The extended fixed recoverable costs regime is here

New rules extending the scope of fixed recoverable costs (FRC) are now in force. This development has the potential to drastically limit the amount of recoverable costs for many claims valued up to £100,000.

What is new?

FRC now apply in the fast track with four bands of complexity. There is also a separate intermediate track, again with four complexity bands. However, it is also worth noting that “judges will retain the discretion to allocate more complex cases valued at under £100,000 to the multi-track, so that complex cases will not be inappropriately captured by the extended FRC regime in any event.”

Mesothelioma and other asbestos-related lung disease claims, abuse cases, claims against the police involving an intentional or reckless tort, or relief or remedy in relation to the Human Rights Act are excluded from the FRC.

For personal injury claims, FRC apply where the cause of action accrues on or after 1 October 2023. FRC do only apply to disease claims where the letter of claim has not been sent to the defendant before 1 October 2023.

Changes to Part 36 offers have also come into force to encourage the parties to settle at an earlier stage. Where a claimant beats their Part 36 offer, they may receive a 35% uplift on the fixed costs, to the stages from the date of the expiry of the Part 36 offer to trial.

Bands of complexity

The following complexity bands apply in the fast track under CPR 26.15:

Band one	RTA related, non-personal injury claims. Defended debt claims.
Band two	RTA related, personal injury claims (within the Pre-Action Protocol). Personal injury claims to which the Pre-action Protocol for Resolution of Package Travel Claims apply.
Band three	RTA related, personal injury claims (outside the Pre-Action Protocol). Employer’s liability accident and public liability personal injury claims. Possession claims. Housing disrepair. Other money claims.
Band four	Employer’s liability disease claims (not including noise-induced hearing loss). Complex possession and housing disrepair claims. Property and building disputes. Professional negligence claims. Any claim which would normally be allocated to the fast track but is nonetheless complex.

The following complexity bands apply in the intermediate track under CPR 26.16:

Band one	Any claim where: Only one issue is in dispute; and The trial is not expected to last longer than one day, including: Personal injury claims where liability or quantum is in dispute; Non-personal injury road traffic claims; and defended debt claims.
Band two	Any less complex claim where more than one issue is in dispute, including personal injury accident claims where liability and quantum are in dispute.
Band three	Any more complex claim where more than one issue is in dispute, but which is unsuitable for assignment to complexity band two, including noise induced hearing loss and other employer’s liability disease claims.
Band four	Any claim which would normally be allocated to the Intermediate Track, but which is unsuitable for assignment to complexity bands one to three, including any personal injury claim where there are serious issues of fact or law.

What next?

Prior to the rules coming into force, the Association of Personal Injury Lawyers (APIL) issued judicial review proceedings against the Lord Chancellor challenging several aspects of the new rules. The UK Government also issued a FRC consultation which closed on 8 September.

The judicial review proceedings have been stayed until three weeks after the Government has considered the submissions to the consultation and published its response.

In the meantime, following on from its FRC proposals in January 2022, the Government announced on 15 September that FRC will be imposed on clinical negligence claims worth up to £25,000 from next April. On the same day, a consultation to address whether disbursements should be included within the FRC regime was launched. The consultation will close on 27 October 2023.

Related items:

• Fixed recoverable costs update: judicial review and last minute consultation
• The extension of the fixed recoverable cost regime: impact on professional liability claims
• Civil Justice Council publishes its final report on costs
• Personal Injury Brief: latest decisions December 2022
• Watch this space: fixed recoverable costs are coming