Assignment to complexity bands

The extension of fixed recoverable costs on 1 October 2023 saw the introduction of complexity bands. Now, when the court allocates a matter to either the fast track or the intermediate track, they must also assign the matter to a complexity band. The assignment to a complexity band is key as this sets the level of costs that can be recovered in the matter at the conclusion.

CPR 26.15 sets out the complexity bands that will normally be applied in the fast track:

Table one

CPR 26.16 sets out the complexity bands that will normally be applied in the intermediate track:

Table two

But how does this assignment work in practice? That is the unknown unfortunately, much like many of the practical considerations of the updated rules. What we do know is that the parties must state within their directions questionnaire whether the complexity band is agreed and, if not, provide any relevant information in support of their proposed assignment (CPR 26.14(6)).

Note that the court has the power to assign to a different complexity band notwithstanding any agreement made between the parties (CPR 26.14(5)). If the court does disagree with the parties’ proposed assignment, then they must have regard to the factors set out in CPR 26.13(1), being:

• the financial value, if any, of the claim;
• the nature of the remedy sought;
• the likely complexity of the facts, law or evidence;
• the number of parties or likely parties;
• the value of any counterclaim or additional claim and the complexity of any matters relating to it;
• the amount of oral evidence which may be required;
• the importance of the claim to persons who are not parties to the proceedings;
• the views expressed by the parties; and
• the circumstances of the parties.

You will see financial value is top of the list which illustrates its impact on both allocation to track and assignment to complexity band, making it all the more crucial that defendants break down the claim that is presented and formally agree aspects that are not in contention as the court shall disregard any amount not in dispute (as well as interest, costs and contributory negligence – CPR 26.13(2)) when considering the financial value.

Furthermore, Practice Direction 14(6) to CPR 26 confirms that where the court believes that the amount the claimant is seeking exceeds what they may reasonably be expected to recover, it may make an order under rule 26.7(4) directing the claimant to justify the amount. It is therefore not sufficient for the claimant to simply issue a claim form for a higher than expected amount in order for the claim to appear more complex.

There are some other factors to be taken into account when considering assignment including:

• Oral evidence at trial — can witness evidence or expert evidence be agreed thus removing it from being a contentious issue required at trial?
• Number of parties — are the claimants pursuing completely separate claims or are they capable of being brought within the confines of CPR 45.5? Have regard to Practice Direction 14(10) to CPR 26. Where the case involves more than one money claim (for example where there is an additional claim or there is more than one claimant each making separate claims) the court will not generally aggregate the claims. Instead, it will generally regard the largest of them as determining the financial value of the claims.
• Has there been any unreasonable behaviour in the pre-action stages which can reasonably bring in CPR 45.13?
• Vulnerability — this is subsumed within the overriding objective. Will claimants be using it to argue for increased complexity and thereafter increased costs in line with CPR 45.10?

But what happens if the claim settles prior to allocation to a track or band? The CPR is clear as CPR 46.13(3) states: “Where the court is assessing costs on the standard basis of a claim which concluded without being allocated to a track, it may restrict those costs to costs that would have been allowed on the track to which the claim would have been allocated if allocation had taken place.” This is supported by CPR 45.43(1), CPR 45.44 and CPR 45.49(1) and CPR 45.50(1) so the same applies for all tracks and it will be open to the parties to agree the appropriate track and band between themselves. If the parties cannot agree then the court will decide through the assessment procedure. Of course we now know that the Government intends to fix the costs associated with costs of assessment in FRC cases which currently fall in the provisional assessment process.