Kerry Underwood

FIXED COSTS REPORT OVERVIEW : POST 1

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This blog first appeared in Practical Law on 31 July.

On 31 July 2017 Lord Justice Jackson’s Supplemental Report on Recoverable Fixed Costs was published and is available here.

You can book for my 10 city Autumn Fixed Costs Tour here.

This will now be subject to consultation by the government, and so these are proposals at this stage.

Whatever comes in is likely to be on 1 October 2018.

Fast Track

The Fast Track limit remains £25,000.00 and all Fast Track claims will be covered by Fixed Recoverable Costs.

The new grid has the same stages as the current Fast Track personal injury grid set out in CPR 45.29, but has four bands of complexity, a new concept.

In Band 4 alone, covering the most complex cases, there will be ring-fenced fees for counsel/specialist lawyers as follows:

Post-issue advice or conference –                             £1,000.00

Settling Defence/Defence and counterclaim –           £500.00

Throughout the Fast Track, both pre and post-issue, all figures are fixed, not capped.

There is a special table for noise induced hearing loss (NIHL) claims as follows:

Stage NIHL claims with value less than £25,000
Pre-Issue £4,000 + £500 per extra defendant (reduced by £1,000 if there is an early admission of liability or by £500 if settled before proceedings drafted)
Post-issue, pre-allocation £5,650

+ £830 uplift per extra defendant

Post-allocation, pre-listing £7,306

+ £1,161 uplift per extra defendant

Post-listing, pre-trial £9,187

+ £1,537 uplift per extra defendant

Trial advocacy fee Not agreed

The costs figures are to be reviewed every three years.

Non-monetary awards

Non-monetary awards, such as declarations or injunctions are to be valued at £10,000.00, with courts having a discretion to vary that valuation.

The fixed recoverable fee for an interim injunction application will be £750.00.

Interim applications in NIHL and Band 4 fast track claims will be paid at two-thirds of type A and type B costs, rather than one-half.

Portals

There will be no extension to the portal system.

Complexity

The Pre-action Protocols are to be amended to require parties, pre-issue, to agree the band of complexity, and that will depend upon the individual case, rather than the type of case.

Ultimately the Judge on Allocation will decide both the track and the band.

The party will be able to challenge the band and track allocation, but if unsuccessful, will incur fixed costs of £150.00.

Clinical negligence

The only clinical negligence cases to be covered by fixed costs will be where breach and causation are admitted in the Pre-action Protocol Letter of Response and the claim is valued at less than £25,000.00.

Given the absence of any other fixed costs regime for clinical negligence cases, this is a very powerful incentive on Resolution (formerly the NHSLA) to admit liability and causation, where appropriate, immediately.

IPEC

Intellectual Property and Enterprise Court claims will remain subject to their own existing capped costs scheme and are not affected by this report.

Intermediate Track

This new streamlined track will apply to most civil claims, including personal injury, but not clinical negligence, matters valued at between £25,000.00 and £100,000.00.

This is subject to those claims being ones where the trial will take three days or less, with no more than two expert witnesses giving oral evidence on each side.

The Intermediate Track has nine pre-trial stages and four complexity bands.

As with the existing fast track grid, the fixed costs are a combination of a core fee and a percentage of damages.

The figures are cumulative, that is you get the figure in the box at the stage you have reached; you do not add all of the stages up.

In relation to non-personal injury cases, the Stage 1 costs, that is for settlement pre-issue, or pre-defence investigations, is capped and not fixed.

The reason for this is that in personal injury cases, there is a minimum amount of work which must be done to achieve a settlement pre-issue and therefore the Stage 1 figures are calculated on a “swings and roundabouts” basis.

In non-personal injury cases, the amount of work to be done to achieve a pre-issue settlement may vary substantially. In some cases, a simple Letter of Claim may bring about a settlement, whereas in other cases a large amount of investigation may be required.

The figures

In the Intermediate Track, these are the figures:

Stage (S) Band 1 Band 2 Band 3 Band 4
S1 Pre-issue or pre-defence investigations £1,400 + 3% of damages £4,350 + 6% of damages £5,550 + 6% of damages £8,000 + 8% of damages
S2 Counsel/ specialist lawyer drafting statements of case and/or advising (if instructed) £1,750.00 £1,750.00 £2,00012 £2,00013
S3 Up to and including CMC £3,500 + 10% of damages £6,650 + 12% of damages £7,850 + 12% of damages £11,000 + 14% of damages
S4 Up to the end of disclosure and inspection £4,000 + 12% of damages £8,100 + 14% of damages £9,300 + 14% of damages £14,200 + 16% of damages
S5 Up to service of witness statements and expert reports £4,500 + 12% of damages £9,500 + 16% of damages £10,700 + 16% of damages £17,400 + 18% of damages
S6 Up to PTR, alternatively 14 days before trial £5,100 + 15% of damages £12,750 + 16% of damages £13,950 + 16% of damages £21,050 + 18% of damages
S7 Counsel/ specialist lawyer advising in writing or in conference (if instructed) £1,250 £1,500 £2,000 £2,500
S8 Up to trial14 £5,700 + 15% of damages £15,000 + 20% of damages £16,200 + 20% of damages £24,700 + 22% of damages
S9 Attendance of solicitor15 at trial per day16 £500 £750 £1,000 £1,250

