horwich farrelly

Introduction of a ‘fixed costs’ pilot scheme for certain multi-track cases

June, 28, 2017

In addition to the legislative programme outlined in the Queen’s Speech, the government has also signalled its intention to press ahead with other reforms not requiring primary legislation. Among these may be Lord Justice Jackson’s suggestion that fixed fees should be extended to all civil cases with a value up to £250,000.

LJ Jackson’s final report on the matter is expected in July.  However it has emerged that, with the support of the Civil Procedure Rules Committee, an initial voluntary pilot scheme is being planned for some types of claim.  This is to be run for two years in selected locations of the Business and Property courts (including Leeds and Manchester) with the success of the trial being monitored by a number of academics.

Importantly, personal injury cases will be excluded from this pilot.  Nevertheless it is interesting to reflect on what is being proposed, which is not a fixed fee scheme in the sense we are used to.

In the pilot cases over £250,000 or where a trial is expected to go beyond two days will be excluded.  Costs will be capped at various stages, with a maximum total of £80,000 payable. The caps suggested for each stage are:

Pre-action £10,000
Particulars of claim £  7,000
Defence and counterclaim £  7,000
Reply and defence to counterclaim £  6,000
CMC £  6,000
Disclosure £  6,000
Witness statements £  8,000
Experts’ reports £10,000
Trial and judgment £20,000
Settlement/negotiations/mediation £10,000
Making or responding to an application £  3,000
Work done post-issue which is not otherwise covered by any of the stages £  5,000

VAT, court fees and wasted costs orders are payable in addition where applicable.

Costs budgeting will not apply to the scheme and if the parties cannot agree costs at the conclusion of the case the court will assess them summarily based on the costs’ schedules which will have been exchanged.

Claimants will have the option to run a claim in the scheme but the case will leave the process if the defendant objects. Cases in the scheme will be subject to a form of streamlined case management leading to a trial within eight months of the case management conference.

The process will begin with a ‘succinct’ letter of claim indicating the claimant’s intention to use the capped costs system, although the case can enter the process at a later stage. Similarly statements of case must be ‘concise’ with a core bundle of documents being created as the case progresses. Beyond this core bundle disclosure will be limited; witness statements restricted to no more than 15 pages; and expert evidence will not be permitted, save in exceptional circumstances. Then any expert evidence will be that of a single joint expert.

The progress of the case will revolve around a list of agreed issues to which any evidence heard at the trial will be restricted, as will cross-examination. No more than two witnesses will be permitted to give oral evidence at the hearing.

This streamlined process will exclude cases involving allegations of fraud or dishonesty and those involving extensive disclosure, multiple issues or multiple parties.

Successful claimant Part 36 offers will attract indemnity costs but with a maximum uplift of 25% on the costs that would otherwise have been recoverable. The maximum costs recoverable may thus not exceed £100,000. The usual interest penalties under Part 36 also apply.

Our view

Given the parameters being applied this pilot may be viewed by many as a damp squib: it is voluntary so it remains to be seen what the take up is; it may be evaluated only after the full two years that it is set to run; it relates to only limited types of claims; and only to those that are suited to a streamlined procedure.  A cynic might even say that if this is as successful as the pilot scheme for the new bill of costs, it may be nearer to three years before we hear any more about it – and we are not yet aware of any cases that have been assessed under the new bill format.

Lord Justice Jackson has unerringly championed a fixed costs regime applicable to all cases valued at up to £250,000, so it will be interesting to see how the implementation of this pilot impacts his proposals insofar as personal injury claims are concerned.  No doubt all will become clear when his full report is published.

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