Fixed recoverable costs consultation

The Ministry of Justice has launched a consultation in relation to extending the use of Fixed Recoverable Costs (FRC) in civil cases

The Ministry of Justice has launched a consultation in relation to extending the use of Fixed Recoverable Costs (FRC) in civil cases, as originally outlined in the Jackson report.

During the course of civil litigation in England and Wales it is generally the case that the winning party recovers their costs from the party that loses. FRC prescribes the amount that can be claimed back, giving both sides certainty as to the maximum level of costs that they could be liable to pay/entitled to recover at the culmination of any proceedings.

Weightmans have been heavily involved throughout the process having been a party to discussions with the Ministry of Justice from an early stage in the formulation of the consultation.

Housing sector clients are currently facing an influx of disrepair cases and it is hoped that the number of claims will reduce should FRC be adopted owing to the significant limitations it places on the costs of claimant solicitors. FRC will also assist in the decision making process of whether to defend a claim or not. As there will be a level of certainty in respect of the costs which may be recovered by a claimant solicitor, in the event that a defence is not successful, it may enable a more robust approach to disrepair claims.

The consultation itself is seeking interested parties’ views on how to implement the following changes:

  1. The extension of FRC to fast track cases
  2. The extension of FRC to intermediate cases (cases valued between £25,000 and £100,000); and
  3. A new process and FRC for Noise Induced Hearing Loss claims.

The change most applicable to housing disrepair claims is the extension of the FRC to fast track cases.

FRC are currently in place for fast track personal injury cases including road traffic cases, employers’ liability accident cases and public liability cases.

The recommendation is that FRC be extended to all of the cases that fall under the auspices of the fast track regime by the creation of four new bands:

Band

What is covered?

Band One

Road traffic accident, non personal injury, claims and defended debt claims.

Band Two

Road traffic accident personal injury claims (inside the pre-action protocol)

Band Three

Road traffic accident personal injury claims (outside the pre-action protocol, employers’ liability accident claims, public liability claims, tracked possession claims, housing disrepair and other money claims.

Band Four

Employers’ liability disease claims (excluding noise induced hearing loss), complex tracked possession claims, complex housing disrepair claims, property disputes, professional negligence claims and other claims at the higher end of fast track.

Housing disrepair claims would fall into Band Three or Band Four for which the FRC would be:

Stage

Complexity Band

 

3

4

Pre-issue

£1,001 - £5,000

£988 + 17.5% of damages

£2,250 + 15% of damages + £440 per extra defendant

Pre-issue

£5,001 - £10,000

£1,929 + 12.5% of damages over £5,000

Pre-issue

£10,001 - £25,000

£2,600 + 10% of damages over £10,000

Post issue, pre-allocation

£2,735 + 20% of damages

£2,575 + 40% of damages + £660 per extra defendant

Post-allocation, pre-listing

£,484 + 25% of damages

£5,525 + 40% of damages + £660 per extra defendant

Post-listing, pre-trial

£4,451 + 30% of damages

£6,800 + 40% of damages + £660 per extra defendant

Trial advocacy fee

a) £500

b) £710

c) £1,070

d) £1,705

a) £1,380

b) £1,380

c) £1,800

d) £2,500

The figures above are cumulative and include prior stages in the figure for that stage.

The consultation also considers FRC in the context of Part 36 offers to settle. In such cases the recommendation is that there is a 35% uplift on the FRC from the time of the Part 36 offer, should that offer not be beaten at trial.

The proposed changes are likely to have a huge impact on housing disrepair matters by significantly capping the costs recoverable by tenant solicitors. As a result it is enormously important that interested parties review the consultation paper here and provide comments prior to the deadline on 6 June 2019.

For any further information regarding any aspect of the issues raised in this case, please contact Partner, Sian Evans on 0151 242 6821or email sian.evans@weightmans.com or Associate, Matthew Wilson 0151 242 6801 or email matthew.wilson@weightmans.com

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