23 November 2012Print This Post

Escape to victory? 20% get-out clause "becomes more achievable" under proposed fast-track fees

Fletcher: conduct of the defendant is likely to be integral to the court’s decision

The low level of the proposed new fast-track fixed fees could make it relatively easy to trigger the ‘escape clause’ built into the regime, it has been claimed.

Under every entry in the table of proposed fixed recoverable costs scheme (FRCS) for claims outside the road traffic, and employers’ and public liability protocols – which essentially replaces and expands on the current FRCS – a 20% ‘escape’ is mentioned.

Michael Fletcher, a costs lawyer at Manchester firm Glaisyers, explained that the rationale for this is set out in the Jackson report and essentially reflects and seeks to replicate the current rules under CPR 45.12 and 45.13.

These permit a claim to be made for more than FRCS fees, the caveat and disincentive being that if the solicitor does not persuade the court to award more than 20% over the FRCS, then he has failed and must pay the defendant’s part 8 costs.

“In the current predictable fee system CPR 45.12 is little used, as at £800 plus 20% of damages, costs normally reach a similar amount to the approximate work in progress (WIP) required to conclude the necessary work. However, if fixed costs are as low as £550, which they will be in a £2,000 pre-issue case, then you would only have to persuade the court that you have reasonably incurred more than £660 in WIP to exceed the fixed-fee amount.”

Mr Fletcher predicted that if liability has been disputed, a police report is obtained and witness statements are required, then getting more than fixed costs could well be achievable.

He added: “The conduct of the defendant is likely to be integral to the court’s decision making on whether a claim can ‘escape’. The defendant’s conduct is of course one of the features of the new Jackson proportionality test, which has the overall effect of reversing the decision of Lord Woolf in Home Office v Lownds.

“Will defendant insurers sufficiently resource themselves to ensure that they cannot be accused of procrastination or conduct that has the effect of breaching the letter and spirit of a low-value fixed-fee scheme?”

The Jackson report contemplated that the Senior Courts Costs Office would see a reduction of over 700 cases per year as a result of fast-track fixed fees, but Mr Fletcher questioned whether in fact the reverse will be true.

“Will we actually see more costs litigation instead of less? For those of us old enough to remember it, is this county court scale 1 all over again?”

By Neil Rose


One Response to “Escape to victory? 20% get-out clause "becomes more achievable" under proposed fast-track fees”

  1. The post seems logical BUT having sought further guidance from the MoJ it appears that the escape clause can only apply if there are exceptional circumstances why FRCS should not apply. The reason why there is little case law is that its hard to persuade the Court to what constitues “exceptional circumstance”

  2. Roberto Carassale on November 23rd, 2012 at 10:30 am