Fixed recoverable costs update: judicial review and last minute consultation

There have been two key developments in the lead up to the extension of the fixed recoverable costs (FRC) regime coming into force on 1 October 2023. Firstly, the Association of Personal Injury Lawyers (APIL) has issued judicial review proceedings against the Lord Chancellor challenging several aspects of the new rules. Secondly, the UK Government has issued a consultation which closes just over three weeks before the rules are due to come into force.

Background

Arguably the most anticipated (and long awaited) change in the personal injury arena this year is the extension of the fixed FRC regime.

On 28 March 2019, the UK Government launched a consultation seeking views on a number of recommendations made by Sir Rupert Jackson in his ‘Review of Civil Litigation Costs: Supplemental Report Fixed Recoverable Costs’, published in July 2017, with the UK Government aiming to take forward most of his recommendations.

On 6 September 2021, the UK Government announced that the proposals to extend FRC would indeed be introduced. However, the implementation date was delayed from April 2023 until October as, according to Lord Bellamy in a November 2022 speech, more time was needed to redraft the rules.

Despite the fast approaching deadline, on 21 July 2023 the Ministry of Justice published a consultation on issues relating to the extended regime.

Ministry of Justice consultation This consultation focuses on the following issues: Whether costs on assessment should be fixed. Whether there should be fixed costs for Part 8 (costs only) claims. The recoverability of, separately, (a) inquest costs and (b) restoration proceedings, and how this should be dealt with in the CPR. The issue of providing for the recoverability of advocates’ preparation in the CPR, in cases which (a) are settled late or (b) are vacated. Whether the fixed trial advocacy fees now in Practice Direction (PD) 45 of the CPR should be further uprated for inflation, and by how much. Whether to make explicit in CPR 26.9(10)(b) in respect of clinical negligence claims, that an early admission of liability must be made in the pre-action protocol letter of response. The consultation closes on 8 September. It is proposed that, assuming agreement by the Civil Procedure Rule Committee by December, amendments could be included in the Civil Procedure Rules SI for implementation in April 2024. It therefore seems that the Ministry of Justice does not wish to delay the set deadline of 1 October 2023.

Judicial review proceedings

APIL is arguing that the rules coming into force on 1 October are unlawful. In an August 2023 press release, APIL announced it has issued judicial review proceedings against the Lord Chancellor relating to the FRC regime on four key grounds:

1. Clinical negligence cases - the introduction of fixed costs without proper consultation and a lack of clarity about when FRC will be applied.
2. The provisions on vulnerability – specifically provisions impacting vulnerable people’s access to justice.
3. The exclusion of FRC for representation at inquests and the restoration of companies to the Companies Register. Since APIL raised this point, the Government appears to have acknowledged the need for change. Nonetheless, the rules have not yet been amended.
4. Contracting out of FRC – without consultation, the apparent reversal of parties’ power to settle a claim between £25,000 and £100,000 and provide for detailed assessment rather than fixed costs.

The challenge relates to the extension of FRC into new categories of cases, and certain provisions which may create confusion and complexity when read with case law, as these reverse Court of Appeal or High Court judgments.  

The judicial review proceedings have been stayed until the consultation has closed and the UK Government has responded.

Comment

Two of the four grounds of the APIL judicial review are currently under consultation, with an indication from the Ministry of Justice that the changes suggested by APIL will be considered favourably. It remains to be seen whether the remaining limbs of the judicial review will be pursued.

The ongoing uncertainty as to the interpretation of the rules relating to additional costs for vulnerable claimants is unhelpful and satellite litigation is inevitable in the event that the rules remain as currently drafted. Clarification would be beneficial to claimants and defendants alike.

The question of contracting out of fixed costs remains controversial, with the new rules closing a loophole most recently considered and significantly widened by the Court of Appeal in Doyle v M&D Foundations & Building Services Ltd [2022]. Certainty is key to a successful FRC regime and the reversal of the decision in Doyle is a welcome development.

Related items:

• Civil Justice Council publishes its final report on costs
• Personal Injury Brief: latest decisions December 2022