Fixed recoverable costs – has the momentum stalled?

A guest post by Alistair Kinley, director of policy and government affairs at BLM

Kinley: The 2013 FRC reforms have achieved notable efficiencies

What looked like inevitable progress towards the extension of fixed recoverable costs (FRC) appears, like many other policy proposals, to have been halted as we work out our relationship outside or alongside (but probably no longer inside) the EU.

Last week, therefore, seemed a strange time for the Law Society to reissue its position on the point.

Perhaps it chose to do so because the Ministry of Justice’s (MoJ) consultation last March about extending FRC – which was much more about how rather than whether to do so – closed in early June and indicated a response within three months.

Maybe the Law Society issuing its position was intended as a pre-emptive strike in case the MoJ kept to that timetable, as that would have meant we’d see developments this week?

The Law Society states it is against extending FRCs as currently proposed, ie across the entire fast-track and to ‘intermediate’ cases valued at up to £100,000. While it says it is not opposed to the principle of FRCs, it lists significant qualifications which appear to act as an absolute bar to it giving its endorsement to these proposals.

That stance runs, as I see it, in contrast to our views as an insurance litigation business and to views of similar firms within the Forum of Insurance Lawyers.

We can agree that there are some definite flaws in the present FRC regimes – the lack of a review mechanism for the figures and bands is one – but the idea of simple and predictable costs tariffs for broadly homogenous groups of cases is surely sound in principle and capable of promoting efficient resolution of cases.

Certainly that was the conclusion of an important government review of fixed costs, which noted: “If there is an effective mix of incentives and penalties in place, lawyers can generally be expected to comply with the requirements of the new rules, meet deadlines, and develop more efficient working practices (rather than maximising the amount of work they do and charge for, as the current system motivates them to do).”

The sobering thought, however, is that that passage is taken from a 1997 review that preceded the Civil Procedure Rules – plus ça change?

In our view, the 2013 FRC reforms have achieved notable efficiencies in mainstream low-value personal injury cases. The next wave of reforms and extension of FRC proposed by the MoJ in March (and based heavily on Sir Rupert Jackson’s supplementary report) could, if implemented pragmatically, reviewed and monitored properly, build on those efficiencies.

Of course there will be unintended consequences, attempts to work around the changes and technical challenges to new rules. But let’s make the changes and then deal those issues on their own merits.

They need not be a barrier to further reform and to the wider use of FRC.

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