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Government to implement Jackson’s fixed costs blueprint

Gauke: FRC have made costs proportionate

The Ministry of Justice (MoJ) today laid out its intention to implement Sir Rupert Jackson’s blueprint for fixed recoverable costs (FRC) across the fast-track and in most money cases worth up to £100,000.

It will also take forward the Civil Justice Council’s plan for FRC in noise-induced hearing loss cases, and introduce costs management in judicial review (JR) cases where a party’s costs exceed £100,000.

Introducing the consultation [1], Lord Chancellor David Gauke wrote: “It is sometimes suggested that fixed recoverable costs favour defendants at the expense of claimants. But it is generally just as much in claimants’ interests to control the costs that they might have to pay.

“Access to justice is enhanced if claimants are able to contemplate legal proceedings with an informed assessment of the likely costs, rather than to avoid them altogether due to a fear of a high but uncertain liability.

“Given their success in making costs proportionate and improving access to justice for many, we are now looking to extend fixed recoverable costs.”

The consultation also hinted at further reform down the road: “It remains our intention to extend the areas in which costs are controlled in due course: such an extension could include extending FRC to further categories of claims, including claims of higher value, and controlling costs incurred before the first costs and case management conference, where cases are not otherwise subject to FRC.”

It said the government was also working on fixed costs for asylum and immigration JRs.

The MoJ only rejected two of the former Court of Appeal judge’s recommendations: rather than introducing his new intermediate track for cases worth £25,000 to £100,000, given “the costs and complexity that that would involve”, it proposed assigning these so-called ‘intermediate’ cases to an extended fast-track.

Second, it does not intend to extend the ‘Aarhus’ costs-capping rules across all JR cases.

The MoJ has accepted the different bands of fast-track and intermediate cases, the criteria for the latter, and the actual figures proposed by the 2017 Jackson report. They are all detailed in our story here [2].

The consultation said: “The proposed figures for FRC were devised by Sir Rupert based on data submitted by Taylor Rose (a firm of solicitors and costs lawyers) that was analysed by Professor Paul Fenn.

“Sir Rupert consulted with his team of 14 assessors, drawing on a breadth of views and experience, and brought his own expertise to bear in finalising the figures. As such, we consider that the figures have been devised with appropriate rigour and intend to implement them as he recommends.”

The consultation sought views on whether, and how, the rules should be strengthened to make sure that unnecessary challenges were avoided, and cases stayed within FRC where appropriate.

In the event of beating a part 36 offer, the MoJ said an uplift of 35%, rather than indemnity costs, should be applied to the FRC.

It also sought views as to whether, in the case of unreasonable litigation conduct, the court should award an uplift of FRC, indemnity costs or some other penalty.

The MoJ backed Sir Rupert’s view that it was necessary to ring-fence fees for counsel or specialist lawyers only in band 4 and hearing loss cases, “as counsel is rarely instructed in cases outside of band 4”, as well as continued London weighting.

Sir Rupert did not deal with multiple claims arising from the same cause of action – such as a family claim from holiday sickness. The MoJ proposed that the FRC for each additional claimant should be set at 10% of that for the principal claimant.

In cases which did not go to trial but there was a costs dispute, there would be a shortened form of detailed assessment, with a provisional assessment fee cap of £500.

The MoJ deferred the question of extending FRC to part 8 claims for future consideration, and said it would retain the existing multi-track court fees for intermediate cases, “at least until the reforms have had time to bed in”.

The Aarhus rules are an optional, means-tested costs-capping regime for JRs currently used in environmental JRs.

The MoJ said: “As both costs-capping orders and legal aid are available for JRs (as well as the Aarhus rules for environmental claims), we do not consider there to be an access to justice issue in respect of non-Aarhus JRs.

“Extending cost capping increases the risk of less meritorious JRs coming forward with increased costs to the government and other public-sector defendants. We therefore do not propose to extend costs capping in this way, and are not seeking views on this proposal.”

It decided that there should just be one criterion for defining a ‘heavy’ JR to which costs management scheme would apply: whether the costs of a party are likely to exceed £100,000.

The MoJ said that, given this was unlikely to apply to many JRs (less than two dozen per annum), it did not propose to pilot this.

The two other recommendations of the 2017 report – introducing a new procedure and FRC for clinical negligence claims worth up to £25,000 and a capped costs pilot for Business & Property Court cases worth up to £250,000 – have already been taken up.

A Civil Justice Council working party is considering the former, while the latter began in January [3].

The consultation closes on 6 June.