Download Extending Fixed Recoverable Costs

Extending Fixed Recoverable Costs
Bristol Law Society invited its member firms to complete a survey in relation to extending
fixed recoverable costs. A total of 33 individuals responded to the survey and a
summary of the results are set out below together with our conclusions based on those
results. The full responses including comments are attached.
For further information please contact [email protected].
Access to Justice
27 of 33 considered that extending fixed recoverable costs would reduce Access to
Justice, 2 people considered that extending Fixed Recoverable costs would promote
Access to Justice and 4 people commented without expressing a direct response.
Conclusion- Extending fixed recoverable costs is likely to reduce Access to
Justice.
Accepting Fixed Costs claims
21 of 33 considered that their firm would be less inclined to accept a claim which was
subject to Fixed Costs.
Conclusion- Extending fixed costs may reduce the choice of solicitor available to
the public.
Charging the Client the Shortfall
26 of 33 indicated that their firm are likely to seek any irrecoverable costs from their
client.
Conclusion- Extending fixed costs may increase a successful client’s
contribution towards their own costs.
Should there be a cap on Fixed Costs by reference to the amount of damages?
The question was perhaps not clear and this is illustrated by the variety of answers. The
intention was to understand our members views as to whether fixed costs should be
applied by reference to the amount of damages (i.e. up to £50,000 or £100,000) and if
so at what level of damages. 10 people appear to indicate that costs should not be
calculated by reference to damages. Other appear to suggest that costs should be
capped 25% or 70% of the damages. Other appear to suggest that the financial limit of
a claim for damages to which fixed fees should apply should be £10,000, £15,000,
£25,000, £50,000 or £100,000.
Conclusion- Inconclusive, however nobody appears to support applying fixed
costs in claims where damages are as high as £250,000.
Should Fixed Recoverable Costs be extended to specific types of litigation?
This question generated a variety of responses. Some indicated that there should be no
exclusions or that fixed costs should not be extended at all. A number suggested low
value claims, debt claims and low-value PI or Clinical Negligence.
Conclusion- Most responses appear to favour only extending fixed fees for low
value or straight forward claims.
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Exemptions or Criteria which should be applied
Many proposed exemptions for unreasonable conduct, denying liability, denying
causation, where fraud is alleged, multiple Defendants, or where there have been a
significant change of circumstances. It is also suggested that people on a low income or
with learning difficulties should be exempt and that there should be some forms of
means related criteria. One person suggested Counsel’s fees should be allowed in
addition to any fixed fees where reasonable/justified. Finally one person suggested a
Guideline Costs rather than Fixed Costs.
Conclusion- If Fixed Costs are extended then clearly careful consideration
should be given as to appropriate exemptions, particularly relating to
exceptional cases, unreasonable conduct or exceptional circumstances. The
proposal for Guideline Costs rather than Fixed Costs is perhaps a very attractive
alternative.
Should further substantive reform on costs be considered at this stage?
19 of 33 indicated that no reform was required at this stage. Of those that favoured
change, many felt that the litigation and costs processed should be simplified and
streamlined.
Conclusion- The majority indicated that substantive reforms on costs were not
required at this time, but there appears to be some desire for some change, in
particular simplifying the litigation and assessment process.
Is Proportionality and Costs Management effective in managing reasonable costs?
18 of 33 indicated that the proportionality and costs management regime do adequately
ensure that recoverable costs are kept reasonable. However, many criticised the
proportionality test and costs management regime, indicating that it adds to the costs
and risks.
Conclusion- The majority feel that the current proportionality test and costs
management regime are ensuring recoverable costs are kept reasonable.
Should Fixed Recoverable Costs be extended at this time?
27 of 33 opposed an extension of fixed recoverable costs. Of those in support, 1
suggested it should be extended within reason with clearly defined parameters and
another suggested claims up to £50,000.
Conclusion- The majority opposes an extension of fixed recoverable costs.
Could extending Fixed costs increase the risk of unfairness or inequality of arms?
28 of 32 indicated that extending fixed costs would increase the risk of unfairness and/or
inequality of arms.
Conclusion- Most consider that extending fixed recoverable costs increases the
risk of unfairness or inequality of arms.
What percentage of cases settled without the need for proceedings to be issued?
The majority of cases appear to settle without the need for proceedings to be issued.
Conclusion- It is already the position that more than half of cases on which
lawyers are instructed settle pre-issue and, in some cases, significantly more. It
is not clear that extending fixed recoverable costs is necessary to ensure that
litigation is a last resort.
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Bristol Law Society Conclusion
Reforms which reduce Access to Justice, reduce the pool of legal advisors and risk
increasing unfairness and inequality of arms must not be implemented lightly.
With successful Claimants already having to meet irrecoverable success fees,
irrecoverable ATE premiums and unrecovered legal fees, it is concerning that the amount
of unrecovered legal fees could increase with an extension of fixed recoverable costs.
Any extensions to fixed recoverable costs should be implemented in stages, starting with
lower value and straightforward claims which resolve pre-issue. It may be appropriate to
start with “Guideline Costs” so that parties litigate with an understanding of what is
considered to be reasonable in normal circumstances, albeit further consideration is
needed on the proposed levels of any such guideline costs, given that the majority of
respondents appear to disagree with the current proposals.
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