Civil Procedure Rule Changes for Civil Litigation
The Civil Procedure (Amendment No.2) Rules 2023 introduced the biggest reforms to Civil Procedure Rules in a decade. As of 1st October 2023, the reform has introduced the ‘Intermediate track’ and changes to Fixed Recoverable Costs (FRCs). The intermediate track was introduced to simplify and expedite settlement in civil cases, whilst changes to fixed costs aimed to ensure that any legal expenses incurred are proportionate to the value and complexity of each case.
Understanding the Intermediate Track
The Civil Procedure Rules reform has now introduced a 4th track; ‘the Intermediate track’.
Upon application to court in a civil claim, if the matter is defended, the case will be allocated to a ‘track’ depending upon a variety of factors, including the monetary value of the claim, its’ complexity, the issues in dispute and the potential number of experts relied upon. Naturally, more complex cases will incur higher costs due to expenses such as expert reports to instructing legal professionals. Therefore, the type of ‘track’ a case is allocated could be influential in the outcome of the case, so it is important that initial information provided is correct, to ensure it is allocated accurately. Whilst the court has ultimate discretion as to which track the claim should be allocated, the parties can, upon agreement, decide to allocate the case to a lower track which may be beneficial to limit costs.
The Small Claims track is designated to deal with less complex claims with a value of less than £10,000. This track is considered to be more informal than the other tracks and it is often that the parties will deal with the claim themselves, as opposed to instructing a solicitor. This is often due to the fact that the costs of instructing a legal representative, often exceed the amount claimed. Cases under this track generally reach a hearing within 6 months due to the less demanding pre-action protocols and requirements.
The Fast track is for more complex cases, where there are multiple issues in dispute, complex areas of law or fact in dispute, or evidence required from more than one expert, with a value of between £10,000 and up to £25,000. These cases are generally not expected to last for more than one day at trial.
The new Intermediate track is for claims with a monetary value between £25,000 to £100,000, but that are not complex enough to fall into the Multi track. Claims in the Intermediate Track should only be allocated if the claim is not suitable for the Small or Fast track, where the trial is likely to be heard within three days and where expert oral evidence is likely to be limited to two experts per witness. A Claim that is not for monetary relief is unlikely to be allocated to the Intermediate Track.
The Multi track has now been dedicated for especially complex cases concerned with claims over £100,000.
The goal of the new ‘Intermediate’ Track is to streamline allocation and expediate resolution, particularly in cases involving claims over £25,000 but that are not complex enough to justify allocation to the multi-track.
Understanding Extended Fixed Recoverable Costs
Prior to these recent changes, Fixed Recoverable Costs has applied to the Small Claims track and limits the amount of costs recoverable from the unsuccessful party. Under the new regime, Fixed costs will now apply to claims (with some exceptions) on the Fast and Intermediate tracks.
Sir Rupert Jackson sets out that “if the costs are too high, people cannot afford lawyers. If costs are too low, there will not be any lawyers doing the work” He summarises the difficulty of having statutory controls on Fixed Recoverable Costs in Civil Proceedings, but also the necessity for recoverable costs to be proportionate and fair 1.
The latest reforms have extended Fixed Recoverable Costs to cover Fast and Intermediate track claims. Both these tracks now have their own specific four-band complexity categorisation to determine recoverable fixed costs on a case-by-case-basis. Within each complexity band, costs are also calculated according to which stage the case has reached.
The fixed recoverable costs regime aims to give litigants more certainty in advance about the maximum amount that the losing party will be required to pay. The four-band categorisation grades each claim on complexity to provide a scale for fixed costs, which will increase proportionally to the value of money and specific facts of each case.
Applicability
Notably, judges will still have discretion to allocate more complex cases, which are valued at under £100,000, to the multi-track to ensure that complex cases will not be inappropriately or unfairly captured by the extended FRC regime.
The new FRC regime will apply to non-personal injury claims where proceedings were issued on or after 1st October 2023. For personal injury claims, the new FRC rules will apply where the cause of action accrues on or after 1st October 2023. For disease claims, the FRC will only apply where the letter of claim is sent to the defendant after 1st October 2023. However, application of the FRC regime for housing claims will be delayed until October 2025 to reflect the proposed changes in housing legislation.
Exceptions
Sir Rupert’s report also noted that there should be some exceptions to the FRC regime. Rule 26.9(10) controls these exemptions which include but are not limited to cases concerned with mesothelioma and asbestos-related disease, certain clinical negligence claims and certain claims against the police. These claims, as explained by Sir Rupert in 2017 2, are necessarily complex which requires them to be allocated to the multi-track to exclude them from the FRCs.
1 – Sir Rupert Jackson, Executive Summary of Supplemental Report on Fixed Recoverable Costs. Pg. 10. 21st July 2017.
2 – Sir Rupert Jackson, Executive Summary of Supplemental Report on Fixed Recoverable Costs. 21st July 2017.
Moving forward
In the transitional period, these reforms are likely to cause some uncertainty for legal practitioners as they navigate the new rules, the categorisation of the band system and how to advise clients accordingly. The extended applicability of the FRC regime and the introduction of the ‘Intermediate track’ will bring more certainty about legal expenditure and may contribute to quicker resolution of cases. Yet, its true impact remains to be seen.
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