Top ten tips on the new Fixed Costs Regime

From  1 October 2023, a new fixed recoverable costs regime (“FRC”) is being introduced  to almost all civil claims. This will be the first time that commercial disputes with a value of £25,000 or more will be subject to fixed costs. Fixed costs means that the amount of costs that can be recovered by the winning party from the losing party in court proceedings will be subject to a “cap”.  There are pros and cons to the new regime and only time will tell of its real impact. However, the time to take notice of the changes is undoubtedly “now”.

There are currently three “tracks” to which a claim can be allocated at court, namely the small claims track, the fast track and the multi-track.  The allocation to a track has an impact on the level of costs that can be recovered from the losing party. Allocation is governed by court rules and takes into account various factors such as the value and complexity of the claim. The new FRC introduces a new fourth track, namely the Intermediate track, for claims with a value of between £25,000 and  £100,000.

In addition to the new  Intermediate track, the new FRC regime introduces complexity bands  for the existing fast track and the new  intermediate track cases. This means that your recovery of legal costs will now not only depend on the track allocation but also on how your case is categorised within the new complexity bands. This is likely to result in spin off litigation with regard to interpretation of the new rules whilst this new regime is bedded into the legal system. This is an additional cost and degree of uncertainty that can potentially be avoided if you act now.

Here are our Top Ten Tips for anyone with existing or potential claims with a value of between £25,000 and £100,000 to take on board before the new FRC come into force:

The impending introduction of the new fixed costs regime in October is poised to bring significant changes to how legal costs are managed and billed. It’s crucial for legal professionals and businesses alike to stay informed and adapt to these changes promptly. If you have any questions or concerns about how this new regime might affect your specific legal matters, don’t hesitate to reach out to our expert Dispute Management Team.