Fixed recoverable costs - summary of key points from the new regime

Mark Foxcroft

Partner

020 7065 1861

  • The new Fixed Recoverable Costs (‘FRC’) rules came into force on 1 October 2023, subject to transitional provisions.
  • All claims issued on or after 1 October 2023 and allocated to the fast or newly created intermediate tracks, will be subject to the new FRC regime.
  • The new FRC rules provide that a party may only recover fixed sums from their opponent regardless of the level of costs actually incurred and the amount of the fixed sums varies depending on at what stage the case settled or was determined by the court.
  • The new rules will apply to all cases allocated to the fast and intermediate track (but see below) issued on or after 1 October 2023.
  • The following types of case are excluded from the FRC regime and must be allocated to the multi-track;
  • Mesothelioma and asbestos-related lung disease claims (these should be allocated to the multi-track).
  • Clinical negligence claims unless both breach of duty and causation have been admitted and the claim is suitable for the intermediate track.
  • Child or vulnerable-adult abuse claims.
  • Claims which could be resolved by jury trial (specifically cases that the court could order to be tried by jury if satisfied there is in issue a matter set out in section 66(3) of the County Courts Act 1984 or section 69(1) of the Senior Courts Act 1981) (for example, false imprisonment, malicious prosecution or fraud).
  • Claims against the police (but not road accident claims arising from negligent police driving, employer's liability claims or claims arising from an accidental fall on police premises).

Housing claims are also excluded from the new FRC rules - it was intended that these be subject to FRC, but implementation has been delayed until at least October 2025 due to developments in the housing sector. These cases will be allocated to the appropriate track (generally the fast track), as now, but will not be subject to FRC for the duration of the delay.

  • All other civil claims allocated to the fast and intermediate tracks will be subject to FRC.
  • FRC will be reviewed every three years.
  • Once a claim is allocated to the fast track or intermediate track, the court's power to award costs is limited and the court does not have discretion to remove a case from the FRC regime, unless it re-allocates it.
  • Each case subject to this regime will be allocated a complexity band. In the fast track, there will be four complexity bands (1 to 4 in ascending order of complexity) with associated grids of costs for the stages of a claim.
  • The new CPR 45 contains tables setting out how much the FRC are in each case.
  • The percentage of damages is calculated by reference to the damages awarded or agreed, not the sum claimed, except where the defendant recovers costs in which case the percentage of damages will be calculated by reference to;
  • The value of the claim that is stated on the claim form, not taking into account any reduction for contributory negligence, any amount not in dispute, interest or costs.
  • If no amount is specified in the claim form, the maximum amount which the claimant could be reasonably expected to recover according to the statement of value included in the claim form.

We anticipate satellite litigation in relation to band and track allocation along with an increase in ADR. Do watch this space for developments.

For further information, please contact Mark Foxcroft.

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