Extending fixed recoverable costs

What are fixed recoverable costs? 

Fixed recoverable costs fix, by reference to tables, the total costs that a losing opponent – for example an insurance company or public body- has to pay a successful claimant. At present, they apply to cases which are allocated to the fast-track.

In general, this is the majority of personal injury claims valued up to £25,000. There are some exceptions.

What are the changes? 

The Ministry of Justice has recently confirmed that it will implement Sir Rupert Jackson’s recommendation to increase the scope of fixed recoverable costs so as to include most money cases worth up to £100,000. This is a key change which will have an impact across the claimant personal injury marketplace.

The Justice Minster, Lord Wolfson, said that the lack of certainty about costs in claims for “relatively low” damages made it difficult for claimants or defendants to take an informed decision about the appropriate way forward.

What personal injury cases will be included?

The cases which will be subjected to fixed recoverable costs include money claims up to £100,000 where the trial should not last longer than three days with no more than two expert witnesses giving oral evidence for each party.

Are there any exceptions?

Importantly, mesothelioma, asbestos, actions against the police, child sexual abuse and complex personal injury claims shall be excluded from the fixed recoverable costs regime. In addition, the Ministry of Justice is still considering what the rules should be in respect of those who lack capacity. Separate proposals are expected in relation to medical negligence cases.

Will successful claimants be able to recover more from unsuccessful defendants? 

It will be possible for successful claimants to seek additional costs beyond the tariff award if unsuccessful defendants fail to beat formal offers (known as “Part 36 offers”) or if they behave in an unreasonable way during the litigation. These are important safeguards.

Will court fees decrease if the costs recovery decreases? 

Although the Government is keen to restrict the costs which are payable and therefore effectively increase the cost of litigation for successful claimants, it has indicated that the court's fees shall remain the same as those charged on the multi-track. The increasing court fees, at unprecedented levels, appears to be less of an issue for access to justice for the Government.

What does this mean?

The personal injury sector has undergone substantial change dating back to 2007. The Government continues to advance its reform agenda. This could present a challenge for access to justice as less clear-cut cases may be seen as too risky by some law firms, an increase in litigants in person with the risk that the Judiciary spend more time supporting them.

What is Irwin Mitchell doing? 

Irwin Mitchell has been deeply involved in talking with important stakeholders and engaging with the Government consultation process, in order to promote the interests of our clients, present and future. There has been considerable uncertainty about the planned programme for a good while.

We will await clarity about the timeframes and continue to advance an agenda which continues to put our clients at the heart of what we do to secure access to justice. We will also seek to influence the decision as to what the rules should be in connection with those who lack capacity.

The Ministry of Justice (MoJ) today confirmed that it will implement Sir Rupert Jackson’s blueprint for fixed recoverable costs (FRC) across the fast-track and in most money cases worth up to £100,000.”