Big Fixed Recoverable Costs changes to come into effect

On 1^st October 2023, the new rules on fixed recoverable costs (FRC) came in. What are the changes and what does this mean for you?

One of the biggest changes to civil litigation in over a decade has now come into force.

Fixed recoverable costs are sums set for the recovery of legal costs from an unsuccessful party. Although fixed recoverable costs (FRC) have been applicable to personal injury claims up to £25,000 since 31 July 2023, from 1 October 2023 fixed recoverable costs have now been extended to apply to most civil claims valuing up to £100,000.

Kayleigh Whitman, Associate at Coodes, shares more details about the changes and what this means for you.

When does the Fixed Recoverable Costs Regime apply?

From 1 October 2023, the Civil Procedure (Amendment No 2) Rules 2023 will apply to:

• Civil claims issued after 1 October 2023
• Personal injury claims where the accident took place before 1 October 2023
• Disease claims – where the Letter of Claim was issued before 1 October 2023

There are some exceptions to the rule, such as cases involving children or vulnerable adults, certain claims against the police, housing, and asbestos-related injury claims.

What is the track system and how has this been changed?

There have also been changes to the ‘track system’. Previously, there were three tracks in litigation cases – the small claims (under £10,000) (SC) fast track (FT) and multi-track (MT) – but now a new fourth ‘intermediate’ track has been created.

The intermediate track is intended for simpler cases which fall outside of FT limits, up to £100,000 in value. Within this are four complexity bands in order of complexity with associated costs being fixed for each stage of a claim.

Fast-track cases, with a value of more than £10,000 but less than £25,000 have not escaped these changes. There will now also be four complexity bands with associated costs for each stage of a claim.

Claims for non-monetary relief will also be caught by the new regime and will be assigned a value for the purposes of costs.

What does this mean in practice?

The extension to the Fixed Recoverable Costs regime is intended to provide certainty on costs for all parties. In particular, Defendant clients ought to be able to make better informed decisions on settling as opposed to defending a matter to trial.

Clients who will be involved in proceedings with a value of up to £100,000 will be impacted insofar as the amount of costs they will be liable to pay or recover.

At present there is little guidance on allocation of the new complexity bands and so it is anticipated that whilst the new rules are intended to provide certainty initially there may be some cases of satellite litigation whilst solicitors and courts get to grips with the changes.

At Coodes we remain committed to providing cost effective pricing packages to assist clients.

If you have any questions or are looking at bringing a claim, forward get in contact with the Coodes team. Call 0800 328 3282 or use our online contact form.