Civil Litigation - Recent Developments in Fixed Costs

This month we will consider some changes to Part 45 of the Civil Procedural Rules (CPR) that will affect how legal costs are recovered in some civil cases. These changes were first suggested in the 2013 Jackson report, which considered whether more proportionate costs could be achieved with changes to procedures. Following consultations in 2019 it is now expected that in October 2022 there will be a significant development in expanding the use of fixed costs making way for the creation of “intermediate” cases. 

Fixed recoverable legal costs are currently used in fast-track personal injury cases up to a value of £25,000. With the creation of a new classification of fast-track cases this will mean that many more matters will be dealt with using the fixed costs regime. So, what will make a case “intermediate”? 

An “intermediate” case could be valued between £25,000 and £100,000. There are some exceptions such as cases involving mesothelioma/asbestos, professional negligence, complex personal injuries (such as clinical negligence), actions against the police, child sexual abuse, and intellectual property claims. 

If a case does not fall into one of these exceptions, then it will be classified into one of four bands:

Band 1: The simplest claims that are just over the current fast track limit, where there is only one issue and the trial will likely take a day or less, e.g. debt claims.
Band 2: The ‘normal’ band for intermediate cases, with more complex claims going into Band 3.
Band 3: The ‘normal’ band for those complex intermediate cases.
Band 4: The most complex claims, with claims such as business disputes and Employer liability disputes where a trial is likely to last three days and there are serious issues of fact/law to be considered. There would also be limits on the use of experts - no more than two expert witnesses giving oral evidence for each party.

It is expected that different levels of fixed costs will be allowed depending on what band a case falls under. The exact rates that will be allowed are yet to be confirmed.  

There will also be a possibility of challenging what band a case is put into. However, if an unsuccessful challenge to an “intermediate” allocation was made then there would be a “penalty” in costs liability of £300. There is also the possibility of additional costs penalties if a challenge to band allocation is regarded as “unreasonable behaviour”.

Intermediate cases will generally be dealt with in the County Court because of their relative low value and lack of complexity. However, a judge could exercise their discretion to ensure that a case was appropriately allocated (this would only be used in exceptional circumstances).
In the coming months we will monitor how the expansion of the fixed cost regime is proceeding. We will also consider more areas of development and expect updates on:

•    The project to simplify the CPR.
•    The review of pre-action protocols by the Civil Justice Council.
•    A separate independent review of damage-based agreements (DBAs).
•    The development of an online dispute resolution system (the Damages Claims Online scheme).

Article written by Seamus Ryan