______________________________________

12 £3,000 if there is a counterclaim and defence to counterclaim.  The rules may need to specify how costs are split between claim and counterclaim.

13 £3,000 if there is a counterclaim and defence to counterclaim.  The rules may need to specify how costs are split between claim and counterclaim.

14 If the receiving party did not prepare the bundle, subtract: (a) £500 for a Band 1 case, (b) £750 for a Band 2 case, (c) £1,000 for a Band 3 case, and (d) £1,250 for a Band 4 case.

15 In this table “solicitor” includes a representative of the solicitor’s firm.

16 To be halved if attendance is for half a day or less.

Stage (S) Band 1 Band 2 Band 3 Band 4
S10 Advocacy fee: day 1 £2,750 £3,000 £3,500 £5,000
s11 Advocacy fee: subsequent days17 £1,250 £1,500 £1,750 £2,500
S12 Hand down of judgment and consequential matters £500 £500 £500 £500
S13 ADR: counsel/specialist lawyer at mediation or JSM (if instructed) £1,200 £1,500 £1,750 £2,000
S14 ADR: solicitor at JSM or mediation £1,000 £1,000 £1,000 £1,000
S15 Approval of settlement for child or protected party £1,000 £1,250 £1,500 £1,750
Total: (a) £30,000 (b) £50,000, (c) £100,000 damages18

 

(a)   £19,150

(b)   £22,150

(c)   £29,650

(a)    £33,250

(b)    £37,250

(c)    £47,250

 

(a)    £39,450

(b)    £43,450

(c)    £53,450

(a)    £53,050

(b)    £57,450

(c)    £68,450

 

____________________________________________

17 To be halved if attendance is for half a day or less.

 18 Assuming a one day trial in Band 1, a two day trial in Band 2, and a three day trial in Bands 3 and 4. For all bands, it is assumed that there was no counterclaim, that the receiving party prepared the trial bundles, that there was unsuccessful ADR and that there was no approval of settlement for a child or protected party.

19 Solicitors and costs lawyers.

Advocacy Fees

There are six variations of Advocacy Fees and the same four bands of complexity and these are set out at stages 10 to 15 of the table above.

The total maximum fixed costs ranges from £19,150.00 for a Band 1 matter of £30,000.00 or less to £68,450.00 for a Band 4 claim of between £50,000.00 and £100,000.00.

Judicial Review

Judicial Review applications are to be subject to capped costs along the lines of environmental cases as in the Aarhus Convention.

“Citizens must be able to challenge the executive without facing crushing costs liabilities if they lose.” (Paragraph 11 of Executive Summary)

Part 36

If the Defendant fails to beat a Claimant’s Part 36 offer, then there should be a 30%, or 40% uplift on Fixed Costs, rather than an award of indemnity costs.

This introduces certainty for the litigants and avoids the need for a detailed assessment of costs in such cases.

This will apply in both the Fast Track and the new Intermediate Track, although on my initial reading of the report I can see no proposal as to whether a late accepting Defendant, as compared with a Defendant who has had judgment against it, should be so penalised in costs.

Modifications to the existing Fast Track Regime

Lord Justice Jackson states:

“I have come to the conclusion that it is not appropriate for me in this review to start “tinkering” with the existing Fast Track FRC [Fixed Recoverable Costs] Regime, which overall works well. The focus of this report is upon whether and how to introduce FRC for cases where costs are currently at large. I therefore leave it to the Civil Procedure Rule Committee (“The Rule Committee”) to consider the points of detail which have been raised concerning the current regime.”

Commercial pilot for claims between £100,000.00 and £250,000.00

This is part of Lord Justice Jackson’s recommendations, and I dealt with this in my last blog, and do not deal with it again in detail here.

Part 8 Claims

Part 8 claims, generally dealing costs, will not be subject to the Fixed Recoverable Cost Scheme.

Summary

This is very much an initial overview of a 135 page report, excluding appendices.

I will look at specific proposals in much more detail in future posts, as well as dealing with them in my series of lectures in the Autumn, and more information about those courses can be found here. 

 

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Written by kerryunderwood

July 31, 2017 at 4:57 pm

Posted in Uncategorized

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