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New Fixed Recoverable Costs (FRC) regimes have been introduced for claims that are issued on or after the 1st October 2023.  But what does that mean for you?

In short, the regime will extend FRC to all Fast Track claims valued between £10,000 and £25,000. It will also introduce a FRC regime to a new ‘Intermediate Track’ for most claims valued between £25,000 and £100,000 which normally would have fallen under the Multi-Track.

For Intermediate Track claims, the trial is expected to last no longer than 3 days, with only two experts giving oral evidence for each party with some exceptions such as for mesothelioma and clinical negligence cases. Otherwise, the normal track will be the Multi-Track.

Under the extended FRC regime, the costs will be restricted to the fixed costs recoverable for each stage. Whether that is under the Fast Track or the Intermediate Track which is shown in Tables 12 and 14 of the draft Practice Direction 45, (bar exceptional circumstances or a client’s vulnerability). This may require solicitors to have a look at their retainers to check whether they can charge their clients any shortfall.

Three things to consider about the new FRC regimes

  1. The new fixed costs regime will not be subjected to indemnity costs. When it comes to Part 36 offers, 35% will be awarded instead only for an offer which has been beaten at trial for the costs between the expiry of the offer and the date of judgement handed down. Solicitors will need to be aware that they will only get the uplift when the offer is beaten at trial, and they could be subject to a shortfall which may ultimately fall on the client.
  1. It is still of great importance to properly record any time spent on a client’s work for two reasons. The first is that any costs accrued during the proceedings may be greater than the FRC at a particular phase. This may only be recoverable from the client if it has been agreed to by the client and they have given informed consent. The second being that the FRC regime allows for the costs to be assessed summarily or detailed assessment in exceptional circumstances. Or that the client or a witness for the client is vulnerable which has resulted in greater costs exceeding the 20% FRC.
  1. It would also be worth setting out your stall early when it comes to drafting the directions questionnaire, as a ‘Court Officer’ will decide provisionally the track for the proceedings and assign it one of the four complexity bands. When deciding this the Court will need to consider any additional factors as set out by draft CPR 26.13(1), such as the remedies sought and the importance of the case to the client. Particularly in the Intermediate Track where it would be worth noting the number of contested issues and the duration of the trial.

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