EWJ Dec 2023 - Journal - Page 66
It’s a fix! The Fixed Recoverable
Costs regime and the impact on
professional negligence claims
by Jemma Brimblecombe, Legal Director and Holly Shaw, Associate
- www.kingsleynapley.co.uk
The 1 October 2023 saw the Fixed Recoverable Costs (“FRC”) regime extend beyond personal
injury claims in the fast track to almost every area of civil litigation, including professional
negligence, and sees the introduction of a new Intermediate Track.
We address in this article, the impact of the FRC
regime on Professional Negligence claims, and how
this affects the recoverability of costs.
Intermediate Track Cases
For the new Intermediate Track, the relevant bands
and how these apply to professional negligence claims
are less straightforward.
The FRC Regime
With few exemptions, the new FRC regime is
intended to control costs in advance by affording parties better visibility as to recoverable costs. Its proponents argue that as a result, legal expenditure will
become more certain and FRC will lead to an increase
in access to justice and facilitate earlier resolution to
disputes.
CPR 26.16 (Table 2) of sets out how claims in the Intermediate Track should be assigned and is as follows:
l Band 1: Any claim where only one issue is in
dispute; and the trial is not expected to last longer
than one day, including: (i) road traffic accident related, non-personal injury claims; and (ii) defended
debt claims.
l Band 2: Any less complex claim where more than
In addition to the FRC regime applying to professional negligence claims falling within the existing Fast
Track threshold (for pleaded damages between
£10,000 and £25,000), the newly created Intermediate Track will accommodate claims worth between
£25,000 and £100,000 (CPR Part 26.9 (7)-(9)). It will
also apply where cases can be tried within three days
or less and where there are no more than two expert
witnesses giving evidence for each side.
one issue is in dispute, including personal injury accident claims where liability and quantum are in dispute.
l Band 3: Any more complex claim where more than
one issue is in dispute, but which is unsuitable for assignment to complexity band 2, including noise induced hearing loss and other employer’s liability
disease claims.
l Band 4: Any claim which would normally be allocated to the intermediate track, but which is unsuitable for assignment to complexity bands 1 to 3,
including any personal injury claim where there are
serious issues of fact or law.
Within the Fast and Intermediate tracks, cases will
now be allocated to one of four complexity bands and
each complexity band, plus the stage the claim has
reached, will determine the level of costs recoverable
for each stage of the claim. The higher band the claim
is assigned to, the higher the level of recoverable costs.
However, the guidance on how the above banding
applies in practice is limited. For example, what exactly does “one issue” mean in the context of professional negligence cases i.e. would liability be “one
issue” (regardless of issues relating to breach and causation)? How is a determination to be made for professional negligence claims where there is more than
one issue in dispute? How is the extent to which Band
2 and/or 3 are unsuitable for the claim determined?
Fast Track Cases
For the Fast Track, Professional Negligence Claims fall
within complexity “Band 4”, i.e. the highest Band.
Practice Direction 45 of the CPR (Table 12) sets out
the relevant fixed costs for fast track claims and can be
found here.
By way of example, as Professional Negligence cases
fall within Band 4, if a claim was allocated to this track
and was to settle before issuing proceedings the recoverable costs are £2,600 plus an amount equivalent
to 15% of the damages plus £510 per extra defendant.
To the extent the parties cannot agree on the complexity band, the matter will fall to be determined by
the Court at the allocation stage. Although the court
retains a broader discretion to re-assign the claim to an
alternative track after allocation, once directions have
been set the chance of a claim being re-assigned to an
alternative track is significantly reduced. The need to
establish a fundamental change to the claim is required in order to re-assign a claim to an alternative
track after directions are set.
If the claim is disposed of at trial, the recoverable costs
are fixed as £7,900 plus a trial advocacy fee (of between £580 to £2,900) and an amount equivalent to
40% of the damages agreed or awarded plus £760 per
extra defendant.
EXPERT WITNESS JOURNAL
64
DECEMBER 2023