CPR 28: Costs in Fast Track Cases
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What is the Fast Track?
When cases are valued between £10,000 and £25,000, they will usually be allocated to the Fast Track (and if for personal injury, the minimum threshold is generally reduced to £1,000, and £5,000 specifically for Road Traffic Accidents). Cases allocated to the Fast Track are typically low-value claims such as road traffic accidents, employers’ liability and public liability personal injury claims as well as clinical negligence and housing disrepair cases. Fixed costs can apply to cases allocated to the Fast Track for personal injury (not including clinical negligence).
What are CPR 45 Fixed Costs?
The fixed recoverable costs regime for personal injury claims sets out the amount of costs that can be recovered by a successful Claimant throughout the different stages of litigation which includes pre-action up until the point of Trial.
Owing to the fact that litigation can involve parties with substantial means (such as insurers), many potential Claimants are deterred from pursuing litigation due to the potentially high and unpredictable costs. Fixed costs therefore provide a level of certainty for both parties as to their exposure to legal fees.
If fixed costs do not apply on the Fast Track (non-personal injury cases), legal fees are calculated on an hourly basis which can make future costs unpredictable, and this concern is amplified by the requirement that the unsuccessful party must pay the successful party’s costs or partial costs on conclusion. This creates a situation where the unsuccessful party who finds themselves financially limited having just lost a case, may have to pay their own litigation fees combined with those of the successful party. This risk deters potentially worthy Claimants and limits access to justice.
Fixed recoverable costs restrict the amount of legal costs the successful party may claim from the unsuccessful party. This provides certainty in advance about the maximum amount that the losing party will have to pay; however, the total which may be reclaimed may not always cover the material costs of the case which is also difficult to predict.
When are Costs Subject to Standard Costs?
Standard costs refer to costs that are to be quantified and paid on an hourly rate basis. This is the traditional means that a Solicitor calculates their charges, on a 6 minute ‘unit’ basis. Irrespective of whether fixed costs apply or not, a Solicitor will still record the full time and costs they have incurred on a case however, when fixed costs apply it is more likely than not that the full amount of costs will not be recovered from the paying party.
In non-personal injury Fast Track cases currently, such as clinical negligence, housing disrepair or commercial disputes up to a value of £25,000, costs remain recoverable on an hourly rate basis from the unsuccessful paying party. In such cases, costs are likely to be much higher than when fixed costs apply, and will also likely result in a higher proportion of your legal costs being recovered from the paying party, recouping any funds you have paid on account to your Solicitor.
The Proposed Extension of CPR 28 Fast Track Scope and Fixed Costs
Recent recommendations have been made that the Fast Track should be extended to all civil cases up to a value of £100,000, and fixed costs will therefore likely apply to all cases up to this value in the next few years. This will enable justice to be more accessible to all parties, as well as providing more predictability for costs to all those involved in a legal dispute. It will also benefit litigants who have a strong case but limited funds to pay large fees or risk losing money if they are unsuccessful in their claim.
Currently, the costs budgeting system ensures lawyers justify the fees they aim to recover from the unsuccessful party however, it generally does not apply to CPR 28 Fast Track matters and also does not provide the same certainty as fixed recoverable costs. With lower value disputes, the risk increases that final costs will be disproportionate to the amount claimed; therefore, if low value claim disputes end up in Court, it is advisable to settle them as soon as possible alongside costs which are proportionate and fair to both parties.
How can ARC Costs Assist with CPR 28 Fast Track Costs Disputes?
If you require any free initial advice from our Costs Lawyers and Costs Draftsmen, or our assistance with regards to any CPR 28 Fast Track dispute, please do not hesitate to contact us via the Contact Form below and one of the team will get in touch on the same working day.
It is worthwhile noting that if you are a party involved in Fast Track litigation which falls outside personal injury, an N260 Statement of Costs will need to be filed 2 clear working days before Trial detailing your costs. It is therefore essential at this juncture that you instruct a legal costs expert.
Alternatively, if you wish to provide a copy of the electronic papers for us to consider, please email info@arccosts.co.uk so that we can provide a preliminary advice within 24 hours, or contact one of the team directly on 01204 397302.