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Fixed Costs Update

31/07/13

SE

The Civil Procedure (Amendment No.6) Rules 2013 were announced last week setting out the final details of the long anticipated and
much feared Fixed Costs Rules and Practice Directions.  The contents are as expected but there is some good news about the transitional provisions as discussed further below.

Outside the Portal, therefore, the following fixed costs will apply exclusive of VAT:

 

 

 Pre issue £1,000-£5,000

Pre issue £5,001 - £10,000 Pre
issue £10,001 -£25,000

 Issued -      Post issue Pre Allocation

   Issued -
Post-allocation pre listing
Issued - post listing
pre trial
Trial - Advocacy fee
Road Traffic Accident
Fixed
Costs

Greater of £550 or £100+20%
of.Damages

£1,100     + 15% of Damages over
£5k
 £1,930    + 10% of Damages
over £10k
 £1,160         + 20% of
Damages
 £1,880         + 20% of
Damages
 £2,655    + 20% of
Damages

 £500 (up to £3k)
£710 (£3k-£10k)

£1,070 (£10k-£15k)
£1,705 (£15k+)

 Escape +20%  +20% +20%      
  
+20% +20%            
 
+20%      
  
na 
Employers
Liability
 Fixed costs  £950           + 17.5% of
Damages
£1,855     +12.5% of Damages
over £5k
 £2,500 +10% of Damages over
£10k
 £2,630         + 20% of
 Damages
 £3,350         + 25% of
Damages
 £4,280     + 30% of
Damages

£500 (up to £3k)
£710 (£3k-£10k)

£1,070 (£10k-£15k)
£1,705 (£15k+)

 Escape  +20%    +20%  +20%  +20%  +20%  +20%  na
Public
liability 
 Fixed costs  £950           + 17.5% of
Damages
 £1,855     + 10% of Damages
over £5k
 £2,370     + 10% of Damages
over £10k
 £2,450       + 17.5% of
Damages
 £3,065         + 22.5% of
Damages
 £3,790     + 27.5% of
Damages

£500 (up to £3k)
£710 (£3k-£10k)

£1,070 (£10k-£15k)
£1,705 (£15k+)

Escape   +20%  +20%  +20%  +20%  +20%  +20%  na

 

Notes:   Base fees  - in all cases increased by 12.5% where London firm as per CPR 45.29C(2) and 45.29D(2).

 

Based on the table above I have taken the liberty of working out examples of the profit costs solicitors can expect to
recover depending on the value of the case.  Click here  for the table. 

The cost of interim applications will also be recoverable in addition to the costs above and are fixed at £250 profit costs
for any case that falls within the Protocols regardless of the type of claim or the value up to £25,000. Any VAT, London uplift and disbursements in the application are recoverable in addition to this sum on the same terms as set out below.

 

In addition to these costs, the receiving party may only recover the following disbursements under CPR 45.29i:

 

(a) the cost of obtaining medical records and expert medical reports as provided for in the relevant Protocol;

 

(b) the cost of any non-medical expert reports as provided for in the relevant Protocol;

 

(c) the cost of any advice from a specialist solicitor or counsel as provided for in the relevant Protocol;

 

(d) court fees;

 

(e) any expert's fee for attending the trial where the court has given permission for the expert to attend;

 

(f) expenses which a party or witness has reasonably incurred in traveling to and from a hearing or in staying away from
home for the purposes of attending a hearing

 

(g) a sum not exceeding the amount specified in Practice Direction 45 or for any loss of earnings or loss of leave by a party or
witness due to attending a hearing or to staying away from home for the purposes of attending a hearing;

 

(h) any other disbursement reasonably incurred due to a particular feature of the dispute.

 

 

In a claim started under the RTA Protocol only, these disbursements may also include the following costs:

 

(a) an engineer's report;

 

(b) a search for the records of the
-

                  (i) Driver Licensing Authority;
                 (ii) Motor Insurance Database.

