EWJ Dec 2023 - Journal - Page 67
Practice Direction 45 of the CPR (Table 14) sets out the relevant fixed costs for the new Intermediate Track and can
be found here. (https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part45-fixed-costs/practice-direction-45fixed-costs#14)
By way of example, the recoverable costs for stage 1 (pre-issue to service of the defence) for each of the four complexity
bandings is set out below.
Stage
S1
From pre-issue up to
and including the date
of service of the defence
1
£1,600 +
an amount
equivalent to
3% of the
damages
2
£5,000 +
an amount
equivalent to
6% of the
damages
There is a concern, taking the above table as an
example, that the new regime is not in line with the
objectives of the Professional Negligence Protocol
which is geared towards the early exchange of information with a view to settling claims at an early stage
(saving cost and time) so as to avoid the need to issue
proceedings. However, the new regime has the potential to undermine this objective as fixed costs apply
(for stage 1) from the pre-action stage up until the service of a defence. Therefore, as soon as liability is denied, there is little incentive for the parties to try and
resolve the dispute at the pre-action stage and it is arguable that this will lead to more claims being issued
as claimants try and maximise their costs recoverability for this stage.
£6,400 +
an amount
equivalent to
6% of the
damages
4
£9,300 +
an amount
equivalent to
8% of the
damages
Authors
Jemma Brimblecombe
Legal Director
Dispute Resolution
Jemma has a wide range of
experience in dealing with a
variety of commercial disputes,
including breach of contract, breach of trust and
contractual disputes. Jemma also has experience of
dealing with civil fraud claims.
Specific areas of expertise include dealing with claims
against professionals including solicitors, barristers,
accountants and surveyors.
(+44) 020 3535 1570
jbrimblecombe@kingsleynapley.co.uk
For larger and more complex professional negligence
cases, FRC’s will not apply and claims will be allocated
to the multi-track in the usual way. That said, Judges
have retained the discretion to allocate more complex
claims, which are valued at under £100,000, to the
multi-track so that these cases will not inappropriately
be captured by the extended FRC regime.
Holly Shaw
Associate
Holly joined Kingsley Napley
in 2014 and is an Associate in
the Costs team. Holly’s
practice covers a wide range
of civil litigation, with a
particular focus on costs in
defamation and privacy proceedings.
What next?
Whilst many welcome the widening of the FRC
regime on the basis that it brings certainty to costs recoverability and exposure, the extension and application of the regime beyond personal injury claims is not
without controversy.
(+44) 020 7566 5262
HShaw@kingsleynapley.co.uk
www.kingsleynapley.co.uk
What this means in practice for Professional
Negligence claims remains to be seen but it is clear that
parties will need to prepare early and think carefully
about cost considerations before commencing litigation. On the one hand this may result in swifter settlements (although noting the concern outlined above
about the potential for more issued claims). In other
cases, it may exclude valid claims as there may be too
significant a shortfall between the costs incurred and
the costs ultimately recovered under the regime for
them to consider it worthwhile pursuing a claim.
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There is also likely to be an inevitable period of
uncertainty as practitioners and the Court work
through the new regime and how this applies in practice to their cases. This is likely to result in satellite litigation (particularly in respect of the allocation of the
bandings due to the significant cost implications) in
the short term which will have the effect of increasing
costs.
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