Recommendations for Fixed Recoverable Costs
Lord Justice Jackson has published his supplemental report on fixed recoverable costs (“FRC”), as part of his review of civil litigation costs.
In his January 2010 report, Jackson LJ recommended a general scheme of FRC for fast track cases, costs-budgeting for multi-track cases and further consideration of FRC for cases in the lower regions of the multi-track. The intent behind the July 2017 supplemental report is to undertake this further consideration, as well as to consider the extension of FRC to the remaining fast track cases which do not yet have it.
Jackson LJ has now recommended a grid of FRC for all fast track cases (claims of up to £25,000.00). The 12.5% uplift for cases where the relevant party and solicitors are London-based will continue to apply to the extended FRC regime.
Notably, a mortgagee’s contractual entitlement to costs is free from the FRC regimes suggested in the report (see Ch 5 para 3.7). This is because primary legislation would be required to enable the rules in the CPR to override a contractual entitlement. Wider policy issues would be in play, such as the effect on overall mortgage interest rates. Therefore Courts will continue to enforce mortgagees’ contractual rights, subject to their equitable power to disallow unreasonable expenses. Such cases will remain on the fast track, but not be subject to FRC.
All fast track cases will be placed within one of four bands of complexity. In the suggested “paradigm cases’ for each band, “defended debt cases” feature in band 1 (the least complex), “other money claims” in band 3 and “tracked possession claims” in band 3 or 4 (Chapter 5, para 5.2). The Court’s discretion upon allocation to move cases between bands should be exercised “sparingly”. The table of FRC is at Chapter 5 para 5.4 and will be reviewed every three years. By way of example, for a fast track case in band 1 with a value between £10,000 – £15,000, FRC is only £3,250 solicitors’ costs and £1,070 counsel’s fees. Judges will continue to summarily assess costs at the conclusion of a trial.
Above the fast track, Jackson LJ proposes an ‘intermediate’ track for certain claims of £100,000.00 or less which can be tried in three days or less, with no more than two expert witnesses giving oral evidence on each side. The intermediate track will have streamlined procedures and a grid of FRC (see Chapter 7 para 5.3). By way of example, for an intermediate track case in band 1 with a 1 day trial, where damages are £50,000.00, and there was unsuccessful ADR, FRC are £22,150.
Further, Jackson LJ recommends a voluntary pilot of a ‘capped costs’ regime for business and property cases up to £250,000.00, with recoverable costs capped at £80,000.00.
Supplemental report available here.