EWJ Dec 2023 - Journal - Page 14
Does Litigation Pay? An Update
to the Costs Recovery Rules
by Harry Roffey, Thomson Snell & Passmore LLP – www.ts-p.co.uk
In June 2023, I wrote about the rules that apply to costs recovery in civil litigation in England
and Wales, summarising the key principles and some important considerations to bear in mind
when bringing or defending a claim (see: https://www.ts-p.co.uk/insights/does-litigation-pay-whyits-important-to-bear-the-costs-recovery-rules-in-mind/).
In this article, I will look at the extension of the fixed
recoverable costs (FRC) regime, which changes the
costs rules across claims that fall within a Court ‘track’
with a financial value of between £10,000 and
£100,000. The Government plans to introduce the
new scheme on 1 October 2023.
£25,000 and £100,000, with its own FRC regime. This
will effectively increase the threshold for the Multi
Track to claims above £100,000, where the FRC will
not apply.
Change 1: Complexity bands
A major change is the introduction of the so-called
‘complexity bands’. These bands will affect the level of
FRC for the claim.
What is a ‘track’?
Most claims are allocated to one of three systems, or
‘tracks’, which determine how the case will be dealt
with. The tracks each contain their own set of case
management and costs rules, which govern how a
claim progresses through the litigation process. The
Court will provisionally allocate a case to a track at the
outset, based primarily on its financial value as follows:
The complexity bands to be introduced in the revised
Fast Track are as follows:
Complexity Band 1:
1. Road traffic accident related, non-personal injury
claims
1. For claims up to £10,000 – the Small Claims Track
2. Defended debt claims.
2. For claims between £10,000 and £25,000 – the Fast
Track
Complexity Band 2:
1. Road traffic accident related, personal injury claims
which are or should have been started under the RTA
Protocol
3. For claims above £25,000 – the Multi Track.
The financial value of the claim is not the only factor,
however. It is open to the parties to ask the Court to
allocate a case to a different track (although this is ultimately at the Judge’s discretion), based on a range of
other factors such as: (1) the complexity of the issues;
(2) the level of Judge required to hear the case; (3) the
estimated length of the trial; (4) the amount of witness
and documentary evidence involved; and (5) the extent of any technical expert evidence required.
2. Personal injury claims to which the Pre-action Protocol for Resolution of Package Travel Claims apply.
Complexity Band 3:
1. Road traffic accident related, personal injury claims
to which the RTA Protocol does not apply
2. Employer’s liability (accident) and public liability
personal injury claims
3. Possession claims
How do the costs recovery rules currently apply
across the tracks?
Generally, the parties’ legal costs cannot be recovered
in cases allocated to the Small Claims Track (save in
very limited exceptions), whatever the outcome, and
therefore parties must bear their own legal costs.
4. Housing disrepair claims
5. Other money claims.
Complexity Band 4:
1. Employer’s liability disease claims (other than a
claim for noise induced hearing loss)
Legal costs are recoverable, in principle, under the
Fast Track and the Multi Track. Usually this means
that the successful party is able to secure an Order for
a proportion of their legal costs to be paid by the losing party. However, there are limitations, more so for
cases allocated to the Fast Track, where some FRC
limits already apply.
2. Complex possession and housing disrepair claims
3. Property and building disputes
4. Professional negligence claims
5. Any claim which would normally be allocated to the
Fast Track, but is nonetheless complex.
What will be changing?
From 1 October 2023, a revised FRC regime will
apply to the Fast Track (i.e. for claims with a value of
between £10,000 and £25,000). A new Intermediate
Track will be introduced for claims valued between
EXPERT WITNESS JOURNAL
The complexity bands to be introduced in the new
Intermediate Track are as follows:
Complexity Band 1:
Any claim where:
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DECEMBER 2023