Justice responded to that consultation in their publication: “Extending Fixed Recoverable Costs in Civil Cases: the Government Response”.

The FRC regime sets out the amount of legal costs that can be recovered by the winning party at different stages of litigation.  The intention of the regime is to help to ensure that legal costs remain certain and proportionate.

The Ministry of Justice has confirmed that fixed recoverable costs (which are currently in place for personal injury claims) will be extended to cover all claims valued at up to £25,000.  In addition, the fast track will also be extended to include non-complex claims valued at between £25,000 and £100,000, with fixed recoverable costs will apply to these cases too. 

As might be expected, the detail is yet to be confirmed.  However, Chapter 5 of the response document confirms “the way forward”, and states that it will be for the government to submit draft rules for consideration by the Civil Procedure Rules Committee. 

It is clear that there will be a greater emphasis on ensuring that Part 36 offers are not ignored (with an increasingly punitive 35% uplift on costs where they are note beaten). However, for the standard costs to be recovered, it is not clear whether the progression from the costs already set out at CPR 45 for cases worth up to £25,000 will increase in a linear or exponential fashion from £25,000 upwards. 

Further, there is no specific timeline in place which will guarantee that the necessary legislation is put in place during this parliament.  Regardless, it is clear that this government remains committed to the reduction of legal costs, as championed by Lord Justice Jackson.

If you would like to discuss this topic in more detail, please contact Roger Carver, Associate or Georgina Shorland, Legal Executive.