The Future of Fixed Recoverable Costs

In 2017, Lord Justice Jackson suggested a raft of fixed recoverable costs reforms as part of his wider review into civil litigation costs. One suggestion was that the fixed recoverable costs regime should be extended to civil claims involving a claim for damages up to £100,000. 

In 2019, the Government announced that it was holding a consultation on the extension of fixed recoverable costs as advocated by Jackson LJ. After the consultation, the Government announced that it agreed with the proposals of Lord Justice Jackson in the main and published its response to the consultation paper in September 2021. The Government intends to move forward with the reforms and although a date is yet to be set in stone, practitioners consider that the new fixed costs regime will be in place by October this year.

So, what are the reforms and what do they mean for the client? In summary, cases will be allocated to certain bands and depending on which band your case is allocated to, this will determine the level of costs, which you are able to recover from the other party in the event of your case being successful. Based on the Government’s current proposals, it would appear that the level of costs recoverable in the most complex of cases will be capped at a level of circa £70,000 for a damages claim of £100,000. The cap will vary depending on the complexity of the case and the value of the claim. 

In our view the proposals can be looked at in a number of ways: some legal commentators believe that this is another nail in the coffin of access to justice, on the basis that clients will have to bear a greater proportion of their legal costs in the event of success, than under the current costs’ regime. Others consider that it will improve access to justice, as people will be aware of their precise costs’ exposure in the event of being unsuccessful with their case from the outset, thereby allowing clients greater control over the management of such risk and perhaps making them more inclined to seek the assistance of the courts. The Law Society opposes the reforms on the grounds that they pose a “substantial risk” to access to justice. The body believes that costs should be reduced by streamlining processes and that the proposals do not take into account, the major changes to court process such as the HM Courts and Tribunals Service reform programme. 

It is our view, that we will only know the true effect of these reforms, once they have been implemented. As a client, the key thing to bear in mind is that the reforms address costs recovery between parties to litigation. They do not affect a client’s liability in respect of fees paid to solicitors acting.

Should you have any questions at all in respect of the proposed reforms, then please feel free to contact James Thorton, our Head of Litigation of Dispute Resolution, who would be happy to assist further.

The contents of this article do not constitute legal advice and are provided for general information purposes only.