Insights

Tanya Seevaratnam

Published 27 July 2023
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New Intermediate Track and Fixed Recoverable Costs Rules  

New rules are coming into force on the 1st October 2023 to implement the extension of fixed recoverable costs in civil cases and to establish an intermediate track for claims above £25,000, but not more than £100,000.

New intermediate track

Intermediate track cases will be those civil cases where:-

  •  the claim is worth between £25,000 and £100,000;
  • the trial is likely to last less than three days; and
  •  oral expert evidence is likely to be limited to two experts per party.

More complex cases will be allocated to the multi-track regime where the extended fixed costs scheme will not apply. The new intermediate track will also have new standard directions. 

As you might expect, the intermediate track will sit between fast track and multi-track cases and will apply both to claims for monetary relief, claims for non-monetary relief and to mixed claims. However, a claim which includes a claim for non-monetary relief will not be allocated to the intermediate track unless the court considers that it would be the interests of justice to do so.

Complexity bands  

The fast track and intermediate track will each have four complexity bands (with some exceptions) and a case must be assigned to both a track and a complexity band. The parties may agree a complexity band, but the court also retains discretion to assign a case to the band it feels is appropriate. In addition to allocation hearings, a claim may also need an assignment hearing to determine the relevant complexity band. The complexity bands are defined in a way that is not “overly prescriptive” which means there is likely to be room for disagreement.

The complexity band to which a claim is assigned and the stage the claim has reached will determine the level of fixed recoverable costs allowed. The more complex the claim, the greater the fixed costs. There will be 15 stages for an intermediate track claim. 

Fixed recoverable costs

The fixed recoverable costs regime will apply to all cases in the fast track and the new intermediate track, with limited exceptions, although there will be specific provisions for vulnerable parties and witnesses. Claims for possession, disrepair and unlawful eviction in respect of residential properties are excluded from the fixed recoverable costs regime. In most cases, the amount of costs recoverable will be less than that which could have been recovered under the standard basis time costs regime. 

The intention behind the changes

In respect of fixed recoverable costs, the intention behind the reforms is to try and ensure that legal costs are more certain and proportionate across a wider range of civil claims, and to enhance access to justice and allow for more informed decision-making throughout the litigation process. In particular, the aim is to reduce costs as far as possible.

Comment

The new rules are far from simple and as with any change, it is going to take time for them to bed in. However, it is clear that the new banding and lose terminology are likely to lead to disputes. One of the aims of the changes is to encourage early resolution and settlement of a case in light of greater clarity about the level of costs involved. However, the reverse could also be true, and it remains to be seen how this will play out.

The new FRC will apply only to claims issued on or after 1 October 2023 so consideration should now be given as to the timing of any anticipated claims and whether it’s necessary to issue a claim early.  

As always, we will keep you informed of any developments or further announcements. But if you’d like more information or to discuss the implications for you, please get in touch with Tanya Seevaratnam or Chris Ward of our Dispute Resolution Team at 020 3988 0170 or email us at tanya@rswlaw.co.uk or chris@rswlaw.co.uk.

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