Part 4 – Intermediate Track claims
This this the fourth 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 Intermediate Track claims that have never been in the MOJ Portal and will address:
1. The general rules on disbursements in disbursements in Intermediate Track claims
2. How the new rules deal with counsel’s fees in these claims
3. Provision for restoration proceedings
Claims which settle within the Portal and Fast Track claims have been addressed in previous articles. A subsequent article will explore NIHL claims.
Unless specified otherwise, all references to the CPR refer to the current version of the rules.
1 – Disbursements in Intermediate Track claims
The provision for disbursements in Intermediate Track claims is (at least on its face) straightforward, and is set out in 45.60:
in a claim to which Section VII applies, the court may allow any disbursement which has been reasonably incurred, other than a disbursement covering work for which costs are already allowed in Section VII.
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 very least, this provision excludes any counsel’s fees for advice, drafting statements of case or attendance at a mediation or JSM, as these are specifically provided for under PD 45 Table 14 (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
Counsel’s fees in the Intermediate Track form part of the claimant’s fixed costs and are dealt with as conditional stages under Practice Direction 45 Table 14:
S2 - Specialist legal representative providing post-issue advice in writing or in conference or drafting a statement of case - £2,065-£3,613
S7 - Specialist legal representative advising in writing or in conference following the filing of a defence - £1,445-£2,994
S14 - Alternative Dispute Resolution: additional fee payable once only for specialist legal representative attendance at a mediation or joint settlement meeting covered by S13 - £1,445-£2,374
The applicable fixed fee is determined by complexity band, and in bands 3 and 4 an additional sum is recoverable under S2 where “counsel is also instructed to draft a defence to a counterclaim”.
Some restrictions to the application of these stages are provided for under 45.50(4):
The costs in stages S2, S7 and S14 of Table 14 are only allowed where—
(a)legal advice is obtained from, or a statement of case is drafted by—
(b)a specialist legal representative in respect of a matter within their specialist expertise; or
(c)the intended trial advocate; and
(d)the use of that person to provide the advice or draft the statement of case is justified.
We do not know how strictly the specialism requirements of subsection (b) will be interpreted, but given that subsection (c) 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, draft the statement of case in question or attend the relevant meeting 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.
Subsection (d) confirms that the use of counsel or a specialist representative must be justified. On this basis it seems reasonably safe to assume that where the primary file handler was capable of drafting the statement of case themselves, or should not have required counsel’s assistance to assess the issues in the claim, these add-ons will not be recoverable. Regard should be had in such cases to the handler’s litigation experience.
The rules do not specify whether these stages may be invoked multiple times, i.e. where it is “justified” to obtain multiple advices from counsel or to have them prepare multiple statements of case, and doubtless we will see litigation on this question in the future, but given the provision for an enhancement to S2 in bands 3 and 4 where a defence to counterclaim is also prepared by counsel, it seems more likely that the CPRC did not intend for these stages to apply more than once. If that is the case, counsel’s involvement in cases valued between £25,000.00 and £100,000.00 will be greatly curtailed by the new rules.
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.