Extending Fixed Recoverable Costs: a note on the new rules

Advice  |   9 October 2023

Written by
Anahita Zandi, Solicitor

What is the Fixed Recoverable Costs?

Fixed Recoverable Costs (FRC) set the amount of legal costs that the winning party can claim back from the losing party in civil litigation. The term ‘cost’ can typically include solicitor’s fees, court fees, expert witness fees and other necessary disbursements. This means that parties can get some certainty regarding the amount of costs they may recover in litigation and there is no need for cost management or assessment of costs during proceedings.

By way of background cases in the civil courts are now allocated to one of four ‘tracks’

  • Small Claims Track for claims up to £10,000;
  • Fast Track;
  • Intermediate Track;
  • Multi Track.

Fast track

The fast track remains as is – the normal track for claims with a value of not more than £25,000 or claims which are or include a claim for non-monetary relief and the value of the claim for monetary relief is not more than £25,000. Cases allocated to the fast track under the new FRC regime are where:

  • The trial is likely to last no longer than one day.
  • Oral expert evidence is limited to one expert per party in any expert field.
  • Expert evidence is limited to two experts per field.
  • A claim is for up to £25,000.
  • A claim is not on the small claims track.
  • It cannot be demonstrated that the trial would last longer than one day or more than two experts are needed.

The fast track now has four complexity bands (1 to 4) in ascending order of complexity.

Complexity band 1

Complexity band 2

Complexity band 3

Complexity band 4

  • RTA-related non-PI claims.
  • Defended debt claims.
  • RTA-related PI claims which are or should have been started under the RTA Protocol.
  • PI claims to which the Pre-action Protocol for Resolution of Package Travel Claims apply.
  • RTA-related PI claims to which the RTA Protocol does not apply.
  • Employer's liability (accident) and public liability PI claims.
  • Possession claims.
  • Housing disrepair claims.
  • Other money claims.
  • Employer's liability disease claims (other than a claim for NIHL).
  • Complex possession and housing disrepair claims.
  • Property and building disputes.
  • Professional negligence claims.
  • Any claim which would normally be allocated to the fast track, but is still complex.

Therefore, when a claim is allocated to the fast track, the court must also assign the claim to one of the four complexity bands. What determines the complexity of a case is currently unknown.

Intermediate Track

The new intermediate track sits between the fast and multi-tracks. Less complex multi-track cases with a value of over £25,000 but no more than £100,000 damages will be allocated to the intermediate track. The intermediate track will include the following provisions:

  • There should be a Case Management Conference to deal with contested procedural directions/issues.
  • The court will now limit disclosure of documents and other relevant material to that which is necessary.
  • Witness statements cannot exceed 30 pages.
  • Expert reports (on technical issues) are limited to 20 pages.
  • Oral expert evidence at trial is limited to one expert per side, save where the oral evidence of a second expert for any party is reasonably required and proportionate.
  • The time estimate for the trial must not exceed three days.
  • The claim is brought by one claimant against either one or two defendants or is brought by two claimants against one defendant – there should only be a maximum of three parties.

As with the Fast Track the court must assign each case to a complexity band. The following table sets out the complexity bands:

Complexity band 1

Complexity band 2

Complexity band 3

Complexity band 4

Any claim where:

  • Only one issue is in dispute.
  • The trial is not expected to last longer than one day, including:
  • PI claims where liability or quantum is in dispute;
  • non-PI RTA claims; and
  • defended debt claims.

Any less complex claim where more than one issue is in dispute, including PI accident claims where liability and quantum are in dispute

Any more complex claim where more than one issue is in dispute, but which is unsuitable for assignment to complexity band 2, including NIHL and other employers' liability disease claims

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 PI claim where there are serious issues of fact or

What does this mean for you in terms of costs?

A series of tables in the new Practice Direction 45 to the Civil Procedure Rules (which govern how cases are run) set out a menu of fixed costs which apply depending on the stage reached. As the rules have only just been introduced it will take some time for practitioners to determine how they will work in practice. They do provide the parties with some certainty over what they will recover in costs if they win their case; and conversely what they will have to pay if they lose. Under the old rules the assessment of costs recoverable or payable was left for a Judge to determine. The new rules will also allow for disbursements that have been reasonably incurred.

What does this mean for you as the client?

It means that, you may be able, to a certain extent to predict your cost exposure and will certainly help when considering whether to settle the case or take it to trial.

To make an informed decision, or if you’d like further information on the new rules and how they can help you, please email Anahita.zandi@thackraywilliams.com and our Dispute Resolution team will then be pleased to provide you with further assistance.

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