CPR Fixed Costs & the October 2023 changes 

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What are CPR fixed costs?

CPR 45 refers to the rules and procedures governing the Fixed Costs regime in England and Wales. The Civil Procedure Rules (CPR) are the set of rules that govern civil litigation procedures in these jurisdictions.

The Fixed Recoverable Costs regime was introduced to simplify the process and provide certainty about the amount of costs that parties can expect to recover, as well as the costs payable in certain types of cases. It applies to specific types of cases with relatively lower monetary value or straightforward issues; however, this is due to change in October 2023 with the fixed costs extension.

Listed below are some key excerpts from the fixed costs rules under Part 45 CPR to explain the Fixed Costs regime:

CPR 45.1 – Scope and application:

(1) This Section sets out the fixed costs and disbursements allowed to any party in relation to proceedings to which this Section applies.

(2) This Section applies to claims started under the Pre-Action Protocols for Low-Value Personal Injury Claims in Road Traffic Accidents and Low-Value Personal Injury (Employers’ Liability and Public Liability) Claims.

(3) Where the claim no longer continues under the relevant Pre-Action Protocol but continues under this Section, this Section will apply.

In essence, CPR 45 applies to certain types of low-value personal injury claims, particularly those arising from road traffic accidents and employers’ liability or public liability cases.

CPR 45.6 – The fixed costs table:

(1) Subject to rules 45.29H, 45.29J, 45.29K and 45.29M, the amount of costs which the court will assess pursuant to rule 45.29E(1)(b) is the amount set out in the Table.

(2) The fixed costs are all the costs, apart from disbursements, which are recoverable in accordance with Part 36.

CPR 45.6 establishes the Fixed Costs Table, which provides specific amounts of costs recoverable in different stages of the proceedings. These fixed costs include all the costs recoverable under Part 36, except disbursements (expenses such as court fees, expert witness fees, etc.).

CPR 45.29 – Restriction on costs for Pre-Action Disclosure and additional claims:

(1) In relation to any proceedings which include a claim to which this Section applies, if the claimant makes an application for an order for pre-action disclosure or serves an additional claim to which this Section applies, the only costs allowed will be the relevant Type A or Type B fixed costs in accordance with rule 45.29C or 45.29I.

(2) In this rule, ‘additional claim’ means a claim made by a claimant under—

(a) rule 20.5 (amendment to correct a mistake as to the name of a party); or

(b) rule 17.1(2)(a) (addition or substitution of a party).

CPR 45.29 restricts costs recoverable for pre-action disclosure and additional claims, limiting them to specific Type A or Type B fixed costs.

 

Changes to be introduced in October 2023

In October 2023, a number of changes will be made to the CPR fixed costs rules. Civil claims with a value of up to £100,000 will be subject to fixed recoverable costs. The changes will apply to all civil litigation, with a few exceptions. Changes will not apply to housing disrepair cases for another two years.

In addition to this, a new intermediate track will be created. Claims with a value up to £25,000 will still fall within the fast track; however, claims with a value between £25,000 and £100,000 will be assigned to the intermediate track and fixed costs applied. Multi track cases will now require a value over £100,000.

Complexity bands will be introduced to the intermediate track which will determine the amount of fixed costs recoverable based on the complexity of a case.

The updated regulations concerning allocation and assignment will be found under Part 26 of the Civil Procedure Rules. Draft changes can be found on the Government’s website and the draft rules under CPR 26.14 state the following:

“(1) When a claim is allocated to the fast track or the intermediate track, the court must also assign the claim to a complexity band, unless it is one to which Section VIII of Part 45 applies.

(2) In both Table 1 and Table 2, below, the complexity bands numbered 1 to 4 provide an ascending scale of allowable costs commensurate with the complexity of the claim.

(3) The complexity band to which a claim is assigned shall determine the costs that are to be allowed under Table 12 or Table 14 in Practice Direction 45.

(4) Subject to paragraph (5), the parties may agree the complexity band to which a claim is assigned. (5) The court may direct that a claim be assigned to a different complexity band than that agreed by the parties, but shall have regard to the factors set out in rule 26.13(1).

(6) A party must state on their directions questionnaire—

(a) the agreed complexity band; or

(b) where the parties disagree, the complexity band considered appropriate by that party”

The impact of the CPR Fixed Costs extension

Solicitors have expressed significant frustration over the proposed extension of fixed costs regimes to a broader array of civil cases.

Whilst the objective of these proposals is to decrease the overall expenses of litigation and introduce greater assurance and predictability for parties engaged in legal proceedings, there are apprehensions surrounding the potential implications of these new plans on solicitor firms and, of course, claimants.

In addition to restricting access to justice for claimants, it is evident that the expansion of CPR fixed costs will result in adverse outcomes for the majority of law firms affected by these changes.

The most apparent consequence of the fixed costs extension is that solicitors will face limitations on the amount of costs they can recover from the opposing party, ultimately leading to reduced profits and constrained cash flow.

 

How can ARC Costs assist with CPR fixed costs?

Our team of Costs Draftsmen and Costs Lawyers can assist with any legal costs matters, including fixed costs disputes.

We can provide assistance on any pre or post issue CPR 45 dispute, and on provision of the paper or electronic papers, we typically secure an interim payment within two weeks, and a resolution to the dispute within two months.

Some matters may need Bills of Costs preparing, and to proceed to a provisional assessment hearing. This may extend the length of the dispute however, we have an unrivalled success rate on proceeding to assessment, with 96% of our fixed costs cases succeeding at this stage.

Get in touch via email at info@arccosts.co.uk, by phone on 01204 397302, or contact us on live chat below.

 

 

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