Civil litigators get first sight of new fixed costs rules

Maxwell Scott: Hoping to avoid the Wild West

The Civil Procedure Rule Committee yesterday published the draft rules that will govern the extension of fixed recoverable costs (FRC) from October.

The background information includes confirmation that the introduction of FRC to clinical negligence claims worth up to £25,000 will not happen at the same time – this is going through a separate process run by the Department for Health and Social Care, with its response to a consultation that closed a year ago still awaited.

It emerged last week that the new FRC – for most money cases worth up to £100,000 – will apply where proceedings are issued on or after 1 October.

But for personal injury, they will apply where the cause of action accrues on or after 1 October, and will only apply to disease claims where the letter of claim has not been sent to the defendant before that date.

The final version of the rules should be published at the end of May but the committee had committed to giving practitioners as much notice of the changes as it could.

The draft accompanying note said the original figures laid out by Sir Rupert Jackson in 2017 would be uprated by the services producer price index and the Ministry of Justice intended to review them after three years.

That index is a lower measure of inflation than the retail prices index, which is how the Judicial College guidelines for general damages is uprated. The Association of Consumer Support Organisations (ACSO) has previously questioned why officials were using different indices.

The draft rules confirmed that the rule changes on vulnerability that it consulted on will be applied to FRC cases, but said there will be no changes to the arrangements for disbursements for vulnerability.

The rule committee said it took a “generic approach… so far as possible” so that all categories of case were covered by the same rules. An exception is noise-induced hearing loss claims.

Other key provisions of note include that, where the claim is for or partly for non-monetary relief, there will be fixed assigned values for the four complexity bands. In mixed claims, the FRC will be calculated by reference to the damages awarded and also the assigned value for non-monetary relief, taken together.

A party who successfully defends a claim and brings a counterclaim will be eligible for two sets of FRC.

Matthew Maxwell Scott, executive director of ACSO, commented: “It is welcome that the government has heeded our warnings that more notice will be needed if the 1 October implementation of the new FRC regime is not to create a Wild West of avoidable confusion. Legal firms and compensators alike cannot plan based on rumour alone.”

But he said the market needed much more detail on many of the areas raised.

Some of the planned measures may serve to raise further access to justice barriers, he added, “for example if it is no longer commercially viable for certain cases to get the attention they need or if ambiguity in the draft rules translates ultimately into delays and ancillary litigation which is detrimental to legal consumers.”

Andy Wild, head of legal at First4InjuryClaims, welcomed the publication but said the market still awaited “further detail and clarification on several uncertainties contained within the draft papers to enable law firms to be able to fully plan accordingly for the future”.

He said: “The primary consideration must be how this will affect the consumer, and, in my view, it would be far better to delay these reforms for this consideration to be undertaken rather than rush them through and risk eroding access to justice.”

Leading defendant lawyer Andrew Parker, partner and head of strategic advisory at DAC Beachcroft, described fixed costs as “a good thing”.

“They provide certainty for clients and solicitors alike; and they reward firms who handle cases within this value band efficiently and in a way proportionate to the value of the claim. Our commercial clients expect that certainty and efficiency from their lawyers anyway.

“These changes have been a long time coming. Fixed costs in all fast-track claims were first advocated by Lord Woolf as long ago as 1995.”

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