Following Sir Rupert Jackson’s recommendations for a reduction in civil litigation costs, the Ministry of Justice (MOJ) announced its intention to implement fixed costs for civil cases with a value of up to £100,000.
According to the then justice secretary David Gauke: “One of the major concerns about embarking on litigation is the fear of adverse costs: the requirement by a losing party to pay the other side’s costs. It is important that these costs are proportionate to the sums in issue. In order to ensure that ordinary people can engage in civil litigation without fear of incurring ruinous costs, where possible we must control legal costs in advance. This provides certainty and transparency for all involved.”
One key proposal was the introduction of a new 'intermediate track' which would impose fixed costs for straightforward cases worth between £25,000 and £100,000. This was rejected by the MOJ since it concluded this would involve further costs and complexity. It is instead intended that any such cases will be subject to an extended fast track.
The level of costs will vary according to complexity and follow Sir Rupert’s previous recommendations (notwithstanding the 4% inflation which has occurred since then).
By way of example, for a case that settles at £25,000, the recoverable costs would be as follows:
It remains to be seen if fixed costs will apply to foreign accident cases litigated in the English jurisdiction. These inevitably require additional work and specialist expertise, to include the gathering of evidence in the foreign jurisdiction, the instruction of foreign experts for advice on foreign law and/or local standards, preparation of power of attorneys etc. Realistically, very few firms would be willing or able to handle foreign accident claims on the basis of the MOJ’s proposed fixed fees. This could then detrimentally impact on access for justice for those who have suffered injury abroad.
Although the new rules are due to be implemented in April 2020, this now seems unrealistic given the continuing uncertainties surrounding Brexit. Claimant lawyers will be hoping that the proposals are put out to the long grass - and that they stay there.