In recent years, fixed recoverable costs (FRC) have become a central feature of the UK civil justice system, with its changes designed to make litigation more predictable, transparent and affordable.
Instead of legal costs being passed after the case concludes, FRC sets out in advance the amount a successful party can recover from their opponent for legal fees in certain types of civil cases.
What has changed?
Prior to October 2023, FRC applied mainly to lower-value personal injury or small claims. However, under the new rules, most civil claims issued on or after 1 October 2023 are now subject to FRC. To enable this, a new ‘Intermediate track’, sitting between the existing ‘Fast Track’ and ‘Multi-Track’ allocations has been introduced.
What is the new structure?
Civil claims are now broadly allocated to one of four tracks, depending on the value and complexity of the claim:
- Small Claims Track – For claims under £10,000 in value
- Fast Track – For claims ranging between £10,000 – £25,000
- Intermediate Track – Typically for claims worth between £25,000 – £100,000, and
- Multi-Track – For the more complex claims worth over £100,000. In this instance, FRC generally do not apply.
Both the Fast and Intermediate Track further assign cases to ‘Complexity Bands’ 1-4, reflecting various factors such as their relative complexity and the expected work involved. The higher the bands, the higher the recoverable costs.
What does this mean in practice?
Under FRC, if you win a claim, the legal costs you can recover from the losing party are capped and fixed depending on the track and the stage at which the claim ends.
For example, if your claim is allocated to the Small Claims Track, you will not be able to recover your Solicitors or Barristers’ costs regardless of whether you are the successful party; Only the court fees, modest fixed witness expenses and capped expert fees can be recovered.
On the other hand, for the more complex higher value claims allocated to the Intermediate Track, you will be entitled to recover a fixed sum for your legal costs, determined by the allocated complexity band and stage of the litigation when the claim is concluded.
What this means for you – guidance for potential litigants, claimants and defendants
If you are considering bringing a civil claim under £100,000, the new FRC regime may make litigation more financially predictable, but you should check whether your case qualifies as the complexity of your case will also impact the Track in which your claim is allocated.
Understanding the new regime will be particularly helpful if you intend to pursue a low value monetary claim, as this might help you determine whether or not it would be cost-effective to seek legal advice and representation.
If you are the defendant in a claim, the fixed-cost regime can help in assessing the downside risk more precisely. It may also influence settlement strategy, as known costs may encourage early settlement.
Further information, including the tables of fixed costs, can be found in the Civil Procedure Rules.
If you are thinking about bringing a claim, or a claim has been brought against you, we encourage you to call 02920 470909 to arrange an appointment with one of our specialists.