The Ministry of Justice has confirmed that the fixed recoverable costs regime will not be extended until October 2023 to give the legal sector more time to prepare for the changes.
What are Fixed Recoverable Costs (FRCs)?
FRCs fix the amount of legal costs that a successful party can recover from a losing party at different stages of the litigation, from pre-issue up to trial. This is already the case in the majority of low-value personal injury cases. FRCs aim to ensure that legal costs remain certain and proportionate, thereby promoting access to justice for parties involved in litigation.
Proposed Extension
In 2019, the Government announced that it was going to consult on whether there should be an extension of FRCs in civil cases. This consultation came in response to the proposals put forward by Sir Rupert Jackson in his 2017 report on FRCs. In September 2021, the government published its long-awaited response to the consultation, announcing that it would be implementing the majority of the recommendations suggested by Sir Rupert Jackson. The response confirmed the government’s intention to extend FRCs to all civil cases on the fast track. Initially, the plan was to expand the fast track to include simple ‘intermediate’ cases. It emerged recently, however, that the government would now instead adopt Jackson’s recommendation for a new intermediate track, which will increase the coverage of FRC to less complex claims from £25,000- £100,000 (with exemptions).
The proposals are controversial and while it is hoped that fixed costs will give both parties certainty about the amounts they will have to pay if they are unsuccessful, critics argue that the proposals could have the opposite effect and risk driving lawyers out of civil justice work if the costs are too low, leaving litigants to represent themselves.
Further Delays
The extension was initially to October 2022, but earlier this year it was delayed again until April in the new year. However, the Ministry of Justice has recently confirmed that the extension to FRCs will now take place in October 2023 to give the legal sector more time to adjust to the new regime. It has also proved logistically difficult to redraft the rules in time and the new rules to support the extension have also not yet been agreed upon.
The Ministry of Justice has also confirmed that a ‘full scale’ review of the civil legal aid would be announced before the end of the year with the aim of ‘bringing the scheme into the 21st century’.For more information on FRCs, speak to a member of our litigation team.
