MOJ launches fixed recoverable costs consultation

The Ministry of Justice has launched a consultation on extending fixed recoverable costs (FRC) in civil cases worth up to £100,000.

The proposed extension follows Sir Rupert Jackson’s 2017 report, in which he argued that controlling litigation costs is “a vital part of promoting access to justice”. 

The consultation, which launched today, is taking responses until 6 June 2019, with a response paper scheduled for three months after the consultation closes. 

FRC determine the amount of damages that can be claimed back from a losing party in civil litigation and theoretically keep legal costs under control by providing some certainty as to the maximum amount either party may have to pay.

“If the costs are too high, people cannot afford lawyers. If the costs are too low, there will not be any lawyers doing the work”, Jackson explained in his 2017 report. 

FRC currently operate in most low value personal injury cases and have been extended earlier this year to a capped costs pilot in the business courts.

The capped cost pilot scheme applies to cases valued at up to £250,000 in the Chancery, Circuit Commercial and the Technology and Construction Court in Leeds and Manchester, and the London Circuit Commercial Court.

In his foreword to the consultation document Lord Chancellor and Secretary of State for 

Justice David Gauke said: “The government understands that a ‘one-size fits all’ approach does not work for all types of claim, and this is reflected in our proposals for different treatment of these cases”. 

However, a statement from the Association of Costs Lawyers today hinted at the content of its consultation to response.

“The proposed figures for the fixed costs adopted by the Ministry of Justice in the consultation are nearly two years out of date and were based on just one law firm’s sample of cases, where it acted for the defendants,” it said.

“The government needs a much more rigorous statistical base if it is to widen the use of fixed costs, and also needs to commit to regularly reviewing and updating them. This is absent from the consultation, and indeed history shows that it does not happen, to the detriment of clients, their lawyers and access to justice”. 

APIL president Brett Dixon comment: “Efficiencies in process and procedure are important. Fixing recoverable costs does not mean fixing actual costs. Claimants already have significant liability for court fees and just introducing fixed costs without consideration of the necessary process will add to this burden. 

“Attention must be on helping to control costs, including any recoverable costs of those representing the wrongdoer based on the work they do, rather than limiting what is recoverable from those responsible for putting the injured person back on track.”