Fixed recoverable costs regime: what’s changing?
The Government has announced that from 1st October 2023, there will be new changes to the Fixed Recoverable Costs regime (FRC) in civil law cases.
Before we explain what’s changing and how this may affect you, let’s take a look at what the current FRC regime is.
What is the Fixed Recoverable Costs regime?
The Fixed Recoverable Costs regime is the amount of legal costs that a winning party can claim back from a losing party in most civil litigation disputes. What can be recovered varies depending on which stage of the litigation process you resolve the case, and includes things like court fees and solicitors’ fees.
FRC already applies in most personal injury claims under the value of £25,000.
What changes are happening?
Once you apply to the court to make a civil litigation claim and you have received a defence from the opposition, you will be allocated a ‘track’. This ‘track’ will be dependent on the complexity of the case and the amount in dispute.
The current tracks are: small claims track (for claims worth less than £10,000 in civil litigation and under £1,500 in most personal injury claims (excluding whiplash claims), fast track (claims worth £10,000 to £25,000) and multi-track (for claims over £25,000).
The Government is planning to extend the fast track (normal track for claims up to a value of £25,000) and introduce a new intermediate track for simpler cases valued from £25,000 to £100,000 in damages; this will mainly apply to claims where proceedings have been initiated. Multi-track will then be for cases worth in excess of £100,000 and where the nature of the case means it is too complex for the fast or intermediate tracks.
For both the fast track and intermediate tracks, you will be assigned to one of four complexity bands:
|Fast track complexity band 1||Fast track complexity band 2||Fast track complexity band 3||Fast track complexity band 4|
(a) Road traffic accident-related, non-personal injury claims; and
b) Defended debt claims
(a) Road traffic accident-related, personal injury claims which are or should have been started under the RTA Protocol; and
(b) Personal injury claims to which the Preaction Protocol for Resolution of Package Travel Claims apply
(a) Road traffic accident-related, personal injury claims to which the RTA Protocol does not apply;
(b) Employer’s liability (accident) and public liability personal injury claims;
(c) Possession claims;
(d) Housing disrepair claims; and
(e) Other money claims
(a) Employer’s liability disease claims (other than a claim for noise-induced hearing loss);
(b) Complex possession and housing disrepair claims;
(c) Property and building disputes;
(d) Professional negligence claims; and
(e) Any claim which would normally be allocated to the fast track, but is nonetheless complex
|Intermediate complexity band 1||Intermediate complexity band 2||Intermediate complexity band 3||Intermediate complexity band 4|
Any claim where:
(a) Only one issue is in dispute; and
(b) The trial is not expected to last longer than one day, including:
(i) Personal injury claims where liability or quantum is in dispute;
(ii) Non-personal injury road traffic claims; and
(iii) Defended debt claims
Any less complex claim where more than one issue is in dispute, including personal injury accident claims where liability and quantum are in dispute
Any more complex claim where more than one issue is in dispute, but which is unsuitable for assignment to complexity band 2, including noise-induced hearing loss and other employer’s liability disease claims
Any claim which would normally be allocated to the intermediate track, but which is unsuitable for assignment to complexity bands 1 to 3, including any personal injury claim where there are serious issues of fact or law
What does this mean for litigation and personal injury cases?
These changes are intended to make the claims process and associated process fairer for both parties in litigated matters. The FRC provides the parties with a clear outline of the costs they may recover if they win or lose a case; this may help individuals decide whether to pursue or defend a claim.
For civil litigation claims, all cases issued at Court on or after 1st October 2023 will be subject to the new FRC bands.
For personal injury claims where the accident occurred before 1st October, the FRC will not apply; only accidents which happen after 1st October 2023 will be captured by the new FRC.
Industrial disease claims are treated a bit differently and Fixed Recoverable Costs if the letter of claim is sent after 1st October 2023.