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Civil Cases: Extending Fixed Recoverable Costs

Volume 700: debated on Monday 6 September 2021

The Ministry of Justice is today publishing its consultation response on extending fixed recoverable costs (FRC) in civil law cases in England and Wales. This follows the 2019 consultation paper, Extending Fixed Recoverable Costs in Civil Cases: Implementing Sir Rupert Jackson’s Proposals, which was based on the recommendations in Sir Rupert Jackson’s report on FRC, published on 31 July 2017. This consultation response has been delayed, principally because of the covid-19 pandemic.

As we build back a better justice system, we continue with renewed vigour to modernise the courts and how users interact with them. One area in need of further reform is costs, and particularly those that a losing party must pay the winner. This is especially true in lower value civil claims which people and businesses are most likely to face, either as claimants or defendants. Currently, the costs of these cases are too uncertain. Without being able to predict what the costs may be, it is difficult for either side to take an informed decision on the best way forward. We want cases to be resolved as early as possible, including those that proceed to litigation, with costs that are certain, proportionate, and fair to both sides.

FRC is a way of controlling the legal costs of civil litigation in advance by prescribing the amount of money that can be recovered by the winning party at set stages of litigation. They reduce overall costs, keep them proportionate, and enhance access to justice. FRC is already an important part of our justice system in lower value personal injury cases: their extension will be of particular benefit to those of more modest means, including individuals and small and medium enterprises (SMEs), and those who may otherwise be unable to litigate.

The Ministry of Justice has carefully considered the way forward in the light of responses to the consultation and developments since, including the Government’s desire to extend the use of FRC in other cases not covered in this response, such as clinical negligence claims and immigration and asylum judicial reviews. As is set out in our response, we propose to extend FRC to all cases in the fast track—generally those up to a value of £25,000, and to implement a new regime for ‘intermediate’ cases—simpler cases between £25,000 and £100,000. We will work with the Civil Procedure Rule Committee to ensure the smooth delivery of these reforms, to be implemented over the coming year.

The case for extending FRC remains strong: uncertainty of costs hinders access to justice, whereas certainty of costs set at a proportionate and fair level enhances it.