Do you know what the exemptions to fixed recoverable costs are?
The introduction of the expanded fixed recoverable costs (FRC) regime to civil litigation on 1 October 2023 marked a significant shift in the landscape of legal costs management. This article delves into the background of this reform and focuses on the exemptions within CPR 45.1 and CPR 26.
Background
The journey of fixed recoverable costs in civil litigation began with the Jackson reforms, named after Lord Justice Jackson, whose comprehensive review of civil litigation costs aimed to promote access to justice at proportionate cost. The first stage of these reforms was implemented on 1 April 2013, applying CPR 45 fixed costs to personal injury claims valued up to £25,000. This initial phase encompassed Road Traffic Accident (RTA), Employer’s Liability (EL), and Public Liability (PL) claims.
The further expansion of fixed costs, effective from 1 October 2023, broadened the scope to include all types of civil litigation cases valued up to £100,000. This expansion does not solely apply to personal injury claims but to a wide array of case types. The reforms introduced an Intermediate Track for claims generally valued between £25,000 and £100,000, bridging the gap between the Fast and Multi-Tracks.
Exclusions Pursuant to CPR 45.1
While the expanded regime captured a number of previously “free” cases, CPR 45.1(4) outlines specific exclusion. Namely, any claim or counterclaim involving residential property disputes related to possessions, housing disrepair, or unlawful eviction is exempt from the fixed costs regime. These types of claims, despite being eligible for allocation to the Fast or Intermediate Tracks, will not be subjected to fixed costs. Instead, costs payable in such cases will be on an hourly rate/ inter partes basis.
Exclusions Pursuant to CPR 26
Beyond the specific exclusions in CPR 45.1, CPR 26 on Case Management also identifies cases that must be allocated to the Multi-Track and are therefore exempt from the fixed costs regime. CPR 26.9(10) specifically states that the following types of cases be allocated to the Multi-Track, regardless of their value:
- Mesothelioma or Asbestos Lung Disease Claims
- Clinical Negligence Disputes: Where there is a dispute concerning breach of duty or causation.
- Allegations of Harm, Abuse, or Neglect
- Jury Trials
- Claims Against the Police: Specifically, claims involving intentional or reckless torts or breaches of the Human Rights Act 1998, excluding negligent driving RTA disputes, employer’s liability disputes, or accidental falls on police premises.
Conclusion
Solicitors may now face the difficulty of recovering fair compensation for their efforts due to the fixed costs regime. Whilst the regime aims to streamline and limit costs, it can result in Solicitors receiving lower recoverable fees for cases that are complex and time-consuming. This financial strain may deter Solicitors from taking on certain types of cases, potentially limiting access to justice for clients. The need for meticulous case management and cost prediction adds to the administrative burden, making it essential for Solicitors to adapt their practices to navigate these challenges effectively.
For more information, contact Karl Robson here.
