New Intermediate Track and Fixed Recoverable Costs Rules: A Comprehensive Guide
From 1st October 2023, there will be a significant change to Civil Litigation in England and Wales with the introduction of a new Intermediate Track and Fixed Recoverable Costs Rules. This will impact the way civil cases are conducted and managed. In this article, we explore the key aspects of these new rules, their implications, and what they mean for litigants and legal practitioners.
Understanding the Intermediate Track
The Intermediate Track is a procedural innovation introduced to streamline and expedite the resolution of certain civil cases in England and Wales. It falls between the Fast Track and the Multi Track in terms of complexity and value of claims. The primary goal of this track is to enhance the efficiency and cost-effectiveness of litigation, making it accessible to a broader range of litigants while reducing the burden on the court system.
1. Applicability: The Intermediate Track is designed for cases with a financial value between £25,000 and £100,000.
2. Simplified Procedure: To achieve its objectives, the Intermediate Track features a simplified procedure, which includes stricter case management and fixed recoverable costs (“FRCs”). This simplification aims to reduce the uncertainty and costs associated with litigation.
Fixed Recoverable Costs
Fixed Recoverable Costs are predetermined costs that a successful party in a case can recover from the losing party for each stage of the litigation process. An amendment to Civil Procedure Rule 45 will introduce FRCs for Fast Track and Intermediate Track claims. It is a significant departure from the traditional method of costs being assessed by a Judge. The key aspects of FRCs are as follows:
1. Predictability: FRCs provide greater predictability for litigants, as they know in advance the maximum amount they can recover if they win the case. This predictability reduces the risks associated with litigation and encourages settlement.
2. Cost Control: FRCs are intended to control and limit the costs of litigation. By fixing the recoverable costs, the court aims to ensure that the legal expenses incurred by the parties remain proportionate to the value and complexity of the case.
3. Encouraging Efficiency: The fixed nature of these costs incentivizes parties to resolve disputes efficiently. Prolonged and unnecessary litigation can result in parties incurring costs beyond what they can recover, thus encouraging early settlement and cooperation.
4. Reduced Burden on the Courts: By reducing the scope for protracted cost disputes and detailed assessments, FRCs alleviate the burden on the court system, allowing it to allocate resources more effectively.
Challenges and Considerations
While the introduction of the Intermediate Track and FRCs has many advantages, there are also challenges and considerations to be mindful of.
The amount of fixed recoverable costs you can recover will depend on the complexity of the case. Each case will be allocated to one of four bands depending on complexity – with band 1 being the simplest. Straight forward debt claims will generally fall into ‘band 1’. Case assessment will therefore be extremely important.
There will also be changes to Part 36 offers with fixed recoverable sums increasing or decreasing in certain circumstances. For example, a claimant who matches or beats its own Part 36 settlement offer at trial may receive a 35% uplift on the fixed recoverable costs. However, if there is unreasonable behaviour during litigation a 50% increase or reduction of fixed recoverable costs may be applied as a penalty.
For the last 30 years, Lovetts Solicitors has been campaigning for efficient, accessible, and cost-effective debt recovery. The FRCs gives costs certainty to creditors when they are forced into litigating due to non-payment of debts and Lovetts Solicitors fees will mirror the FRCs to achieve a costs neutral position for our clients in the majority of our clients.
While these changes come with challenges and considerations that legal professionals and litigants must navigate, Lovetts Solicitors believes the introduction of the Intermediate Track and Fixed Recoverable Costs Rules represents a significant step forward.