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The Government have published their response to the proposal to extend fixed recoverable costs (FRC) in civil cases and their response can be found here.
Access to justice at a proportionate cost for all parties has been at the heart of the Government’s civil litigation costs and funding reforms over recent years. They have concluded that that FRC provide parties with the certainty necessary to make more informed choices throughout the litigation process, they help to ensure that legal costs remain both certain and proportionate, and promote access to justice.
In his 2017 report, Sir Rupert recommended introducing FRC regimes for civil cases up to £100,000, as costs management was already working well in higher-value cases and his proposals have largely been accepted.
Sir Rupert proposed a four-band structure for both the fast track and intermediate cases, with which the Government agrees. These proposals seek to balance the advantages of a relatively simple and straightforward scheme of costs with the need for appropriately enhanced costs in exceptional cases.
Rather than implement a new intermediate track, which was thought not practical, they have instead chosen to proceed with an expanded fast track for cases valued up to £100,000, that will cater for simpler ‘intermediate cases’ where fixed recoverable costs will apply.
The Government does not believe that awarding indemnity costs would be proportionate, as this may result in an award of costs which is significantly higher than FRC. Consequently, they have concluded that a 50% uplift should apply in respect to unreasonable behaviour and 35% in relation to costs following a Part 36 offer.
The Government has confirmed that the following categories of cases will be excluded, as categories, from the expanded fast track at this stage:
(i) Mesothelioma and other asbestos related claims;
(ii) Clinical negligence cases;
(iii) Actions against the police;
(iv) Child sexual abuse claims;
(v) Intellectual property cases.
The Government also agrees with Sir Rupert’s recommendation that certain cases will fall outside FRC by reason of complexity. Band allocation can be challenged, however unsuccessful challenges to allocation should incur a costs liability of £300, this will be kept under review and consideration will be given regarding whether any such challenge could be construed as unreasonable behaviour.
The Government noted that costs budgeting has worked effectively to create greater costs certainty for all parties and because of that the Government intends to introduce costs budgeting to all ‘heavy’ Judicial Reviews.
Should you have any queries or require any assistance, please do contact our legal costs specialists and award-winning team on 01733 350 880 or by email at email@example.com.
Published 8 September 2021
Author – Sue Fox
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