 

Most solicitors will be familiar with the majority of this list of disbursements from the predictive costs rules under part 45.12.  A notable addition, however, under sub-section (c) above is that the cost of any advice from a specialist solicitor or counsel provided for in the relevant Protocol will also be recoverable as a disbursement in addition to the fixed costs.

 

Both Protocols indicate that an additional advice on quantum may be recoverable where the value of the claim exceeds £10,000 and the advice is reasonably required.


The Protocols, however, are silent as to whether an advice on liability may be recoverable.  In proceedings that progress through the Protocol liability would normally be admitted at first instance. In these circumstances, clearly an advice on liability would not be required but in contested proceedings an advice on liability is just as beneficial as an advice on quantum and it will be difficult for courts to separate the two in a single document.  At present, one can only assume that the Civil Procedure Rules Committee decided that a formal advice on liability was not strictly necessary in the context of one-way cost shifting or simply assumed that this cost would be met out of the fixed profit costs.  Similarly, as expected, the cost of drafting pleadings will not be recoverable as a disbursement. 


Under CPR 45.29J the court can order that the fixed costs provisions do not apply in 'exceptional circumstances'. On assessment, however, the receiving party must exceed the applicable fixed costs by 20% or the costs will be reduced to the fixed costs
amount anyway under CPR 45.29K and the receiving party is likely to be liable for the wasted costs of the assessment in these circumstances.  


Transitional Provisions 

On the bright side, the transitional provisions do allow some time for the profession to prepare for the changes.


In summary, the courts will continue to assess costs on the standard basis for any accidents before 31st July 2013 in EL/PL claims or RTA claims valued in excess of £10k. This is crucial as it means that  the standard costs provisions that are currently in place will apply to any accident before 31st July in these categories. In these cases, therefore, the costs will be subject to assessment on a standard basis on an hourly rate and disbursements (including Counsel's fees) will be recoverable in principle.

 

The reason for this is that the new CPR provisions confirm that the Fixed Costs rules only apply to cases which "no longer continue under" the relevant Protocol.

 

Yet, in EL/PL claims the Protocol only applies where the accident occurred after 31st July 2013. EL/PL accidents which occur before 31st July 2013, therefore, cannot start under the protocol and will not attract Fixed Costs.

 

In disease claims the Protocol applies where no letter of claim has been sent to the Defendant before 31st July 2013. Disease
claims where the letter of claim was sent before 31st July 2013, therefore, cannot start under the protocol and will not attract Fixed Costs.

 

Unfortunately, the position is not as clear for RTA claims as there is already an existing Portal for these cases. Under the new CPR 45.29B it appears that the Fixed Costs rules only apply where the case started under the Protocol and the Claim Notification Form (CNF) was submitted on or after 31st July 2013.
 

The extended Protocol only applies to RTA cases worth between £10k to £25k where the accident occurred on or after 31st July 2013. Consequently, high value (>£10k) RTA accidents before 31st July 2013 cannot start under the Protocol and, again, will not attract fixed costs.

 

Similarly, RTA cases worth less than £10k where the CNF was submitted before 31st July 2013 will not attract fixed costs under CPR 45.29B.

 

Before 31st July 2013, therefore, solicitors should rush to issue CNFs in RTA claims worth less than £10k and write letters of claim in any disease case. Otherwise, there should be no rush as the accident date will determine whether Fixed Costs apply in the remaining EL/PL claims or high value RTA claims.

 

I appreciate that these amendments will be of some concern to the profession and if any solicitor would like to discuss this matter further feel free to contact me in chambers.

 

Shannon Eastwood

 

 

This publication is intended to provide general guidance only.  It is not intended to constitute a definitive or complete statement of the law on any subject and may not include more recent changes since the date of publication.  It is no substitute for legal or professional advice in any case.  Any views or opinions expressed in this article are those of the author only.