The extended fixed recoverable costs (FRC) system is mired in uncertainty for injured people and law firms, APIL has warned.
“It’s still early days, but obvious problems are emerging from the 2023 extension to the FRCs regime,” said APIL executive committee member John McQuater.
“There is a lack of clarity around allocation and assignment to a complexity band, particularly where the parties are exploring settlement before issue of proceedings or, when proceedings have been issued, prior to allocation. That is because the figure at which a claim settles will often not be a reliable indicator of value, as a settlement may reflect innumerable factors,” he said.
APIL has responded to a Civil Procedure Rule Committee and Ministry of Justice stocktake of the reforms, which introduced a new intermediate track for cases valued between £25,000 and £100,000 and applied FRC to all fast-track claims.
“The whole point of FRCs is so the legal costs of a case can be predicable and assessed accurately. But with the uncertainty brought by the reforms, it can be hugely difficult for claimant lawyers to fully inform injured people, at the outset, about how costs will be dealt with,” he said.
“Issues arise when cases are initially placed in the multi-track but then settle at a lower value that puts them in the intermediate track and defendants don’t agree to the assessed costs.
“The rules should require the parties to attempt to agree the track and, if appropriate, the complexity band at the outset. This need not be binding but could be referred to at assessment if costs cannot be agreed,” Mr McQuater said.
“Personal injury cases should also be removed altogether from complexity band 1 in the intermediate track,” he said.