The deputy head of civil justice has issued a robust defence of the new regime of fixed recoverable costs (FRCs) for cases worth up to £100,000 – while acknowledging it is not as simple as he would like.
Delivering the Harbour Litigation Funding annual lecture in London, Sir Colin Birss, a Lord Justice of Appeal, said: “We know that claims are not being brought or defendants are throwing in the towel because the cost risk is too high. That is part of what the fixed recoverable costs are trying to address.
“We are trying as hard as we can, in the fixed recoverable costs that we have introduced, to try to make sure that the recoverable costs are broadly proportionate to the sum at stake.
“The idea is that £200,000 in costs being incurred on a claim worth £100,000 just is not sensible. Everyone always says immediately when I say that, ‘Yes, but what about so-and-so?’ We know, and it is built in, that there will be exceptional cases, but there really are not that many [and there are mechanisms within the rules to address those]…
“We tried using budgeting. That is what we used to have for claims between £25,000 and £100,000, but it has its own cost overhead. This new system is designed to produce an answer that is dependent on only three parameters: the sum at stake, the track and the complexity band.”
These were all questions that could be resolved by a judge, he said. “I wish we could have made it a bit simpler, but we have tried to make it the system that was in the Jackson reports, and we have tried to make it as good as it can be. That way, hopefully, it means that in that space cost recovery will become more certain.
“It will not happen overnight. I totally understand it is a new system and people will say at the beginning, ‘I do not know what this is going to be’. It will take time to bed in, but that is the idea. It also means that one can say probably from now, ‘Jackson, we are finished’.
“That is something, actually, when you think of the amount of work that went into the Jackson report. It is done now.”