CIVIL PROCEDURE (AMENDMENT NO.2) RULES 2023: LATEST REFORMS.
From 1st October 2023 all civil litigation claims valued between £25’000 and £100’000 will be allocated to a new ‘Intermediate Track’ which will carry fixed recoverable costs varying depending on complexity. This is part of the new Civil Procedure (Amendment No.2) Rules 2023 that provides further amendments to the long-established fast and multi tracks. Our article explains the changes below.
LITIGATION TRACKS & THE CURRENT REGIME
At present, depending on the value and the complexity of a civil litigation dispute, a claim is allocated to one of three tracks:
SMALL CLAIMS TRACK: This applies to claims up to £10’000 save for RTA claims where the limit is £5000, all other injury claims where the limit is £1500 and any housing disrepair claim more than £1000.
FAST TRACK: All claims above the Small Claims limit and up to £25’000.
MULTI TRACK: Any case above £25’000 in value.
The differences between the tracks relate to how the case is managed by the court and when it will be listed for trial. These are as follows:
Small Claims Track:
Claims allocated to the Small Claims Track are generally heard by a District Judge or Deputy in open county courts and the use of a solicitor is actively discouraged insofar as a solicitor’s costs are not recoverable save for a minimal sum. Upon receipt of a Defence, the court will order dates for the filing of evidence and a trial will usually be listed within 6 months. Such trials do not usually last more than 3 hours and the court’s decision is largely based on the papers filed. It is extremely rare for the court to hear oral evidence from a witness nor should there be any need for expert evidence.
Fast Claims Track:
Multi Claims Track:
THE NEW INTERMEDIATE TRACK
The new reforms introduced by the Civil Procedure (Amendment No.2) Rules 2023 as part of Sir Rupert Jackson’s 2017 review introduce an new ‘Intermediate Track’ which is essentially a hybrid of the fast and multi track.
After 1 October 2023 (except for personal injury and disease claims) less complex disputes valued between £25’000 - £100’000 will be assigned to the Immediate Track. This aims to provide quicker listings for matters requiring no more than a 3 day trial and no more than 2 experts per party. While there is as of yet no current guidance as to what ‘less complex disputes’ involve (and to make maters more confusing), claims allocated to the Intermediate Track will be subdivided into 1 of 4 ‘Complexity Bands’. These will determine the amount of fixed recoverable costs the parties are able to recover under the amended CPR Part 45 and Practice Direction 45. As costs are fixed, there is no need for cost budgeting in the Intermediate Track or cost assessment save with the latter, for interim applications.
OTHER CHANGES
Together with the Intermediate Track, other changes that are being brought in consist of:
The extension of Fixed Recoverable costs to all civil claims across the fast track.
A new process and separate table of costs for Noise-Induced Hearing Loss claims valued up to £25’000.
Vulnerable Parties and witnesses will have specific provisions under a new CPR r.45.10 under the extended fixed recoverable costs regime.
Fixed Recoverable Costs will apply to all cases in the fast track and the Intermediate Track with some limited exceptions.
The arrangements for Part 36 Offers to settle in low value personal injury cases already subject to fixed recoverable costs will be updated. And;
Under the new CPR r.26.9(10) certain claims that are in the public interest must be allocated to the multi track regardless of their complexity or value. These are claims for:
Mesothelioma or asbestos lung disease claims. In all cases, these diseases are fatal.
Clinical negligence unless liability has been admitted and it would normally be allocated to the intermediate track.
Arising from abuse, harm, neglect of children or vulnerable adults.
Triable by Jury.
Against the police for intentional or reckless assault or for a remedy under the Human Rights Act 1998.
A copy of the new rules can be viewed here.
COMMENT
The Jackson Reforms and their accompanying fixed recoverable costs were introduced following intense government lobbying from the insurance industry during the last recession. This was essentially a ‘gentleman’s promise’ that if solicitor fees were capped, premiums would be dropped and there would be more money to circulate in the economy. Instead, after the then coalition government capped solicitor fees, the insurers all hiked their premiums. This resulted in higher costs for businesses and the public, a flood of litigants in person into the lower courts that combined with reduced government funding created a record back clog which exacerbated by Covid these changes are now meant to address.
Our view is that further complicating a long established system and cutting fees further will result in increased satellite litigation and make matters worse. Rather than spend time trying to settle the dispute, lawyers will argue viciously over which of the new 4 complexity tracks a claim should be allocated to and then try to reverse the decision so the claimant can recover increased costs. Meanwhile the county courts will continue to be clogged with unrepresented parties as law firms no longer find it profitable to assist these clients on certain matters.
Solicitors have never been able to recover more than what their clients are liable to pay them and the market dictates what a reasonable fee is for a dispute (e.g. nobody will pay a lawyer £255 p/h for 18 months to recover £26’000). To prevent a client being hoodwinked by an unscrupulous practitioner and to establish a level playing field, the amount of solicitors fees recoverable from the losing side has always been capped by specific bands based on a solicitor’s experience together with location. Consequently, it has never been possible for a law firm to claim that an untrained paralegal should recover £500 p/h from the insurer and in the event that a Senior Solicitor with a high hourly rate on a London band had been instructed on a straightforward RTA matter in say Hartlepool, the courts already had the power to reduce their fees accordingly.
There is more evidence for the Loch Ness Monster than the need or efficiency of these reforms.
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