The Ministry of Justice (MoJ) has announced an extension of the Fixed Recoverable Costs (FRC) scheme.
The move, set to take effect from 1 October 2023, will see FRC extended to simpler cases valued up to £100,000 damages.
Luke Morgan, the Supervising Director of our Litigation Team, Debt Recovery & Employment Departments, explores what is changing later this year.
What are Fixed Recoverable Costs?
FRC is a set of predetermined legal costs that the losing party is ordered to pay the winning party in litigation proceedings.
The FRC regime is intended to control legal costs, provide certainty, and ensure proportionality in civil litigation.
The new intermediate track
The MoJ has introduced a separate intermediate track for less complex multi-track cases under £100,000 damages.
This track will have four complexity bands (one to four in ascending order of complexity) with associated grids of costs for the stages of a claim.
Exceptions from FRC
The FRC will apply to all cases in the fast track and the new intermediate track, with a few exceptions. These exceptions include housing claims, which will be delayed for two years from October 2023, and certain types of cases that will be allocated to the multi-track rather than the new intermediate track, thereby being excluded from FRC.
These include mesothelioma or asbestos lung disease claims, claims for clinical negligence, and claims for damages in relation to harm, abuse or neglect of children or vulnerable adults, among others.
Future review and inflation
The MoJ plans to review the tables of costs and the extended FRC regime in three years. The figures of FRC costs in the 2017 Jackson report have been uprated for inflation using the January 2023 Services Producer Price Index (SPPI).
The extension of the FRC scheme represents a notable change in the landscape of civil litigation. It aims to provide greater certainty and control over legal costs, making the legal process more accessible and predictable for all parties involved.