Martin Hall, 19 June 2024
Litigation can lead to significant financial burdens for the parties involved.
The general rule in respect of cost recovery in litigation, has for a long time been that the successful party in the litigation is entitled to recover their legal costs from the losing party.
However, the implementation of the new fixed recovery costs regime (“FRC”) on 1st October 2023 has dramatically changed the recovery of legal costs in litigation.
The FRC is applicable to the majority of civil proceedings where the value of the claim is less than £100,000.00, and as its name would suggest, the successful party can only claim a fixed sum of legal costs depending on the stage at which the litigation reached before concluding.
The FRC has also introduced a new claims “track” and complexity bands which affect the amount of fixed costs recoverable.
Track Allocation
Claims are categorised into different tracks primarily based on their monetary value and complexity. The Court retains discretion to adjust track allocations in the interest of justice.
The four tracks are:
- Small Claims Track- for claims with a value of less than £10,000;
- Fast Track – for claims with a value between £10,000 and £25,000;
- Intermediate Track – for claims with a value between £25,000 and £100,000;
- Multi-track – for claims with a value of £100,000 or more.
Complexity Bands
There are four complexity bands for Fast Track Claims and Intermediate Track claims.
Assignment to a specific band depends on the complexity of the claim. Simpler claims will be assigned to Band 1, while more complex claims with be assigned to band 4.
The amount of recoverable costs the successful party may be entitled to under the FRC will depend on both the track and the complexity band that the claim is assigned to.
Exemptions
There are only a few exemptions from the FRC in Fast and Intermediate Track Claims, as follows:
- Residential housing claims including possession, disrepair and unlawful eviction;
- Any claim where a party is a protected party;
- The Court may consider a claim for an amount of costs which is greater than the FRC where a party or witness for the party is vulnerable and the vulnerability has required additional work to be undertaken and by reason of that additional work alone, the claim for an amount that is 20% greater than the amount of the FRC.
Conclusion
The introduction of the FRC marks a significant shift in legal costs recovery for civil litigation claims. The above should not be taken nor used as legal advice. If you do require assistance with any civil dispute please do contact Martin Hall on 0117 973 3989 or by emailing info@amdsolicitors.com
