Extending Fixed Recoverable Costs: A Look at the Changes [Part 2]
Relationship with the current RTA and EL/PL Portals
The proposed extension to the fixed costs regime is precisely that; the RTA and EL/PL Protocols retain their place in the process and should continue to be utilised in the normal way. For cases which begin life on the relevant Portal, the impact of the extension to the FRC regime is seen at the point of exit: the Rules found at current CPR r. 45, Section IIIA will be replaced by fixed costs matrices which introduce a ‘Complexity Band’ to be applied when calculating the applicable fixed fee.
The Complexity Bands will feature in two separate tables – one for Fast Track cases and the other for Intermediate Track cases – at CPR r. 26, as follows –
It will be seen that the Complexity Band into which a case falls is determined by reference to the type of case in question. Specifically in relation to RTA and EL/PL cases either allocated to, or destined to be allocated to, the fast track, once the Complexity Band has been ascertained reference should be had to the relevant row and column at Table 12 of CPR r. 45 in order to ascertain which fixed profit costs apply.
Where an ex-portal case is allocated to the intermediate track, then refence should be made to Table 14.
It will be noted that whilst fixed Portal costs have stayed the same, there will be an increase in fixed costs for those cases subject to what will be the old regime come October 2023.
It should also be noted that there is now a standalone fixed cost regime which applies to NIHL claims. Presently, once an NIHL matter exits the portal, there is no secondary FRC regime that kicks in as there is with, say, ex-portal RTA claims. However, the new regime will be extended to provide for a fixed costs regime for all NIHL claims save where certain exceptions apply.
More than ever solicitors will have to ensure that commerciality is as the forefront of their practice. The extension of fixed costs to non-personal injury cases means that no firm which concerns itself with civil litigation can continue afford to ignore the swings and roundabouts nature of fixed costs regimes.
Those who work in personal injury should be profoundly aware of the need to make proper provision within any retainer for the recovery from the client of any shortfall between fees incurred and costs recovered inter parties. The simple reality is that with the advent of fixed costs to previously ‘at large’ areas of civil law, both the number of cases and the distance between what is invoiced versus what is recovered is only going to increase.
The importance of watertight provisions within terms of business which reserve the right for solicitors to charge the difference between what has been billed to the client and what is recovered from the other side cannot be overstated.
Can I Escape Fixed Fees?
In short, yes. There are apparently two immediate “outs” and one avenue of escape which is left to the discretion of the Court. In relation to the latter, we expect this to be fertile battleground for the foreseeable future. Whilst the rules do retain the ‘exceptional circumstances’ provision currently found at CPR r. 45.29J, given the wholesale change to the rules it is questionable to what extent anything save the bare principles of existing decisions will apply to any equivalent Application under the new rules.
Apparently the simplest way to avoid fixed costs is either for the claim to be (reasonably) valued in excess if £100,000 and/or for the claim to be allocated to the multi-track.
Please contact Christopher McClure to discuss any query relating to Part 2 of this article. Christopher is based at our Manchester office and can be contacted on 0161 835 4087.