Disbursements in the new FRC regime Part 3 – Non-Portal Fast Track claims

This this the third in a new series of articles designed to assist case handlers in navigating the rules concerning disbursements under the new fixed recoverable costs (FRC) regime, which came into force on 01/10/23. This series will be structured according to claim type, with each article exploring what has changed, what remains the same and where we are still waiting for clarity from the courts, as regards disbursements in a given type of claim.

These articles will assume a certain degree of familiarity with the disbursements that were recoverable under the old FRC regime and with the circumstances in which the new FRC regime applies. Any readers in need of a quick refresher can consult the accompanying cheat-sheet for an easily digestible breakdown.

This article deals with disbursements in Fast Track claims that have never been in the MOJ Portal and will address:

1. The general rules on disbursements in disbursements in non-Portal FT claims
2. How the new rules deal with counsel’s in these claims
3. Provision for restoration proceedings

Claims which settle within the Portal and Fast Track claims that were commenced in the Portal but have exited the same have been addressed in previous articles. Subsequent articles will explore Intermediate Track claims and NIHL claims.

Unless specified otherwise, all references to the CPR refer to the current version of the rules.

1 – Disbursements in non-Portal Fast Track claims

The provision for disbursements in Fast Track claims that did not commence in the MOJ Portal is (at least on its face) straightforward, and is set out in 45.59(b):

in any other claim to which Section VI applies, any disbursement which has been reasonably incurred, other than a disbursement covering work for which costs are already allowed in Section VI.

Many disbursements that would previously have been recoverable in such claims will still be recoverable under the new FRC regime, but the exclusion of any disbursements covering work which has already been allowed for in Section VI is potentially wide-reaching.

At the very least, this provision excludes any counsel’s fees for advice (written or in conference) or drafting statements of case, as these are specifically provided for under 45.46 (see below), but it will likely have wider relevance than this.

The wording echoes the second limb of the Cham v Aldred test for whether an item is recoverable as a disbursement reasonably incurred due to a particular feature of the dispute, which states: “If an item of work is deemed (or can be said implicitly) to be within the fixed recoverable costs in Table 6B, then it will not be separately recoverable as a disbursement”.

How strictly the court will interpret this rule remains to be seen, but it provides a solid basis for opposing any disbursement that relates to “ordinary” case work that the claimant solicitor could have undertaken themselves and which should therefore have formed part of the claimant’s fixed costs. Obviously, what constitutes “ordinary” case work is far more open to debate now that a much wider range of cases are subject to FRCs, but disbursements such as medical agency fees, agents’ fees for obtaining witness statements or visiting accident sites, costs draftsmen’s fees and counsel’s fees for advocacy and drafting documents other than statements of case are likely to be the subject of future disputes on this basis.

2 – Counsel’s fees

Provision is made for recovery of counsel’s fees in non-Portal Fast Track claims, but these are not treated as disbursements and are subject to significant restrictions. 45.46 refers:

 (1) Where a claim would normally be assigned to complexity band 4, under rule 6.15 in addition to the costs allowable in Table 12, the fixed costs may include an amount in accordance with Table 13.

 (2) The additional costs in Table 13 are only allowable where—

 (a) the legal advice is obtained from, or a statement of case is drafted by—

(i) a specialist legal representative in respect of a matter within their specialist expertise; or

(ii) the intended trial advocate; and

(b) the use of that person to provide the advice or draft the statement of case is justified.

 (3) A court may only order payment for one advice in writing or in conference unless further advice is justified.

Practice Direction 45, Table 13 provides for the following fixed fees:

1. Providing post-issue advice in writing or in conference £1,000
2. Drafting a statement of case £500

The most significant part of these provisions is that they restrict recoverable counsel’s fees to band 4 claims only. This excludes all RTA, EL (accident) and PL claims. In band 1-3 claims that did not commence in the MOJ portal, it is difficult to see how any counsel’s fees could be recovered under the new regime apart from in the most exceptional circumstances.

The fixed fees for this work represent a substantial curtailing on the sums we would have previously expected to see in claims that now fall under band 4.

We do not know how strictly the specialism requirements of subsection (2)(a)(i) will be interpreted, but given that subsection (2)(a)(ii) provides that these requirements will not apply where counsel is the intended trial advocate, it is doubtful that this provision will much impact.

Strictly speaking, the person instructed to provide advice or draft the statement of case in question does not have to be counsel, but can be any specialist legal representative or the intended trial advocate. When an add-on fee is claimed for work undertaken by someone other than counsel, maximum scrutiny of their specialist expertise is called for, and where that person is the primary handler of the claim or an internal advocate, there will be serious questions to be asked about whether the work in question falls outside the ordinary case work that should properly form part of the fixed costs. We are currently in the dark as to how flexibly the courts will interpret these provisions, and recommend that any issues of this kind which arise are referred immediately to the Costs team.

It seems that multiple advices will, in principle, be recoverable. The circular wording of subsection (3) is essentially meaningless, adding nothing to the general requirement that any costs claimed must be justified.

Whether fees for multiple statements of case will be recoverable is open to debate. The wording used in relation to statements of case is generally singular, but the CPRC have not felt the need to specify that only one such fee will usually or always be recoverable as they have with advice fees. It also seems odd to suggest that in a more complex claim the rules would provide for counsel to draft the particulars of claim or the schedule of loss but not both. As with so many other points, we must wait for further clarification from the courts.

3 – Restoration proceedings

All Fast Track, Intermediate Track and NIHL claims under the new FRC regime are subject to 45.15A which provides that:

(2) Where—

(a) it is necessary for the claimant to make an application in separate proceedings to restore a defendant company to the Companies Register; and

(b) the claimant is successful in their claim and obtains an order for costs against that defendant,

Additional disbursements, as set out PD 45 Table 15A(2) will be recoverable. These disbursements are:

(a) any fees charged by the Government Legal Department or the solicitors to the Duchy of Lancaster or the Duchy of Cornwall;

(b) any court fees;

(c) the disc fee; and

(d) any adjournment fee

These provisions are self-explanatory.

Chris Simpson