The government has come under fresh pressure to delay the new fixed recoverable costs (FRC) regime amid continued uncertainty weeks before the start date.

The Association of Costs Lawyers, which represents costs professionals, said the ‘piecemeal and unreasonable’ reforms are not ready and still to be finalised.

The Ministry of Justice has insisted that the FRC extension will start from 1 October but earlier this year it opened a consultation on ‘issues relating to the new regime’. These included the previously unheralded inclusion of certain clinical negligence claims and whether costs on assessment should be fixed. There is also the outstanding issue of whether the costs of bringing Part 8 proceedings – for disputes about costs of the main action – should be fixed.

The consultation itself suggests that any amendments stemming from it would not be implemented until April 2024, leaving practitioners to potentially deal with two sets of reforms within six months. The issue is clouded further by an ongoing legal challenge to the reforms by the Association of Personal Injury Lawyers.

The ACL said there will be a period where a different set of rules applies, proposing that the new rules be updated and implemented in full next April.

ACL chair Jack Ridgway said: ‘Irrespective of our opposition to the FRC extension on principle, it is clear that the government’s piecemeal approach to reform is only going to cause more problems than it purports to solve. It fails to give the legal market sufficient time to plan, prepare and adapt to what will be a significant upheaval.

‘The Ministry of Justice needs to fix the Solicitors Act before tipping a new load of cases into the system. Otherwise, it will fail in its stated aims of improving access to justice and providing clarity and certainty to all parties in respect of the costs of civil litigation.’

Jack Ridgway

Ridgway: 'Government’s piecemeal approach to reform is only going to cause more problems than it purports to solve'

Lawyers told last week of their concern that the new rules will lead to a glut of disputes. The MoJ admitted in its consultation that leaving these disputes subject to hourly rates created the potential for the exemption to be exploited.

The ACL said its members agreed with introducing fixed costs for these proceedings but that the proposed level (£300 for a claimant and £150 for a defendant) was ‘far too low’ for the work required.

On clinical negligence, the ACL said these claims were naturally ‘front-loaded’ with costs, so the proposed fixed rates were unlikely to cover the work required to investigate claims at the outset.

A consultation response by the Bar Council had a similar theme, warning that the rules as set down may incentivise defendants to prolong cases until the moment before costs are due to increase. The representative body was due to meet the MoJ on Monday and impress on officials that the costs of a trial advocate should still be recoverable even where proceedings are vacated shortly before trial.

Sam Townend KC, vice chair of the bar, said: ‘There are aspects of the reforms that remain unreasonable and arguably irrational. The costs regime should help, not hinder, settlement and getting the backlog down, especially where improvements to the scheme cost the taxpayer nothing more. And all workers, including barristers, should be paid a reasonable fee for work done, otherwise they will be inclined to stop doing that work.’

 

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