The anticipated extension to the Fixed Recoverable Costs (FRC) regime has been pushed back for a second time.

HEADLINE SUMMARY

It is now expected in October 2023. Lord Bellamy KC announced the news in his address to the Civil Justice Council's National Forum on 18 November 2022. The delays are said to result from the complex set of reforms required and the need to give the legal sector more time to adjust to the new regime.

BACKGROUND

The proposals originally announced by the Ministry of Justice in September 2021 include:

• Extending FRC to all civil cases in the fast track (those valued up to £25,000 in damages that will last no longer than a day)
• Expanding the fast track to include simple 'intermediate' cases valued between £25,000-£100-000 in damages

These reforms were prompted by Sir Rupert Jackson's review of civil litigation costs in July 2017. A consultation on extending FRC in civil cases in England and Wales was then held by the government from March to June 2019.

COMMENTARY

The proposals have generally been welcomed by defendants' representatives and their insurers. Claimants' representatives on the other hand have criticised the "one size fits all" model.

The Law Society has been particularly critical of the proposals, stating that they pose a "substantial risk" to access to justice by making many legitimate claims economically unviable. They have also commented that the proposals are now based on out-of-date data, highlighting that the justice system has changed significantly since the consultation in 2019.

KEY POINTS

FRC are intended to provide certainty, in allowing a losing party to know in advance the maximum amount of legal costs they will have to pay. This allows parties to prepare for the worst- case scenario. However, with this comes the risk that the amount reclaimed by a claimant may not cover the actual costs incurred. This is particularly the case for unusual and complex claims where costs are more difficult to predict.

Additional time to prepare for these changes, and in particular to scrutinize the detail (not yet available), will be welcome. It remains to be seen whether the reforms will finally make their way through to implementation in October or whether they will be delayed further.

Key Contact

Harriet Turner