Costs News

28 March 2019
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Government to press ahead with Jackson’s fixed recoverable costs plan

The government is set to implement Sir Rupert Jackson’s (pictured) recommendations for fixed recoverable costs (FRC) across the fast-track and in most money cases worth up to £100,000, it said this morning.

The long-awaited announcement also confirmed that the Ministry of Justice (MoJ) was backing the Civil Justice Council’s plan for FRC in noise-induced hearing loss cases, and said it supported Sir Rupert’s plan for costs management in judicial review (JR) cases where a party’s costs exceed £100,000.

The Ministry of Justice (MoJ) only rejected two of the former Court of Appeal judge’s recommendations: rather than introducing his new intermediate track for cases worth £25,000 to £100,000, given “the costs and complexity that that would involve”, it proposed assigning these so-called ‘intermediate’ cases to an extended fast-track.

Second, it does not intend to extend the ‘Aarhus’ costs-capping rules across all JR cases.

The MoJ has accepted the different bands of fast-track and intermediate cases, the criteria for the latter, and the actual figures proposed by the 2017 Jackson report, which were based on data provided by Peterborough law firm Taylor Rose.

In the event of beating a part 36 offer, the MoJ said an uplift of 35%, rather than indemnity costs, should be applied to the FRC and sought views on how to penalise unreasonable litigation conduct.

The MoJ backed Sir Rupert’s view that it was necessary to ring-fence fees for counsel or specialist lawyers only in band 4 and hearing loss cases, “as counsel is rarely instructed in cases outside of band 4”, as well as continued London weighting.

Sir Rupert did not deal with multiple claims arising from the same cause of action – such as a family claim from holiday sickness. The MoJ proposed that the FRC for each additional claimant should be set at 10% of that for the principal claimant.

In cases which did not go to trial but there was a costs dispute, there would be a shortened form of detailed assessment, with a provisional assessment fee cap of £500.

The MoJ deferred the question of extending FRC to part 8 claims for future consideration, and said it would retain the existing multi-track court fees for intermediate cases, “at least until the reforms have had time to bed in”.

On JR, it said the Aarhus rules used in environmental cases were not necessary given that both costs-capping orders and legal aid were available. “Extending cost capping increases the risk of less meritorious JRs coming forward with increased costs to the government and other public-sector defendants. We therefore do not propose to extend costs capping in this way, and are not seeking views on this proposal.”

It decided that there should just be one criterion for defining a ‘heavy’ JR to which costs management scheme would apply: whether the costs of a party are likely to exceed £100,000.

The MoJ said that, given this was unlikely to apply to many JRs (fewer than two dozen per annum), it did not propose to pilot it.

The two other recommendations of the 2017 report – introducing a new procedure and FRC for clinical negligence claims worth up to £25,000 and a capped costs pilot for Business and Property Court cases worth up to £250,000 – have already been taken up.

A Civil Justice Council working party is considering the former, while the latter began in January.

Lord Chancellor David Gauke said FRC in the fast-track have succeeded in making costs proportionate and improving access to justice for many: “It is sometimes suggested that fixed recoverable costs favour defendants at the expense of claimants. But it is generally just as much in claimants’ interests to control the costs that they might have to pay.

“Access to justice is enhanced if claimants are able to contemplate legal proceedings with an informed assessment of the likely costs, rather than to avoid them altogether due to a fear of a high but uncertain liability.”

The consultation also hinted at further reform down the road: “It remains our intention to extend the areas in which costs are controlled in due course: such an extension could include extending FRC to further categories of claims, including claims of higher value, and controlling costs incurred before the first costs and case management conference, where cases are not otherwise subject to FRC.”

It said the government was also working on fixed costs for asylum and immigration JRs.




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