Fixed recoverable costs – April 2024 revisions

From 6 April 2024 various amendments to the extended fixed recoverable costs (FRC) regime will come into force. This follows the Ministry of Justice’s (MoJ) consultation process, the response to which was published last month.

Background

In July 2023 the MoJ launched a consultation on a number of issues arising out of the new FRC regime. The Government published its response to the consultation in February 2024 in which it confirmed the following:

• The FRC figures will be uprated for inflation in line with the Services Producer Price Index (SPPI) between January and October 2023. This is an increase of 3.2%.
• Trial advocacy fees on the fast track bands 1 to 3 will also be uprated in line with SPPI, in addition to a further 4%.
• A new procedure to resolve FRC disputes called "Fixed Costs Determination" is expected to be implemented in October 2024. The costs of this procedure will be fixed.
• The costs of Part 8 (costs only) claims will be fixed. The rule change for this is also expected in October 2024.
• By amending Part 45, the costs of inquest proceedings will be recoverable, but only to the extent that they are outside of FRC.
• The FRC regime will be extended making the costs of restoring a company to the register recoverable in fast track and intermediate track cases.
• The regime will be extended to provide for recoverability of fixed trial advocacy fees where cases are 1) settled late or 2) vacated by the court shortly before trial. The CPR will be amended to allow recover of:

• Fast track cases - 100% of the advocacy fee where a claim is settled on the day of trial or the day before, and 75% where a claim is settled/vacated not more than two days before the trial date.
• Intermediate track cases - 100% where a claim is settled on the day of trial or the day before, and 75% where a claim is settled/vacated not more than five days before the trial date.

• The rules on clinical negligence claims subject to FRC should provide that an early admission of liability should be made in the pre-action protocol letter of response where a claim may be allocated to the intermediate rather than the multi-track.

Outside of the consultation process, the MoJ has also taken forward a number of other changes, including providing clarity about the 20-page limit for expert reports, and confirming that claims against public authorities for trespass will be automatically allocated to the multi-track, unless it is not in the interests of justice to do so.

From 6 April a change to 45.1(3)(b) will also come into force that appears to open the door for contracting out of FRC. The rule confirms that, where FRCs apply and the court orders that a party is entitled to costs: “the court may only award costs in an amount that is neither more nor less than the fixed costs allowed by the applicable Section and set out in the relevant table in Practice Direction 45." The following wording will now be incorporated into this rule: “…unless the paying party and receiving party have each expressly agreed that this Part should not apply”.

Comment

These changes are largely expected and uncontroversial, but there is potential for unwelcome uncertainty given the change to rule 45.1(3b) and the lack of clarity as to what “expressly” may mean in practice.

The MoJ has committed to reviewing the extended FRC regime in October 2026, including the tables of costs. It also plans to consult on the impact of the rules on vulnerable parties by no later than October 2026.

On the back of the MoJ’s response to its FRC consultation, APIL has withdrawn its judicial review proceedings.

You can find our FRC calculator here. This helps calculate and forecast the amount of legal costs a winning party can recover from a losing party at different stages of a claim.

 

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