Exclusive: Capped-costs pilot ends in failure

Towneley Hall: Case was only one run through capped-costs pilot

The capped-costs pilot has ended with just one case run through it and the model will not be taken forward, Litigation Futures can reveal.

The similar insolvency express pilot has also been ditched after attracting no cases at all over four years.

The Civil Procedure Rule Committee decided last month not to extend the pilots to try and attract more cases.

Based on the capped-costs regime in the Intellectual Property and Enterprise Court (IPEC), the capped costs pilot was recommended by Sir Rupert Jackson as part of his July 2017 report on extending fixed recoverable costs in civil cases.

Using a streamlined procedure, the opt-in pilot began on 14 January 2019 and was available for all cases in London, Manchester and Leeds worth up to £250,000 where the trial was expected to require no more than two days. Costs were capped at £80,000.

The only case run under it was Faiz v Burnley Borough Council [2020] EWHC 407 (Ch), about whether the defendant council lease had successful forfeited the lease on a café at Towneley Hall, a historic country house in Lancashire.

The case entered the pilot at the suggestion of the His Honour Judge Halliwell, sitting in Manchester as a High Court judge, and the judge commended the parties for their “significant degree of collaboration” to make it work.

The insolvency express trials pilot was launched on 1 April 2016. It was designed to deal with simple applications to the Insolvency and Company Courts Judges, which could be disposed of in under two days with limited directions, as opposed to case management, limited disclosure and where the costs of each party would not exceed £75,000.

A paper before the committee said the aims of both pilots “remain laudable” as efforts to increase the accessibility of the Business & Property Courts to businesses with “medium-value” claims.

It went on: “It is important, though, to be realistic and accept that they have not been a success, and have failed to capture the imagination of courts users in the same way as the IPEC scheme.

“This could be for a number of reasons – lack of promotion and the success of costs budgeting for medium-value claims among them. They should not, in any event, be extended any further.”

The paper said the need for schemes of this kind “for the efficient despatch of medium-value claims, whether as pilots or not, will continue to be considered in the context of post-Covid 19 recovery and new ways of doing business litigation”.

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