Changes to the fixed recoverable costs regime: everything you need to know

On 1^st October 2023, a huge change came to civil litigation cases. Let’s start with a quick summary: fixed recoverable costs now apply to almost all claims with a value up to £100,000. 

If you’re unfamiliar with civil litigation proceedings, this will probably mean very little. But it will make a big difference to almost every case up to that value. At Bate & Albon, we want to make the law accessible to everyone. So, with that in mind, let’s break the new rules down.

What are fixed recoverable costs?

We’ll start at the beginning. When someone sues somebody else and wins, they’re normally awarded a sum of money. This will normally include amounts for damages, legal fees and court fees. In lower-value claims, the amounts relating to costs and fees are at a set level. We call these fixed recoverable costs.

Previously, these applied only to cases with a value up to £25,000. The idea is to prevent these disputes from dragging on in the courts and generating legal costs that are disproportionate, making them more efficient. It limits the number of court dates, and gives both parties a clear idea of what to expect.

This latest change extends that to higher-value cases. Now, as of 1^st October 2023, fixed recoverable costs apply to most cases up to £100,000 in value. They’ve done this by creating a new intermediate “track”. To explain that, we’d better explain what tracks are …

What are the “tracks” in civil litigation?

Civil litigation cases are now allocated into one of four “tracks” according to the value of the claim. These are:

1.       The small claims track (claims of less than £10,000)

2.       The fast track (claims from £10,000 to £25,000)

3.       The new intermediate track (claims between £25,000 and £100,000)

4.       The multi-track (claims above £100,000)

The intermediate track is the new one. Apart from some specific personal injury cases and some claims against the Police, cases in this new track will be applicable to the fixed costs regime. Cases relating to residential property will be phased in to this new regime over two years. It’s designed to make these cases more efficient. The hope is that more cases will be resolved early, and that the potential cost of litigation will reduce.

Before we go into what it all means, there’s one other detail to cover: complexity bands.

Complexity bands in civil litigation

When a claim is allocated to a track, there’s another step. The court has to assign it to a “complexity band”. There are four of these, numbered 1 to 4 in ascending order of complexity (so, the simplest cases are level 1, and the most complex are level 4).

Various factors determine the complexity band for each case. These include the number of parties involved, as well.

It’s relevant here for two reasons. First, the complexity band affects the level of fixed costs you can recover. Second, the most complex cases (level 4) are excluded from the fixed costs regime.

How does it affect claims in the intermediate track?

Each stage of a claim will have a set amount of costs that can be claimed and recovered throughout the course of any claim right up until a final trial. There’s also a provision for alternative dispute resolution.

It therefore removes the hourly rate that solicitors have charged and replaces it with stage-by-stage costs that can be recovered. A table of those costs are set out in the Civil Procedure Rules 45.50 in Table 14. You can find these here:

https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part45-fixed-costs 

It’s also worth mentioning that if a Claimant brings court proceedings in this intermediate track and fails, the Defendant’s costs will be paid in accordance with the value of the failed claim plus interest.

What should I do?

This is a big change for claimants and defendants alike. Whether you’re considering making a claim or a claim is being made against you, we’d strongly recommend seeking quality legal advice as early as possible.

There’s a lot to navigate under the new regime, and you need to start with a clear understanding of what track and complexity band your case falls into. If you need any advice or guidance on the subject, our civil litigation specialists would be delighted to help.