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Jackson's Plan to extend Fixed Costs

Today saw the release of Lord Justice Jackson’s recommendations to extend the ambit of fixed recoverable costs. The full report can be found here https://www.judiciary.gov.uk/publications/review-of-civil-litigation-costs-supplemental-report-fixed-recoverable-costs/

 

It’s another Herculean effort from LJJ completed in less than 9 months. It is worth noting that these are recommendations only and the government has promised to consult on them. It is therefore unlikely that they will be introduced before next April at the earliest.

 

The report runs to a staggering 135 pages and much will be written over the coming weeks as everyone digests the full contents. Some immediate headlines however are:

 

Intermediate track

 

The recommendation is that there should be 4 tiers of costs (in most cases) for claims worth between £25K and £100K based on the following criteria:

 

(i) The case is not suitable for the small claims track or the fast track.

(ii) The claim is for debt, damages or other monetary relief, no higher than £100,000.

(iii) If the case is managed proportionately, the trial will not last longer than three days.

(iv) There will be no more than two expert witnesses giving oral evidence for each party.

(v) The case can be justly and proportionately managed under the expedited procedure described in section 4 below.

(vi) There are no wider factors, such as reputation or public importance, which make the case inappropriate for the intermediate track.

(vii) The claim is not for mesothelioma or other asbestos related lung diseases.

(viii) Alternatively, even if none of criteria (i)-(vii) are met, there are particular reasons to assign the case to the intermediate track, of the kind described in paragraphs 3.7-3.8 below.

 

Pre-action protocols will be amended to encourage the parties to agree the Band or the court will determine this at Allocation. There will be a streamlined litigation process. Counsel’s fees will be ring-fenced.

 

The proposed costs are set out on pages 106 and 107 of the report and maximum totals range between £19,150 for a Band 1 case worth up to £30K to £68,450 for a Band 4 case worth between £50K - £100K.

 

Personal injury cases

 

Cases, where only one issue (such as quantum) is in dispute, will generally go into Band 1. Cases where both liability and quantum are in dispute will generally go into Band 2 or Band 3. Cases where there are serious issues on breach, causation and quantum (but which still fall within the intermediate track) will go into Band 4.

 

Clinical negligence

 

Clinical negligence claims above £25,000 will seldom be suitable for the intermediate track, unless both breach of duty and causation have been admitted at an early stage. The multi-track will be the normal track for clinical negligence claims above £25,000.

 

Non PI cases

 

Cases, where only one issue is in dispute (e.g. proving a debt), will generally go into Band 1. Most intermediate track cases will go into Band 2 or Band 3. Complex cases falling within the intermediate track will go into Band 4.

 

Disbursements

 

Fall outside the figures but LJJ recommends that there be a review of experts’ fees in due course (probably a year after the introduction of the scheme).

 

Miscellaneous

 

Defendant’s failure to beat Claimant’s Part 36 offer

 

If the defendant fails to beat an effective claimant offer under CPR Part 36, there is a tentative proposal that there should be a 30% or 40% uplift on costs rather than indemnity costs.

 

Unreasonable litigation conduct

 

In cases of unreasonable litigation conduct it is proposed that the court should have the power either to award a percentage uplift on costs or to make an order for indemnity costs. The court will exercise that power, having regard to the seriousness of the conduct in question. One example of such unreasonable conduct might be substantial non-compliance with the relevant pre-action protocol.

 

London weighting

 

The current FRC rules in the fast track provide for a 12.5% uplift on fixed costs payable to a party who lives in the London area and instructs a legal representative who practises in the London area: see CPR rule 45.29C (2), rule 45.29F (5) and Practice Direction 45 paragraph 2.6. It is recommended that the same should apply to FRC in the intermediate track.

 

Summary

 

This is only intended to be a very brief, initial overview but it is already clear that the proposals are not as draconian as had been feared but will nonetheless have a significant impact.